The large scale of the corporate body, be it a country or a company, effectively insulates its managers from feeling the consequences of their decisions. Large scale corporate bodies do not function in free markets where their managers' decisions are immediately rewarded and punished by market discipline. They function in oligopoly or monopoly markets where they enjoy "market power" and/or legislative immunity, the power to impose the costs of their excessive pay packages and the cost of their business mistakes on shareholders, consumers or taxpayers.
Corporate managers, on Wall St for e.g., enjoy 'earning' $10-50 million per year in salary, bonuses and benefits, so they could afford to cover a $50 million loss that their company suffered just like the small business guy has to personally cover the $50k loss he suffered. It doesn't matter whose 'fault' the loss is. If a small business loses $50k due to bad weather or economic events that the owner had nothing to do with, he still pays the full $50k out of his pocket. That's the 'risk' side of operating a business in a free market. If the small business enjoys a windfall of $100k due to forces beyond the owner's control that he is luckily positioned to cash in on, that is the 'reward' side of the free market.
Corporate managers want to have their cake and eat ours too. They are guaranteed very large salaries and benefits that maybe the company can afford to pay in good markets, but they suffer no personal losses ever like a real free market businessman. This is because corporate managers are not free market players but are in fact employees, bureaucrats, 'economic managers" of large scale enterprises that enjoy market power, not free enterprise businessmen working in a truly competitive market economy.
Once we recognize that free market discipline does not function in the corporate sector, and it doesn't matter if we're talking about the public corporate sector (governments) or the private corporate sector (corporations), then we collapse the whole moral argument that private corporations deserve the same treatment as free enterprise businesspeople. If your personal income is not directly affected by the ups and downs of your company's fortunes, then you are an employee, a bureaucratic manager/worker, and not a free market player. If somebody other than you pays ANY of the costs of your excesses and errors, you are not a free market player.
In a republic it is the people who hold ultimate power over the managers they elect or hire to govern various aspects of their corporate affairs. Too much power for too long corrupts these managers, so they need to be constantly reined in or routinely replaced, or they become tyrants who believe it is their 'right' to rule their particular niche of the realm, their personal fiefdom. Politicians, corporate executives, and all of the bureaucrats under them, are subject to this corrupting influence of power because their personal incomes are insulated from the forces of market discipline.
Market fundamentalists are right. Market competition is the only real solution to the buildup of dominant powers that stifle free enterprise and the functioning of market discipline. Governments and companies must be kept too small to dominate. Big government and big business needs to be broken up and their powers dispersed among many players in a truly competitive market economy.
Americans believe in the morality of free markets, where individuals have the right to enjoy the benefits of their own successes, and the responsibility to suffer the costs of their own failures. If it is beneficial to have a safety net so failures don't suffer a social Darwinist death, that is up to the people to decide how to pay for.
If it is beneficial to have some very large government enterprises or companies as oligopoly or monopoly "national champions" as part of an industrial policy that serves the interests of the nation better than free market competition (the German and Chinese model), then it must be recognized that those companies and their managers and employees are not operating in a free market where their income is set by market forces.
They are working in a command economy where their personal incomes are insulated from market forces, so their incomes must be set by the people who permit monopolistic entities to exist in their nation. They are not entitled to take as much of the enterprise's profits as they can get away with. They are entitled to reasonable compensation for managing a non-market enterprise. The manager of the publicly owned Bank of North Dakota, for e.g., is paid about $800k per year. That is a realistic salary for a competent manager of a large enterprise.
Market fundamentalists fail to see that the corporate sector does not exist in this virtuous word of free market competition and market discipline. They believe incomes and economic conditions in the corporate world are generated by market forces. This is just false. These outcomes are management decisions, the product of market power, not free market competition. Corporate dominance, whether by government or 'private' actors, and the extreme inequality of outcomes that is generated by the exercise of corporate power, is contrary to liberty, and should be broken up or placed under the management of the people before it does even more damage to the nation.
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