(1) What is your opinion on intellectual property? (I expect some interesting answers to this one, especially from true anarchists, who surely can’t be in favor of the status quo)
(2) What is the ‘free market’ case against corporations?
Please feel free to write the long and nuanced answer to either or both questions–I’ll be reading it all (and asking questions).
There is a thread about this subject at least once a month, if not more.
My answer is that there is no such thing as “intellectual property”. Patents, copyrights, and trademarks are all blatant monopolies.
It’s artificial scarcity, artificial monopoly, and is unjustifiable.
Corporations AS THEY ARE NOW, or corporations qua corporations. Yes, there is a difference.
Roderick Long, Kevin Carson, and many others have written the long & nuanced response to your second question. You might want to check out their blogs…
Ugh.
Long and Carson conflate corporations with large firms.
An individual can incorporate. Long and Carson don’t carefully make that distinction.
I’d also advise (if the OP wants an Austro-Libertarian/Ancap perspective) reading Stephan Kinsella, Walter Block-J.H. Huebert and Peter Klein’s responses.
It is not property.
If you use the forum search, there are several large debate threads on it. Generally anarchists do not recognize it as property, minarchists and objectivists may sympathize with the status quo.
Jeffrey Tucker, the mises.org webmaster is a big fan of “Against Intellectual Monopoly” by Boldrine and Levine, and Stephan Kinsella, the author of “Against Intellectual Property” is one of the Mises Economics blog contributors. But not every Austrian is an anarchist, and not every LvMI associate is an anarchist or against IP.
That’s what I would have guessed.
OK, so I guess I care more about the second one.
I don’t know what the ‘free market’ position is on either, or what the difference.
Thanks.
There isn’t one, as they are voluntary associations.
When he speaks of corporations I think he is meaning it in the sense of large firms that are monopolies due to discriminatory state treatment.
Corporations as they are now are creatures of the state. But corporations qua corporations are fine. Put simply, corporations are aliases for a group of people which created/run a company.
Right, this is what I am referring to. This is a claim I’ve heard repeated often by libertarians, and I wonder what exactly they mean by it. I’m vaguely aware of a claim that Green/left-liberal types frequently make, which is that some landmark court case(s) extended the constitutional (thirteenth amendment, iirc) rights of a “person” to corporate entities. All the ramifications of this through American history, I’m not really sure. Anyway, I was wondering if this perspective is shared by free marketers, and also whether they have additional criticisms of the way the state treats corporations.
Basically, what things does the government do for corporations that you would have them stop doing tomorrow if you had your way. Besides those related to intellectual ‘property’.
edit: besides bailouts and subsidies, obviously; those only go to certain corporations, even if a rather large number. It’s also not a criticism of corporations per se, since some small American farmers also get state subsidies.
Interesting threads, I might add (though sometimes they go in circles). I started out with some pretty Randian views on copyright (though not patents), and following some of the threads and then my own mental conclusions convinced me of its folly.
The government underwrites a legal regime which allows for corporate personhood.
It is important to understand corporations in the first place. A corporation as we understand it under the state, is a legal fiction (like IP) which allows for personhood for the business entity that is separate from its owners (shareholders) and shields those owners from being 100% accountable for the actions of the firm.
Typically, capitalists will incorporate when their business has become established, and they want to separate their personal finances and assets from the business. As a sole proprietor, an individual could be sued for his business dealings, and his non-business assets are fair game.
Corporate personhood creates “limited liability” which insulates the owner/shareholder personal non-business assets.
Now in a market economy a corporation is a reasonable natural development, for many small investors to pool their capital to start a larger enterprise. Even the notion of limited liability is a reasonable idea, provided that in a free market, all parties interacting with the corporation, agree that there are limits on compensation if they sell a bad product, or if they don’t pay their bills. This may create a competitive disadvantage for a free market corporation, but we can’t honestly know, so for now, I maintain they are possible and we’ll have to wait and see if they could be viable.
So putting all of the anti-capitalist nonsense aside, I don’t have a particular issue with corporations. I think the state is a much bigger problem, and I am trying to avoid working with the state. Avoiding corporations (if one is predisposed to do so) is a lot easier.
As far as the Long/Carson left libertarian deal, they have a hardon because they are anti-capitalists. Neither was able to make a particularly good argument against corporations, except to conflate them with large firms, which is not the case, as incorporation is not related to the size of the ownership group or capital base, but rather the necessity to protect non-business assets when taking excessive risks. Do corporations get subsidies? Sure. As you mentioned, so does everyone else.
One popular strawman of the Austrian, and particularly Misesian position (lovingly referred to by our unsuccessful friends as Misoids) is that austro-libertarians think that a free market will have the same institutions, but just no state. This is absolute nonsense. What I have seen, is that austro-libertarians are careful not to make false objective [sic] claims about free market outcomes on the level that our anti-capitalist and left anarchist friends tend to do.
Are you asking about the case against corporations qua corporations (limited liability, legal personhood, etc.), or large firms (which are generally corporations, but this is mostly irrelevant)? The two are often conflated.
Ah, should’ve known LS would beat me to the punch [:D]
Without turning this into another “Conflation” debate, I understand their thesis to be something like: large firms are a byproduct of the state, without which they would be significantly less prevalent.
IMO, the distinction between “corporation” and “large firms” is kind of a false dichotomy; yes there are small “corporations” and sole proprietorships which have incorporated, but they take advantage of the state subsidy which is corporate personhood (etc.) because it is to their advantage to exploit the system in such a manner. Without the state, many of these organizations would (or at least could) still survive as family businesses. Without the state, however, it is absolutely infuckingconceivable that an organization the size of Coca-Cola or General Motors could last very long at all.
Distilled, the LL argument is that sans State interference, organizations simply can’t get that big, because bigness requires profits (and lots of them) the existence of which encourages potential competitors to get off their arses and open up shop across town, thus driving prices (and profits) down… etc.
But yes, Kinsella et. al have responded, and those are worthwhile rejoinders for anyone interested in the topic.
Right. Which is not what Jimmy Jazz asked about, and is not a critique of corporations (which they failed miserably at).
I think you’re making a leap you cannot prove. To be able to make that claim, you would have to be able to prove you know the maximum possible size of a firm in a free market.
This is my problem with leftoids (yourself typically excluded). An assumption of knowledge they cannot have. It was my issue with the conflation debate, that with my very poor layman’s knowledge, was immediately able to point out gaping holes in the reasoning of Long in particular.
Right. And it is based on a narrow understanding of commerce. When I purchase in bulk, I get discounts. When I have multiple outlets, I can rotate larger amounts of stock in and out faster than small firms that try to match my purchasing volume. And so on. I know there are costs (informational costs) to operating a large firm, but that alone is not a proof that those costs can’t be lowered over time through efficiency. Such an argument (that informational costs are static, or cannot be tamed) flies in the face of what we know about competition.
The argument against corporations is that they receive massive direct and indirect State subsidies.
If I want to borrow $1M to start a business, I can’t borrow at all or I’ll pay extortionate interest rates.
If a CEO of a large corporation wants to borrow $1B, he can borrow on very favorable terms. This distorts the market in favor of large corporations.
Regulations also subsidize large corporations. The cost of regulation compliance is usually fixed rather than per-unit. Suppose it costs $1M to comply with a regulation. If I sell 1000 units, my regulation cost is $1000 each. If I sell 10M units, my regulation cost is $0.10 each.
It’d be very hard to have a business larger than 100-200 without State restriction of the market.
Suppose that someone is a brilliant manager and can oversee a 100 person factory. Why should he work for a large corporation? Instead, he should raise capital and start his own factory.
In a free market, anyone who’s a really good worker would be able to start his own competing business, rather than work for a large corporation.
In order to have large corporations, you need State restriction of the capital market, making it hard for individuals to start new businesses. You need State regulations, which impose extra costs on small business owners.
As another example, suppose a small business owner has $100k in revenue. He probably has to spend $5k on accountants, just to make sure he’s in compliance with the tax laws. That’s effectively a tax of 5%. A large corporation with $10B in revenue might spend $10M on accountants. That’s a tax of only 0.1%.
Those things, as well as protect them with IP laws, tariffs, and go to war for them. So really, it’s not the corporations themselves, but the fascist bedbuddy system.
“Without turning this into another ‘conflation’ debate…”
I have no intention of debating the merits of either position, in this thread. My intent was only to summarize the idea (as best as I understand them) in response to the OP’s inquiry.