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Guest Post: Are Corporations People?

Tyler Durden's picture





 

Submitted by John Aziz of Azizonomics

Are Corporations People?

I have always found something inherently creepy about Mitt Romney — indeed, in a choice between Obama and Romney with a gun to my head, the gun looks like an increasingly attractive proposition. Most puzzling is his defence of corporate personhood:

Corporations are people, my friend… Everything corporations earn ultimately goes to people

 Do corporations breathe? Do they eat, sleep, feel and think? Do they require housing? Do they have families? Or medical care? Do they pay income tax? Do they have DNA? Eyes? Ears? Teeth? Has Texas ever executed one?

No. Corporations are not people. Corporations are composed of people, and for a very good reason. From Wikipedia:

Limited liability is a concept whereby a person’s financial liability is limited to a fixed sum, most commonly the value of a person’s investment in a company or partnership with limited liability. In other words, if a company with limited liability is sued, then the plaintiffs are suing the company, not its owners or investors. shareholder in a limited company is not personally liable for any of the debts of the company, other than for the value of their investment in that company.

Corporations essentially exist to allow groups of people to act collectively, without taking personal responsibility if the entire thing goes down like a lead balloon. Sure, if an employee of a corporation behaves in a criminal manner, they are sometimes jailed. Yet corporations — ever since the birth of the modern corporation through Standard Oil — have created what is known as the agency problem. Corporations allow their owners to win, without the possibility of deep losses. And what does this mean in terms of responsibility? It means that things like the BP Oil spill are much, much more likely. Because if you can’t get hurt, you’re not going to exercise diligence in the same way you would if you could get more hurt. This is why the juggernauts of global industry — the titans of Wall Street in particular — blow up so frequently and so violently. Corporations are firewalls, spinning mammoth profits through risky bets, but allowing management and shareholders to hide behind them when their risky behaviour comes home to roost. And what happens if the house falls down? The creditors — or more frequently in recent years since we adopted this perverse bailout culture, the taxpayer — take the hit. The philosopher Nassim Nicholas Taleb wrote on his Facebook page:

Hammurabi’s code, ~3800 years ago, removed the agency problem as a condition for transaction: “If a builder builds a house and the house collapses and causes the death of the owner – the builder shall be put to death. If it causes the death of the son of the owner , a son of that builder shall be put to death.” Everything in past 100 years has been to shield managers from liabilities. Think of Fukushima.

Either limited liability should be abolished  — corporations could still exist, but their owners and management are personally responsible for any debts and destruction incurred — or their behaviour should be taxed punitively to encourage individual and small business initiatives — the real wealth creators, job creators and innovators — over large scale destructo-juggernauts. At the very least, we should completely stop bailing them out when they blow up. That’s responsibility.

Corporations are certainly not free market entities. Their very reason for existence — limited liability — is created through government fiat. Capitalism and markets existed long before the creation of limited liability, and surely will exist for a long time after its demise.

 


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Mon, 07/16/2012 - 21:42 | Link to Comment CitizenPete
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Write in RON PAUL

Mon, 07/16/2012 - 22:05 | Link to Comment King_of_simpletons
King_of_simpletons's picture

Corporations are people who have a different indoctrinated view of success. For them success is to rob others all the while promoting charities, church and community, family friendly environment, caring and safety. Ah what a nice place to work for, except that you are part of a system that's ass raping society and sucking blood off its host.

Mon, 07/16/2012 - 22:22 | Link to Comment Nothing To See Here
Nothing To See Here's picture

Corporations are called "moral persons". That standing allows real persons to commit immoral acts without facing the responsibility. Obviously, moral person really means immoral person. Doublespeak reigns supreme.

War is peace. Slavery is freedom.

 

Mon, 07/16/2012 - 23:25 | Link to Comment SGS
SGS's picture

This is the one ebook that will describe the strawman, corporations, and in the process change the way you look at the ponzi.  BOOM.

 

http://www.scribd.com/doc/100273022/Mary-Croft

Mon, 07/16/2012 - 23:48 | Link to Comment Precious
Precious's picture

Corporations have numerous legal rights.  In that small way they are like people.

They are very unlike people in that corporations can theoretically live forever.

Moreover, corporations in the form of foundations, can rape profits without EVER being taxed.  The great tax-free-profit-in-perpetuity invention of the illuminati allows them to not only decide your future, but shield their wealth so as to keep amassing more riches within their foundations, with the unwritten purpose of deciding the economic destiny of every generation to follow your cold, sorry corpse.  

Church Lady says "Isn't THAT charitable !"

Tue, 07/17/2012 - 00:04 | Link to Comment Oh regional Indian
Oh regional Indian's picture

How many people are aware that the UNITED STATES is a corporation? 

Or that Corporations were granted personhood in 1886 by a SCOTUS judgement.

http://reclaimdemocracy.org/personhood/

It's one of the key root actions that helped spawn this current mess we inhabit.

ori

truth-about-america-truth-about-us

 

Tue, 07/17/2012 - 00:52 | Link to Comment ForTheWorld
ForTheWorld's picture

Just like Canada is registered with the SEC (http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000230098...) and voluntarily files certain information with the SEC. Why on earth would a country decide to voluntarily file information with the SEC?

 

 

 

Tue, 07/17/2012 - 07:17 | Link to Comment Harlequin001
Harlequin001's picture

Ok let's put it this way, if, by investing in this business I might be bankrupted as an investor I'm not going to invest in it. So now kiss your jobs goodbye and then we won't need any oil.

corporations could still exist, but their owners and management are personally responsible for any debts and destruction incurred —' you mean like a partnership then, which we still have?

Why don't we go the whole hog? Anyone who invests in the S&P tracker is personally responsible for all the debts of all the companies, and by that I mean any one of them, and can be bankrupted for whatever reason. That would work well, not.

What an absolute load of fucking drivel...

Tue, 07/17/2012 - 07:28 | Link to Comment GMadScientist
GMadScientist's picture

What's wrong with the inside-trading officers of the S&P500 companies having to demonstrate some accountability?

Is it worth a million Wal-Mart jobs so that shitheels like John Thain can toss a grenade over their shoulder and move on to the next catastrophe-in-waiting as if it never happened all the while spending millions in golden parachute bucks?

 

Tue, 07/17/2012 - 07:47 | Link to Comment Harlequin001
Harlequin001's picture

'What's wrong with the inside-trading officers of the S&P500 companies having to demonstrate some accountability?' - what has that got to do with the concept of limited liability?

'Is it worth a million Wal-Mart jobs so that shitheels like John Thain can toss a grenade over their shoulder and move on'... - if the alternative is that you starve then yes it is. Limited liability is the reason why people put their savings to good use. Who is going to invest in anything if it means even the remotest possibility of bankruptcy? And then we ask where does the capital come from?

Limited liability is what makes the world go round. What your talking about is a lack of enforcement of penalties on senior officers who do wrong. It is not the same.

Tue, 07/17/2012 - 09:00 | Link to Comment GMadScientist
GMadScientist's picture

If you don't understand that investing in a public company contains the risk of "bankruptcy" (as if someone would invest their entire life savings in one company?!), then you should probably be putting your capital in the hands of someone else. Perhaps if people actually knew something about the risks inherent in their investments, they wouldn't invest so poorly.

What fucking "enforcement penalties"?!  Anything that stacks up against the seven figure salaries and megalomaniacandybrain power trips? There is zero accountability on Wall St and in multinational corporations.

Show me the BP execs in the clink. The TEPCO execs that committed sepukku for their failure. A single TBTF head that has rolled. One.

When you've seen a start-up implode, and the employees unpaid and owed promised and earned bonuses, and the execs neglecting to pay the health insurance premiums or SS taxes, and you've even got a judgement against the incompetent assholes from your state labor board, but what you don't have is a penny to show for it, your plaintive little "if we have to address risk we can't be bothered to be in business" bullshit rings very very hollow. The people who ran this company into the ground have started up another one the next state over because of limited liability.

Tue, 07/17/2012 - 09:56 | Link to Comment Nothing To See Here
Nothing To See Here's picture

Who said that people are supposed to invest in companies about which they don't know much and of which they don't know the officers?

That premise alone is wrong. The stock market is a sham. From first principles, technically, investors in a company should be those who know the company and who believe in its future. Those who don't and who invest in it anyway deserve to be hit by any loss the company takes.

Starting from there, limited liability is also a sham. Its purpose is to protect the insiders when the do things they could not do otherwise, period.

Tue, 07/17/2012 - 11:09 | Link to Comment Harlequin001
Harlequin001's picture

Without limited liability the directors can do what they want because the shareholders would be on the hook for everything wouldn't they? so what exactly are you proposing that is better?

Tue, 07/17/2012 - 11:07 | Link to Comment Harlequin001
Harlequin001's picture

Seems to me that you need to go learn about something called limited liability, because there's nothing here that has anything whatsoever to do with it.

'as if someone would invest their entire life savings in one company?!' -with what you're saying it doesn't matter how many companies you invest in, you can be sued and bankrupted by any one of them, and possibly even all, and for what, because someone made a seven figure salary and you didn't?

I think you need to go think it through a little...

Tue, 07/17/2012 - 09:53 | Link to Comment 5880
5880's picture

Is it an institution that makes US investments? Then yes

d'uh

Tue, 07/17/2012 - 01:02 | Link to Comment covsire
covsire's picture

Small business can't build the microchips you are currently relying on to read and write here.  /Thread

Tue, 07/17/2012 - 01:09 | Link to Comment Dr. Sandi
Dr. Sandi's picture

They would if they weren't eaten alive by the giant motherfuckers that suck the life out of creative entrepreneurism.

But then, YOUR small business surely couldn't do that.

Don't judge us all by your own miserable limitations.

 

Tue, 07/17/2012 - 01:23 | Link to Comment covsire
covsire's picture

The people who are good at creating microchips are terrible at motivating themselves.  The managers who motivate the engineers are terrible at sales.  The salesmen are terrible at logistics.  The shipping people are terrible at marketing strategy.  The strategists are terrible at cleaning toilets.  The toilet cleaners are terrible at creating microchips..

If your small business could create a cutting edge lithography spitting microprocessor forge, configure it using the last 50 years worth of micro-op science, produce it, market it, ship it, support it and still compete with the awesome small business guy down the street, hey more power to ya.  In the real world though, monster corps make the world go around.  Not that I don't hate big inefficient monstrocites with a passion but blanketly hating big corps is a bit anti-human in more ways than the SCOTUS decision reveals.

Edit:  I get your point though.  Abolish the minimum wage for small businesses!

Tue, 07/17/2012 - 02:12 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Don't abolish the minimum wage. Bring back slavery. It's worked throughout human history, it seems wasteful to give it up now.

Tue, 07/17/2012 - 06:42 | Link to Comment francis_sawyer
francis_sawyer's picture

If corporations are PEOPLE...

& Soylent Green is PEOPLE...

Then CORPORATIONS  are SOYLENT GREEN!!!!

Tue, 07/17/2012 - 09:05 | Link to Comment GMadScientist
GMadScientist's picture

Tastes like chicken.

Tue, 07/17/2012 - 06:53 | Link to Comment johnQpublic
johnQpublic's picture

slavery is way too expensive for the average plantation owner

what we need is wage slaves....that lowers the maintenance costing when you can get the slaves to pay for their own healthcare and what not.

imagine if you could get your car to pay for its own gas and tires...

Tue, 07/17/2012 - 09:07 | Link to Comment GMadScientist
GMadScientist's picture

Just make sure you only every hire them as temps so they can't unionize and demand air-conditioning in SoCal warehouses or other tomfoolery.

Tue, 07/17/2012 - 08:52 | Link to Comment yrbmegr
yrbmegr's picture

Hmmm.  The Thirteenth Amendment prohibits involuntary servitude of persons.  I wonder if the relationship between corporations and their shareholders violates the Thirteenth Amendment.

Tue, 07/17/2012 - 07:10 | Link to Comment Skateboarder
Skateboarder's picture

You speak much sense, covsire. There's no way for technological advances to happen on the global scale without corporations. But is it so hard to ask that they don't loot and pillage the whole place to the ground? An honest and fair corporation goes a long, long way, whether it consists of one person or one million.

However, I will say this. The world is at the stage where manufacturing has caught up for the SMB to be able to lead innovation and progress (true innovation and progress, mind you - not just copycatting and repackaging) more effectively than the large corporations. What will stop SMBs from taking over is the widespread virus known as Intellectual Property Rights and the team of bloodsucking lawyers that come with it.

Good luck to all small and medium businesses - may the force be with you.

Tue, 07/17/2012 - 07:15 | Link to Comment Harlequin001
Harlequin001's picture

'But is it so hard to ask that they don't loot and pillage the whole place to the ground?' - No you just make it illegal for any government to put public money into private entities.

Done...

Tue, 07/17/2012 - 07:27 | Link to Comment Skateboarder
Skateboarder's picture

There is no money, and I don't think any amount of reset-button-pushing or otherwise will ever bring it back. The extent of fuckery, starting with our food production... it is so immense as to be incapable of returning to a state of 'good.'

Welcome to the Georgia guidestones future soon? =\

Tue, 07/17/2012 - 07:21 | Link to Comment Skateboarder
Skateboarder's picture

And to make good use of my accidental double post, I want to remind everyone not to forget the power each of us holds. Take individual responsibility and collective responsibility for our creations and our actions. Each of us now has the power and ability to produce and expand upon what the entire collective of our peers and ancestors have in ages past. One human CAN do everything, but there is not enough time in one's life. Thus we DO need each other, but if we separate ourselves from our brothers and sisters through the artificial barriers that we have been told to erect (money, titles, statuses, credentials), we will only drift apart further.

"O God of earth and altar,
bow down and hear our cry,
our earthly rulers falter,
our people drift and die;
the walls of gold entomb us,
the swords of scorn divide,
take not thy thunder from us,
but take away our pride."

-GK Chesterton's hymn

Tue, 07/17/2012 - 07:36 | Link to Comment GMadScientist
GMadScientist's picture

"The people who are good at creating microchips are terrible at motivating themselves. "

TRolololololo.

Tue, 07/17/2012 - 07:25 | Link to Comment TerraHertz
TerraHertz's picture

'Corporations vs small business' is a false dichotomy. The real issue is whether corporations (legal fictions) can OWN STUFF.

If we simply changed the legal system to only allow living, breathing individuals to OWN anything, there would be no problem with immortal self-serving giant evil corporations. They could not exist.

The moral hazard of limited liability is a side effect of allowing legal fictions to OWN things. Since there's no practical limit to how 'fictional' an abstract legal fiction can become, of course such entities can finagle the laws to avoid any responsibility for the disasters they create. And since their 'objectives' are also disconnected from the reality of living, finite lifespan humans and our need for a healthy, functioning biosphere, of course corporations act like eco-cidal psychopaths.

If only living individuals were able to own things, there would still be large businesses, even global in scope. People would still be able to invest in large business, and receive returns on their investment. However the actual control of the business, and thus the ultimate legal responsibility for screw-ups, would rest on the owner. Who might or might not be an arsehole. But at least that person would have a beating heart. Something that can NEVER be said for corporations.

Change the law. Allow only living humans to own anything. Abolish all corporations.

Tue, 07/17/2012 - 10:32 | Link to Comment Anusocracy
Anusocracy's picture

When you get right down to it, government owns everything.

The idea of ever larger business entities (corporations) means ever easier control by government.

Chain of command is a godsend for those who crave power.

Tue, 07/17/2012 - 07:34 | Link to Comment barroter
barroter's picture

Most of our technological adavances are from the old Pentagon System.  Tax money used for R&D, and the private corp gets to keep the profits of what they discover. I wonder how much private business would invent IF they had to use their own capital?

Tue, 07/17/2012 - 10:36 | Link to Comment Anusocracy
Anusocracy's picture

Lots!

Invent or perish. The ultimate incentive.

Tue, 07/17/2012 - 07:34 | Link to Comment GMadScientist
GMadScientist's picture

"Small business can't build the microchips"

But they can test the chips, assemble the computers, get software written to run on said chips, provide a web backend with varnish caching etc to keep the site for going tits up, provide co-lo or cloud services, manage the CDN for ad content, provide billing to accept donations (you have donated, haven't you?), and even run packages as contractors for the larger carriers to get the machine into your hands.

Now.

Grow a brain or shut the fuck up.

 

Tue, 07/17/2012 - 09:33 | Link to Comment GeezerGeek
GeezerGeek's picture

A few areas in which we disagree:

1) I'd rather have the producer of microchips do the testing. If I were a small business building computers, I'd rely on quality components to reduce my costs and risk. Consider, if you will, the practice of AMD. By pretesting their CPUs, they identified quad-core processors with a single damaged core and sold those as tri-core processors. Would you like to be a small business having to determine that sort of thing for yourself?

2) While many individuals and small businesses are now capable of building computers, that cannot be said when it comes to large systems. What small business could ever have built a mainframe? Moreover, building any significant quantity of reliable servers requires experise not commonly found in small businesses. Servers, with their redundancy (fans, pwoer supplies, RAID arrays, etc.) are more complex than simple single-processor PCs. Companies like HP and Dell exist, in part, because they can engineer these types of systems and build them more efficiently than small businesses.

3) You ignored the infrastructure needed to make computers useful in business these days. Is a small company going to build all your routers, bridges, etc.? Is it going to write the code that runs inside of all these boxes? Will that code be as secure, or the hardware as reliable, as that from a large company like CISCO?

There is a place in the IT economic ecosystem for small businesses. I used to run one myself. It is essential, however, that large companies such as those mentioned above exist to provide the tools for the small businesses. Disclaimer: I do not own stock in any of those companies.

 

Tue, 07/17/2012 - 10:39 | Link to Comment Anusocracy
Anusocracy's picture

How does the Apple model work?

Tue, 07/17/2012 - 08:09 | Link to Comment BigJim
BigJim's picture

You are quite correct - some products require so much capital investment and such large infrastucture to manage it all, that without them, things like (affordable) microchips almost certainly wouldn't exist.

But he's not decrying large business - he's decrying the government established & maintained limited liability that corporations enjoy that give them an (unfair) immunity the rest of us don't enjoy.

Tue, 07/17/2012 - 12:03 | Link to Comment lineskis
lineskis's picture

Not that I disagree with the lack of accountability and resposability due to the agency problem. However solve the agency problem like it's been ~3800 years ago and you'd have to build your house by yourself... As nobody, nobody would ever take the risk to build yours...

Tue, 07/17/2012 - 07:14 | Link to Comment brettd
brettd's picture

Theft is liberation.

Mary is my husband.

Tue, 07/17/2012 - 07:44 | Link to Comment Peter Pan
Peter Pan's picture

The profit that corporations can make is unlimited but the liability of their shareholders is limited. Perhaps this is one reason why corporations are not people. When ordinary people run businesses in their own names they are PERSONALLY LIABLE FOR EVERY PENNY BEYOND THE ASSETS OF THE BUSINESS.

Mon, 07/16/2012 - 22:29 | Link to Comment world_debt_slave
world_debt_slave's picture

yep, did that in 2008 and will do the same again. Sadly, alot of well meaning people are saying vote for Romney.

Mon, 07/16/2012 - 23:03 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

No.

Tue, 07/17/2012 - 02:13 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Even more sadly, a lot of well meaning people are going to vote.

Tue, 07/17/2012 - 09:39 | Link to Comment GeezerGeek
GeezerGeek's picture

I plan on voting against Obama. He poses a far greater danger to my liberty and financial well-being than does Romney, or Paul, or Palin, or any of the other Republicans. That's just my assessment, but Obama's actions have been diametrically opposite what I consider good for me or for the country as a whole. If Romney doesn't work out well the voters can dispose of him at the appropriate time. At least Romney hasn't issued any executive orders gathering absolute power unto himself. Obama has, and I will therefore oppose him in the voting booth.

Mon, 07/16/2012 - 21:42 | Link to Comment realtick
realtick's picture

The question is is Mitt Romney people?

Mon, 07/16/2012 - 21:48 | Link to Comment john39
john39's picture

are zombies people?  maybe at one time they were.  not sure about romney.  obama, same thing...  doubt that he ever had a human soul.

Mon, 07/16/2012 - 22:12 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

Are zombie corporate banks people?

Tue, 07/17/2012 - 00:47 | Link to Comment RockyRacoon
RockyRacoon's picture

Apparently they are.  And first in line at the government trough, well in front of you and me.

Tue, 07/17/2012 - 07:38 | Link to Comment GMadScientist
GMadScientist's picture

Zombies have better ethics.

Mon, 07/16/2012 - 22:50 | Link to Comment OsirisIsABlackGod
OsirisIsABlackGod's picture

He's a cylon!

Tue, 07/17/2012 - 07:16 | Link to Comment brettd
brettd's picture

Stop worrying about Mittens.

Local focus.  All politics is local.

Tue, 07/17/2012 - 07:39 | Link to Comment GMadScientist
GMadScientist's picture

How should I feel about the proposal to expand the cell tower attached to the structure at ____________?

 

Tue, 07/17/2012 - 08:06 | Link to Comment Peter Pan
Peter Pan's picture

Perhaps we should ask if people are in fact people any more. Or are they just allowed to exist to ensure the livelihood and existence of corporations?

Tue, 07/17/2012 - 09:46 | Link to Comment GeezerGeek
GeezerGeek's picture

It seems, more and more, that people exist to ensure the existence of the government and its private-sector cronies, corporations and unions alike. Corporations can't make you buy their products. With government you have far less choice, since they have more and bigger guns. I consider it more important to reduce the scope of government - at all levels - than to reign in big corporations or big unions, at least for now. If corporations (or unions) begin hiring thugs to attempt imposing their will on me, then I will resist them, too.

Mon, 07/16/2012 - 21:44 | Link to Comment Random_Robert
Random_Robert's picture

The world will be a better place once all forms of government fiat are eradicated....

Tue, 07/17/2012 - 08:49 | Link to Comment Mercury
Mercury's picture

If corporations are people is a merger a gay marriage?

No but -mark my words- when taxmageddon fires up in 2012 we'll see a lot of creative, gay marriage asset transfer deals.  Goldman Sachs is probably already working up some pre-nup templates.  Two cheers for financial innovation. 

Personally I'd like to see David Einhorn waltz into a hospital and marry Warren Buffett on his deathbed but I understand that personal issues may present complications.  But you have to admit it would make a great quarterly client letter and just think how much better DE could deploy that kind of capital for the betterment of all Americans than the government.

And Taleb's overreaching here.  Let's please see a presentation of wealth creation and/or standard of living delta per decade, in the media of your choice, on either side of the advent of the LLC as a legal entity.

Mon, 07/16/2012 - 21:46 | Link to Comment old naughty
old naughty's picture

corporate mergers and gay marriages,

"...and surely will exist for a long time after its demise..."

still struggling to accept their legality?

hummmmm.

 

Mon, 07/16/2012 - 21:46 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

End.Corporate.Welfare.Now.........all of it.......

Mon, 07/16/2012 - 22:44 | Link to Comment Nothing To See Here
Nothing To See Here's picture

*strikes "Corporate" from the above statement*

Mon, 07/16/2012 - 21:48 | Link to Comment ZeroAvatar
ZeroAvatar's picture

Are people reptiles?  /sarc

 

Corporations get all the perks without paying any of the penalties.  They control our government with 'bribes'.  They have WAY too much power.

 

I think the word I'm looking for here is 'Fascism'.

Mon, 07/16/2012 - 21:48 | Link to Comment LetThemEatRand
LetThemEatRand's picture

This article is dead on.  Unfortunately, the approved Red Team/Blue Team issue box does not permit questioning of the value of the corporate form.   We are only allowed to debate how much the corporate tax rate should be, and whether corporations should be allowed to give unlimited money to individual candidates (thank you Citizens United for resolving that silly debate in favor of the corporations).

Tue, 07/17/2012 - 07:46 | Link to Comment GMadScientist
GMadScientist's picture

Eventually it will dawn on the conservatwits that unlimited, completely opaque contributions will eventually mean Chinese dictation of the composition of American government. I wonder if the Chinese will be interested in retaining the people trying to implement tariff barriers and constantly calling for them to be labeled as currency manipulators.

First they were for unlimited contribs with transparency, but I guess the Waltons and Koch Bros didn't feel like having their names on 70% of the ads in an election, so now they're against reporting requirements too. All while pretending that they stand for "freedom" with the TeaPotDomeExpress cheering them on like fucking hillbilly lemmings.

 

Tue, 07/17/2012 - 07:51 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

one can only laugh at the "seriousss discussionsss here Gmad as a good example: when you have bought pols what does it matter folks who gives the money?? when diebold preselects your vote what does an election matter?

EU could be called: honest, as the leaders there are just outright selected as in Italy.

so many here have not yet woken up or are paid not to.

Tue, 07/17/2012 - 09:16 | Link to Comment GMadScientist
GMadScientist's picture

You don't see that pointing out foreign corruption of the American political process as a justification for ending the "bought pols" (at least the "bought" part)?

Sometimes, it's easier to get the lemmings on-board when you point out fuzzy foreigners are fisting them; they don't seem to react much when their fellow Americans get in up to the elbow as far as I can tell.

Openly corrupt is not honest; the process is still subverted, they just don't fucking care, but enough "deep" semantic quibbling. ;)

Tue, 07/17/2012 - 08:55 | Link to Comment yrbmegr
yrbmegr's picture

Anyone can be bought.  The conservatives are not concerned about the Chinese controlling the American government, so long as they can control the Chinese.

Tue, 07/17/2012 - 09:09 | Link to Comment GMadScientist
GMadScientist's picture

Maybe they should start with their dicks and their mouths and work up to something more advanced.

 

Tue, 07/17/2012 - 10:04 | Link to Comment GeezerGeek
GeezerGeek's picture

Please provide evidence backing up your statement about conservatives not being concerned about the Chinese controlling the American government.

The Clintons clearly were not averse to receiving foreign donations, nor was Gore. We should remember the Loral-China episode under Clinton, and the Buddhist monks contributing to AlGore  Now Obama is campaigning overseas. I will admint I don't know where Romney's campaign contributions come from. I find him less than inspiring and ignore him as much as possible. Obama, on the other hand, I find appalling and can't excape encountering information about him.

I don't have a problem with independent expenditures for advertising, as long as it is factual. Even the Chinese should be allowed free speech here. Considering the $4+ billion spent by unions to push an overwhelmingly leftist agenda, and the overwhelmingly leftist pap put out by the MSM, some degree of balance is needed. Allowing corporations to have the same free speech rights as individuals is no big deal, and their expenditures are much more balanced, in a left-right sense, than that of unions or George Soros.

Mon, 07/16/2012 - 21:51 | Link to Comment q99x2
q99x2's picture

Corporations are not people. I once hosted a radio interview with Steven Provisor and the judge's daughter that ruled on the case. During the interview it came out that the Judge never ruled on that part of the case but the railroad took it upon themselves to implement the effects of it being law. So the ruling from which the chief justices allow corporations to act as individuals was never decided in a court of law.

Hang a banker. Hang a judge. 

Mon, 07/16/2012 - 21:56 | Link to Comment PicassoInActions
PicassoInActions's picture

as far as i know corporation as a person, not corporation is a person

there is a difference

And the 5th does not apply to corporations.

Mon, 07/16/2012 - 22:04 | Link to Comment MsCreant
MsCreant's picture

"And the 5th does not apply to corporations."

I politely ask, "Why does this matter?"

The individuals being questioned (it will always be an individual) will plea the fifth on their own behalf.

Mon, 07/16/2012 - 22:07 | Link to Comment PicassoInActions
PicassoInActions's picture

As individual can use the 5th but corporation by the law cant

So if there was a true case where corporation is a person than the 5th would apply to it.

Corporation can use some of people rights but not all.

That's why corporation as a person. And i belive the 14th is kinda scatchy under corporation as a person too. Tough there were several outcomes for that.

Mon, 07/16/2012 - 22:17 | Link to Comment Mercury
Mercury's picture

Well, unlike real people, corporations can't vote and limited liability is still more than zero liability which is the legal status the government enjoys as far as most real people are concerned.

Mon, 07/16/2012 - 23:07 | Link to Comment Western
Western's picture

are you people seriously reading what you're debating?

 

1) voting doesn't exist

 

2) the millions they pour into campaigns is worth twice the weight of a vote... in gold

Mon, 07/16/2012 - 23:19 | Link to Comment MsCreant
MsCreant's picture

The money is a much bigger vote than most of us will ever have.

Tue, 07/17/2012 - 09:00 | Link to Comment Mercury
Mercury's picture

Of course money is important but at the end of the day, no one is holding a gun to your head to vote R/D. And if voters are too stupid to resist the big $ marketing push behind this candidate or that candidate, why would you want them to have more control over the process.

Where big $ is the most effective is when it works to keep someone like Ron Paul from winning the primaries and when it buys legislation/rules/regs that never get within a mile of a ballot box - everything from JPM getting the EBT card biz concession to the EPA preventing you from piling one rock on top of another in your own back yard without forking over $10k in environmental permits/studies/bribes.

The most elegant solution is not to make awhole new slew of rules about money in politics but to restrict the size and scope of government in the first place so that there isn't that much to buy.

Tue, 07/17/2012 - 10:09 | Link to Comment GeezerGeek
GeezerGeek's picture

I wish I could have given +1000 for that last part. No one ever tried bribing me or contributing to me, because I have never had the power to do anyone a favor warranting such a contribution.

Who would bother bribing a politician or bureaucrat who could not return the favor?

Mon, 07/16/2012 - 23:18 | Link to Comment MsCreant
MsCreant's picture

If a criminal decision was made, it was made by an individual who will plea the 5th. A corporation cannot speak, a person will.

Consider me dense and be nice and explain it to me, please. I don't see how it can matter. 

Tue, 07/17/2012 - 09:01 | Link to Comment yrbmegr
yrbmegr's picture

Parts of the 5th certainly do apply to corporations.  One example is the Takings Clause.

Mon, 07/16/2012 - 21:56 | Link to Comment Chupacabra-322
Chupacabra-322's picture

No, they're Fascist's.

Mon, 07/16/2012 - 21:57 | Link to Comment Dingleberry
Dingleberry's picture

Obama should be the next Jimmy Carter with shit as bad as it is prior to the election. But he will win. Easily. And this article is one of the primary reason why.  If corporations are people, and all people are equal......then I want to "corporate equal".   Romney is an unabashed corporatist. Obama is too, but masks it with rhetoric.

We know that there is no appreciable difference between bankster/corpoarate support between the two candidates.  But Obama APPEARS to be on the side of the little people.  So let the unwashed masses feel like they have a voice.  Maybe they won't riot when the food stamps, unemployment insurance, etc. runs out on Obama's watch.

 

In the meantime, let's celebrate the mass illegal amnesty and homosexual marriages he is pushing through....

Tue, 07/17/2012 - 00:57 | Link to Comment RockyRacoon
RockyRacoon's picture

You are probably right Mr. Berry, or may I call you Dingle?  It has been pointed out elsewhere on ZH that the Republicans probably don't want to own the next 4 years, hence, Romney.  As one of his compatriots pointed out, he's the WORST Republicans they could put forward in this race.  My question is, if they don't expect much from this election cycle, why not Ron Paul?  The anti-Paul venom from the right has been particularly noticeable.   Strange, that.  Does he not distill the very essence of the Tea Party?  Speaking of the TP, where are they?!

Tue, 07/17/2012 - 01:12 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Sadly, the Tea Party has apparently morphed into the Kool-Aid party. I had a little hope for them.

Not a lot, but a little.

Tue, 07/17/2012 - 07:06 | Link to Comment New_Meat
New_Meat's picture

RR:

"Speaking of the TP, where are they?!"

Pretty much yanked themselves out of the MSM line of fire.  But not gone viz. Lugar,, forced Hatch to break a sweat, here we have Fauxcahontas Warren getting exercised. ...

- Ned

Tue, 07/17/2012 - 07:50 | Link to Comment GMadScientist
GMadScientist's picture

It is somewhat telling that he's the darling now after losing out to Palin for the veep spot with old whats-his-twelve-houses-and-a-stepford-wife.

 

Tue, 07/17/2012 - 00:58 | Link to Comment Lednbrass
Lednbrass's picture

You mention the reason I think Obama was the choice of the men behind the curtain- as long as he is in office urban blacks in particular and the left in general will remain entirely docile, no matter what happens. There will not be any serious riots from those groups as long as he is in office.

Kind of like the anti-war movement in the US. Once Team Elephant gets back in power, I suspect they will make a large and vocal return.

Tue, 07/17/2012 - 01:14 | Link to Comment Dr. Sandi
Dr. Sandi's picture

No uprisings are on the horizon here in the Untied Snakes until a lot more young male bellies start rumbling. And then it won't matter if they're Urban or White.

Tue, 07/17/2012 - 10:19 | Link to Comment GeezerGeek
GeezerGeek's picture

Urban blacks were much more unruly under LBJ than under Nixon - neither of whom I liked. Anti-war sentiment was more violent under LBJ than under Nixon. In many recent stories it seems that blacks consider themselves above the law and act in violent groups. Under Eric Holder they probably are immune to prosecution, since he's been too busy protecting the voting rights of illegal voters and supplying guns to Mexican drug cartels.

Put Sheriff Joe in charge of the DOJ (not a serious suggestion, just as a thought experiment) and see if those demonstrations you expect actually occur.

Mon, 07/16/2012 - 21:59 | Link to Comment Shizzmoney
Shizzmoney's picture

Corporations are certainly not free market entities. Their very reason for existence — limited liability — is created through government fiat. Capitalism and markets existed long before the creation of limited liability, and surely will exist for a long time after its demise.

Plus infinity.

Mon, 07/16/2012 - 22:02 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

Corporations are capitalism bots.

Mon, 07/16/2012 - 23:16 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

Don't like the truth eh?  I've seen this before.  Fucken retards.

Mon, 07/16/2012 - 22:04 | Link to Comment MillionDollarBogus_
MillionDollarBogus_'s picture

Corporations are like people because they have the same psychotic tendancies...

Lie, cheat & steal, and deny it all.... 

Tue, 07/17/2012 - 00:13 | Link to Comment Dingleberry
Dingleberry's picture

But when real people do that, they go to jail.

When "corporate people" do that, they get a bonus!!

Tue, 07/17/2012 - 08:02 | Link to Comment Lebensphilosoph
Lebensphilosoph's picture

Those are not psychotic tendencies.

Mon, 07/16/2012 - 22:06 | Link to Comment MsCreant
MsCreant's picture

Corporations are the fundamental building block of Ponzi scamming.

Mon, 07/16/2012 - 22:45 | Link to Comment t0mmyBerg
t0mmyBerg's picture

Corporations are the fundamental building block of western civilization.  like everything else there is abuse.  and corporations are constructive people for a limited variety of reasons, not real actual people. creating a whole area of law from scratch to flesh out an entity for collective action and enterprise was too onerous.  easier to say it is a person and then limit it from there.  but make no mistake, without the corporation (or literally "created body") we would all be poorer or we would all be muslims.

Mon, 07/16/2012 - 23:09 | Link to Comment MsCreant
MsCreant's picture

I get it that big projects need big collective efforts and corporations enable that. But it is abused waaaaay too much. Makes me think the construct is the problem.

Tue, 07/17/2012 - 07:35 | Link to Comment Bob
Bob's picture

The Corporation:

http://www.youtube.com/watch?v=nmXgedNKgjI

Better than "Inside Job" and all the rest. 

Tue, 07/17/2012 - 00:15 | Link to Comment Dingleberry
Dingleberry's picture

Companies were the building blocks. Corporations are just companies on steroids. Multi-national corporations are now more powerful than most, if not all governments.  No coincidence the rise of the multi-national has coincided nicely with the wealth disparities.

Tue, 07/17/2012 - 01:01 | Link to Comment Lednbrass
Lednbrass's picture

Wait...what?

Without corporations we would all be muslims?

I have seen some serious contortions of logic and reasoning in my day, but that is some world class silliness right there.

Tue, 07/17/2012 - 07:56 | Link to Comment GMadScientist
GMadScientist's picture

You have a profoundly lacking sense of imagination and should not be trusted with hyperbole.

Tue, 07/17/2012 - 17:37 | Link to Comment Maghreb
Maghreb's picture

Everyone has had corporations in some form or another take a look at those Chinese Dhows that the Spanish Galleon was based only the the largest business clans could afford to make that kind of invesmtent and they functioed with a similar role as a corporation. Same for the various guilds. Same situation with the Islamic trade organizations. Read some history before you spout off about the wonders of the corporation. If the laws we had now worked we wouldn't be bailing the fuckers out and watching them blow up and sell shit goods all the time.

 

Mon, 07/16/2012 - 22:21 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Lets face it guys.  We're not going to get another Reagan for a long time. So lets just forget about POTUS for a while.

 

Although Mitt's message is fine. Corporate America is fine.

 

With his superficially sunny disposition - and a ruthless political strategy of exploiting white-male resentments - Reagan convinced millions of Americans that the threats they faced were: African-American welfare queens, Central American leftists, a rapidly expanding Evil Empire based in Moscow, and the do-good federal government...

 

Sounds like Reagan was pretty much dead on with his shit.

 

I have absolutely no Idea what Romney or Obama stand for.


Bush was all about the Al Queda, Clinton was all about getting head. Beyond this I am confused.

Tue, 07/17/2012 - 06:43 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

The Little Brains Strike again.

Tue, 07/17/2012 - 07:58 | Link to Comment GMadScientist
GMadScientist's picture

...all the while lining the pockets of his best friends so they could buy him a ranch in Santa Barbara where his spongiform excuse for a brain could rot out in peace.

Fuck Reagan.

Mon, 07/16/2012 - 22:13 | Link to Comment barkingbill
barkingbill's picture

international corporations are in the process of taking over the world. the empire star destroyers and deathstars are in position and on the attack destroying worlds and peoples all over, for some years now, somewhere in the galaxy however some rebels are writing a blog and wondering if perhaps darth and his ships are a bad idea....maybe those corporations shouldn't get infinite rights at the cost of lowly citizens? mmm??? maybe just maybe....

Mon, 07/16/2012 - 22:14 | Link to Comment White.Star.Line
White.Star.Line's picture

When corporations become people...

People become commodities...

David Korten
"When Corporations rule the world"

Mon, 07/16/2012 - 22:32 | Link to Comment White.Star.Line
White.Star.Line's picture

.

Mon, 07/16/2012 - 22:32 | Link to Comment White.Star.Line
White.Star.Line's picture

.

Mon, 07/16/2012 - 22:15 | Link to Comment barkingbill
barkingbill's picture

though i think if i were to carry this metaphor farther.....hillary is darth vader.....she has his charm, slowly the dark side has taken her over. just take a look at her....

Mon, 07/16/2012 - 22:15 | Link to Comment White.Star.Line
White.Star.Line's picture

Double Post?

Skynet at work, obviously!

Tue, 07/17/2012 - 08:06 | Link to Comment GMadScientist
GMadScientist's picture

Skynet found it profound, at least.

Mon, 07/16/2012 - 22:17 | Link to Comment Ms. Erable
Ms. Erable's picture

If a corporation is a person, what is its natural lifespan? If it exists past that alloted time, who euthanizes the entity?

 

Tue, 07/17/2012 - 08:06 | Link to Comment GMadScientist
GMadScientist's picture

Bain Capital.

Mon, 07/16/2012 - 22:18 | Link to Comment CuriousPasserby
CuriousPasserby's picture

This is so misguided, ill-imformed and pure bullshit...

Yes there was capitalism before limited liability companies (which started about 400 years ago) but it was dudes selling eggs and making shoes by hand and smithing horses.

There would be no planes, cars, computers, high-rises, medicines, anything that take more than a few people to accomplish if every shareholder was liable for all the company's potential debts and liabilities. No company would have more than a few people who trusted each other.

The modern world would not exist. Corporations let people pool fixed sums on an adventure with no risk of losing his home and life savings.

I know, you think the stone age was great, bring it on, yeah...

Mon, 07/16/2012 - 22:52 | Link to Comment barkingbill
barkingbill's picture

the corporations will bring us back to the stone age.....just watch....

Mon, 07/16/2012 - 23:28 | Link to Comment adr
adr's picture

You don't need the stock market to make airplanes, cars, computers, etc. Henry Ford did just fine without having a publicly traded company. Private corporations are far better "people" than public corporations because they must actually provide a profitable service to exist.

Public corporations do not need to focus on profit as long as there is someone willing to hand them money for the promise of being handed back more money in the future. Instead of a valuable product, public corporations mostly sell hype, and deal in fraud to make their real product, shares of stock, look valuable.

The end of the stock market would bring back an age of real capitalism.

Tue, 07/17/2012 - 08:01 | Link to Comment Reptil
Reptil's picture

That's too simplistic. Of course there were "corporations" longer than 400 years ago. And 400 years ago the stone age didn't end. Total nonsense.

What's at stake is here, is a small group of people ruling over a larger group of people. There's nothing new about it, or inherently wrong.
What is wrong is that mistakes go unpunished.

If a bad investment kills millions of people, it's not registered as such in our "upside down" society.When a bad investment doesn't have consequences, then the cumulation of bad investments will lead to a huge mistake in development of our society, and increasingly, of a mistake on a scale which threatens our collective survival. It sure isn't capitalism. And even if it were, human beings are more than just actors in a market strategy.

The ones controlling it know this. They have ulterior motives, since they already control enough of the marketplace for their uses. They are the modern "kings and queens". (and some/most of them are royalty) The corporation personhood is just a lightning rod to distract from these intentions. It's very clever, but the strategy is running out of steam. Just like anyone, they're not infallable, and they've made HUGE mistakes. Also nothing new.
The concentration of power, because of Globalisation and technological advances now has become so great, that they're untouchable. And that mistakes can grow bigger than ever before while in the past the unwashed masses could topple them. You can see it like this: Direct feedback has been removed because of this concentration. Very DANGEROUS for us all (including the controlling elite).

Sharing responsibillity (in a Republic, where more are included in the descision making) should render a more balanced descision making process and better descisions. An informed public is capable of making rational descisions, if they can understand the scale and repercussions. We're all just humans, from the stoned foodstamp couchpotato to the most ardent efficient CEO. This is not contrary to capitalism, as long as there's more factors included than short term profit for a limited group of people.

In short they've lost the plot, or they've decided something very different than continuation of our society. Or both, since they don't seem to understand they are just as much "useless eater" as the rest of us.

Tue, 07/17/2012 - 08:14 | Link to Comment Lebensphilosoph
Lebensphilosoph's picture

There would be no planes, cars, computers, high-rises ...

And? Oh, by the way, none of these things was invented by a corporation.

 

medicines

Balderdash

The modern world would not exist.

And?

 

I know, you think the stone age was great, bring it on, yeah...

 

Stone age? Everything before the industrial revolution was the 'stone age'? Well, primitive tribesmen still living their primitive lifestyle are happier than people living in the 'modern world'. Let's see ... drink, dance, brawl, song, conversation, sex, hallucinogens, freedom ... but no pro-sports, flat screen boob tubes, trash ficiton and working away your life at least eight hours a day, five days a week, from six to sixty, so you can pretend with your modern medicine that existing longer is the same thing as living longer ... alright then.

Mon, 07/16/2012 - 22:20 | Link to Comment DavosSherman
DavosSherman's picture

Watch the movie "The Corporation" --- corporations are people.

 

After the Civil War corporate lawyers argued that the Fourteenth Amendment afforded people equal rights.  They filed 288 cases, former slaves filed 18.  The courts gave corporations “people status”.  Soulless entities whose legal DNA puts profit above all else—even its fellow citizens.  As a result they exhibit all the traits of a psychopath: A callous unconcern for the feeling of others, they are incapable of maintaining enduring relationships, they posses an incapacity to experience or feel guilt and they fail to conform to social norms with respect to lawful behavior.

Tue, 07/17/2012 - 07:39 | Link to Comment Bob
Bob's picture

One of the best documentaries I've ever seen.  Extremely well done, fast moving and continually informative, high production values, etc.

The Corporation:

http://www.youtube.com/watch?v=nmXgedNKgjI

 

Mon, 07/16/2012 - 22:25 | Link to Comment caimen garou
caimen garou's picture

I had a corporation,I closed it in 2009. profits were on the way down. i was not in business to loose money, I was in it to make money and have a decent retirement. there was no bailouts for my company,so I sold it split the money between myself and employees and we all went on our way.
It was my emloyees that made that business work and it was gov regulation that killed it! life goes on......

Mon, 07/16/2012 - 22:26 | Link to Comment icanhasbailout
icanhasbailout's picture

The inception and existence of corporations is at the will of the government.

Tue, 07/17/2012 - 05:48 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Used to be at the will of the people...

"Under pressure from industrialists and bankers, a handful of 19th century judges gave corporations more rights in property than human beings enjoyed in their persons. Reverend Reverdy Ransom, himself once a slave treated as property, was among the many to object, declaring "that the rights of men are more sacred than the rights of property."

Undeterred by such common sense, judges redefined corporate profits as property. Corporations got courts to assume that huge, wealthy corporations competed on equal terms with neighborhood businesses or with individuals. The courts declared corporate contracts, and the rate of return on investment, were property that could not be meddled with by citizens or by their elected representatives.

Within a few decades, judges redefined the common good to mean corporate use of humans and the earth for maximum production and profit. Workers, cities and towns, states and nature were left with fewer and fewer rights corporations were bound to respect.

Wielding property rights through laws backed by government became an effective, reliable strategy to build and to sustain corporate mastery."

Rest here, excellent read...

http://www.nancho.net/bigbody/chrtink1.html

ori

Tue, 07/17/2012 - 07:45 | Link to Comment Bob
Bob's picture

It's a glaring ommission big enough to fly a 747 through that the "Liberty" crowd, with their sanctimonious obsession with The Forefathers and Constitution, rarely have any issue with The Corporation, as far as I can tell.

Mon, 07/16/2012 - 22:28 | Link to Comment Gmpx
Gmpx's picture

This is very simple. People have non-commercial side, kids, love, family, beliefs. Corporations only have commercial side. Corporations act for profit even if the profit comes from poisoning entire planet.

The alternative would be to nationalize all companies larger than certain size. It is not a question of efficiency, but a question of survival.

Mon, 07/16/2012 - 22:30 | Link to Comment SgtShaftoe
SgtShaftoe's picture

I like the Swiss model where the board is personally responsible. High give a shit factor.

Mon, 07/16/2012 - 22:32 | Link to Comment putbuyer
putbuyer's picture

You are an idiot!

Tue, 07/17/2012 - 08:11 | Link to Comment GMadScientist
GMadScientist's picture

Step away from the mirror before you take a swing and hurt yourselves.

Mon, 07/16/2012 - 22:34 | Link to Comment Technical Bard
Technical Bard's picture

The original poster needs to read Timur Kiran's excellent book, "The Long Divergence: How Islamic Law Held Back the Middle East"  While his premise is explaining why European and American economies have been more successful that those of the Muslim world, he clearly points out the key aspect that limited liability partnerships and corporations had over the full liability partnerships that existing in the Muslim world until the 19th and 20th centuries.  

Passing full liability through a corporation to it's owners increases the risk for investors dramatically, especially if they don't have direct control.  This will drive smaller businesses focussed on much narrower fields of endeavour.  This is how the Muslim world has been while the West expanded.  Limited liability corporations provide the opportunity to pool capital in a much larger fashion, as is needed for efficiency and for projects of vast scale that otherwise could only be done by governments.  The Free Market didn't build the Pyramids, but it did built the infrastructure of the oil industry and air travel.

Mon, 07/16/2012 - 22:42 | Link to Comment ghenny
ghenny's picture

Yes and that infrastructure is in the process of making our planet uninhabitable to all mamals.  Great Job Brownie.

Mon, 07/16/2012 - 22:44 | Link to Comment Sophist Economicus
Sophist Economicus's picture

...The Egyptians didn't buld the Great Pyramid either....

Tue, 07/17/2012 - 03:19 | Link to Comment gwiss
gwiss's picture

Technical Bard,

Your argument is the same argument always advanced by those who favor limiting the liability of people who want to to embark upon a project, understanding that projects always involve risk -- society benefits by pushing people in the direction of taking more risk, and on balance, you argue, more good is accomplished for society by taking these risks than by holding back from taking the risk.

 

There are three fundamental flaws to your thinking.  The first is your conception that corporations limit risk. They do not, any more than a CDS limits risk.  They simply, just like a CDS, redistribute it. The amount of risk to any venture is static if the techniques used remain the same.  Thus the question is not one of limiting risk, since the risk is static.  Instead, the question is who bears that risk.

 

Imagine a corporation who engages to drill a railroad tunnel through a mountain.  There are two possible outcomes.  Outcome one is that they are successful, in which case the farmers in the valley they have reached with their tunnel now have an outlet for their food, which is a good thing for them.  However, they pay full price to ship food to market through this tunnel, in the process paying their fair share of the production cost plus a risk premium (profit) to the tunneling corporation.  Thus, they don't really benefit from the tunnel in the sense that they get a share of the risk premium from creating the tunnel. This becomes important when we consider outcome two, which is that in the process of tunneling the side of the mountain collapses, burying and destroying the farms in the valley.  The corporation declares bankruptcy because its assets cannot cover the damages it has created. 

 

In the case of a bad outcome, we see that what was actually occuring was that the farmers were also putting their assets at risk, but were doing so unknowingly, and they do not get paid a risk premium for this risk.  Thus we can see that the effect of a corporation is actually to divert the risk premiums which rightfully belong to others and instead direct them to the investors and owners of a corporation.  If the venture is successful, then those whose assets were put at risk don't ever become aware of what they were risking, and the investors hiding behind their corporate shield get to keep the risk premium for their own assets plus the risk premiums of those whose assets were unknowingly risked.  However, in the case of a bad outcome, the corporate investors only stand to lose the assets they have consciously risked, rather than standing to lose everything as an owner with unlimited personal liability might.

So, let's lay out your argument again, but this time overtly.  You argue that it is a good thing to protect the right of corporations to appropriate the risk premiums of others, because in the process you create an asymmetry, which is that the risk premiums only accrue on one side of the equation while the assets risked exist on both.  This tilts the table in favor of taking risk, and because you believe success is statistically more likely than failure, society on balance advances.

However, this brings us to my second point, and it is at this point that the actions of a corporation begin to diverge from the expected actions of an owner with unlimited personal liability.  Remember, risk is static for any given endeavor as long as the technique used remains the same.  Unfortunately, because you have now artificially tilted the risk/reward matrix by creating an imbalance between assets at risk and risk premiums paid, this means that technique used will not remain the same.  Instead, technique used will in all probability shift towards more risky/less careful, because the corporate owners have been encouraged to ignore the full amount of assets at risk and instead only focus on the amount of assets their corporation has at risk which will be just a proportion of their own personal assets, and thus they move forward on the project using a method whose cost is appropriate for this level of risk.   Thus they underestimate the care required because they never factor in the full extent of possible losses.  Delayed effects especially are ignored, as those can be allowed to fall either on a corporate structure which has already outlived its usefullness as a shield for resource extraction and which can therefore be allowed to fail through bankruptcy and thus absorb displaced societal anger like a car crumple zone, or can be displaced to fall on another board or CEO at some point in the future.

 

This temporal risk redistribution brings me to my final point, which is that your argument for the benignant nature of corporations is predicated upon the corporation making the same choices an individual owner would, but with less risk to those investors whose pooled resources the corporation wields.  This presumptive outcome ignores the warping effect that shielding from risk has on corporate officers who exist inside this shielded corporate environment.  The outcome for corporate america, when combined with a broken stock market obsessed with share price rather than dividend yield, has been boards of corporations and corporate officers making choices no individual owner would make, in that they perpetually chase ever increasing sales volume and the illusion of profits as if share price was actually a useful outcome indicator rather than a secondary effect capable of being gamed through accounting and inventory gimmicks. Thus corporate officer behavior is simply an extension of what corporations do to society -- corporations claim they are engaging in the greater good to provide cover for the asymmetry they are exploiting.  Similarly, corporate officers claim they are engaging in the greater corporate investor good in order to provide cover for the asymmetry they themselves are exploiting, which is putting assets of investors at risk in order to benefit themselves personally.

 

Yes, without corporations our pace of progress would have been slower.  But, remember that greater risk commands a greater risk premium because the odds of failure are higher, and the benefit society experiences from corporations according to you is that more risky projects are undertaken.  Thus, what you are really arguing by defending the concept of corporate personhood is that it is better to choose a societal course which has a greater chance of a catastrophically bad outcome, are you not?  And unfortunately, when it comes to the beneficial effect of corporations on society, that experiment is not yet concluded.

Tue, 07/17/2012 - 08:30 | Link to Comment GMadScientist
GMadScientist's picture

You have pointed out a necessity for making higher profit margins for corporations, not a reason that the western world has excelled at anything (save wanton destruction of the environment or the erosion of man's natural rights). The answer is that investors should feel the risks inherent in the enterprises with which they entrust their capital and should have more control in return for sharing the burden of that risk. Making investors numb to the consequences of their placement of capital is no way to insure proper operation of a free market. Driving smaller businesses more focused on a particular market is a good thing. You can trace so many ills that face capitalism today down to multinationals and their disproportionate effect on the market. The oil industry you tout as a success was the very first example of cartel and monopoly power in the private sector in the US, a phenomenally huge fail from any perspective other than returns.

As for air travel...an industry built from the skills of pilots from WWI in the air service being put to civilian use. It would not have happened under capitalism otherwise, just like no corporation would've spent money on a moon shot because they had visions of someday selling Garmin GPS to civvies.

Mon, 07/16/2012 - 22:35 | Link to Comment White.Star.Line
White.Star.Line's picture

The people heckling him in this video are my heroes.

Mon, 07/16/2012 - 22:36 | Link to Comment Bunga Bunga
Bunga Bunga's picture

If corporations are people they can be sentenced to death!

Mon, 07/16/2012 - 23:24 | Link to Comment FleaMarketPete
FleaMarketPete's picture

Not if they vote Obama......

Tue, 07/17/2012 - 08:31 | Link to Comment GMadScientist
GMadScientist's picture

Bain's buying out who?

Mon, 07/16/2012 - 23:45 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

Corporations are not persons, not the individual. Corporations do not have an inherent  interest in an individual and thereby all individuals are exposed under the current Supreme Moron's claim of legal dominion above the security of all individuals, meaning ''yer fired'' or ''you are subject to the power of the collective corporate voice''. That voice has more singularity based on not only the fact that a corporation is not a single individual but, a algo that is beyong human in speed and intelligence. Corporations are a (the) new world order. http://www.youtube.com/watch?v=CTtaflRXBCg

Mon, 07/16/2012 - 22:36 | Link to Comment tmosley
tmosley's picture

Corporations are people.  They are the priviledged aristocrats of our era.  People who are above the law, but worse, required by the law to be sociopathic, valuing nothing except for profit for their shareholders.

Time to do what they did to the aristocracy in France.  Make them not people.  Preferably make them not exist at all as priviledged entities.  They can be companies, owned by people who are LIABLE for their actions.

Mon, 07/16/2012 - 22:40 | Link to Comment Bunga Bunga
Bunga Bunga's picture

If corporations are people they can be killed on US soil.

Tue, 07/17/2012 - 06:19 | Link to Comment Dburn
Dburn's picture

They are also subject to search and seizure w/o Warrant, rendition, torture, and indefinite imprisonment by signature ( robo-signed of course ) of the President.

Mon, 07/16/2012 - 22:44 | Link to Comment FleaMarketPete
FleaMarketPete's picture

 

Congrats on finding such a distinguishing portrait of Cramer wearing Bjork.

But if you’ve ever taken a business law class then you would know that corporations have always been classified as “people” and limited liability is a fundamental principle of free market capitalism.

This recognition allows for capital investment.  If owners were personally liable for their corporate investments, there would be no capital markets and we would all be Nigerians.

Your confusion arises  with the status quo bailouts under GW and compounded under Obama where bad actors, who contribute significantly to L and R wing politicians, buy their reprieve with votes in exchange for tax payer dollars.

Romney is not a devil just because he calls corporations people.  If fact, all pensions, endowments, and non-profit organizations (huge! Bain investors) and all 401k administrators would agree with him.

 

Not a smart post.

Mon, 07/16/2012 - 22:58 | Link to Comment jomama
jomama's picture

it wouldn't kill you to develop a sense of humor.

Mon, 07/16/2012 - 23:23 | Link to Comment FleaMarketPete
FleaMarketPete's picture

I didn't realize the OP was satire.  Junk me all you want street people.  No form of [American] governament will pay you for being stupid.  Vote Obama all you want.

Tue, 07/17/2012 - 00:02 | Link to Comment MsCreant
MsCreant's picture

"Romney is not a devil just because he calls corporations people."

Why is he a devil then?

Because he is a statist fuck like Obama?

Tue, 07/17/2012 - 01:21 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Romney is not the devil. The devil has a history of honoring his agreements, albeit not with good humor.

Also, the devil is better looking.

Mon, 07/16/2012 - 22:42 | Link to Comment Steve in Greensboro
Steve in Greensboro's picture

You are a moron.

If the First Amendment protects anything, it protects political speech.

Read it and weep, commie jackass.

"Congress shall make no law ...abridging the freedom of speech..."

Tue, 07/17/2012 - 01:22 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Give me the First Amendment as currently interpreted and a healthy hen, and tomorrow I can have an egg for breakfast.

Mon, 07/16/2012 - 22:43 | Link to Comment ArsoN
ArsoN's picture

Extremely important idea.  Been kicking this around for years.  Fairly convinced outlandish executive compensation is closely tied to this.  

The rise, sophistication, and prevelance of the LLC/LLP (complexity of corporate structure) has been the major business/corporate story of the last 30-40 years.  It's been a result of a fierce lobby but has largerly passed under the radar as it has mostly occured on the state level.  It obviously encourages all kinds of risk taking and inefficient behavior while futher entrenching our addiction to perpetual (and thus unsustainable) growth.

Would love to get some commentary from the austrian types about corporations.  Afterall, the corporate set up is a great governmental intrusion into the marketplace...    

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