Ron Paul, must watch? really?

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ron45's picture
ron45
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Ron Paul, must watch? really?

Many of you pounded your desk and went yea thats it! When guys in suits that expensive are whining about freedom they mean freedom for corporations to do what ever they deem necessary to win. That is not freedom, is it greed. Freedom for people is fine. Corporations are not people! They are mostly raptors.

Everything about the articles of incorporation needs to be thrown out and rewritten to make these blood suckers accountable. Give them the freedom of civil/financial/legal/PERSONAL responsibility. When moneyed interests speak of big government they mean too big to bully. That gets in the way of too big to fail.

So, you Ron Paul fans have a few more children, trade that Saab in on an Excesscalde so THEY know just where you will stay for the next 18 years. So long as sheepeople continue to set on their ass in their offices and homes instead of filling the streets, particularly wall street, this kind of biddniss as predator model will continue... straight into chaos. So have another late grande and stop that damn bleating.

Ron

 

 

goes211's picture
goes211
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Huh?

What is there to watch and what does this have to do with Ron Paul?

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A. M.
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No Point

 Ron45,

You've managed to make no specific points, used no facts to back your assertions, were which basically just slander, and offered no realistic alternatives.

This isn't exactly the way to get your point to the readers in a manner that's going to be constructive or intellectually stimulating.
If you can find a specific fault about Ron Paul that you'd like to discuss, do that. 
Insinuating that we're all bleeting sheepeople because some acknowledge that he's literally the only politician discussing the endemic failures of central banking is a bit short-sighted and vitriolic on your part.

Cheers,

Aaron
 

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Hmmm...

Well, there is at least the nub of an interesting discussion in ron45's post.

One major appeal of libertarianism of course is the weakness of government under a libertarian philosophy, and the protections for individual rights.  But this governmental weakness is also a source of criticism, even from people who otherwise love the idea of libertarianism, when it comes to corporations.  The primary practical failure of libertarianism, they say, is its failure to prevent concentration of power into the hands of large corporations.  Not just large national corporations, but multi-national corporations which may be nominally incorporated in one nation or the other, but which truly do not answer to any one national government, and certainly not to any state government.

So the question becomes: is the concentration of unlimited power in the hands of private corporations any better than concentration of unlimited power in the hands of government?  Or have we not just jumped from the frying pan into the fire?

Certainly the experience of the U.S. in the late 19th century shows that when large monopolies have almost infinite pricing power, the market will not provide for the needs of the individual, because the true "market price" for a day's labor was often at or below starvation level wages.  And that was only when the person was willing to work 16 hours per day in unspeakable conditions.

While we can argue about whether people have any "moral entitlement" to a living wage (I personally believe that there is no moral entitlement to a living wage in the case of any at-will employee), the reality is that such conditions cause riots and revolutions.  A country could be a miserable place to live where the power of large monopolies is unchecked, just as much as where the power of the government is unchecked.

So, when ron45 says:

ron45 wrote:

Everything about the articles of incorporation needs to be thrown out and rewritten to make these blood suckers accountable. Give them the freedom of civil/financial/legal/PERSONAL responsibility . . . Freedom for people is fine. Corporations are not people!"

I interpret this as a criticism of libertarian philosophy, and a suggestion that libertarian philosophy needs to be modified at least slightly in order to give the government the ability to prevent excess concentration of power in the hands of corporations.  This is not a new idea.  In the 18th century, it was accepted that corporations had the right to exist only so long as they acted in the public interest.  Corporations enjoy significant governmental protections such as immunity of the directors from personal lawsuits, and immunity of the directors for liability for company debts.  In return for these sovereign privileges, the right of the corporation to exist could be revoked at any time.

So why not modify libertarian philosophy slightly in order to prevent corporations from filling the vacuum of power left by a weak government? 

Do I know the answer?  Honestly I don't have a clue!  But I think it's a discussion worthy of CM.com.

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Libertarians and corporations?

I do not think that all Libertarians agree on the role and scope of corporate power.  Certainly many corporate shills live under the Libertarian umbrella and are supported by organizations like the CATO institute. 

However I don't think it would be hard to make a libertarian argument against the concept of limited liability.  Here is one such argument....

http://www.anti-state.com/article.php?article_id=415

Limited Liability Corporations in a Free Society*
by Bob Murphy
7/11/2003

Most of my work (e.g. http://anti-state.com/article.php?article_id=41 ) on private law (i.e. law outside the State) has been critical of the a priori approach. I normally get very suspicious when people sit back in their armchairs and tell me that a legal system "obviously" must be structured such-and-so, and that if it doesn't conform to the theorist's vision, then the system must be objectively immoral. Usually, I remain very agnostic about what form a private legal system "ought" to take, and I always defer to the customs and legal procedures that would gradually evolve in a truly voluntary, market setting.

However, when it comes to limited liability corporations, I tend to side with the crotchety writers who flatly reject fictitious "legal persons" as complete balderdash. The way I see it, individuals in a free society with private property rights would have the option of pooling their funds into a joint entity called a "corporation," and they would even have the option of issuing (limited liability) stocks and bonds to raise capital, but such actions would in no way limit the ethical and legal obligations of the founding members.

Let's use a concrete example to make my meaning clearer. Suppose that Joe Blow and Bill Smith live in a free society of the type that most libertarians have in mind. (I remain agnostic as to the exact nature of their legal system, whether it be Rothbardian natural law or Friedmanite utilitarian in its foundation. I think my analysis works for both.) Suppose that Joe Blow and Bill Smith believe they can earn a profit in the trucking industry.

Now, from a libertarian point of view, the actions of Joe and Bill do not suddenly change when the men engage in "business activity" rather than "personal activity." In their relations with others, everything is a simple matter of the voluntary exchange of property titles and the fulfillment of contractual obligations. In particular, if Joe owns a truck, he can certainly use it in his "business" to transport cargo for customers, rather than moving his family around. From the libertarian point of view, it doesn't really concern us about the higher context of the operation; all that matters is that Joe has to pay for his gasoline, pay tolls on the private roads, maintain adequate car insurance if road owners insist on this as a condition of entry, etc.

Now the question arises: Suppose that Joe injures someone while operating his truck. What are his obligations to the injured person?

Well, it would certainly depend on the specific case. If Joe is fiddling with his radio and swerves off the road, then under almost any legal regime we would expect that Joe would be held liable for the damages. (Of course, Joe might have "no-fault" insurance to cover this, but that's a separate point. We are here concerned with the determination of legal liability for the damages.)

On the other hand, if it's late at night and some drunk frat kids lie down in the road (after watching a movie featuring such foolishness), then it's plausible that Joe would be absolved from any legal obligations for the injuries to those hit by the truck.

The issue of liability after a tort is one of the things that any legal system (including a private one) must solve. Some libertarians who favor "strict liability" think they can avoid the issue, but they're wrong: Even if you think someone should be fully liable for the damage he causes, regardless of his intentions or ability to pay, that still begs the question of how to determine who "causes" (from a legal standpoint) the accident. After all (as any student of the Coase theorem knows) there are a whole host of people who could be said to have "caused" an accident, including the biological parents of the victim.

At this point I have not really said too much; I have just pointed out that different types of situations would probably be handled differently. Libertarian legal theorists will certainly differ on their recommendations for the assessment of liability in various cases. However, I think one thing we can all agree on is that, in a free society, the private courts would never rule that the truck itself was liable for the damage. No judge would ever declare, "The Ford Ranger owes the victim $10,000 in medical expenses and $5,000 for pain and suffering."

Notice that this is true even if an accident is "caused" by a mechanical failure. Suppose the brakes suddenly go out and this "causes" Joe Blow to hit someone with his truck. Now, the courts might rule that Joe is liable as the owner/operator, or they might rule perhaps that the mechanic who approved the brakes in his last inspection is liable. But clearly the courts would never decide that the brakes were legally responsible and hence liable for the damages.

Why is this? I think the reason is that, except in Stephen King novels, motor vehicles are not acting agents. Rather, the law recognizes the owner(s) as the responsible agent(s) for damage physically "caused" by a piece of property. Therefore, when property damage occurs (and this includes bodily harm, since a person's body may be considered his property), the purpose of the legal system is to determine the person(s) to bear the damage. If the law finds that someone other than the immediate victim should do so, then the law's designated person must compensate ("make whole") the victim.

Finally, how does this relate to limited liability corporations? I think my reasoning shows that it is completely incompatible with libertarian theory (as well as common sense) to say that, e.g., an oil spill is "caused by" the Exxon Corporation, and that plaintiffs are therefore only entitled to the assets of Exxon. To me, this is as nonsensical as saying that a traffic accident is "caused by" a particular truck, and that the plaintiffs may only seize the truck, but no other assets of the truck's owner.

Now, if the founders of a corporation feel that they can raise more capital by issuing limited liability shares of stock, that is perfectly fine. For example, Joe Blow and Bill Smith can sell shares in the Acme Trucking Company, and use the money to buy a fleet of trucks and to hire drivers. The drivers can sign contracts with Acme, in which the "corporation" pledges to assume full liability for any damages caused by the drivers while operating a truck on the job. Therefore, if the drivers hit someone while driving an Acme truck, the victims can sue Acme (rather than the individual driver).

Here is the crucial point: When a plaintiff "sues Acme," that is just a shorthand for saying "sues the owners of Acme corporation." In my view, a person can't really bring charges against an abstract thing like a "corporation," just like a person can't sue "racism" or "hatred."

Now then, if a plaintiff sues Acme and wins, then he is entitled to restitution out of Acme's assets, i.e. the assets held jointly by the shareholders and devoted to the operation of the company.

And finally, we come to the controversial part: If Acme's assets are insufficient to pay the claims of the plaintiff, then I am arguing that there must exist at least one individual whose personal property the plaintiff can seize. This is because, even though subsequent investors may have purchased stock with an agreement that "Acme Corporation" would assume any legal liabilities above and beyond the initial contribution, the original creators of Acme Corporation certainly can't use the same trick.'

To put it differently: After an accident, the truckers can say to a plaintiff, "Don't take my house; go talk to my boss." The boss can say, "Hey, it's not my fault; talk to the manager." The management can say, "Hey, we're just agents of the shareholders; talk to them." Even individual shareholders can say, "Hey, we had a contract with Acme when we first bought in; we're not liable; talk to the founder."

But when the plaintiff finally reaches the founder of the corporation, he cannot say, "Hey, it's not my fault; the accident was caused by Acme Corporation." This would be as nonsensical and perverse as an assassin first forming a corporation, naming himself CEO, and then shooting someone. When the family sues, the assassin couldn't say, "Hey, I didn't kill anybody acting as a private individual; I was acting as an agent of the corporation."

In conclusion, limited liability corporations are compatible with standard libertarian legal theory, only if the original founders (or subsequent individuals who buy the company and assume full responsibility) maintain full liability for damages caused by agents of the corporation. Individuals cannot evade responsibility for actions by hiding behind the legal fiction of a corporate "person."

 

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Personally, I give little or

Personally, I give little or no credit to Ron Paul’s “platforms”, as I write this off to more of the same-just another flavor of meaningless identity politics. We Americans are hard wired to elevate the chief executive to positions of grandeur, despite ample evidence they have feet of clay. We are raised to react to adversity by just substituting for a new quarterback to turn the game around, and the false legacy of Ron Paul is no different. His parlor tricks of auditing the Fed and counting the gold in Ft Knox are just so much sensationalism in my book, no better (and arguably worse) than Obama’s preposterous hope and change initiative.

Worse, it’s what he doesn’t tell you that should be most concerning. He is just another misguided free market evangelist, prosthetyzing that a return to unregulated markets is the recipe for prosperity and a resurgence of Jeffersonian government, a disingenuous (and uniquely libertarian) association to late 18th century agrarian culture-with no meaningful analogue to today’s consumerist society, none whatsoever. While some of his views are superficially appealing, his preferential treatment of Austrian economics and associated lassiez faire principles expose him as yet another lost idealist unable to reconcile history, soon to fall under the thumb of mainstream Republicanism.

Jrf29 does a nice job summing a pretty serious intellectual error in libertarian thinking, I would remark that this contradiction is one of first principles, and I’m not clear how any meaningful adjustment can be made to accommodate the reality of the private sector acting as a Statist entity, and still preserve even a modicum of core libertarian principles, to me if this is recognized it is simply game over.

 

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Hi ron45 This sounds like a

Hi ron45

This sounds like a familiar topic that was recently discussed on this thread.

http://www.peakprosperity.com/forum/citizens-united-vs-fec-we-people-mus...

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 Darbikrash, Quote:Personall

 Darbikrash,

Quote:

Personally, I give little or no credit to Ron Paul’s “platforms”, as I write this off to more of the same-just another flavor of meaningless identity politics. We Americans are hard wired to elevate the chief executive to positions of grandeur, despite ample evidence they have feet of clay. We are raised to react to adversity by just substituting for a new quarterback to turn the game around, and the false legacy of Ron Paul is no different. His parlor tricks of auditing the Fed and counting the gold in Ft Knox are just so much sensationalism in my book, no better (and arguably worse) than Obama’s preposterous hope and change initiative.

What? Seriously?
This is like checking your bank statement before making wild purchases. Why wouldn't you want to know how much you had in your bank account and evaluate if your bank was screwing you over?

Quote:

orse, it’s what he doesn’t tell you that should be most concerning. He is just another misguided free market evangelist, prosthetyzing that a return to unregulated markets is the recipe for prosperity and a resurgence of Jeffersonian government, a disingenuous (and uniquely libertarian) association to late 18th century agrarian culture-with no meaningful analogue to today’s consumerist society, none whatsoever. 

Disingenuous? Elaborate on how that's so. 
I can't think of a more genuine approach to bringing our society back towards a sustainable equilibrium than a Libertarian/Jeffersonian government with Agriculture at the center of the national economy. 

So, let me recap - you give no credit to his platforms:
1. Sound Money
2. Small Government
3. Individual Liberty
4. Markets free of statist intervention

Because... they're all principles our nation was founded on?

Not sure what you're getting at.

Cheers,

Aaron

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Alpha Mike wrote:   What?
Alpha Mike wrote:

 

What? Seriously?
This is like checking your bank statement before making wild purchases. Why wouldn't you want to know how much you had in your bank account and evaluate if your bank was screwing you over?

 

Ummm,….yes, seriously. Not really sure why you would twist my comments to suggest that I am not interested in audits, that’s not what I said, what I said is that I find Mr. Paul’s’ antics to be nothing more than sensationalism. To that end, how long  has this guy been trumpeting this shtick? 10 years? More? And when are these “audits’ going to happen? Well I believe he is now heading up a committee with ostensibly some charter to address the at least some of these issue, do let me know when he has some results, in the meantime, I’ll consider them for what they are- more vapid identity politics with an eye towards tea party votes.

 

 

Alpha Mike wrote:

Disingenuous? Elaborate on how that's so. 
I can't think of a more genuine approach to bringing our society back towards a sustainable equilibrium than a Libertarian/Jeffersonian government with Agriculture at the center of the national economy. 

 

Well neither can I, as long as the population is about 1/10th of what it is today, as it was in Jeffersonian times, and the “small” government was busy with the messy business of primitive accumulation of land, and passing out these land parcels to homesteaders, all the while massacring native Americans. Fun stuff huh? And yes, once so equipped with copious amounts of free (or low cost) government issue land, agrarian sustenance farmers existed quite nicely without much need for money, government help, or commerce of any kind, really. Barter and self sufficiency ruled the day, and with a population enabled to do so with the aforementioned land, this worked out quite well. 

But a funny thing happened in the form of the industrial revolution, and the economy began to transform into a capitalist/consumerist economy with a rather disturbing and fundamental sea change. What was it? It was the appearance of a wage labor economy in support of the burgeoning capitalist expansion. In short, a wage labor economy means that you can no longer “live off the land”, in fact, you must, and I emphasize the word must, sell your labor power to achieve sustenance wages- so that you may eat and have shelter. The impact this had on governments’ role is profound and far reaching, and most of the 19th century was spent locked in battles to try and reel in the capitalists’ obscene exploitation of the wage economy, which required (and was nearly unsuccessful) ever growing government oversight to allow nine year old girls to work only 8 hours a day instead of the requisite 12 hours.  Quite a difference here, and most certainly not a difference Jefferson advocated-yet here we are:

 

Jefferson's belief was that unlimited expansion of commerce and industry would lead to the growth of a class of wage laborers who relied on others for income and sustenance, as indeed happened during the later Industrial Revolution and Gilded Age. Such a situation, Jefferson feared, would leave the American people vulnerable to political subjugation and economic manipulation. The solution Jefferson came up with "was a graduated income tax that would serve as a disincentive to vast accumulations of wealth and would make funds available for some sort of benign redistribution downward.

 

 

So yes, I opine that to suggest a return to such a political economy is morbidly unrealistic and sophomoric, although this type of thinking is passed around by Tea Party types as a simple, and entirely logical deconstruction, which belies the fallacy and complexity of reversing 200 years of capitalist growth, and presents again the even uglier business of another round of primitive accumulation for reallocation of  land and assets back to a distribution compatible with supporting a population of 308 million people.

 

Not in my lifetime.

 

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Quote:yes, seriously. Not
Quote:

yes, seriously. Not really sure why you would twist my comments to suggest that I am not interested in audits, that’s not what I said, what I said is that I find Mr. Paul’s’ antics to be nothing more than sensationalism

This isn't twisting your words, one of RP's core "platforms" is, and has been, auditing the FED and holding them accountable. Here is your quote:

Quote:

 I give little or no credit to Ron Paul’s “platforms”

 

You went on to say:

Quote:

To that end, how long  has this guy been trumpeting this shtick? 10 years? More? And when are these “audits’ going to happen? Well I believe he is now heading up a committee with ostensibly some charter to address the at least some of these issue, do let me know when he has some results, in the meantime, I’ll consider them for what they are- more vapid identity politics with an eye towards tea party votes.

Yes, more than 10 years.
Eye towards the Tea Party votes? C'mon. You're capable of more than this:

Quote:

On January 24, 2009, Trevor Leach, chairman of the Young Americans for Liberty in New York State organized a "Tea Party" protest in response to "obesity taxes" proposed by New York Governor David Paterson, and out-of-control spending. Several of the protesters wore Native American headdresses similar to the band of 18th century colonists who dumped tea in Boston Harbor to express outrage about British taxes.[36]

Let's do some basic analysis of what you're saying - RP has been lobbying against the FED since he took office in 1982:

Quote:

On the House Banking Committee, Paul blamed the Federal Reserve for inflation,[27] and spoke against the banking mismanagement that resulted in the savings and loan crisis.[13] The U.S. Gold Commission created by Congress during 1982 was his and Jesse Helms's idea, and Paul's commission minority report was published by the Cato Institute in The Case for Gold;[15] it is now available from the Ludwig von Mises Institute, to which Paul is a distinguished counselor.[28]

http://en.wikipedia.org/wiki/Ron_Paul

So you're suggesting that a campaign he started almost thirty years ago is to pander to the votes of an establishment formed 2 years ago?
Intellectually dishonest and lacking in credibility. Further, you decrying sound currency and independence from Central Banking as a "visage" to sell to voters... shall we recall just how much of the vote Ron Paul received in the 2008 elections? He maxed in the high teens in the intermountain regions. If he wanted to pander to a vote, he chose the wrong damn demographic. Unless he's "intentionally" trying to be unpopular with the mainstream "growth" based politicians/economists.

Quote:

But a funny thing happened in the form of the industrial revolution, and the economy began to transform into a capitalist/consumerist economy with a rather disturbing and fundamental sea change. What was it? It was the appearance of a wage labor economy in support of the burgeoning capitalist expansion. In short, a wage labor economy means that you can no longer “live off the land”, in fact, you must, and I emphasize the word must, sell your labor power to achieve sustenance wages- so that you may eat and have shelter.

Don't condescend to me, I won't tolerate it.
You know just as well as I do that the inevitable crash would create an environment perfect for a return to the Jeffersonian model.

Quote:

So yes, I opine that to suggest a return to such a political economy is morbidly unrealistic and sophomoric, although this type of thinking is passed around by Tea Party types as a simple, and entirely logical deconstruction, which belies the fallacy and complexity of reversing 200 years of capitalist growth, and presents again the even uglier business of another round of primitive accumulation for reallocation of  land and assets back to a distribution compatible with supporting a population of 308 million people.

So, thanks for your opinion - you've offered nothing else.

Cheers,

Aaron

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Alpha Mike wrote:   Don't
Alpha Mike wrote:

 

Don't condescend to me, I won't tolerate it.
You know just as well as I do that the inevitable crash would create an environment perfect for a return to the Jeffersonian model.

I have to vigorously disagree with this statement. Any crash (in the timeline of my lifespan) will much more likely result in a direct dive into fascism, with the end game being militarized management of disappearing oil resources. I consider the potential for a return to Jeffersonian democracy completely unbelievable for the reasons (not opinions) already stated. If that is what you want to bank on, knock yourself out. And yes, I do believe Ron Paul is simply pandering to a voting block.

Regarding your interpretation of my comments-you may want to go back and review them again. Where are RP's results again? How many years? And I find his association with Cato Institue and Von Mises institite to be a signficant liability- not a positive.

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Fascinating, goes211

goes211,

That was a very good article; thank you for posting it.  Honestly it didn't even occur to me that the privileges that corporations currently enjoy are themselves just a form of government intervention in the old common law (which of course produces unintended consequences).  I love the analogy of the truck.  A corporation really is no different than a mechanical device, is it?

In the context of the 3E's, I wonder if you could even make the argument that the original reason for giving corporations special status might no longer exist in the future.  The main justification for special corporate protection has always been (I think) that it allows entrepreneurs to take greater risks than would otherwise be possible.  This greater risk tolerence leads to greater net innovation and net economic growth.  The rationale was the same for providing more and easier credit for the past several hundred years. 

But for the past several hundred years the Western world has been faced with a situation where there were enormous amounts of free resources to consume, and countries and individuals were in a race to see who could consume them the fastest.  First from the discoveries of land and resources in the New World, and then in the form of oil energy.  But if the future is a world of zero or negative net growth, then what is the purpose of incentivizing risk?  Why is it still a good idea?  In fact, it seems to me that in a world of zero net growth, in general you want to incentivize conservatism.  Maybe it isn't a mistake that these new forms of corporate law first arose during an era of exponential growth.  So a reform of corporate law to reintroduce personal liability might not only agree with libertarian theory, but could also be a good idea anyway.

 

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Alpha Mike wrote: So, let me

Alpha Mike wrote:

So, let me recap - you give no credit to his platforms:
1. Sound Money
2. Small Government
3. Individual Liberty
4. Markets free of statist intervention

Because... they're all principles our nation was founded on?

As I have studied the markets, Peak Oil, and International Politics I have become much more of a Ron Paul fan.  I don't agree with some things he says, but my eyes have really been opened as to how badly our system is rigged.  I believe his views have helped at least a little in keeping some sanity in government.

Cheers,

Ernest

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Corporate Power Overreach has always been a Danger
jrf29 wrote:

goes211,

That was a very good article; thank you for posting it.  Honestly it didn't even occur to me that the privileges that corporations currently enjoy are themselves just a form of government intervention in the old common law (which of course produces unintended consequences).  I love the analogy of the truck.  A corporation really is no different than a mechanical device, is it?

In the context of the 3E's, I wonder if you could even make the argument that the original reason for giving corporations special status might no longer exist in the future.  The main justification for special corporate protection has always been (I think) that it allows entrepreneurs to take greater risks than would otherwise be possible.  This greater risk tolerence leads to greater net innovation and net economic growth.  The rationale was the same for providing more and easier credit for the past several hundred years. 

But for the past several hundred years the Western world has been faced with a situation where there were enormous amounts of free resources to consume, and countries and individuals were in a race to see who could consume them the fastest.  First from the discoveries of land and resources in the New World, and then in the form of oil energy.  But if the future is a world of zero or negative net growth, then what is the purpose of incentivizing risk?  Why is it still a good idea?  In fact, it seems to me that in a world of zero net growth, in general you want to incentivize conservatism.  Maybe it isn't a mistake that these new forms of corporate law first arose during an era of exponential growth.  So a reform of corporate law to reintroduce personal liability might not only agree with libertarian theory, but could also be a good idea anyway.

 

Sorry to burst your bubble, but the danger of corporate power has always been with us, beaten back at times and now allowed full sway.

 

 

 

 

Ralph Nader: When Corporations are the Government

 

 

It was Bill Clinton’s campaign strategist, James Carville, who in 1992 created the election slogan: “It’s the Economy, Stupid.” For the 2010 Congressional campaigns, the slogan should have been: “It’s Corporate Crime and Control, Stupid.”

But notwithstanding the latest corporate crime wave, the devastating fallout on workers, investors and taxpayers from the greed and corruption of Wall Street, and the abandonment of American workers by U.S. corporations in favor of repressive regimes abroad, the Democrats have failed to focus voter anger on the corporate supremacists.

The giant corporate control of our country is so vast that people who call themselves anything politically—liberal, conservative, progressive, libertarian, independents or anarchist—should be banding together against the reckless Big Business steamroller.

Conservatives need to remember the sharply critical cautions against misbehaving or over-reaching businesses and commercialism by Adam Smith, Frederic Bastiat, Friedrich Hayek and other famous conservative intellectuals. All knew that the commercial instinct and drive know few boundaries to the relentless stomping or destruction of the basic civic values for any civilized society.

When eighty percent of the Americans polled believe ‘America is in decline,’ they are reflecting in part the decline of real household income and the shattered bargaining power of American workers up against global companies.

The U.S. won World War II. Germany lost and was devastated. Yet note this remarkable headline in the October 27th Washington Post: “A Bargain for BMW means jobs for 1,000 in S. Carolina: Workers line up for $15 an hour—half of what German counterparts make.”

The German plant is backed by South Carolina taxpayer subsidies and is not unionized. Newly hired workers at General Motors and Chrysler, recently bailed out by taxpayers, are paid $14 an hour before deductions. The auto companies used to be in the upper tier of high paying manufacturing jobs. Now the U.S. is a low-wage country compared to some countries in Western Europe and the trend here is continuing downward.

Workers in their fifties at the BMW plant, subsidizing their lower wages with their tax dollars, aren’t openly complaining, according to the Post. Not surprising, since the alternative in a falling economy is unemployment or a fast food job at $8 per hour.

It is not as if we weren’t forewarned by our illustrious political forebears Fasten your seat belts; here are some examples:

Thomas Jefferson—“I hope that we shall crush in its birth the aristocracy of our monied corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”

Abraham Lincoln in 1864—“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. …corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.” (1864)

Theodore Roosevelt—“The citizens of the United States must control the mighty commercial forces which they themselves call into being.”

Woodrow Wilson—“Big business is not dangerous because it is big, but because its bigness is an unwholesome inflation created by privileges and exemptions which it ought not to enjoy.”

Franklin D. Roosevelt—“The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is Fascism—ownership of Government by an individual, by a group, or by any other controlling private power.”

Dwight Eisenhower, farewell address—“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.”

And, lastly, a literary insight:

Theodore Dreiser—“The government has ceased to function, the corporations are the government.”

Are you, dear reader, the same now as you were when you began reading this column?

 

 

darbikrash wrote:

 Any crash (in the timeline of my lifespan) will much more likely result in a direct dive into fascism, with the end game being militarized management of disappearing oil resources. 

And the signs of an ever-increasingly oppressive domestic security apparatus are quite apparent. 

 

 

goes211's picture
goes211
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What bubble is that?
xraymike79 wrote:
jrf29 wrote:

goes211,

That was a very good article; thank you for posting it.  Honestly it didn't even occur to me that the privileges that corporations currently enjoy are themselves just a form of government intervention in the old common law (which of course produces unintended consequences).  I love the analogy of the truck.  A corporation really is no different than a mechanical device, is it?

In the context of the 3E's, I wonder if you could even make the argument that the original reason for giving corporations special status might no longer exist in the future.  The main justification for special corporate protection has always been (I think) that it allows entrepreneurs to take greater risks than would otherwise be possible.  This greater risk tolerence leads to greater net innovation and net economic growth.  The rationale was the same for providing more and easier credit for the past several hundred years. 

But for the past several hundred years the Western world has been faced with a situation where there were enormous amounts of free resources to consume, and countries and individuals were in a race to see who could consume them the fastest.  First from the discoveries of land and resources in the New World, and then in the form of oil energy.  But if the future is a world of zero or negative net growth, then what is the purpose of incentivizing risk?  Why is it still a good idea?  In fact, it seems to me that in a world of zero net growth, in general you want to incentivize conservatism.  Maybe it isn't a mistake that these new forms of corporate law first arose during an era of exponential growth.  So a reform of corporate law to reintroduce personal liability might not only agree with libertarian theory, but could also be a good idea anyway.

 

Sorry to burst your bubble, but the danger of corporate power has always been with us, beaten back at times and now allowed full sway.

 

Burst whose bubble?   How is this a response to what he was saying?  I would think the guy that posts 3x as much content as any other poster could at least read what was being said before going off on a tangent.

tictac1's picture
tictac1
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What about simply

What about simply eliminating corporations?  Admittedly, i haven't through this completely, but why on earth do we LIMIT liability?  Liability is simply responsibility for one's actions.  Why should any person be partially immune to the consequences of their actions, save a young child?  Certainly not a powerful corporation.  If anything, I think that should bring ENHANCED liability, sort of  "with great power comes great responsibility". 

The ability of CEO's to remain immune to the consequences of their decisions is ridiculous, IMO.

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xraymike79
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goes211 wrote: xraymike79
goes211 wrote:
xraymike79 wrote:
jrf29 wrote:

goes211,

That was a very good article; thank you for posting it.  Honestly it didn't even occur to me that the privileges that corporations currently enjoy are themselves just a form of government intervention in the old common law (which of course produces unintended consequences).  I love the analogy of the truck.  A corporation really is no different than a mechanical device, is it?

In the context of the 3E's, I wonder if you could even make the argument that the original reason for giving corporations special status might no longer exist in the future.  The main justification for special corporate protection has always been (I think) that it allows entrepreneurs to take greater risks than would otherwise be possible.  This greater risk tolerence leads to greater net innovation and net economic growth.  The rationale was the same for providing more and easier credit for the past several hundred years. 

But for the past several hundred years the Western world has been faced with a situation where there were enormous amounts of free resources to consume, and countries and individuals were in a race to see who could consume them the fastest.  First from the discoveries of land and resources in the New World, and then in the form of oil energy.  But if the future is a world of zero or negative net growth, then what is the purpose of incentivizing risk?  Why is it still a good idea?  In fact, it seems to me that in a world of zero net growth, in general you want to incentivize conservatism.  Maybe it isn't a mistake that these new forms of corporate law first arose during an era of exponential growth.  So a reform of corporate law to reintroduce personal liability might not only agree with libertarian theory, but could also be a good idea anyway.

 

Sorry to burst your bubble, but the danger of corporate power has always been with us, beaten back at times and now allowed full sway.

 

Burst whose bubble?   How is this a response to what he was saying?  I would think the guy that posts 3x as much content as any other poster could at least read what was being said before going off on a tangent.

The legal concept of 'limited liability' didn't come into practice in the U.S. until the creation of the Limited Liability Act 1855. I believe it opened the door for criminally negligent "risk taking". Before limited liability corporations were established, the common law doctrine of respondeat superior required investors to bear responsibility for the acts of a business, just as individual proprietors and partnerships remain so liable today. Sole proprietors and partnerships have been and remain liable for the acts of a business because it is unjust to allow them to externalize a significant portion of the risks of their activities, while capturing the benefits of those risks. The limited liability of the corporate form greatly reduces incentives of shareholders to monitor corporate risk-taking, and frees executives to act in ways that further their own interests without bearing full responsibility for risks that are posed to third parties and to investors (which is quite evident in the activities leading up to the ongoing financial crisis). Limited liability corporations are also in a position to shift the social costs of their business activity on to members of the public who have not agreed to bear those costs.

Limited liability is supposed to encourage enterprise[13][14][15] but it has also been argued that it distorts the free market by allowing the entrepreneur to externalise some risk and impose it on society at large.[16] Moreover, there has been some concern that present structures favour large creditors who are in the position to negotiate secured terms, whereas small creditors' debts are left unsecured.

 

Limited liability

...the so-called "corporate veil" must also be understood as a key part of official channels that reduce company "exposure." It is, if you like, an institutionalisation of corporate advance "planning for 'maximum deniability.'"[47] The corporate veil derives from legislation and court precedent that grants the shareholders in a company limited liability for the actions of that company and gives companies themselves the status of a ("special") person in general and specifically in relation to their holding in other companies.[48] Courts have interpreted this to mean that companies also have limited liability in relation to their holdings in other companies and subsidiaries, even where they are majority shareholders and effectively manage the day-to-day operations. In both cases too, corporate veil protection was augmented through the fact that national court jurisdiction on foreign operations has limits; this is an example of the way that the increasing globalisation of enterprises is testing the capacity of governments, courts and citizens to ensure accountability for actions.

http://www.bmartin.cc/pubs/06globalsociety.html

 

Take for instance the nuclear industry as an LLC and its externalization of environmental and private/public property damage.

In the United States the nuclear power industry operates with a limited liability for damages which are caused by any accident at a nuclear power plant.  As a result of the Price-anderson Act of 1957 the owners of damaged reactors would be covered by private insurance for only $11 billion dollars.  This sounds like a lot but it is far less than the trillions of dollars of damage that would be caused.  Note also that virtually all homeowner insurance policies in the U.S. exempt insurers from the liability for a nuclear reactor disaster.  Citizens of the U.S. have virtually no insurance protection from the nuclear power industry in the country, even though the U.S. has the largest number of nuclear power plants in the world.

http://presstorm.com/2011/03/an-open-letter-to-environmentalists-end-lim...

By the way, Westinghouse and General Electric are looking to benefit from the passage of the Civil Liability for Nuclear Damages Bill by the Indian parliament.

Or take BP and its "limited liability" in the Gulf Oil catastrophe:

Matthew Wald of The New York Times reports the details of the previously obscure Oil Spill Liability Trust Fund, a $1.6 billion fund financed by a minuscule tax on oil -- eight cents per barrel, which Wald says is roughly 0.1%. According to Wald, the fund is designed to pay damage claims resulting from oil spills, though not cleanup and containment costs. But that's not all it does. It also limits the liability of oil companies like BP.

Under the law that established the reserve, called the Oil Spill Liability Trust Fund, the operators of the offshore rig face no more than $75 million in liability for the damages that might be claimed by individuals, companies or the government, although they are responsible for the cost of containing and cleaning up the spill.
The fund was set up by Congress in 1986 but not financed until after the Exxon Valdez ran aground in Alaska in 1989. In exchange for the limits on liability, the Oil Pollution Act of 1990 imposed a tax on oil companies, currently 8 cents for every barrel they produce in this country or import.
The tax adds roughly one tenth of a percent to the price of oil. Another source of revenue is fines and civil penalties from companies that spill oil.

According to Wald's report, there have been 51 instances in which damages under the $75 million liability cap has been exceeded. That figure will certainly be exceeded with BP's Deepwater Horizon spill. Up to $1 billion from the fund can be used for any single accident, but in this case, $1 billion is likely to be peanuts.

In other words, it was a pretty sweet deal for oil companies: they agreed to a tiny tax which they can pass on to consumers, and in exchange their liability is limited to $75 million. Because they can pass the oil tax along to consumers, it's like they got the liability caps for free.

If this law does indeed carry the final word, and there isn't another way to hold BP accountable for the damage it has caused, then you can chalk up another victory for corporate socialism.

 

edited to add source: http://www.dailykos.com/storyonly/2010/5/3/863045/-NYT:...

 

Or limited liability in the Bhopal, India disaster:

 

Technical responsibility clearly falls at Union Carbide’s door. It was the company’s over-full holding tank that leaked. Legal responsibility should be equally as clear. It’s not. At the time, the US headquarters of Union Carbide said it wasn’t responsible for day-to-day operations of the plant. That fell to its subsidiary, Union Carbide India Limited, in which it had a 50.9% stake. Union Carbide eventually paid up $470 million in compensation, but said its legal liabilities ended there.
 
 

 

As for the personal responsibility of the company’s management, Union Carbide’s chief executive has deftly dodged any number of civil and criminal cases. Seven other senior executives were recently found guilty, two and a half decades after the event. All obtained the right of appeal, as Chhabara observes in his blog. So no-one - neither the company nor those charged with running it – are left carrying the can.

 

http://crmanagementblog.blogspot.com/2011/01/bhopal-pinning-down-respons...

 

 

'Limited liability' empowers corporations to benefit from excessive risk-taking while shifting the costs of such behavior onto the public.

goes211's picture
goes211
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No bubble was burst...
xraymike79 wrote:

Limited liability' empowers corporations to benefit from excessive risk-taking while shifting the costs of such behavior onto the public.

It is strange to hear me say this but I think I may actually agree with XRM! 

xraymike79's picture
xraymike79
Status: Diamond Member (Offline)
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Posts: 2040
goes211 wrote: xraymike79
goes211 wrote:
xraymike79 wrote:

Limited liability' empowers corporations to benefit from excessive risk-taking while shifting the costs of such behavior onto the public.

It is strange to hear me say this but I think I may actually agree with XRM! 

I guess I did bolster jrf29's case for him. One difference is that in a world of depleting energy, it appears that the powers-that-be are actually breaking down laws and legal barriers to risk-taking in order to extract much more difficult to reach energy sources. We're ravaging the environment and chasing depleting resources to maintain a lifestyle that is unsustainable as well as unrealistic for the BRIC countries to emulate.

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