[seren]

You can probably replace communism by capitalism in most sentence of your post. Regarding the incentive to inflate numbers, think about quarter report, or of things like Enron, Volkswagen or Autonomy (which was sold as an inflated price).

The main difference is that in an autocratic system, it is easier to not get caught by using force to silence oppositions or whistle blowers. In a working democracy with some kind of transparency and regulation, you can't lie for ever. (But then you can still say you are flabbergasted by what the auditors have found and you will do everything in your power to find out why such shocking activity took place and restore the public confidence in your company)

[naveen99]

Corporations have a bigger principal agent problem. But in capitalism you also have privately owned businesses which doesn't have as much bloat. And the corporations have to compete with these.