Just wondering what the general consensus on corporations as persons is here at amongst the Mises community. Can they have rights as a person? Can they then own another corporation?
A corporation would be a form of contract. People pool their resources into an entity which associates with people according to conditions specified in the contract. Potential customers, potential stockholders, potential employees: anyone has the choice of association or non-association.
Only natural persons are persons in libertarian law. Liability has to be managed with contracts.
I suggest reading Kinsella’s blog entry In Defense of Corporations.
Thanks all. I will read the blog post. I am glad to see we are on the same side of the issue.
I cant see why corporations cant be seen as an acting entity. They behave, attempt tochange a present state of affairs to an imagined better one, that is action. The same way for cells inside human body acting, etc.
Sure they are acting, but someone has to assume full liability. This can be management, shareholders, … let the market decide. It is fundamentally unlibertarian to coerce limited liability via the state onto third party stakeholders.
^
A legal fiction does not act.
I think a relevant speech is one given by Peter Klein at Mises University 2010 called “The Corporation and The Free Market”:
Exactly. Anyone else care to share their thoughts on this? Can a corporation exist within a free market environment?
I see no reason why it could not.
I’d have to say no.
Of it so, the model for a corporation would be different. Perhaps needing a form of liability insurance…
One way under this method is obviously having higher premiums for more dangerous businesses or for continued violations, but those insurers would be smart enough to keep higher premiums for corporations that continue to hire CEO’s or staff that are high risk - and thats IF they even received it at all. This would provide insentive to companies to hire low-risk individuals and workers to remain low-risk.
Even so, the modern day coporation has limited liability (the liability of a firm’s owners for no more than the capital they have invested in the firm). To the best of my knowledge, this would force companies loosing lawsuits to liquidate under the worst case, but allow any wrong-do’er in the corporate body to slide over, create another and pop up as another limited liability. This ability comes only from the state that creates a limited liability infrastructure.
Because of property rights, I believe someone would always liable unless someone voluntarily gave up their right to sue (ex: rock climbing or parachuting school, surgeries).
I asked this in another thread a while back in reference to For a New Liberty when Rothbard mentions that if a building collapses and kills people as a result of the owner’s negligence, it is an insufficient deterrent for the owner to be held financially responsible. He must also be personally held criminally responsible. I was wondering how this logic applies to a corporation that owns a building that collapses. How else could proportional restitution be achieved unless financial restitution by the shareholders was deemed sufficient? Executing the shareholders for murder wouldn’t be proportional. Would the shareholders split jail sentences among themselves based on % ownership? It’s just tough for me to imagine how this would work unless financial restitution could suffice for a crime as bad as negligent homicide, which Rothbard rejects.
What affect would this have on capital accumulation and investing? Why would you buy stock in a corporation if you could be held liable for its actions? How could you possibly know what’s going on in a multinational like Intel or Coke? How could you invest in a mutual fund where you’d own a variety of company shares? Doesn’t this kill the public corporation?
What affect would this have on capital accumulation and investing? Why would you buy stock in a corporation if you could be held liable for its actions? How could you possibly know what’s going on in a multinational like Intel or Coke? How could you invest in a mutual fund where you’d own a variety of company shares? Doesn’t this kill the public corporation?
It would make capital accumulation more sound, i.e. leading to more real economic growth.
If management of a company is too difficult to oversee for shareholders, managers can assume liability for their actions.
This does not kill the corporation because liabilities can be dealt with via contracts.
It does kill the possibility to hide behind a corporation for negative externalities towards third parties who want compensation but are stopped from ding so by current corporate law.
I am not sure even criminal responsibility is sufficient deterrent.
I am not sure even criminal responsibility is sufficient deterrent.