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A Civil Rights Movement for Corporations? Inside the 400-Year Struggle

UCLA Law Professor Adam Winkler on his new book We the Corporations

"The movement and struggle to win rights for corporations," says UCLA Law School Professor Adam Winkler, is "one of the least well-known yet most successful civil rights movements in American history."

An important chapter in that history came in 2010, when the Supreme Court ruled it unconstitutional to keep corporations from spending money on political ads right before an election. Many liberal advocacy groups were outraged over Citizens United v. Federal Election Commission. Last year, U.S. Senators Tom Udall (D–N.M.) and Martin Heinrich (D–N.M.) introduced a constitutional amendment that would overturn the decision.

In a new book, We the Corporations: How American Businesses Won Their Civil Rights, Winkler challenges the conventional wisdom about Citizens United. He complicates the narrative about America's founding, too.

Interview by Paul Detrick. Edited by Detrick. Shot by Zach Weismuller and Alexis Garcia.

"Aourourou," by Blue Dot Sessions, is licensed under a Creative Commons Attribution license (https://creativecommons.org/licenses/by/4.0/)
Source: http://freemusicarchive.org/music/Blue_Dot_Sessions/Azalai/Aourourou
Artist: https://www.sessions.blue/

"Toothless Slope," by Blue Dot Sessions, is licensed under a Creative Commons Attribution license (https://creativecommons.org/licenses/by/4.0/)
Source: http://freemusicarchive.org/music/Blue_Dot_Sessions/Azalai/Toothless_Slope
Artist: https://www.sessions.blue/

Photo of Supreme Court: credit, Jonathan Ernst/Reuters/Newscom
Photo of crowd outside Supreme Court: credit, Jonathan Ernst/Reuters/Newscom
Photo of protest sign: credit, Bill Clark/CQ Roll Call/Newscom
Photo of protesters yelling: credit, Jonathan Ernst/Reuters/Newscom
Photo of arrest: credit, Jonathan Ernst/Reuters/Newscom

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  • What Smells Like Pee?||

    Corporations are not people, they're just groups of people who lose their rights by grouping together because reasons.

  • DJF||

    No, the people do not lose their rights when grouped together, they should not get extra rights when grouped together

    They should not have limited liability since by limiting their liability they shift liability to others. You do not get rid of liability you just transfer it by government decree.

  • What Smells Like Pee?||

    I guess I should have used the sarcasm font.

  • ||

    They should not have limited liability since by limiting their liability they shift liability to others.

    The limited liability corporation is the greatest invention in the history of mankind.

    Maybe it's the words that are the problem? Corporations -- specifically, the people who compose the corporation and represent the corporation -- do not have limited liability with respect to crimes or fraud. They have limited liability solely with respect to their financial dealings.

    Would you rather deal with a company that, if it goes under, cannot supply you the service you contracted for? Or would you rather not have that service available at all? Because under unlimited liability the latter will usually be your only option.

  • Gilbert Martin||

    I get amused by people claiming that limited liability for corporate investors is somehow a "free" benefit bestowed by government - as if unlimited liability was some sort of natural law instead of an equally artificial construct of law.

  • John||

    Exactly, but it is even worse than that. Let's say for the sake of argument that they are right and limited liability is a benefit bestowed by government. Since when does the government have the right to demand that you give up your constitutional rights as a price of accepting a government benefit? If that is the rule that leftists want to adopt, I don't think they are going to like it very much when the government starts demanding people give up their constitutional rights for other benefits. If accepting the benefit of limited liability can mean giving up your right to free speech, why can't accepting welfare or unemployment benefits mean giving up your right to vote?

  • Kyfho Myoba||

    > Since when does the government have the right to demand that you give up your constitutional rights as a price of accepting a government benefit?

    Since forEVER. TANSTAAFL, baby.

    It's always the same. People want to avoid responsibility, and moar free stuff, and that's how the State grows. They don't take your liberty until you give up responsibility.

  • MarkLastname||

    Yeah, we have limited liability for creditors, so why not for investors? They're actually arguing for unusually stringent standards for equity holders.

  • Michael Hihn||

    Yeah, we have limited liability for creditors, so why not for investors?

    That's what it means. (investors)
    Creditors have nothing to do with it. Absolutely nothing.

    Else we'd never have any large employers, relying on shareholders -- who have no ongoing control over management practices and policies. Imagine a world with only sole proprietorships and partnerships. (Offsetting the limited liability, shareholders can also lose everything, and be ESSENTIALLY helpless to avoid it. Balance.)

  • Michael Hihn||

    The owners are people, Sluggo,
    We call them shareholders.
    /sarc

  • Joe Blowski||

    do you mean shareholders can't vote because corp's can't vote?

  • Eidde||

    Ooh, will PBS do an Eyes on the Prize style documentary?

  • Jerryskids||

    They wanted to, but the Corporation for Public Broadcasting realized they had no right to free speech.

  • Jerryskids||

    I always like it when the New York Times Company, Cox Enterprises, Tribune Media and others publish editorials in their newspapers arguing that corporations don't have free speech rights. It makes a good argument for why you shouldn't trust journalists to get the story right because they're some of the dumbest people on the planet.

  • Eidde||

    "some of the dumbest people on the planet"

    To be fair, they're probably also dumber than the inhabitants of Dimwittia, the Planet of the Morons.

  • MarkLastname||

    Tony will be here shortly to explain how being a corporate media company (as long as you're not Sinclair or Fox News or the National Review etc.) exempts you from such restrictions. See the first amendment clearly says "only corporate media outlets shall enjoy these rights."

  • Michael Hihn||

    Non sequitor.

    A Free Press.

  • Sevo||

    "Non sequitor."

    No, it follows exactly, so we can assume you don't know what that means.

  • DajjaI||

    Great discussion! Now I understand Reason's fetish with "listeners' rights". But in fact there is no such thing. Only free speech rights, and that alone allows pharmacists to advertise prices. Listeners' rights is an odious concept and can be exploited for all sorts of mischief and buffoonery. For example right wingers are using them to justify criminalizing the act of 'disrupting a public event'. Well of course it's wrong to block an office building or something, but just speaking out and ruining someone's soap box day is perfectly legal. In all such cases, the protesters are removed and the event continues. No harm no foul. Ben Shapiro is an expert at this - he says, "If you disagree with me, come to the front of the line." Just call their bluff and they will melt. No "listeners' rights" required. (Also such rights will be used against us when the tide turns after the progtards rise to power after the midterms - careful what you wish for!)

  • Eidde||

    They tend to melt away once they think they face actual consequences for their misbehavior.

  • DajjaI||

    The oppobrium of the group is sufficient. Listeners are not helpless patsies and don't require government protection. In fact, this is an insult to them. If they really are so effete, then maybe they need pharmacy price bans to protect them from their own stupidity and lust. And I'm talking here, stop disrupting me!

  • sarcasmic||

    Listeners are diffuse and disorganized. They don't make for a formidable force or lobby, unlike those who would disrupt what the listeners want to hear.

  • DajjaI||

    You are a complete moron if you think the government is qualified to shut down protesters but not free speech.

  • Eidde||

    "protesters" is a very broad term, and protesting can encompass a wide variety of behavior.

  • John||

    No, you are a moron if you can't see the difference between speech and disruptive behavior. Your free speech rights do not extend to you disturbing the peace any more than they allow you to assault someone.

  • EscherEnigma||

    No, you are a moron if you can't see the difference between speech and disruptive behavior


    Yeah! Yeah! And hate speech isn't free speech either! Yeah!

    In cast that's insufficiently clear, trying to draw lines between what is and isn't "free speech" in order to ban things you don't like will never be a clean endeavor.

  • John||

    I think it is pretty clean. You can say whatever you like just so long as you do it in a way that doesn't disturb the peace. We have no problems making that distinction in other contexts. I have a right to walk down the street but saying that doesn't allow me to run you over when I do is not difficult. It is not difficult to determine disorderly conduct. People just pretend it is because they want to use their right to say something as a way to justify disturbing the peace.

  • EscherEnigma||

    People just pretend it is because they want to use their right to say something as a way to justify disturbing the peace


    And you want use your understanding of "disturbing the peace" to force property owners and police to evict protestors that you don't like.

    Which is, at it's core, the issue. Property owners already have the right to revoke permission to be in a place, and have folks escorted off for trespassing. But they don't do it enough for your liking, so you want to use your understanding of "disturbing the peace" to force them to.

  • John||

    And you want use your understanding of "disturbing the peace" to force property owners and police to evict protestors that you don't like.

    No I don't. Property owners can do what they like. If they want to let someone disrupt a speech, that is their business. But, they absolutely have a right to do so if they choose to. And if they do not choose to, then they can't claim to have given the person speaking a fair chance to speak. Where on earth did you get the idea that I am saying property owners must do anything?
    But they don't do it enough for your liking, so you want to use your understanding of "disturbing the peace" to force them to.

    that is just a complete load of horseshit. Nothing I said could reasonably lead someone to conclude that.

  • EscherEnigma||

    And if they do not choose to [...]


    Then like you do, again and again, you'll bitch and moan about how the speaker's "Freedom of Speech" was being trampled by the big mean protestors that the property owner had no problem with.

    Folks have memories John.

  • John||

    Then like you do, again and again, you'll bitch and moan about how the speaker's "Freedom of Speech" was being trampled by the big mean protestors that the property owner had no problem with.

    Their free speech rights are being trampled. The fact that the property owner is free to allow that to happen, doesn't make it something to applaud. The property owner deserves criticism. Moreover, if the property owner is the government, he deserves more than that. The government does have a duty to let everyone speak and have rules that are applied in an even hand.

    What are you saying here? Sorry but running up and screaming in someone's face is not your right. You may be able to do it if they are in your house, but when you do, don't tell me it was about your free speech. No. It was about your right to be an asshole on your property. And don't tell me you are not restricting the other person's right to speak. You are. You just have a right to do that because they are on your property.

  • EscherEnigma||

    What are you saying here?


    That you're confusing a Property Rights issue with a Free Speech issue because you don't like what the property owner does.

    Further, you're confusing rude behavior with not protected by civil rights behavior.

    You and the crazy street preacher have the same rights. So you two can yell at each other till you're blue in the face... so long as you stay on public property. The moment you step into a coffee shop, the owner can tell you to shut your trap or get out.

  • DajjaI||

    You are a moron if you can see the difference between speech and disruptive behavior. Honestly I can't believe you think you can win this.

  • sarcasmic||

    How does that refute what I said?

  • DajjaI||

    STOP INTERRUPTING ME.

  • John||

    but just speaking out and ruining someone's soap box day is perfectly legal.

    Not necessarily. There is such a thing as disorderly conduct. It also could be trespassing. If I host an event on my property, I have a right to expect the people attending to be there to listen to the event and not disrupt it. If you show up to scream and disrupt it, you have violated the terms by which I allowed you on my property and are guilty of trespass if you don't immediately leave when I tell you too.

    It is not a question of listeners having rights. It is a question of everyone having a right to the quiet enjoyment of their property or the public commons. If you disagree with what is said at my event, the solution is to have your own event, not show up and disrupt mine. My free speech is meaningless if every time I try and exercise it, the mob shouts me down.

  • Kyfho Myoba||

    Bingo. This is exactly why you don't falsely yell "Fire!" in a crowded theater. Textbook Rothbard.

  • Jason Dawes the Elder||

    "right wingers are using them to justify criminalizing the act of 'disrupting a public event'."

    I can make stuff up, too. For example: that was a very insightful comment.

  • John||

    Corporations are nothing but associations of people. If people lose their constitutional rights when they band together to form corporations, then the right to free association is effectively read out of the Constitution. What good is the right to free association, if forming a permanent association with someone means giving up your constitutional rights with regards to that relationship?

    Beyond that, what makes the modern world is people's ability to cooperate and do things together that cannot be done alone. And the primary means of doing that is the corporation. By creating an efficient means for people to cooperate and share the risk of failure, corporations have created more wealth and improved the well being of mankind more than any other type of organization in history. The fact that the left hates the entire concept of the corporation is just further proof that the left hates the modern world more than anything.

  • sarcasmic||

    And the primary means of doing that is the corporation.

    No, dude. The primary means of working together is government. When people cooperate together in the form of a corporation, it isn't fair. They get things done while others who are not part of the corporation reap the benefits. It isn't fair. The only thing that is fair is government, because it forces everyone to participate. Besides, corporations would never invent anything without government research grants. Nothing would have ever been invented without government money. Voluntary cooperation is not fair, and therefore is evil. Government force is fair, and thus the source of all that is good in this world.

  • sarcasmic||

    Even fire and the wheel owe their discovery to government. Some tribal leader ordered Og to make fire, and paid him with skins taken from the rest of the tribe. Without that rudimentary government, we would never have had fire. Or the wheel. Or anything.

  • John||

    Sadly, this is what these idiots actually believe. It is just terrifying when you think about it.

  • JFree||

    You enjoying wrestling with your straw pigs? Listen to the video above. GOVERNMENT in America is a form of incorporation. Our Constitution itself is the articles of incorporation for the federal govt.

    You fucking anarchopropertarian clowns on the right. Govt is evil. Except when it grants rights to private corporations. Which is good. So govt should go away and let its creations take over all its functions. Including creating new corporations???

  • John||

    That doesn't even make any sense. Sure, the governments are corporations in many respects. But so what? Governments are just associations of people just like corporations. And governments have sovereign rights because the people who form and consent to them have such rights.

  • sarcasmic||

    I have no idea of what you are talking about. And I did watch the video. The Virginia Corporation is not longer a factor here.

  • JFree||

    You CHOOSE to have no idea. Because you somehow think government is some alien imposition. When in fact, every original 13 colony was a corporation chartered by the King. All the remaining are corporations chartered by Congress under the charters of statehood. Our ideas of governance are derived almost entirely from a)the explicit rules of incorporation of those colonies and b)the religious governance ideas (presbyterian, episcopal, congregational) of churches that were also incorporated.

    The fed govt is a corporation chartered by those original states. Cities and counties (and a ton of special-purpose entities like in the old days individual schools - now school districts) are corporations chartered by each state. They are all corporations. Deal with it.

  • MarkLastname||

    You completely miss the point. Government 'corporations' aren't engaged in voluntary exchange. If governments are just corporations and that makes their coercion a nonissue, surely you won't object to Walmart or the Catholic Church forcing you on threat of punishment to give them a tithe?

  • sarcasmic||

    I see. You see no difference between a government corporation that uses violence to force people to pay for services that they neither want nor need, and a private corporation that exists only because people voluntarily purchase its goods and services.

    Gotcha.

  • JFree||

    You're the one who wants to parse differences and demonize/lionize particular corporations. Unions bad - corp good. Sierra Club bad - BigOil good. Govt corporation bad - private corporation good. D party bad - R party good.

    I am simply saying that they are ALL corporations. And they have a lot more in common with each other - re their incentives, distortions, etc - than they do with YOU (the individual human).

    I think just keeping that realization - that they are all corporations - up front in my non-corporate individual brain - makes it a lot less likely that I will be reduced from being a free human to simply becoming a useful idiot for some corporate power struggle. And not coincidentally that realization also makes it much easier to go beyond ideology with individuals on 'the other side'.

  • sarcasmic||

    You're the one who wants to parse differences and demonize/lionize particular corporations.

    Really? Tell me more. Because I have done no such thing, except in your mind.

    I merely pointed out that a government corporation can use force, while the Sierra Club cannot. Government can force people to pay for services whether they like it or not, and Big Oil cannot.

    Call them all corporations if you must, but they are not equal by any measure. Government corporations can literally destroy their competition. Literally. Like with bombs and guns.

    Private corporations may joke about killing their competitors, while governments literally kill those they don't like.

    To say they are all the same because of the word "corporation" is not even remotely honest.

  • sarcasmic||

    It all comes down to choice.
    Private corporations offer choice. Buy shares if you want. Work for them if you want. Buy their goods and services if you want.
    Government offers no choice. Do what they want or men with guns will hunt you down.
    Not. The. Same. Thing.

  • JFree||

    Private corporations offer choice...Government offers no choice.

    Such a wonderfully useless distinction there. OK. Pretend you are in Bhopal India in Dec 1984. A joint venture (roughly 50/50 owned by Union Carbide/state-controlled banks) emits a shit-ton of methyl isocyanate.

    Was it only the govt-controlled part of that joint venture that forced people to breathe?

    Seriously - here's the harm:
    Somewhere between 3000 and 16,000 people directly and (near) immediately dead.
    Somewhere between 500,000 and 1,000,000 injured
    The plant ceases to operate - and turns out the land and water there are hopelessly toxic.

    The government corporation - no matter how incompetent - is gonna be stuck with all the uncovered short-term and all the long-term costs - because if they don't that's how democracies get overthrown. The private corporation can fight everything (starting from the admission that any of it even happened) - with both limited liability and time (plaintiffs die, corporations don't) on its side. So it quickly becomes a corporate power struggle between the two - with the humans reduced to manipulated objects.

    And your supposedly libertarian contribution is It all comes down to choice.?? WTF.

  • Ariki||

    I love how you ignore the part about the dangers of the Wallmart SWAT team showing up to your house while you're masturbating, smashing the door down, killing your cum soaked dog, throw you in Google prison, and put your name on a permanent list of sexual deviants.

    Yeah, governments and corporations are exactly the same.....

  • Sevo||

    JFree|4.16.18 @ 4:43PM|#
    "Private corporations offer choice...Government offers no choice.
    Such a wonderfully useless distinction there."

    Such an amazingly STUPID comment!
    Hint:
    Chose not to give your money to Apple, watch what happens.
    Chose not to give your money to the IRS, watch what happens.
    Are you really this fucking stupid?

  • JFree||

    Corporations are nothing but associations of people.

    That's not correct. Corporations are the associated PROPERTY of people. And that particular form of associated property is granted rights - by the state - that non-incorporated property does NOT have and nor do people. eg limited liability, unlimited lifespan, anonymity of ownership, etc. Those granted rights also are granted completely freely (virtually no cost either upfront or ongoing) with any externalities or unintended costs being laid solely on the unincorporated.

    I don't really have a problem with most of those corporations rights lawsuits. The judicial rationale - from common law - is sound. But it is also very incomplete. In large part because those granted rights are not natural rights of individuals. They derive from CIVIL law - not common law. So it is on legislatures - not judges - to redefine that nature of artificial incorporation so that those extra granted rights do not create a disadvantage for the unincorporated.

    eg Citizens United is only a problem because of a lack of transparency about who are the actual PEOPLE who are associating behind the corporate veil.

  • John||

    No. They are associations of people. The association is used to create wealth and as a repository of that wealth and property, but they are still associations of people. And that is an important distinction. If a corporation were just a collection of property, then the left might have a point about it not having rights. But it is not. A corporation is an expression of the will and desires of its owners. It is not just about property. It can also be about making a statement or expressing a way of life or a religion. For example, if a bunch Christians form a corporation it could be for more than just selling something and being a depository of property, it can also be an expression of their religion and values. Maybe they are closed on Sundays and don't sell certain products they feel violate their religious views.

    The point is that the corporation is nothing but a vehicle to accomplish whatever the people who own it want. And that purpose can be anything and does not have to just be property. It is an expression of the values and wishes of the owners. And that makes it an association of people not just a collection of property.

  • JFree||

    You are dead wrong. Corporations are PROPERTY. That is why they have limited liability. It is why they do not die.

    Partnerships are associations of people - where property may or may not be involved. Partnerships are not corporations.

  • John||

    You miss the point. Corporations are a collection of property but they are not only that. The limited liability exists so that people can associate easier and spread the risk associated with a given action more easily among themselves. The entire point of limited liability is to make it easier for people to associate and cooperate for their common benefit.

  • JFree||

    The entire point of limited liability is to make it easier for people to associate and cooperate for their common benefit.

    Yes. They receive a huge personal benefit from govt without paying for it. While the costs get transferred to others. One could call that cronyism.

  • John||

    Yes. They receive a huge personal benefit from govt without paying for it. While the costs get transferred to others. One could call that cronyism.

    That is utterly absurd. It doesn't cost anyone anything. You know the rules upfront. If you don't think the corporation has enough assets to cover whatever harm it might do to you, then don't do business with it. No one is forced to do business with or loan money to a corporation. The rules are there and no one is harmed by them. To think otherwise is absurd.

  • JFree||

    It doesn't cost anyone anything.

    Sure. And if a corporation kills someone - or dumps a ton of pollutants in a river - and declares bankruptcy; then its very easy to see how the cost gets transferred. An individual person does not EVER get a get out of jail free card. Nor can they escape criminal responsibility by declaring bankruptcy.

  • John||

    Sure. And if a corporation kills someone - or dumps a ton of pollutants in a river - and declares bankruptcy;

    And if someone who has no assets does those things, the victims can't be compensated then either. You can only get compensation if the person who wronged you has assets. None of the risks you mention are special to corporations. That can happen with individuals too. In fact, it is more likely to happen with individuals since corporations are associations of many individuals and likely to have many more assets than an individual.

  • JFree||

    if someone who has no assets does those things, the victims can't be compensated then either.

    No. But they go to prison. A corporation cannot be imprisoned either. Even post-bankruptcy, some of those uniquely corporate 'assets' still remain because the decision maker is assumed to have been acting as an agent of the corporation and the actus reus and mens rea are assumed to be 'corporate' not individual.

  • Kyfho Myoba||

    Ahh, but it does cost some people something. The limited liability means that when a corporate entity incurs liability greater than its assets, the victims of said liability cannot be fully compensated. And one doesn't have to "do business" with a corporation for it to damage/injure you.

    What the state creates, the state controls. The created is never greater than the creator.

    That said, of COURSE a corporation is a "person". (That doesn't mean that it is "people") It has a legal "personality". How else can it sue and be sued?

  • Mickey Rat||

    You do understand that "limited liability" means your personal assets outside of your investment cannot be at risk for the actions of the corporation?

    Without limited liability, a person holding one share could have all their personal asstes at risk to make up the debts of the corporation, even if they were not involved with how the irhanization was run. What good effect would changing that bring?

  • JFree||

    You do understand that "limited liability" means your personal assets outside of your investment cannot be at risk for the actions of the corporation?

    Yes thank you. And for the corporation itself, that means that it cannot really be held responsible for any actions with an impact beyond its net worth. That can create a huge cost transfer - especially since it also creates an incentive to turn 'expected expenses' into negative externalities simply by leveraging up and running at a negative (or low) net worth.

  • gormadoc||

    Why would anybody with a high net worth invest in anything risky without limited liability? If corporations weren't able to offer limited liability, I'm not sure how well we could have taken the recent recession.

  • JFree||

    Why would anybody with a high net worth invest in anything risky without limited liability?

    If limited liability is that valuable, why would a high net worth person expect to get that value for free?

    If corporations weren't able to offer limited liability, I'm not sure how well we could have taken the recent recession

    Golly. So WHO did that risk get transferred to?

  • EscherEnigma||

    What good effect would changing that bring?
    If you can't ditch debt by shifting it to a company that you then cause to self-destruct (see Bain Capital and Toys R Us), then certain destructive business tactics might dwindle in popularity.

    To be clear, I'm not sure that getting rid of limited liability would mean Toys R Us wouldn't have declared bankruptcy. But the legal fiction of corporations, and the limited associated between that and real people, is definitely part of what enabled it.

    Alternate snark: Trump may have become a nobody back in the 90s when he had to declare bankruptcy.

  • Zeb||

    Partnerships are not corporations.

    Aren't they?

  • John||

    They can be Zeb. Partnerships can have a corporate veil just like corporations.

  • JFree||

    In which case they are corporations not partnerships. They may still be CALLED partnerships but originally that was just another form of cronyism (prob to prevent a taxable event).

  • Eidde||

    "It is why they do not die."

    What about in strange eons?

  • JFree||

    Just to give one example where the corporate form of property can/does create a problem. Land ownership. Because the corporation does not die (unlike people), transferring ownership of land to a corporation means future generations are bound by the current generation's property distribution.

    Thomas Jefferson was one of the few Americans who saw the problems: The question Whether one generation of men has a right to bind another, seems never to have been started either on this or our side of the water... I set out on this ground which I suppose to be self evident, "that the earth belongs in usufruct to the living;" that the dead have neither powers nor rights over it. The portion occupied by an individual ceases to be his when himself ceases to be, and reverts to the society... But the child, the legatee or creditor takes it, not by any natural right, but by a law of the society of which they are members, and to which they are subject.

    The original statement of that problem dates back to the Biblical jubilee year - Leviticus 25

  • ||

    I think the Coase Theorem has a lot to say about your little conundrum.

  • Kyfho Myoba||

    Bingo!!!!

    I think that the Mises Institute people have Coase' Theorem all wrong. They look at it from a normative perspective (should) rather than a positive perspective (is).

  • JFree||

    I think Coase is right on re externalities. But intergenerational stuff is very different than externalities. It raises the issue of WHO gets to make the decision - when some of the who is not even alive yet - not just HOW or WHAT the decision is. That who is kind of the essence of liberty.

    And if anyone can tell me how trade with the future is even possible - much less with frictionless transaction costs. Well I think Rawls' original position is a better way of figuring out what our limits must be if we don't want to enslave the future to the consequences of our decisions.

  • ||

    The essence of the Coase Theorem is not about externalities: it's about allocation of property or rights. Regardless of the initial allocation of property, if there are zero transaction costs, the property will end up allocated in its most efficient pattern.

    For your example, if there is a more profitable use of the land in the future than the use that the corporation is putting it to, then the corporation will sell it for a price that accounts for those uses to an entity that can put it to those more profitable uses.

    In other words, the problem you and/or Jefferson propose is not a problem at all. To be fair to Jefferson, he probably wrote what you quoted before 1960.

  • JFree||

    if there are zero transaction costs

    Yeesh. His point was the OPPOSITE of what you believe. re zero transaction costs:
    This is, of course, a very unrealistic assumption. In order to carry out a market transaction it is necessary to discover who it is that one wishes to deal with, to inform people that one wishes to deal and on what terms, to conduct negotiations leading up to a bargain, to draw up the contract, to undertake the inspection needed to make sure that the terms of the contract are being observed, and so on. These operations are often extremely costly, sufficiently costly at any rate to prevent many transactions that would be carried out in a world in which the pricing system worked without cost

    when transaction costs DO exist
    In these conditions the initial delimitation of legal rights does have an effect on the efficiency with which the economic system operates. One arrangement of rights may bring about a greater value of production than any other. But unless this is the arrangement of rights established by the legal system, the costs of reaching the same result by altering and combining rights through the market may be so great that this optimal arrangement of rights, and the greater value of production which it would bring, may never be achieved.

    Further - the intergenerational issue is far more complicated than the pollution/externalities. It is about those issues OVER TIME - 4D chess v 2D chess.

  • ||

    Uhhh.... Buying and selling land is about as close to zero transaction costs as you can get.

    Which means that if later generations find a better use of the land in someone else's hands rather than the corporation's, it will end up in that someone else's hands.

  • JFree||

    Buying and selling land is about as close to zero transaction costs as you can get. Which means that if later generations find a better use of the land in someone else's hands rather than the corporation's, it will end up in that someone else's hands.

    blahblahblah. Let's use yet another actual example. The southern part of the Ogallala Aquifer (itself discovered by the USGS) is being drained by irrigation. Started after WW2 and parts of it will be empty by 2030 or so. Legally, the draining of that (use over and above its replenishment) is abusus - not usufruct.

    So tell me how is a FUTURE generation - who will be faced with that land w no possible irrigation source (which btw - is the Dust Bowl area) - supposed to influence the CURRENT generations abusus of that land? Answer - they can't.

    That abusus problem is not unique to corporate ownership. But with individual personal usufruct, there is at least the opportunity to look at that lands use - on a roughly generational basis when the current individual dies and it is society (probate court) that decides who is the next usufruct possessor. With corporate ownership - that IS ossified. And further, since abusus is part of that current corporate owners notion of property, no current purchaser can pay for the land without also having abusus be part of that transfer.

  • ||

    Perhaps society (legislature) should recognize that a commons is being abused, and it should encode property rights over that commons. In this case it should limit the acre-feet drawn from the aquifer and auction the available water to the prospective users. Alternatively, it could auction off the water as it sits in the aquifer and let the owner sell it to those who draw it down.

    When property rights are properly defined, the long lives of corporations become a benefit rather than a problem, as those corporations want to maintain their revenue stream far into the future.

  • JFree||

    Perhaps society (legislature) should recognize that a commons is being abused, and it should encode property rights over that commons.

    It's not a 'commons'. In this country, we decided that land is full absolute property (usus, fructus, and abusus) not usufruct (usus and fructus). And in most cases, the surface landowner also gets free title to everything beneath the surface. That's often precisely the problem.

  • ||

    In this country, we decided that land is full absolute property...

    That's nice. I don't recall making that decision. Nonetheless, the aquifer is a commons. And a commons where one person's consumption of a resource decreases another person's consumption of the resource induces inefficient overuse of the resource.

    The solution to this problem has been known for centuries: parcel out the commons.

  • Michael Hihn||

    So?

  • John||

    As long as the corporation is created for profit, then this isn't a problem. The corporation owns the land and will sell it the moment that someone comes along who can make better use of it and is thus willing to offer it more money for the land than it is worth to the corporation.

    The only time what you say is an issue is with not for profit corporations. There, something like the Nature Conservancy can buy land and make it into the King's forrest and take it forever out of public use. That is a problem. But the solution to that isn't to get rid of corporations. It is to limit the amount of time that not for profit corporations can hold land in trust.

    You are making a good point but it doesn't support your overall indictment of corporations.

  • JFree||

    is thus willing to offer it more money for the land than it is worth to the corporation.

    That's irrelevant. The point Jefferson/Bible were making is that a dead person (or an agent of a dead person) has no right to make that decision and bind the living - even if that agent can make some assertion that they are making the wisest decision possible. No natural right. And no societal right. The Earth belongs in usufruct to the living. And that set of 'the living' is constantly changing. 'Corporation' ossifies that since there is no death event.

    The Bible essentially got round that 'ownership' issue by saying GOD owns the land and will always own the Earth because he created it - and is himself eternal. The tribes of Israel were merely granted 50 year (which is tribally/textually speaking shorthand for one complete generation) usufruct.

    And I'm not hostile to corporations at all. I just think that form of property needs to pay for the governmental benefits it is uniquely granted. And if it can't (and re land it might not be possible), then that form of property shouldn't be created by the state/society.

  • John||

    That's irrelevant. The point Jefferson/Bible were making is that a dead person (or an agent of a dead person) has no right to make that decision and bind the living - even if that agent can make some assertion that they are making the wisest decision possible. No natural right. And no societal right. The Earth belongs in usufruct to the living. And that set of 'the living' is constantly changing. 'Corporation' ossifies that since there is no death event.

    It is absolutely relevant. For profit corporations are answerable to their shareholders. They therefore cannot consistent with their duties hold land for sentimental or noneconomic purposes. What Jefferson was talking about was the rule against perpetuities and the landed gentry. Corporations are not subject to the same incentive structure as families and governments. So, his point doesn't apply.

  • Gilbert Martin||

    You have yet to prove that there are any government granted "benefits" that need to be paid for at all.

  • Gilbert Martin||

    "The point Jefferson/Bible were making is that a dead person (or an agent of a dead person) has no right to make that decision and bind the living - even if that agent can make some assertion that they are making the wisest decision possible. No natural right. And no societal right. The Earth belongs in usufruct to the living. And that set of 'the living' is constantly changing. 'Corporation' ossifies that since there is no death event."

    That isn't a "point" it's an unproven assertion.

    And individuals most certainly can exert control over property after their own death. All the have to do is set up a trust and transfer ownership of the property to it before they die. The trustees carry out the directives that the individual set up in that trust regarding what to do with the property.

  • Michael Hihn||

    As long as the corporation is created for profit, then this isn't a problem. The corporation owns the land and will sell it the moment that someone comes along who can make better use of it and is thus willing to offer it more money for the land than it is worth to the corporation.

    Are you a paperboy? A file clerk? Low-level assembly?

    The business is more valuable than the land, generates FAR more profit than land ... and to a REAL businessman is more akin to a raw material.

    When people who deal in land .. real estate developers ... try to run an actual business, they can fail bigly ... suffer over a dozen business failures, of which four were literal bankruptcies ... go nearly broke from the same failures that caused banks to REFUSE lending to him, thus forcing him to sell his soul to Deutsche Bank, a proven launderer of Russian funds ... be recently forced to pay a $25 million fraud settlement to victims of his "university" ... and turn 1600 Pennsylvania Avenue NW into a careening Clown Car, bouncing of the walls, with loud beeping and propelled by sheer chaos. And a core base that BELEEBS his predecessor was born in Kenya, because robotic minds..

    Anything else?

  • Mickey Rat||

    That Jefferson quote is trying to solve something that is not really a problem, and treating it as if it was a problem causes more mischief than it solves.

    Corporations are not limited by human lifespans, but they are mortal. Their fortunes can shift at a moment's notice. They end all the time.

  • sarcasmic||

    For profit corporations are answerable to their shareholders.

    No. For profit corporations are answerable to their customers. That is the difference between government and business. If you don't like what someone is selling, you don't have to buy it. If you don't like what government does with your money, tough shit. You're paying for it anyway, or else men with guns will come knocking on your door.

  • sarcasmic||

    The vote of the average shareholder matters as much as the vote of the average citizen. It doesn't.

    The vote of the customer though, that is all that matters. Without customers, corporations cease to exist. No matter what the shareholders say.

    Unless the corporation is government. Then the customers don't matter a bit. They are merely cattle to be milked. Or slaughtered.

  • Hank Phillips||

    Or maybe your neighbor's door, depending on the luck of the GPS draw...

  • Gilbert Martin||

    This is starting to sound like that wacko theory that ownership of land is illegitimate.

    What group was it that believed that?

    I remember some character in here some time ago who was proposing that all land belong to the government and it should expropriate it and charge rent on it all to raise government revenue.

  • Kyfho Myoba||

    You're thinking of the Georgists.

  • Gilbert Martin||

    Yeah that's it.

    I can't remember who it was in here who was advocating that but I remember somebody doing it some time ago.

  • JFree||

    Personally - I think George was accurate in his analysis (not so much his prescription which was a product of the 19th century). So BTW - did Milton Friedman, William F Buckley, and David Nolan (founder of LP). And Midas Mulligan ran Galt's Gulch using the basic idea - he leased (NOT sold) land to strikers and used the proceeds to fund the municipal-type contracts.

    Really odd how we have become so rentier oriented in this country.

  • Zeb||

    Something I like to point out to people who think corporations are some great evil is that if "corporate personhood" were not a valid legal concept, then you couldn't sue a corporation which has damaged you. You would have to find the individuals responsible, sue them and hope that they have the money to pay up. Legal personhood is about responsibilities and obligations at least as much as it is about rights.

  • Cynical Asshole||

    the right to free association is effectively read out of the Constitution

    Pretty sure that ship sailed a while ago.

  • John||

    No one ever seems to ask the anti-corporate free speech advocates what is so special about free speech. If corporations are not persons such that they cannot claim the right to free speech, then how are they able to claim any other right? Why for example, do they have the right to due process before being deprived of property? Or the right to exercise of religion or any other right?

  • sarcasmic||

    Since when did leftists give a shit about due process, property rights, or freedom of religion?

  • John||

    Since never. But they always pretend that they just want to take away the evil corporations' free speech rights as if that has no consequences for other rights.

  • Lester224||

    Since when did any individual who owns shares in a corporation or is an executive of a corporation lose their rights to free speech if they are not allowed to take corporate resources to lobby? The individuals can still lobby politically using their own funds including wealth they amass from their shares in the corporation? Where is the loss of free speech?

  • John||

    As long as the owners of the corporation are fine with using the corporate resources to lobby, how is saying they can't do that consistent with the right to free association. If sarcasmic and I want to form a corporation to sell something and then invest all or some of the money we make into promoting 2nd Amendment causes, according to you that would be illegal. If we are not free to associate however we want and somehow lose our ability to speak as a group rather than as individuals, then we have no free association rights and really don't have very effective free speech rights.

    The corporations is just he and I's association. It should have the same rights we do or you are forcing us to give up our rights as a price of associating.

  • Zeb||

    I still say the whole question of corporate personhood or rights is an irrelevant distraction from the issue when it comes to free speech. The first amendment says nothing about individuals' right to speak. It applies to everyone and everything. The right to free speech exists and is protected by the first amendment for American citizens, illegal aliens, aliens from outer space, Russian trolls, clever robots, random word generators, corporations, clubs and trained parrots. There are no special classes of people or entities of any kind to which it does not apply.

  • John||

    I agree Zeb. Look at what the amendment says. It says Congress shall make no law "or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

    Notice a couple of things. First is says "abridging the "freedom of speech". It doesn't say "the right of the people to speak freely". It uses the generic term "free speech". That is very strong support for the proposition that free speech is not a uniquely individual right with no collective implications like the right to a jury trial or the right to bear arms. Second, it is in the same place as the right to free exercise of religion and the right to free association. You put that together and it can only mean that Congress cannot restrict your ability to speak and petition the government in any form, be it individually or collectively.

  • Duelles||

    I would like to know the Professor's take on corporate entities such as PACs, or the corporations formed by politicians to elect and re-elect themselves. Udall and Heinrich from NM have proposed a Constitutional amendment to overturn Citizens United. It would be outstanding to know that this amendment would prevent them from organizing people to reelect said Udall and Heinrich.

  • John||

    It absolutely would. Leftists would try to get around that by claiming there is something uniquely bad about corporations that are formed to make a profit. Your point goes to the heart of the absurdity of this movement and why if it ever succeeded would effectively repeal the First Amendment. There is no difference between you and I forming an association to re-elect that lates Udall idiot son to Congress and you and I forming a corporation to market my new form of widget except one is to make money and the other to get someone elected. So if one is denied free speech rights, it is inevitable all will be.

  • sarcasmic||

    Leftists would try to get around that by claiming there is something uniquely bad about corporations that are formed to make a profit.

    Well, yeah. That is self evident. Corporate profits are theft from their employees and customers. So what if they are the price paid for efficiency? They aren't fair. Better to have things done by governments and non-profits. So what if they are wasteful and inefficient? They're fair. And fairness is all that matters.

  • Zeb||

    A lot of the people I have talked to about this (who are on the other side of the argument) are at least fairly consistent about this. They will say that it should absolutely apply to PACs, unions, etc. The Citizens United case was about exactly that, so it shouldn't be too surprising. I've even had a number of people tell me it should apply to newspapers too. It's important (and depressing) to remember that opposition to Citizen's United is not a position held only by the far left and is pretty broad.

  • John||

    Good for them for being consistent. But, the fact that they are unbothered by essentially banning people from forming collective organizations to influence politics doesn't bother them actually is worse than the people who are hypocrites about this. The people you describe's position amounts to saying that your right to speak and petition the government is limited to you and you alone. Under their view, if say you and I Zeb decide to work together to ensure that our voices are heard by government, we would be committing a crime. That is pretty scary when you think about it.

  • Zeb||

    Yes, it's very scary. It bothers me a lot. The fact that people are consistent about it doesn't make it better. I'd be a lot happier if it was just a far-left position, but it's way more entrenched than that.

  • Hank Phillips||

    I can't help noticing that the same male characters eager to deprive women of individual rights, and serving as invasive press agents for the Republican party and NSDAP policies here, are the ones with a hard-on for the collectivized "rights" of artificial persons and the tender emotional feelings of Mitt Romney's banks.

  • Michael Hihn||

    Agree. Because it's SO crackers to slip a rozzer, the dropsy in snide!

  • Jerryskids||

    Corporations aren't just business enterprises, charitable and philanthropic and public interest groups operate under articles of incorporation. In fact, I'd bet the DNC and the RNC are incorporated. Anybody want to tell them they can't spend money on political speech?

  • John||

    Most newspapers are corporations. Does the New York Times not have the right to endorse political candidates? The whole thing is absurd and would be impossible to administer even if leftists got what they wanted. Okay, Amazon as a corporation does not have a right to political speech. But the Washington Post presumably would. But Amazon effectively owns the Post. How do you prevent corporations from just buying their own newspapers? I don't see how you could. You could say Amazon couldn't own the post but someone has to own the Post. And if that someone is also the major shareholder in a corporation, then the corporation effectively owns the paper.

  • falardea||

    I've always found the argument for a consolidated voice through incorporation to be weak, since those individuals already have an individual voice, it seems the SCOTUS has granted those people within 'associations' additional 'voice' within our society.

  • EscherEnigma||

    I've always said I'll believe that corporations are people when Texas executes one. But interestingly enough, the moment you start talking criminal charges against a corporation they find a warm body to take the fall and disassociate from.

  • John||

    Corporations are associations of people and have the same rights the people who make them up have. It is that simple.

  • John||

    And the state executes corporations all of the time. Plenty of corporations have been rendered bankrupt and dissolved because of civil fines. Moreover, the corporate veil does not shield people from criminal liability. For example, it didn't save the engineer at VW who defrauded the emissions testing on diesel cars. He is going to prison and VW is facing an enormous fine.

    The whole debate about "They don't put corporations in jail do they" is really senseless.

  • EscherEnigma||

    When a person is executed, they're dead.

    When a company is "executed", no one actually dies. And most often, the folks that were actually responsible for whatever caused the bankruptcy are personally enriched, while it's the rank-and-file workers that get no severance. That's not an execution, it's just a transformation.

    That said, I like how to reject my point you gave a perfect example of it. VW does something bad, and the moment they get caught they present a warm body to take the fall and eat up a fine (that they'll probably claim on their taxes) and continue right on trucking.

    Corporations aren't people, and give folks a whole new set of tools to deflect blame and avoid the consequences of their actions. If they didn't, they wouldn't be useful.

  • John||

    VW didn't do something bad, someone in VW on its behalf did something bad. My example is a great illustration of how corporations are nothing but the people who make them up.

    You just don't understand corporations. You just keep making the same stupid points over and over again.

  • EscherEnigma||

    Your example is a great illustration of how corporations allow large groups of people to commit crimes together and then consolidate blame and punishment to a small subset of those actually involved. That's a feature, not a bug.

  • John||

    The guy turning wrenches at the VW factory did not commit that crime. It wasn't a collective crime.

  • EscherEnigma||

    No, according to you it was masterminded and carried out by two guys, completely unknown to all others.

  • JFree||

    Corporations aren't people, and give folks a whole new set of tools to deflect blame and avoid the consequences of their actions. If they didn't, they wouldn't be useful.

    This^ 100%. It's honestly imo why sociopaths are often so successful within corporations. I saw some study that showed the professions with the highest % of sociopaths were:
    CEO
    Lawyer/politican
    Sales
    Media/journalism/PR
    Surgeon
    Cop
    Clergy

  • JFree||

    The lowest sociopath professions were:
    Nurse
    Therapist
    Craftsman
    Beautician
    Teacher
    Artist
    General Doctor (interesting difference here with surgeons above)
    Accountant

  • Kyfho Myoba||

    Surgeons have to emotionally dissociate in order to cut into another human being, something us non-sociopaths are hard wired not to do.

  • Hank Phillips||

    This is why tariffs assessed on corporations are less damaging and more restrained than capitation income taxes taken at gunpoint from individuals.

  • Michael Hihn||

    Cut the hysteria.

  • Zeb||

    As I understand it "corporate personhood" simply means that a corporation is an entity that is recognized by law as having some of the same kinds of legal standing as actual people. And that is important, not only for the benefit of corporations and the people who own or work for them, but also for people in general who might need to sue a corporation. Without corporate personhood, there would be nothing to sue and you would need to find the individuals responsible for the damages and hope they personally have enough resources to pay.

  • Michael Hihn||

    Yep. Since the 1800s.

  • Kyfho Myoba||

    Corporations aren't "people", they're "persons', as in "he placed his hands on my person." They have a BODY, hence the corp part of the corporation. People, as in we the people, are living, breathing, flesh and blood, living souls. Only people have unalienable rights. Corporations - get limited liability from the state, and hence only the rights that the state grants them.

  • gormadoc||

    You do a great job of not backing up your distinction without merit and don't really understand corporate personhood. It's a legal matter, not some weird thing about souls and bodies. It's a recognition of the fact that individuals do not lose their rights upon associating with each other, whether that association is a couple or a global corporation.

  • Michael Hihn||

    Shareholders are people.

    Likewise, my car is not a person.
    BUT I AM!

    My dust mop is not a person.
    BUT I AM!

    Anything else?

  • Michael Hihn||

    CORPORATIONS ARE NOT PEOPLE, you silly goose.
    But their shareholders are.

    My CAR is not a person.
    But I am.

    Occam's Razor. The best arguments are often the simplest ... but rarely used.
    The sad truth.

  • Fist of Etiquette||

    NO TAXATION WITHOUT REPRESENTATION.

    ALSO, LOSE THE MUSTACHE, DETRICK.

  • EscherEnigma||

    "NO TAXATION WITHOUT REPRESENTATION."
    Says the Washington DC license plate.

  • Brandybuck||

    Corporations are people. As long as people have rights, corporations have rights. Corporations do NOT get more rights than its individual person members, but they certainly do get the rights of their individual person members.

    If a solitary individual can make a documentary critical of Hillary, and a group of people can make a documentary critical of people, then a group of people organized into a corporation can make a documentary critical of people. The idea that individuals lose their rights once they get a paycheck is bullshit.

    Ditto for unions, PACs, chess clubs, and the Moose Lodge.

  • Kyfho Myoba||

    > Corporations do NOT get more rights than its individual person members, but they certainly do get the rights of their individual person members

    Are you not following the thread? Corporations DO get more rights, specifically, the privilege of limited liability.

  • ||

    Let's say that I, an individual, contract with you to fix your clogged drain. And that contract stipulates that I am not responsible for any damage done by fixing your clogged drain beyond $1000 -- except and unless I act criminally or fraudulently. And you and I both sign that contract.

    Then you and I have just granted me the privilege of limited liability. No extra rights required. No government required.

    This is exactly the privilege that limited liability corporations have. No extra rights required. No government required.

    Granted, corporations have limited liability with respect to third parties who never explicitly contracted with them. But then so do I the individual plumber. If in trying to unclog your drain I damaged the plumbing of every house on the block, I am still no more liable than all the wealth I have. My liability is limited, just as a corporation is no more liable for accidental injury than all the wealth it has.

    The fact that all this is encoded in legislation and common law is simply the recognition by the government that the public good generated by enabling limited liability corporations is so unbelievable vast as to be virtually immeasurable.

    But in no way do corporations have more unalienable rights than the people who form them. Indeed, it is the people who have those rights, bring those rights to the corporation, and retain those rights even while incorporated.

  • gormadoc||

    Careful, once you sign that contract you lose your free speech rights. That's the cost of freely forming associations, apparently.

  • JFree||

    simply the recognition by the government that the public good generated by enabling limited liability corporations is so unbelievable vast as to be virtually immeasurable.

    Amazing that in all that unbelievably vast immeasurable good, there is the notion that someone who personally and measurably benefits can't pay for those benefits.

  • ||

    The liability of an airplane hitting an apartment building, losing all its occupants and hundreds of people in the building along with an airplane and an apartment building, is enormous. Only a coalition of billionaires would be willing to put up their personal wealth for that risk, since only they could afford to take that hit and still have something left.

    How many people in the world could afford to travel by airplane if airlines faced such unlimited liability?

    1,000? 10,000? Maybe 100,000? The ticket price would be astronomical, and the volume of travel and economies of scale would be nil.

    Instead there are a dozen or more airlines today that could stomach that liability, because they have tens or hundreds of thousands of shareholders who have put up the capital on the explicit condition that that is the extent of their personal liability. There are hundreds more airlines that would be ruined by that liability, but who fly because their shareholders are willing to risk all the money they put into the airline, on the explicit condition that that is the extent of their personal liability, to reap the rewards of transporting passengers who want to fly. Because of that explicit condition, 4 billion people worldwide took flights in 2017.

  • ||

    So, yes, the gap between the public good of limited liability and the very small private good you would see under unlimited liability is really really vast. Mindbogglingly vast. Can you name a more valuable public good than the unlimited liability corporation? I can't. Corporations' shareholders and customers and employees indeed reap considerable internalized rewards. But the world is full of goods and services that would be unimaginable under unlimited liability. They are not going to appear under unlimited liability because there is no way to find enough people willing to put everything they have on the line to organize the means of production for those goods and services.

    Amazing that in all that unbelievably vast immeasurable good, there is the notion that someone who personally and measurably benefits can't pay for those benefits.

    I take it you don't know what public good means.

  • JFree||

    I know exactly what a public good. It is something that cannot be exclusively granted. Knowledge eg is a public good. Once its known - everybody can use it and no one can exclude anyone else's use of it.

    Limited liability is emphatically NOT a public good. It is a private benefit - that is in fact granted by a govt-corporation that itself does not possess limited liability and is also often the last-resort residual payer of claims that result from a limited liability entity failing (eg see Bhopal above).

  • ||

    In your hypothetical world of unlimited liability, there would be very little commerce, no large industry, no risky enterprises, no entrepreneurs.

    Frankly, I imagine it would look very much like a plutocracy as only the very rich could make money, and only by banding together into coinsurance pools to cover each others' liabilities. They would do what they could to warp the government to protect themselves from the unlimited tails of liability. Certainly the middle class, what there might be of it, would have no ownership stake in anything. No startups. No venture capital. All the coordinated means of production would be owned by the top 1% of the top 1%. And imagine the chains that would be placed on labor, as anything that any idiot did in the name of their employer could cause their employer's shareholders to lose everything they have built their lives to keep for them and their families.

  • JFree||

    The FACT is that unlimited liability exists anyway. And it is usually either a)government that becomes the residual payer of claims when a limited liability entity fails or b)a victim who gets screwed by not being compensated for the damage they incurred.

    I don't give a rats fuck about protecting some corporate welfare queen from the consequences of their own decisions when that protection means transferring the burden to the above two.

    If that protection is so important and valuable - then they should damn well PAY FOR IT.

    If it isn't valuable or important, then it should be eliminated.

  • ||

    The FACT is that unlimited liability exists anyway.

    In some philosophical sense, perhaps. But after the responsible parties' entire fortunes have been liquidated, yet the damage is still not paid for, it is hard to call that unlimited liability.

    Even governments do not have unlimited resources to pay for vast liabilities. See for example Germany after Versailles.

    "Limited liability" in this context means liability is limited to the corporation and does not accrue to the shareholder outside the corporation. It does not mean there's a magic infinite font of wealth somewhere that covers any and all losses if only there weren't a limited liability corporation protecting it.

  • JFree||

    Even governments do not have unlimited resources to pay for vast liabilities.

    No. But they are the residual payer - see Bhopal above - where it is govt that is expected to keep paying for those who are still disabled, for the land cleanup, for the continuing impact of water toxicity, etc.

    Which is ALL a transfer of liability from those who made the decisions.

  • ||

    In this hellscape of a society, it would take an unbelievably prescient economist to realize the market failure they all were immersed in. He would add up all the liabilities in the economy, multiply them by the risk they will be lost in any given lifetime, compare them to all the wealth in the economy, and realize that there is far more wealth in the economy than there is liability to lose the wealth. If only there was a way to bring more of the wealth of the world to the means of production, and not leave all production up to the coinsured plutocrats. Could he imagine limited liability? Would he invent it? Would anyone conceive of the orders of magnitude wealthier world they could inhabit if only this market failure would be resolved by incorporation that risked only the wealth that shareholders put into it?

    Even if the prescient economist could convince the world of the vast benefits of limited liability corporations, how could he possibly internalize the gains he would enable because only he had the imagination to see through the market failure all around him? It really is a public good.

  • gormadoc||

    Corporations that have limited liability allow individuals to be liable only as much as their investment. The corporation doesn't gain a right from it; if the corporation has more liabilities than assets they can call upon they go into a tailspin and end up unincorporated or purchased (and the liabilities then go to the purchasing entity).

  • Michael Hihn||

    Corporations that have limited liability allow individuals to be liable only as much as their investment.

    Not a penny -- else the very purpose would not be achieved.

  • Vin_Decks!!!||

    I find it interesting that Winkler cites and lauds Grosjean V American Press Company but declines to NAME it.... weird, since he correctly describes it as the first instances of defining corporations as "persons" for purposes of analysis under the Equal Protection clause.

  • Michael Hihn||

    San Mateo County v. Southern Pacific Rail Road (1882)

  • Hank Phillips||

    FDR called them Artificial Persons when reeling off the list of fines and imprisonment Natural Persons were liable to for insufficient quickness in obeying his 1933 "banking holiday" edict. My concern is exclusively for the rights of individuals, and my patience with purveyors of collectivized rights wore out many years ago. Once individual rights have been properly secured against collective depredations, animal rights and corporate lawyer gibberish rights will doubtless sound less counterfeit. Observe how ALL voters reacted to Mitt Romney's baptism of banking corporations into the Brotherhood of Humanity, then consider how politically attractive that is, ethical disgust aside.

  • Michael Hihn||

    So .... you say that if my business converts from a partnership to a corporation, I lose any and all individual rights associated with running my business.

    One cannot defend individual rights if one has no idea what they are.
    Likewise, your patience with "purveyors of collectivized rights" is equally confused -- if you believe that has any relevance here.

    Believe it or not, I did not lose my sovereign rights when I joined that group called Kiwanis. Or Boy Scouts as a young boy. Or any of hundreds of groups most of us engage in over our lives.

    And Alex Jones is NOT the second coming of a True Messiah.

    Anything else?

  • prediksi singapore||

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    "The movement and struggle to win rights for corporations," says UCLA Law School Professor Adam Winkler, is "one of the least well-known yet most successful civil rights movements in American history."

    "Corporations are people" and "corporate personhood" mainly mean that people don't lose their constitutional rights just because they happen to organize into corporations.

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