It's the opposite of communism. Under communism, the workers own the means of production and all the other assets (at least, that's the theory; reality doesn't quite work out that way!). In a company town, a company owns it all; the workers own nothing.
Imagine the power the company has over individuals.
> done in the name of ... the free world.
Where are company towns described as being done 'in the name of' the free world?