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A state entity is not. But corporations and marriages don't have to be state entities. If they weren't state entities, that doesn't mean that such things would not exist. Your phrase "in its current form" is pretty important, in the case of corporations as well as marriages.
And I don't really see how this is an answer to my question. Who are some of the economists you've read who believe that corporations are incompatible with a free market?
Last edited by erowe1; 12-02-2012 at 07:43 PM.
The market can't give rise to legal immunity. The market is completely and wholly separate from any legal or governing entity and, in its purest form, has nothing to do with government. Of course, as we have seen, the government certainly can stick its hands in the market, but not the other way around, so it's impossible for the market to give rise to legal immunity just by market forces alone. The market can only give rise to voluntary actions. Nothing in the legal system is voluntary in principle.
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That would fall under limited liability.
Not really... Because even those harmed by the corporation, who never signed any kind of agreement, is not able to go after the string pullers who is ultimately responsible for the negligence, since the courts recognize the corporation as a person. Therefore, it was the corporation who committed the negligent act, and not the string puller.
Interest on the loan.
It's more about the limited liability that wouldn't exist. But without limited liability, there really isn't any reason to incorporate to begin with.
I saw a couple of debates and articles on Mises. I forget the names.
Doesn't really matter though... I'm not here to turn this into a debate based on an appeal to authority.
I actually don't. The Catholic Church was the government in centuries past in Europe. All of its doctrine was spawned from obedience to the church -- not to God -- and tithing, which served as taxation. Everything the Catholic church is now is a result of its status in the past. Very little has changed. It may be hard to get rid of now, but the organization isn't a legitimate free market child.
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Good post. On this issue there are two things I would change, the first being a ZERO CONFLATION law. Corporate personhood, as it were, is never, ever to be confused with individual personhood, despite the fact that some rights, powers, privileges, etc., may be common to both. So to begin with:
1) Two entirely separate sets of laws: one for corporations, another for free and natural individuals. And ne'er the twain shall be conflated. You can NEVER have one law that applies to both. In such a case, there must be two separate laws, which would eliminate even the need for disambiguation.
Then, if there is a constitutional challenge by individuals, over actual unalienable rights, an obnoxious or unconstitutional law really can be nullified and stricken--not held up and left on the books because it MIGHT apply to corporations and others. But it would be stricken from that set of laws only. Corporations would have to issue their own separate challenges if the same law existed on their books -- and could not appeal in the same way, or on the same grounds.
2) Most Favored Nation status for Citizens. No corporate power, right, privilege, exemption, benefit, entitlement or advantage of any kind may be given to corporations that does not automatically apply to each and every free and natural Citizen. In other words, no artificial advantage to being a corporation, and no artificial disadvantage for being a free and natural Citizen.
Advantage: free and natural Citizens (at all times)
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Last edited by Occam's Banana; 12-02-2012 at 08:43 PM.
The Bastiat Collection · FREE PDF · FREE EPUB · PAPER Frédéric Bastiat (1801-1850)
- "When law and morality are in contradiction to each other, the citizen finds himself in the cruel alternative of either losing his moral sense, or of losing his respect for the law."
-- The Law (p. 54)- "Government is that great fiction, through which everybody endeavors to live at the expense of everybody else."
-- Government (p. 99)- "[W]ar is always begun in the interest of the few, and at the expense of the many."
-- Economic Sophisms - Second Series (p. 312)- "There are two principles that can never be reconciled - Liberty and Constraint."
-- Harmonies of Political Economy - Book One (p. 447)· tu ne cede malis sed contra audentior ito ·
Extremly decreased transaction costs. An economy without corporations wouldn't work very well. And corporations, as contractually created entities that can only voluntarily transact with other persons or entities, are absolutely possible in a free market. Even limited liability is totally compatible with free markets, as long as any contract partner knows about the liability status. This is obviously only true in cases of damage against contract partners, not against third parties.
In cases of damage against third parties the actual human person responsible for it would have to pay the compensation. However, this is largely already the case.
There are even cases, where the current form of liability might actually help third parties. Think about the Deepwater Horizon accident. If only the responsible managers would be liable for damage, they could never pay compensations worth billions of Dollars.
I agree that limited liability should not extend to people never agreeing a contract. However, that is by far not the only benefit of a corporation. Corporate personhood can also exist without limited liability in such cases.The argument for marriage in the free market is that is basically a contract between two consenting parties. The court only needs to recognize the contract between the two (or more) parties, and not necessarily the marriage itself.
The difference with a corporation is that the courts recognize it as a legal person, regardless of whether or not a contract was in place with the people harmed. One of the key free-market principles is that you are responsible for your actions. A corporation is basically a state-sponsored entity that effectively removes this responsibility.
Multi-national corporations are the most efficient form of organization for some forms of production. That's a great thing. And that would be absolutely impossible without any form of corporation.
Which doesn't mean that no marriage is compatible with free markets.How is a state sponsored entity compatible with the free market? Marriage in it's current form certainly isn't.
What are peoples thoughts on 2 individuals (or companies) coming to a mutual agreement of limited liability?
What if I, as a businessman with a product only sell my product to people with the clause that by purchasing said product, they are limited in the amount they could sue me for?
Is that not free market? Individuals are free not to purchase said product and if they do, they have agreed to a certain amount of liability placed with the seller/producer.
If we DONT allow that type of contract, do we have a free market?
When they do sue the corporation, rather than the actual human responsible, it's because of the amount of money they can get out of the corporation. Are we supposed to think that in addition to suing the human responsible, and the corporation the human works for, the plaintiff should be able to go after all of the corporation's shareholders?
Why do I care that Bain-type entities takes apart failing companies in the most profitable manner again? I keep forgetting. What fraud was committed, exactly?
And in fact, why do we keep using Bain as an example, when there are literally hundreds of companies that do the same thing? This sounds like a liberal talking point.
I've read the whole thread, and haven't seen anything that changes my mind about corporations and LLCs. I have no problem with the fact that corporations exist, I think they are necessary, and I think the problem is, as always, government.
Ownership is exchanged for cash. That's the contract. Corporate executives go to jail for fraud on a fairly routine basis, and the profits of the owners are reduced by fines, fees and penalties on a routine basis. Obligations met.
So people can't own property jointly?But how can a corporation own real property?
I believe there are some pretty bad ways of how corporations are currently handled by government.
However, I believe bankruptcy laws are were the real problem lies. Those laws do nothing but protecting debtors and screwing lenders. And that's true for corporate bankruptcy as well as for private bankruptcy (at least where I live, and I believe it's pretty much the same everywhere in the industrialized world).
That is fine. The problems begin when the government creates non-liability as the default without consent. Here's one of the reasons why the giant corporations of today could not exist without the government non-liability mandate:
When you buy stock in a corporation, you rely on being insulated from anything the corporation does. You rely on the government-created corporate shield limiting your losses to just the amount you invested. The stock is easy to buy and easy to sell. No liability passes to you when you buy it and when you sell it, the buyer doesn't need to woory about buying into a lawsuit or any other liability headaches. This creates an anonymous international market where literally hundreds of millions of people who don't know each other and don't know anything about the business can partake of profits without out being responsible for what the corporation does to get those profits.
In short, because stock holders never have to worry about being responsible for what the corporation does, the corporation can raise vast amounts of money without too many questions being asked. It can then use that vast capital to dominate small business and others in the marketplace.
If, on the other hand, limited liability had to be negotiated with each party with whom the corporation did business, the owners of the corporation would have to take an interest in what the corporation was doing because the chances are that it would not get the waiver right every time if it got very big. That would limt the market in corporate shares.
And this is only dealing with contracts, not torts. When you buy stock in a corporation now, you don't need to be concerned with being sued by someone when a corporate driver runs over a pedestrian. But no contractual limit of liability can contain accidental injuries caused to others.
Ownership without responsibility is far easier to sell than ownership WITH responsibility. That is the purpose of the corporate business form - to allow people to control vast amounts of other people's money.
The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.
"Who would be free, themselves must strike the blow." - Byron
"Who overcomes by force, hath overcome but half his foe." - Milton
If the organization pays the settlement out of the coffers, the shareholders are paying.
But I think it's ridiculous to assert that if a newly hired truck driver has a traffic accident driving the company truck that I could be personally sued because my mutual fund invested in shares of that company. When I invested, I in essence agreed that I might lose a piece of the profit if someone running the company does something horrible, or even accidental. I also in essence agreed to pay for insurance against that scenario through the company.
But if I only bought $10,000 worth of stock, no way should my entire portfolio be in jeopardy because I happen to have one.
The business itself - land, factories, goods, gross income, contracts - is NOT owned by the individuals. It is owned by the corporation, which is a separate legal entitiy. No living human being has any direct legal interest in the business itself. Individuals DO have an ownership interest in the corporate entity.
The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.
"Who would be free, themselves must strike the blow." - Byron
"Who overcomes by force, hath overcome but half his foe." - Milton
The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.
"Who would be free, themselves must strike the blow." - Byron
"Who overcomes by force, hath overcome but half his foe." - Milton
Really? I am willing to bet that you don't even know which corporations you have money invested in, let alone whether or not they have insurance. If you have a pension, it is likley invested in a large number of corporations. Do you have any insurance? Insurance companies are among the largest institutional investors in the stock market so you are invested there. Are you invested in mutual funds? I'll bet you can't list their investments.
The limit on liability allows for widesprfead stock ownership with no oversight by the owners.
The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.
"Who would be free, themselves must strike the blow." - Byron
"Who overcomes by force, hath overcome but half his foe." - Milton
Of course you LIKE being on the side where you are protected from liability. Wait until you have been injured by a corporation with no assets. Professionally, I have to deal with shell corporations all the time. They have nothing in the way of assets or insurance. And it is legal.
The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.
"Who would be free, themselves must strike the blow." - Byron
"Who overcomes by force, hath overcome but half his foe." - Milton
The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.
"Who would be free, themselves must strike the blow." - Byron
"Who overcomes by force, hath overcome but half his foe." - Milton
There is no such thing as a tangible business in that context. Corporations exist to engage in business. Corporations own assets, and shareholders own those assets because they are the owners in the corporation. Corporations are only a set of pre-fab legalities designed to expedite a myriad of routine issues that arise with ownership by multiple individuals.
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