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“Stakeholder Capitalism” Is a Trojan Horse for Fascism

Posted by Vinay 1 year, 6 months ago to Politics
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That shareholders cannot be well served by a corporation that treats its customers or employees unfairly is obvious. One may dismiss the distinction of two types of capitalism as simply a benign delusion. But Davos has always been an instrument of neo-Marxist social engineering, an evil by design.
SOURCE URL: https://www.thesavvystreet.com/stakeholder-capitalism-is-a-trojan-horse-for-fascism/


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  • Posted by BCRinFremont 1 year, 6 months ago
    When I am fed pablum like "Stakeholder Capitalism", I always remember the scene from Dr. Zhivago where upon the good Dr's return from a trip, he finds that his home has been divided up by the Comrades to house dozens of "Stakeholders". The comrades allow the Dr to keep one room for himself and his family.

    As I have stated here numerous times: Under Socialism, everything is free,,,but the shelves are empty....
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    • Posted by 1 year, 6 months ago
      Good one: Under Socialism, everything is free,,,but the shelves are empty....

      Like, to boost GDP, government construct great big projects like long distance trains to carry ghosts from nowhere to nowhere.
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  • Posted by $ Commander 1 year, 6 months ago
    To change a definition is deceitful, whether through ignorance or malice.
    Rand: Definitions are the guardians of rationality, the first line of defense against the chaos of mental [dis-integration].
    The more "definitions" regarding a subject, the more uncertainty, the more opportunity to control the mind through narrative.
    From Claude Shannon: Some messages "resolve uncertainty." These are "information messages." All other messages are "noise."
    IMR/TMR=U
    (Information Messages Received ÷ Total Messages Received equals Uncertainty)

    Which poses the question: Are "we", as a global human group, educated in a methodology of evaluating Information v Noise?....rhetorical.

    Thanks for an insightful essay.
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  • Posted by Lucky 1 year, 6 months ago
    I recall the people who were good at talking rather than producing using expressions like stakeholder this and stakeholder that and triple-bottom-line.
    Sciency sounding stuff like quantitative easing and aggregate demand, still gives me the cringe.

    Triple-bottom-line is good for describing what government owned utilities do (actually, do not do). It is used to cover the fact that despite high charges no profit is made, they claim to be producing unique intangibles.

    Nikki Haley, yes, a name I hope to hear more of.
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  • Posted by 1 year, 6 months ago
    It's a great thing that corporations are entities at law. There are no special privileges that flow from this. The problems of cronyism stem from the fact that fascism is introduced at the state level.

    Limited liability is NOT a special privilege. It is in fact available to all individuals who declare themselves bankrupt to get free of lifelong debt.

    This is because everyone's liability is limited to their assets.

    The bundled assignability of corporations is a great invention, 100% compatible with Rand's philosophy. I have explained this all in the essay linked above.

    In cases of corporate misconduct, courts do look at the individuals involved and hold them responsible.

    Regulation is a different matter.
    As "all" libertarians know? GG Online is for objectivism mainly. And several libertarian professors like Richard Ebeling recommend the greatness of Hessen's book on corporations.

    Libertarianism is often brainless like that. Some, like Reason and Cato, are even anti-science and fall for the climate fraud, which conservatives and objectivists don't.

    Hence I am not a libertarian.

    See the whole explanation here as to why the corporation is a nexus of contracts and has nothing intrinsically wrong with it; governments make it so: https://www.thesavvystreet.com/is-the...
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  • Posted by $ CBJ 1 year, 5 months ago in reply to this comment.
    I've laid out the arguments for why it is beneficial to business.

    “Beneficial to business” does not equate to “appropriate in a free market economy”. The use of eminent domain to force people from their homes and give their property to corporations can be construed as “beneficial to business”, but it is not a policy that any objectivist would support. Whether corporate privilege is allowable under the Constitution is immaterial – we’re talking principles here, not whatever happens to be legal at the moment.

    If you would like to offer up your opinions on why it is not a "proper" service, please do so.

    I’ve already done so, many times over. Creating a corporate entity and endowing it with personal “rights” is not a legitimate function of government, in the context of Objectivist principles.

    "Either separation of personal assets from business interests is a right, or it isn’t." It isn't.

    All right then. Let’s follow this path to its logical conclusion. Government exists to protect individual rights. Separation of personal assets from business interests is not a right. Therefore, it is not a proper function of government to create a corporate system that legally separates personal assets from business interests. QED.

    Registering infants at birth is another matter entirely. It is recognition of an actual entity, a new person (usually a citizen) with human rights. This has nothing in common with government creation of an artificial “person” such as a corporation.

    Incorporation is the process of creating that legal entity which is separate and apart from the individuals who may oversee its operations. This greatly facilitates the sale and transfer of control of such entities (even within a corporation) without the interference of government (barring monopoly or strategic interests) precisely because those assets are not the private assets of any given individual.

    The conveniences that the corporate system “facilitates” are irrelevant to a discussion of basic principles. Pragmatic arguments such as this can be used to justify all kinds of policies that are “good for business” but violate free-market norms, such as the eminent domain example above, and local tax advantages for new businesses that are subsidized by existing businesses.

    Does the government have a responsibility to protect property and property rights? Absolutely. And executing that responsibility relies wholly on the government's ability to properly ascertain who owns what so as to be able to adjudicate claims of wrongdoing.

    Which government can easily do without resorting to creation of an artificial “person” endowed with its own “rights”. There are many other ways available to investors to shield their personal assets from their investment interests, such as royalty and profit-sharing arrangements, or obtaining liability insurance.

    Then demonstrate that there actually exists a double standard here in the US.

    I have already done so, and we have unfortunately arrived at what the article points out as the end result: “an economic landscape dominated by corporate executives and their regulators, at the expense of everyone else’s freedom.”
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    • Posted by $ blarman 1 year, 5 months ago
      “Beneficial to business” does not equate to “appropriate in a free market economy”.

      Appropriateness is used to indicate either moral sanction or pragmatic outcome. Incorporation is eminently pragmatic as I have demonstrated. If you wish to challenge it on a moral basis, please enumerate the principle you feel is being violated and why. But it must be an actual principle of individual rights rather than a personal preference among alternatives.

      "Government exists to protect individual rights. Separation of personal assets from business interests is not a right. Therefore, it is not a proper function of government to create a corporate system that legally separates personal assets from business interests. QED."

      The problem with your logic here is in the very first statement because you take that to mean that the ONLY (an absolute) sanctioned activities of government lie directly in protecting individual rights. According your logic here, States wouldn't have the moral authority to define traffic laws. Cities wouldn't have the moral authority to enact zoning ordinances. As definitive as you want to make your case here, you have to prove that the people themselves do not have the right to delegate powers to government for the orderly regulation of society beyond protection of natural rights. That's likely an entire doctoral thesis right there. I look forward to its presentation.

      "I have already done so..."

      So far you've tried unfairness which was rebutted as unsubstantiated. "Preferential treatment" was exposed as personal preference on the part of the buyer. An argument on the merits of a pragmatic approach was at best a draw. Now you appeal to the limitations of government. It's a fascinating "Hail Mary" but you might want to get some receivers downfield before you throw that one up for grabs. What I have not seen and which would bolster your case substantially is the moral imperitave you feel incorporation violates. Without that, however, your argument is significantly lacking in its merits.
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      • Posted by $ CBJ 1 year, 5 months ago
        Incorporation is eminently pragmatic as I have demonstrated.

        it’s not “pragmatic” in any way, shape or form. It purchases heightened protection from redress for what are often legitimate claims of damage to other parties, in exchange for increased government interference in a firm’s activities.

        If you wish to challenge it on a moral basis, please enumerate the principle you feel is being violated and why.

        I have already done so, repeatedly. To once again quote the article I cited:

        “The nonaggression principle declares that governments should not interfere with anyone’s peaceful activities, provided those activities do not violate the rights of others. For libertarians, this principle applies not only to individuals, but also to groups of individuals — and a corporation, at its root, is simply a group of individuals who share an interlocking set of contractual relationships.

        “The nonaggression principle logically leads to this conclusion: any activities that are legally and morally legitimate for corporations should be equally legitimate for all other private, voluntary groups of people. Conversely, activities that violate the rights of others should be prohibited to all such groups. When it comes to legal rights and responsibilities, a free society should not treat corporations any differently from the way it treats any other privately organized groups, such as labor unions, religious and charitable organizations, foundations, and political parties.

        “This leads to a further conclusion that some will consider radical: there is no need or justification for ‘corporation’ as a legal concept at all. An unincorporated business should have exactly the same standing under the law as an incorporated business in matters such as taxation, liability, reporting requirements, and recognition of contracts. Aside from protecting the rights of third parties, governments should have no say regarding any firm’s form of organization, purpose, or method of operation.”

        According your logic here, States wouldn't have the moral authority to define traffic laws. Cities wouldn't have the moral authority to enact zoning ordinances.

        Correct on both counts. As Ayn Rand has stated: “My position is fully consistent. Not only the post office, but streets, roads, and above all, schools, should all be privately owned and privately run. I advocate the separation of state and economics. The government should be concerned only with those issues which involve the use of force. This means: the police, the armed services, and the law courts to settle disputes among men. Nothing else. Everything else should be privately run and would be much better run.”

        Neither traffic laws nor zoning laws fall under the umbrella of government’s legitimate functions. If the streets were privately owned, traffic rules would be set and enforced by the owners. Private deed restrictions are a legitimate substitute for zoning, and are widely used in cities like Houston that have no zoning restrictions.

        As definitive as you want to make your case here, you have to prove that the people themselves do not have the right to delegate powers to government for the orderly regulation of society beyond protection of natural rights. That's likely an entire doctoral thesis right there. I look forward to its presentation.

        I don’t have to prove a negative. Ayn Rand’s highlighted statement above sums up the Objectivist position on the subject. If you wish to argue the opposite position, it is your responsibility to demonstrate that it is consistent with Objectivism. I look forward to receipt of my PhD.
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        • Posted by $ blarman 1 year, 5 months ago
          "it’s not “pragmatic” in any way, shape or form..."

          Your objection is ostensibly a moral one - that it should or should not. Pragmatic refers to can or can not. The fact that corporations do and have existed for centuries is a testament to their pragmatism.

          “The nonaggression principle declares that governments should not interfere with anyone’s peaceful activities, provided those activities do not violate the rights of others..."

          You're getting to the point of blah, blah, blah monotony. Restating something ad nauseum does not lend any moral authority to its argument - it just becomes tedious and repetitive. Tell me which right incorporation ostensibly interferes with or concede the point - and the entire argument.

          "Neither traffic laws nor zoning laws fall under the umbrella of government’s legitimate functions."

          Uh, let me propose a simple thought experiment. If you create an arbiter - let's say a third party, private arbiter - that is generally accepted as authoritative and binding on society, what makes that in any practical terms different than "government?"

          Who selects this third-party arbiter and grants them power? And what list of powers do you grant them? Are they not the very same powers we grant to the entity we call "government?" YES. Even the Rand quote you gave concedes that legal avenues are a legitimate grant of authority to government. And is not the transfer of property as the result of a lawsuit a use of force? Of course it is! Good grief.

          "I don’t have to prove a negative."

          You made the assertion that people can NOT delegate to government any powers other than those directly dealing with rights. It's not a negative argument. It's simply an untenable one.

          You've made not just one but a whole series of windmills to tilt against. Unlike Sancho, however, I'm done watching and trying to persuade you of the futility and absurdity of your pursuit. Believe what you will. But without an actual moral claim of substance to discuss, I'm going to bid you adieu.
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          • Posted by $ CBJ 1 year, 5 months ago
            Your objection is ostensibly a moral one - that it should or should not. Pragmatic refers to can or can not. The fact that corporations do and have existed for centuries is a testament to their pragmatism.

            Wars, dictatorships and superstition have also existed for centuries. Are they pragmatic? As Ayn Rand points out, “The evaluation of an action as practical depends on what one intends to practice.” Corporations are not pragmatic (practical) in terms of advancing human political and economic liberty, for reasons I stated above..

            Tell me which right incorporation ostensibly interferes with or concede the point - and the entire argument.

            Incorporation interferes with the right of retaliatory force, which in Objectivist terms is a right delegated to government. The interference consists of increasing the expense and difficulty of exercising that right against those who initiate force and then hide behind corporations to escape the consequences of their wrongful actions or negligence.

            Who selects this third-party arbiter and grants them power? And what list of powers do you grant them? Are they not the very same powers we grant to the entity we call "government?" YES. Even the Rand quote you gave concedes that legal avenues are a legitimate grant of authority to government. And is not the transfer of property as the result of a lawsuit a use of force? Of course it is! Good grief.

            Arbiters have whatever powers the parties to arbitration grant them, no more and no less. They do not have a monopoly on the retaliatory use of force, which is a defining feature of a proper government according to Objectivism. The transfer of property as the result of a lawsuit is a use of retaliatory force, properly executed by a legitimate government.

            You made the assertion that people can NOT delegate to government any powers other than those directly dealing with rights. It's not a negative argument. It's simply an untenable one.

            Ayn Rand made essentially the same argument, as I stated above. “The government should be concerned only with those issues which involve the use of force. This means: the police, the armed services, and the law courts to settle disputes among men. Nothing else.” Creating corporations out of thin air and endowing them with “personhood” and “rights” does not meet Objectivist standards for proper government action.
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            • Posted by mccannon01 1 year, 5 months ago
              Wow. Interesting conversation. My two cents is the best part about corporation creation is people can invest in its stocks and bonds without liability past the value of such stocks and bonds. For example, my IRAs and other investment portfolios are a mix of stocks and bonds not always chosen by me. If the financial institution that holds one of my IRAs happens to invest in XYZ company and some fool at XYZ gets sued for doing something really stupid within the company, the worst that can happen to me is XYZ stocks and bonds go to zero value. No lawyer or team of lawyers are going to confiscate the other retirement holdings or my house or my car or put me in "debtors prison" for the rest of my life. Who would invest in the market if that were not so? I'd have to find someplace else to put my money and so would millions of other people. Take that protection away and the whole thing will collapse.
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              • Posted by $ CBJ 1 year, 5 months ago
                Investments do not have to be through direct ownership. For instance, they can be royalty or profit-sharing agreements. If corporations had never existed, these and many other free-market arrangements would have arisen to satisfy investment demand for limited liability. And I have never argued that any form of limited liability is flat-out wrong. All I am saying is that, to the extent that owners of corporations are legally protected from personal liability, the exact same legal protection should also apply to owners of an unincorporated firm.
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                • Posted by Lucky 1 year, 5 months ago
                  ".. to the extent that owners of corporations are legally protected from personal liability, the exact same legal protection should also apply to owners of an unincorporated firm."

                  This is a fair comment, but how to do it?

                  Imagine individuals who trade as a group, not incorporated. They sell a product. The product destroys value of a $1m. There is a court case, the court rules for $1m damages to be paid by the group.
                  The group may (truthfully) say they have together only $100k for this. Too bad, the court can go for homes, cars etc.

                  Now, they want the right stated above to limit their payment, too late, they could have incorporated. Members of the group had that choice. They chose not to set up a separate legal entity (person).

                  Buyers of the product also have the choice of who they buy from, they would/should know about limited recourse when dealing with a corporate v. no limit for non-corporates.
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                  • Posted by $ CBJ 1 year, 5 months ago
                    Firms such as sole proprietorships and partnerships face this possibility all the time. Two responses I can think of, just off the top of my head:

                    1) Liability insurance.
                    2) Clear language on the product label or sale contract, spelling out the limits of the selling company's liability.

                    There are likely many other solutions I haven’t thought of, that can be implemented without violating free-market principles.
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            • Posted by $ blarman 1 year, 5 months ago
              "Wars, dictatorships and superstition have also existed for centuries..."

              Red herring. Stay on topic.

              "Incorporation interferes with the right of retaliatory force, which in Objectivist terms is a right delegated to government."

              Uh, since corporations are registered with the government and deal with the government's arbitration of claims, I'm not seeing a violation here. There is no "right" to retaliatory force. There may be justification but that is not the same thing. Rights are individual. A "right" to retaliatory force would imply that no judgment other than one's own would be sufficient to initiate retaliatory force. Justification properly notes that judgment relies on an impartial third party.

              Furthermore, I'm also not seeing what grants one unlimited retaliatory force against another person. Your claim implies such, yet we don't execute people for vandalism nor do we confiscate one's home for petty theft. Punishment must have parity with the crime or the infliction of retaliatory force becomes tyranny in and of itself rather than justice. (I also cover this in my book.)

              Lastly, government doesn't have "rights" delegated to it. Government has specific powers delegated to it in order to protect rights, etc.

              "Corporations are not pragmatic (practical) in terms of advancing human political and economic liberty, for reasons I stated above.."

              You may find them impractical, but millions upon millions of other people hold the opposite view. You're outvoted on both counts.

              "The interference consists of increasing the expense and difficulty of exercising that right against those who initiate force and then hide behind corporations to escape the consequences of their wrongful actions or negligence."

              That you consider it to be "expensive" or "difficult" is a personal assessment based on your specific biases, cost-benefit analysis, etc. It is not a moral value argument, however. Neither you nor I is an authorized spokesperson for Reality. Nor have you substantiated the second claim to be the modus operandi of the courts. (And really, you'd have to get deep into the guts of any particular case to try to re-evaluate those merits and compare them to the ruling. Knock yourself out.)

              "The transfer of property as the result of a lawsuit is a use of retaliatory force, properly executed by a legitimate government."

              Therefore, you admit that any authorized arbiter is in fact a legitimate governing entity because it has the authority to enforce a ruling. Again, I think you're mincing words and trying to avoid what a government really is and how it works because such understanding nullifies any real distinction between public and private arbiters.

              "Creating corporations out of thin air and endowing them with “personhood” and “rights” does not meet Objectivist standards for proper government action."

              I certainly never implied that incorporation creates "rights" or "personhood" for the corporate entity. I find such a notion prima faciae absurd: a corporation is not a person. It has no sentience in and of itself and therefore can not be recognized as holding rights.
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              • Posted by $ CBJ 1 year, 5 months ago
                There is no "right" to retaliatory force.

                A right to the use of retaliatory force is a component of the right to self-defense.

                A "right" to retaliatory force would imply that no judgment other than one's own would be sufficient to initiate retaliatory force. Justification properly notes that judgment relies on an impartial third party.

                The right to retaliatory force implies no such thing. Aside from force necessary for immediate self-defense, the right to retaliatory force is a right delegated to a proper government. I said as much in my comments above: “a monopoly on the retaliatory use of force . . . is a defining feature of a proper government according to Objectivism.” The government itself is supposed to be that impartial third party. It abandons that impartiality when it agrees to put its thumb on the scales of justice in exchange for the filing of corporation papers.

                Furthermore, I'm also not seeing what grants one unlimited retaliatory force against another person.

                Of course you’re not, because I never made or implied such a claim. As I said previously, the right to retaliatory force is a right delegated to government. No government of a semi-free country that I am aware of claims the right to use unlimited retaliatory force against any person.

                Lastly, government doesn't have "rights" delegated to it.

                “government as such has no rights except the rights delegated to it by the citizens for a specific purpose.” –Ayn Rand, The Nature of Government

                You may find them (corporations) impractical, but millions upon millions of other people hold the opposite view. You're outvoted on both counts.

                You may find Objectivism practical in terms of advancing human political and economic liberty, but millions upon millions of other people hold the opposite view. You're outvoted on both counts.

                any authorized arbiter is in fact a legitimate governing entity because it has the authority to enforce a ruling.

                Unlike government, no private arbiters can use actual force to enforce a ruling. They must turn to government to do so.

                I think you're mincing words and trying to avoid what a government really is and how it works because such understanding nullifies any real distinction between public and private arbiters.

                The real distinction is that, unlike private arbiters, government has the authority to enforce its rulings by the use of physical force. Arbiters don’t. Big difference.

                I certainly never implied that incorporation creates "rights" or "personhood" for the corporate entity. I find such a notion prima faciae absurd: a corporation is not a person. It has no sentience in and of itself and therefore can not be recognized as holding rights.

                I’m so happy to see that you agree with me. Now see if you can convince the U.S. Supreme Court. From its 1886 decision in Santa Clara County v. Southern Pacific Railroad Company to its 2010 decision in Citizens United v. Federal Election Commission, the Supreme Court has consistently held that a corporation is a legal person with a considerable array of the Constitutional rights of real people.
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                • Posted by $ blarman 1 year, 5 months ago
                  "A right to the use of retaliatory force is a component of the right to self-defense."

                  Uh, no. There is justification in using retaliatory force, but not a right. They are very different things. Government doesn't have a "right" to retaliatory force. That's why cases must go to adjudication before law enforcement may be justly empowered to act and confiscate property, etc. If there is a "right" to retaliatory force, you obviate the entire reason for a judicial branch of government. The Executive would be empowered to act without check based entirely on its own perception of an incident.

                  Shooting someone in self-defense isn't a right, it's justified action. Why? Because rights are never dependent on someone else's actions. Rights are individual and exist even if another person isn't around. Retaliatory force pre-supposes another party's actions.

                  "Of course you’re not, because I never made..."

                  You missed the point. Your major complaint in this whole debate is that people who incorporate are able to shelter assets from attachment in a lawsuit - they limit their liability. You don't like it that those assets are taken off the table even though they are no longer that individual's personal assets. You want them available (unrestricted) for inclusion in the damages pool. My point is that damage awards are not unlimited. You don't get to demand someone else's life just because they initiated an automobile accident. That's vindictiveness, not compensation for loss. That's tyranny through other means.

                  "Lastly, government doesn't have "rights" delegated to it." (my words with which you disagreed)

                  I stand by what I said. Government has powers delegated to it - not rights. Rights are individual and can not be delegated away. Either Rand is wrong in that quote or her thoughts are being misinterpreted because she used poor word selection. I take the word "rights" very seriously and definitively.

                  Another way to think of it is this: Government is just as ephemeral an entity as a corporation. If a corporation can not hold rights, under what theory is a government any different? In fact, isn't a government just another form of corporation - just one that is far more expansive in application and jurisdiction?

                  "You may [not] find Objectivism practical in terms of advancing human political and economic liberty, but millions upon millions of other people hold the opposite view."

                  Despite your minor grammatical error (omitting the negative) and personal aspersion toward me, even the other Objectivists on this forum have disagreed with your interpretation regarding corporations. There aren't "millions upon millions of people" agreeing with you. Even if that were the case, you have yet to show how corporations infringe upon either political or economic liberty - especially the latter. The Oxford History of the United States credits much of the explosion in entrepreneurship and industry in the United States in the late 1800's to the advent of widespread incorporation. I'm also not sure how political liberty is damaged by the invention of corporations either. Most counties, cities, etc. are corporations...

                  "Unlike government, no private arbiters can use actual force to enforce a ruling. They must turn to government to do so."

                  If an arbiter has no real authority to enforce the terms of a contract, what good are they? Wouldn't you just have to re-litigate the dispute in Court? What you're really saying is that there are no real third-party arbiters at all - which was my point. The only real arbiters are those who have been granted power to act on behalf of the State.
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                  • Posted by $ CBJ 1 year, 5 months ago
                    There is justification in using retaliatory force, but not a right. They are very different things.

                    If a person’s actions are justified, he is necessarily acting within his rights.

                    rights are never dependent on someone else's actions. Rights are individual and exist even if another person isn't around. Retaliatory force pre-supposes another party's actions.

                    “A ‘right’ is a moral principle defining and sanctioning a man’s freedom of action in a social context.” --Ayn Rand, “Man’s Rights”, The Virtue of Selfishness. The manner in which a right may be properly exercised can depend upon someone else’s actions.

                    Your major complaint in this whole debate is that people who incorporate are able to shelter assets from attachment in a lawsuit - they limit their liability.

                    Wrong. My major complaint, which I have maintained throughout this whole discussion, is that people who bow to the government’s bidding by filing incorporation papers are given enhanced legal protection that is not given to those who choose not to incorporate. It is the double standard that I object to. If the government applies the same standards of asset protection to unincorporated businesses that it does to incorporated businesses, my objection on this issue no longer applies.

                    Either Rand is wrong in that quote or her thoughts are being misinterpreted because she used poor word selection.

                    “That quote” from Ayn Rand’s essay, The Nature of Government, is at the very heart of Rand’s definition of, and justification for, government. Remove it and her advocacy of limited government no longer makes sense.

                    Despite your minor grammatical error (omitting the negative) and personal aspersion toward me, even the other Objectivists on this forum have disagreed with your interpretation regarding corporations. There aren't "millions upon millions of people" agreeing with you.

                    There was no grammatical error in my statement, minor or otherwise. Nor was any personal aspersion intended. I meant exactly what I said. Read it again: ”You may find Objectivism practical in terms of advancing human political and economic liberty, but millions upon millions of other people hold the opposite view. You're outvoted on both counts.”

                    I was simply mirroring the form and structure of your statement, to demonstrate that the argument was invalid – the rightness or wrongness of what one finds “practical” does not depend upon the number of people who hold the opposite position. (I assume that we both find Objectivism practical in terms of advancing human political and economic liberty.)

                    If an arbiter has no real authority to enforce the terms of a contract, what good are they? Wouldn't you just have to re-litigate the dispute in Court? What you're really saying is that there are no real third-party arbiters at all - which was my point. The only real arbiters are those who have been granted power to act on behalf of the State.

                    That’s not what I’m really saying at all. Governments (physically) enforce contracts. An arbitration agreement is a contract. Private arbiters are contracted by two or more opposing sides to decide in favor of one or the other. If the losing party refuses to abide by the decision of the arbitrator, the original dispute would not have to be relitigated in court – the court would simply be asked to uphold the terms of the arbitration contract itself.
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                    • Posted by $ blarman 1 year, 5 months ago
                      Though I appreciate your passion in the prosecution of this case, I find it unpersuasive on either front. On the merits, there is no pragmatic case against corporations whatsoever. From a moral argument, there was no evidence 1) that there is undue influence in the process of incorporation, 2) that the terms are arbitrary (based on applicant), or 3) that there is any difference in the way the defendant is treated at trial which would constitute a moral crisis.

                      Thanks for a most cordial and engaging debate.
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                      • Posted by $ CBJ 1 year, 5 months ago
                        Thank you also. I think I have adequately stated the reasons for my views, which are firmly based on Objectivist principles. Anyone who reads through our entire exchange should acquire a good understanding of both of our positions.
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  • Posted by $ CBJ 1 year, 6 months ago
    Corporations, as they exist today, have no legitimate place in a free-market economy. They are government-created artificial "people" that enjoy special privileges in exchange for their submission to intrusive government oversight and regulation. See https://libertyunbound.com/a-free-mar...
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    • Posted by 1 year, 6 months ago
      It's a great thing that corporations are entities at law. There are no special privileges that flow from this. The problems of cronyism stem from the fact that fascism is introduced at the state level.

      See: https://www.thesavvystreet.com/is-the...
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      • Posted by 1 year, 6 months ago
        As "all" libertarians know? GG Online is for objectivism mainly. And several libertarian professors like Richard Ebeling recommend the greatness of Hessen's book on corporations.

        Libertarianism is often brainless like that. Some, like Reason and Cato, are even anti-science and fall for the climate fraud, which conservatives and objectivists don't.

        Hence I am not a libertarian.
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      • Posted by $ CBJ 1 year, 6 months ago
        Really? No special privileges? Then please address these excerpts from the article I linked to above:

        “Unfortunately, all modern economies have specific sets of rules for corporations — rules that are distinct from and often opposite to those for individuals and other types of organizations. These rules violate free-market norms in two major ways: as all libertarians know, they require corporations to submit to intrusive government oversight and regulation of their activities; and as not all libertarians fully realize, they give corporations special privileges that are not granted to unincorporated firms or individuals.

        “Chief among these special privileges is ‘limited liability,’ designed to shield owners of corporations from financial risk relating to corporate negligence or misbehavior. Although libertarians disagree about the extent to which individual stockholders should be held responsible for corporate misconduct, that is not the issue here. The issue instead is that, by granting limited liability to owners of corporations and denying it to unincorporated firms, the government is creating a double standard in the marketplace, one that favors corporations over individuals.

        “Corporations have additional ways of avoiding the consequences of their wrongful actions. Suing a corporation is a difficult, expensive and time-consuming process — much more so than suing another person. A corporation can easily dissolve or go bankrupt, even as its owners continue to prosper. A judge’s approval is usually needed to ‘pierce the corporate veil’ and sue the owners directly. Such approval can be difficult or impossible to obtain, especially in jurisdictions that advertise themselves as friendly to corporations.

        “Since corporations can own, buy, and sell one another, a privilege rightly denied to individuals, it is easy to establish a chain of corporate ownership to conceal the identity of the true owners, by setting up the controlling corporations in different domestic jurisdictions or in other countries.

        “These state-granted corporate privileges come at a steep price — to our economic freedom as well as to corporations themselves. Corporations are brought into existence by legislative permission. They can be snuffed out of existence just as easily through government revocation of their charters. This gives governments tremendous power to regulate corporations as they see fit, and encourages corporate decision makers to seek the ‘friendship’ of powerful government agencies and do their bidding. The result is a toxic blend of crony capitalism and a ‘mixed’ economy, within which the marketplace is anything but free.

        The competitive advantages conferred by government permit corporations to grow larger than they would in a free market, ‘crowding out’ other types of business organizations in the process. Eventually we arrive at an economic landscape dominated by corporate executives and their regulators, at the expense of everyone else’s freedom.”
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        • Posted by Lucky 1 year, 6 months ago
          CBJ makes a good case but I go, on balance, to the benefits of having options like the corporate structure.

          Maybe it is in Vinay's original article, but raising capital is a big problem without those corporate protections. In the past big projects could only be undertaken by the king, emperor, or the state in some form, or sometimes there was the alternative of dealing on trust and experience and with family only eg big Chinese conglomerates.

          Then in England about the time of James I the corporation was invented, it enabled money to be raised for big projects such as trade and settlement in the new world. It became popular all over.

          Consider your portfolio of stocks, you can lose all you have put in if the company goes bust. This is a risk you decide to take. Would you invest when creditors could take your other savings, your car, your house?
          There are some very large projects with other structures such as joint-ventures, generally the participants are corporations but not always.

          Investors, creditors and suppliers have options about where to invest or who to trade with.

          As CBJ hints, there are legit problems with the way corp law has developed, a managerial class not accountable to shareholders, the modern example here is virtue signalling- expensive and meaningless climate/carbon projects that managers would not do with their own money; managers always get a cut even when owners and suppliers get nothing; obscure lines of ownership and control (like owners of vote machine companies). There should be ways to stop that sort of thing without losing the advantages of corporate structure.
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          • Posted by 1 year, 6 months ago
            Great comment by Lucky: "Would you invest when creditors could take your other savings, your car, your house?"

            "A managerial class not accountable to shareholders, the modern example here is virtue signalling- expensive and meaningless climate/carbon projects that managers would not do with their own money"

            This, Lucky, is because capitalism is not allowed to work. The market for hostile takeovers should also be free. This is not a problem intrinsic to the nature of the corporation.
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          • Posted by $ CBJ 1 year, 6 months ago
            You appear to be arguing from results, not principles. Plantations in the antebellum South were “big projects” that would not have been possible without slavery. This certainly doesn’t morally justify slavery. Likewise, the necessity of raising capital for “big projects” doesn’t justify special treatment of the voluntary financial contractual arrangements that are the basis of corporations. A contract is a contract, period.

            Today, special rules exist for labor unions, religious and charitable organizations, foundations, and political parties, as well as corporations. In a free society, however, these special rules should not exist for these or any other private associations. According to the Objectivist ethics, people do not acquire new rights or responsibilities by forming or becoming members of voluntary groups. A corporation is a voluntary group.

            I am not saying that investors should have unlimited liability for the actions of the firms they invest in. All I am saying is that, to the extent that owners of corporations are legally protected from personal liability, the exact same legal protection should also apply to owners of a firm who have chosen, for whatever reason, not to incorporate.
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            • Posted by $ blarman 1 year, 6 months ago
              "All I am saying is that, to the extent that owners of corporations are legally protected from personal liability, the exact same legal protection should also apply to owners of a firm who have chosen, for whatever reason, not to incorporate."

              While I understand the argument you are making, this becomes strictly a practical arrangement: the registration process is an application for those very protections! What you're arguing for is a lot like the problems with Obamacare - that people could choose not to have insurance until they suffer a severe hardship. Then when they experience that hardship they apply for - effectively - retroactive protection.

              Now I'm not saying that I agree that the government should be picking winners and losers in the corporate space. I object to that 110%. But the basic premise of government is that those governed have to grant the governing body some amount of power - and resources - to maintain the peace. Otherwise everthing simply devolves into chaos and anarchy. I cover this in my book (if you're interested) when I explain the role of the arbiter. It is quite contradictory for an Objectivist to argue that one should be able to take advantage of the protections of government without paying for that protection.
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              • Posted by $ CBJ 1 year, 6 months ago
                Blarman, I don’t know if you read the article I referenced ( https://libertyunbound.com/a-free-mar... ), but nowhere does the article state – nor do I believe – that “one should be able to take advantage of the protections of government without paying for that protection.”

                The purpose of government is to protect individual rights. We are already paying for that protection, whether our business is incorporated or unincorporated. In a laissez-faire capitalist society, I believe Ayn Rand suggested that government could be partially funded through payment for government recognition – and if necessary, enforcement - of a valid contract. Such recognition would not require that one or more parties to that contract be a corporation.

                The corporate registration process is far more than “an application for those very protections”. As the article I referenced points out, “Corporations are brought into existence by legislative permission. They can be snuffed out of existence just as easily through government revocation of their charters. This gives governments tremendous power to regulate corporations as they see fit, and encourages corporate decision makers to seek the ‘friendship’ of powerful government agencies and do their bidding. The result is a toxic blend of crony capitalism and a ‘mixed’ economy, within which the marketplace is anything but free.”
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                • Posted by $ blarman 1 year, 6 months ago
                  There are two issues being conflated here. The first is the necessity of registering a corporation in order to apply for arbitrative protection via the government court system. Let us consider the following:

                  How does one enforce a contract? Both sides in a given contract stipulate and agree to an arbitration method and authorized arbiter which by default is the established governmental authorities. By default, then, you are including in that contract a third party - the government - which hasn't even been represented in the contractual negotiations and therefore may not even be aware that they have been conscripted into service. The registration of a corporation notifies the government 1) that the corporation exists, 2) the corporation intends to engage in activities in which future legal action may be arbitrated by the governmental court system, and 3) establishes necessary contact and other information to facilitate such arbitration. This is no different from a contract which relies upon "private" arbitration. Even if a non-governmentally-appointed arbiter is agreed upon in the contract, that arbiter must still agree to provide its services and will require a payment under its own terms for its services. In short, there's no way to shortcut the registration process - a corporation has no defense if wronged unless it may appeal to an arbiter which is willing to prosecute the case and seek remuneration. (Again, I cover this more extensively in a chapter in my book.)

                  Now does that amount to "non-existence" of a non-registered corporation. Yes and no. No in that that corporation can still conduct operations - all black markets operate on the extreme principle of non-government-sanctioned activity - but Yes in that neither the corporation nor its partners have sanctioned/legal avenues through which to pursue litigation.

                  The second issue being conflated is the potential for government abuse of the registration process in order to pervert free market enterprise - ostensibly in favor of government regulators. I wholly agree that government HAS unequivocably used its powers of regulation to infringe on what should be private contractual obligations and I oppose such actions, labelling them tyranny and corruption. But the misuse of a system does not mean that the system itself is corrupt or morally offensive.
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                  • Posted by $ CBJ 1 year, 6 months ago
                    The system itself is corrupt and morally offensive, in that it consists of a legally enforced double standard for corporations as opposed to other types of business arrangements. Nothing in free-market theory, Objectivist or otherwise, requires the existence of such a double standard, or of an artificial "person" such as a corporation to facilitate this double standard.

                    And contrary to your assertion, non-incorporated business entities, such as partnerships and sole proprietorships, certainly do have “sanctioned/legal avenues through which to pursue litigation.”

                    There is no “conflation” here. As I said in response to another of your posts, government interference may certainly exist without corporations, but a corporation cannot exist without government interference. Corporations owe their very existence to government laws and regulations, and this fact makes it impossible for them to escape government interference. The only difference across jurisdictions is the degree of that interference. The act of incorporating a business automatically gives government a “foot in the door” that allows increased oversight and regulation at the government’s whim.
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                    • Posted by $ blarman 1 year, 6 months ago
                      "The system itself is corrupt and morally offensive, in that it consists of a legally enforced double standard for corporations as opposed to other types of business arrangements."

                      First, is that the result of the existence of corporations or the perversions of government tyranny? You conflate them to be one and the same even though you admit to the notion of "other business arrangements." Specify what these "other business arrangements" represent so we can both make sure we're talking about the same thing in reality. In particular, please explain how they are different than corporations, because there are a wide range of corporate structures.

                      Second, the phrase "legally-enforced" by its very nature implies government involvement. To assert that there is some kind of one-sided arrangement which allows some (unincorporated businesses) to receive a privilege they don't pay for (arbitration on the same level as an incorporated business) is quite absurd.

                      "And contrary to your assertion, non-incorporated business entities, such as partnerships and sole proprietorships, certainly do have “sanctioned/legal avenues through which to pursue litigation.”

                      Are you aware that the primary reason people incorporate their business ventures is to protect their personal assets from lawsuits against the company? That separation is quite important. An unincorporated partnership or sole proprietorship has no such protection and lawsuits may be pursued against the individual's personal assets.

                      Additionally, if you are unincorporated and you want to take another individual or company to court, you also would have to file suit as an individual - not as a business entity. Any counter-suits would then be applied against your individual assets rather than any "corporate" assets. So in reality, an unincorporated "company" has no legal basis to sue except as an individual. It's a technicality, I agree, but in legal parlance a fairly significant one.

                      "The only difference across jurisdictions is the degree of that interference."

                      Jurisdiction is precisely the difference, yes. If you don't want the government to act as arbiter, you do have the choice to specify an alternative. I'm not trying to downplay the severity of government overreach, only to point out that the real problem is government overreach - not the process of incorporation. The fact that the government "overreaches" by its nature predefines a "proper" reach and involvement.

                      "The act of incorporating a business automatically gives government a “foot in the door” that allows increased oversight and regulation at the government’s whim."

                      While you take the argument to the extreme, there is a price attached to having the government participate as the arbiter. (It also facilitates the collection of taxes but that's another matter.) You are, of course, welcome to specify an alternative arbiter if you don't like the terms government provides. I am certainly open to a discussion on what represents "proper" government involvement in such terms.
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                      • Posted by $ CBJ 1 year, 6 months ago
                        I already specified the majority of the “other business arrangements”, namely sole proprietorships and partnerships. The government-created differences between corporate and non-corporate businesses are primarily that (1) non-corporate businesses are subject to less intrusive government oversight, and (2) corporations receive enhanced protections from lawsuits, compared to individuals and unincorporated businesses.

                        And since when is arbitration or enforcement of contracts a “privilege”? According to Ayn Rand, it is a core function of limited government. I agree that individuals and businesses should pay for the cost of such arbitration, when necessary, but such payments should be based on objective criteria regarding the nature of the contract and the cost to the government, not on whether one or more of the contesting parties is “incorporated” or not.

                        Am I aware that the primary reason people incorporate their business ventures is to protect their personal assets from lawsuits against the company? Yes I am. This is one of the main features of the pervasive double standard that exists between government’s treatment of corporations and its treatment of non-corporate entities. It’s one of the main reasons why bad actors are able to thrive within a corporate setting – they run less risk of being held personally accountable for their misdeeds. I’m not saying that this type of asset protection is necessarily a bad thing. All I am saying is that, to the extent that owners of corporations are legally protected from personal liability, the exact same legal protection should also apply to owners of unincorporated firms. And the owners of unincorporated firms should pay exactly the same amount for government arbitration, should the need arise.
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                        • Posted by $ blarman 1 year, 6 months ago
                          Please see the other thread. I have identified the fundamental flaw in the argument to be a misunderstanding of civil vs criminal behaviors. The author completely misunderstands these two and thus misapplies reason.
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        • Posted by 1 year, 6 months ago
          Limited liability is NOT a special privilege. It is in fact available to all individuals who declare themselves bankrupt to get free of lifelong debt.

          This is because everyone's liability is limited to their assets.

          The bundled assignability of corporations is a great invention, 100% compatible with Rand's philosophy. I have explained this all in the essay linked above.

          In cases of corporate misconduct, courts do look at the individuals involved and hold them responsible.

          Regulation is a different matter.
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          • Posted by $ CBJ 1 year, 6 months ago
            Corporations are 100% incompatible with Rand’s philosophy. Corporation law assigns different right and responsibilities to incorporated businesses vs. unincorporated businesses. As the article I referenced states: “An unincorporated business should have exactly the same standing under the law as an incorporated business in matters such as taxation, liability, reporting requirements, and recognition of contracts. Aside from protecting the rights of third parties, governments should have no say regarding any firm’s form of organization, purpose, or method of operation. Legal protections extended to corporations should be equally available to all other groups . . . any activities that are legally and morally legitimate for corporations should be equally legitimate for all other private, voluntary groups of people. Conversely, activities that violate the rights of others should be prohibited to all such groups. When it comes to legal rights and responsibilities, a free society should not treat corporations any differently from the way it treats any other privately organized groups, such as labor unions, religious and charitable organizations, foundations, and political parties.”

            Furthermore, Rand has stated that “one must never attempt to fake reality in any manner.” Corporate “personhood” does exactly that, treating corporations in many contexts as if they were individual persons. But as the article points out, “A corporation, at its root, is simply a group of individuals who share an interlocking set of contractual relationships.” Nothing in free-market theory requires the existence of artificial legal constructs such as corporations.

            Much of today’s corporate bad behavior has been facilitated by unscrupulous “business leaders” taking advantage of the legally-sanctioned “corporate veil” to provide cover for their misdeeds. We see the disastrous results all around us, in corporate-dominated industries such as banking, social media, mass media and health care. We cannot begin to achieve a free and fair marketplace unless we are willing to challenge the dominant role that corporations play in economic life today.
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            • Posted by 1 year, 6 months ago
              I am finding myself repeating the same things. Rand was very smart. And bold. Had she held an opinion that you profess, she would have boldly declared it.

              The corporate veil is readily pierced by courts.

              There is no faking. Limited liability extends to one and all, including individuals. Corporates have to say LLC or similar in other countries that announce their liability is limited.

              If not for the limited liability corporation, the whole world would be far, far poorer.
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              • Posted by $ CBJ 1 year, 6 months ago
                Your argument applies to yourself also: “Rand was very smart. And bold. Had she held an opinion that you profess, she would have boldly declared it.” I do not find a single instance in which Ayn Rand wrote in favor of the idea that corporations should be legal “persons” or have many of such persons’ rights – or that governments should apply different standards to investors in corporations and investors in businesses that do not incorporate. As you say, “limited liability extends to all,” but the limits are very different for these two sets of investors. In a free and fair economy with a level playing field, they should be the same.

                As a philosopher concerned with fundamental political and economic issues, Ayn Rand laid out the moral principles of a free economy, but did not go into exhaustive detail regarding how best to implement those principles. My contention is that the separate and unequal treatment of corporations (and other voluntary associations) under the law violates those principles in a fundamental way, and has contributed greatly to the widespread problems that plague our political and economic life today.
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                • Posted by 1 year, 6 months ago
                  Rand wrote very explicitly in favor of big business at the time including correctly, and staunchly, defending Alcoa against the charge of "monopoly."
                  Even though, in her time, too, cronyism was alive and well.

                  The legal entity of a corporate is NOT a personhood. Obviously, no court sends a corporate to jail. When they do, they find the relevant executives responsible.

                  I have never encountered an objectivist who is against the corporation as an entity. It must be a libertarian misunderstanding.
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                  • Posted by $ CBJ 1 year, 6 months ago
                    I’m an objectivist who is against the corporation as an entity. Get used to it.

                    I have based my opposition to the current corporate structure totally on Ayn Rand’s principles. My objections have nothing to do with any “libertarian misunderstanding”. I’m not opposed to “big business” or any size of business. I am opposed to government treating corporations differently from the way it treats any other business enterprise

                    The legal entity of a corporation IS a person in many respects. Dozens of U.S. Supreme Court decisions have said so. As I stated above, the law treats corporations in many contexts as if they were individual persons. Obviously (as you state) no court sends a corporation to jail. However, courts seldom send corrupt corporate executives to jail either, as evidenced by events following the 2008 financial crisis.
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    • Posted by $ blarman 1 year, 6 months ago
      Disagree. But that's because a corporation is nothing more than an organized way to run a company - nothing more. All the corporate documents do is set up the leadership structure for a company much like the Constitution sets up the structure of the Federal Government. It all comes down to the people who run said organization whether that be a corporation or a government. If you have honorable people in either, you will have an honorable entity and the inverse if not.

      Trivia - did you know that originally in the United States, corporations were solely a creation of the government set up with government sanction to pursue large projects such as canal construction or railroads? They only became a popular tool of business in the late 1800's when you started getting companies which were too big for a single individual to run and then it became primarily a tool for orchestrating the transfer of power in these businesses. It has obviously evolved since then.
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      • Posted by $ CBJ 1 year, 6 months ago
        A corporation is a lot more than “an organized way to run a company”. Government rules require corporations to submit to intrusive government oversight and regulation of their structure and permitted/prohibited activities. In exchange, government gives corporations a separate “personhood” and enhanced protection from financial risk relating to corporate negligence or misbehavior. This creates opportunities for less-than-honorable people to advance in the corporate hierarchy, by making it harder to hold them to account for their wrongful actions.

        As the article I referenced ( https://libertyunbound.com/a-free-mar... ) points out, “The competitive advantages conferred by government permit corporations to grow larger than they would in a free market, ‘crowding out’ other types of business organizations in the process. Eventually we arrive at an economic landscape dominated by corporate executives and their regulators, at the expense of everyone else’s freedom.” We have arrived at that point now.

        In a laissez-faire society, “aside from protecting the rights of third parties, governments should have no say regarding any firm’s form of organization, purpose, or method of operation.” A corporation should have the same rights and responsibilities as any other voluntarily organized group, no more and no less.
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        • Posted by $ blarman 1 year, 6 months ago
          You start out by asserting that a corporation is more than a way to run a company but immediately switch to government interference. This is conflation. The one may exist without the other. I wholly agree that government in general has significantly overstepped its proper bounds in attempting to regulate to death industry and private enterprise. That does not mean, however, that the mere fact that a business owner has incorporated makes them either a party to such or an automatic victim. Again, blame must be assigned where it is due: the tyranny of government overreach.

          “The competitive advantages conferred by government permit corporations to grow larger than they would in a free market, ‘crowding out’ other types of business organizations in the process."

          An examination of the history of corporations in the United States - where the modern "corporate" model began - is instructive. For a detailed explanation, consult the Oxford History of the United States, volumes 3-4.

          In the beginning, corporations were solely government instruments by which political appointees were granted special dispensations to pursue a quasi-governmental policy. The infamous East India Trading Company was one such charter. All of the original colonies in the United States were founded by royal charters granted to colonizers. Later on, the fledgling States chartered such organizations as a National Bank and several corporations (with distinct monopoly powers) to oversee canal and transportation construction projects. Many of these accomplished laudable ends despite being riddled with corruption, such as the railroad industry. Following the US Civil War, corporations began to take on a new flavor in that the States granting incorporation were doing so to draw businesses to those States and the businesses themselves had little or nothing to do with public works projects. Many businesses were trying to seek redress or otherwise protect themselves from government interference in the transferrance of ownership. (Yes, even back then government overreach was pervasive.) The 1880's in particular saw a huge boom in the number of incorporated businesses which largely accompanied the growing size of companies which was made possible by the automation of machines and steam-driven equipment.

          For much of this time, incorporation was as it might be argued to be ideal: the fees for such were small and such provided some legal protections in the event of bankruptcy - which was rampant.

          Then came the critical time of the Robber Barons and Railroad Tycoons. The Railroad Tycoons in particular thrived due to unwholesome agreements with the Federal Government which allowed them to effectively steal 1/2 of all land in the West and sell it to prospects at a markup which they kept. All in exchange for pushing the railroads west into undeveloped lands. When much of those lands remained undeveloped and the traffic to and from such was hardly enough to operate the railroads, the railroads shifted the cost burdens to the more populated sections of the country, raising prices on everyone despite the fact that their subsidies were more than capable of keeping them in business. Add to that corruption of the land surveyors and survey offices which were commonly run by railroad flunkies and there was no shortage of graft to go around. It even affected the Army where there were very lucrative posts being awarded to influencial generals in these areas.

          The Robber Barons were part victims of their own success and those who took advantage of their corporate status to prey upon others. Rockefeller, Vanderbilt, and others were largely villified by actions taken by their successors who sought to entrench themselves by paying off Congressional overseers than continue to innovate. And when the truth of this graft came to light, those same congressmen tried to cover their own behinds by "cracking down" and passing the Sherman Antitrust Act which permitted them to break up those corporations - a law which is still very much in force and in use today.

          Do I agree with you that the unholy alliance of business with government special interest is corruption? Absolutely. But the corporation is merely a tool - not the hand wielding it. Corporations are made up of people. And it is only people which make decisions. Just as it is illogical to blame the gun for violence done with it, it is misplaced to assign blame to the structure of a corporation rather than its managers.
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          • Posted by $ CBJ 1 year, 6 months ago
            RE: “You start out by asserting that a corporation is more than a way to run a company but immediately switch to government interference. This is conflation. The one may exist without the other.”

            This is not conflation. Government interference may certainly exist without an accompanying set of corporate entities, but the modern corporation cannot exist without government interference. Such interference is built into its DNA.

            Consider: In order to incorporate, one must set up the corporation in a form and manner specified by a government agency that oversees such business arrangements. It typically must have a slate of officers and directors prescribed by the government, must hold meetings at specified intervals, must pay an annual fee to the government for the “privilege” of incorporation, and must adhere to government rules regarding permitted and prohibited activities. Any deviations from the government playbook may be met with fines or other penalties.

            Corporations owe their very existence to government laws and regulations, and this fact makes it impossible for them to escape government interference. The only difference across jurisdictions is the degree of that interference. The act of incorporating a business automatically gives government a “foot in the door” that allows increased oversight and regulation at the government’s whim. Or as you put it, “the tyranny of government overreach”.
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            • Posted by $ blarman 1 year, 6 months ago
              Why qualify your argument to be "modern" corporations - as if there is some distinction between one corporation and another based on time (red herring)? That in and of itself is a definitional problem that I would like to hear some support for. The actual arguments you cite are that government has changed and become more intrusive in its restrictions and administrative burden (by some measures in size about $3 TRILLION per year) and I will readily agree. That is very different, however, than supporting the theory that corporations are necessarily slaves to the government by definition. You argued that unincorporated corporations deserved to have the same protection as incorporated ones so clearly you recognize that a corporation does not have to rely on a government to exist.

              Further, I note that your arguments focus on government restrictions being applied to corporations. The error in logic is the fallacy of post hoc ergo propter hoc. I agree that government has overstepped its bounds in many ways - including the ones you list, but that doesn't invalidate the notion of a corporation per se. That's like saying that because some criminals use guns that guns are inherently evil. A corporation is a tool. Tools don't have morality in and of themselves. That comes from the people who utilize/misuse them.

              Again, the only reason the corporation involves the government is as an arbiter in the case of disputes. By signing the contract, both parties agree to the jurisdiction of the arbitrator in resolving the dispute. Why? Because no contract is worth any more than the paper it is printed on without an enforcement mechanism which binds both parties to the arbitrative decisions of the third. But it should be noted, however, that the contract isn't between the government and either party, but between two parties with the government as a disinterested third party. Have actors in the government abrogated and suborned the proper role of the government regarding corporations? Certainly. That doesn't mean, however, that that proper role does not exist.
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              • Posted by $ CBJ 1 year, 6 months ago
                I used the term “modern” corporation to differentiate it from the original historical definition that you presented in an earlier post: “In the beginning, corporations were solely government instruments by which political appointees were granted special dispensations to pursue a quasi-governmental policy.”

                Corporations are not necessarily “slaves” to the government by definition, but they aren’t far removed from that predicament since government creates them and defines their attributes.

                My central argument, that unincorporated business entities deserve to have the same protection as incorporated ones, is simply another way of saying that governments should not discriminate among the different types of business entities – or any other voluntary groups – in matters pertaining to protection of individual rights. As the article I referenced states:

                “Any activities that are legally and morally legitimate for corporations should be equally legitimate for all other private, voluntary groups of people. Conversely, activities that violate the rights of others should be prohibited to all such groups. When it comes to legal rights and responsibilities, a free society should not treat corporations any differently from the way it treats any other privately organized groups, such as labor unions, religious and charitable organizations, foundations, and political parties.

                “This leads to a further conclusion that some will consider radical: There is no need or justification for ‘corporation’ as a legal concept at all. An unincorporated business should have exactly the same standing under the law as an incorporated business in matters such as taxation, liability, reporting requirements, and recognition of contracts. Aside from protecting the rights of third parties, governments should have no say regarding any firm’s form of organization, purpose, or method of operation. Legal protections extended to corporations should be equally available to all other groups.

                “Such a set of reforms, if applied consistently, would have far-reaching effects. It would do away with any reason to treat corporations as privileged legal entities. It would remove the need for a body of corporate law, separate from individual and contract law. It would render irrelevant the legal fiction of corporate personhood, along with the torturous logic needed to justify such a concept. It would create a more level playing field between people and corporations. It would bring more consistency and fairness to government policies regarding liability and secrecy. It would ensure that any legal protections given to corporate owners and agents would also extend to unincorporated individuals and groups. Taken together, these reforms would constitute a major step toward a freer economy.”
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                • Posted by $ blarman 1 year, 6 months ago
                  "I used the term “modern” corporation to differentiate it from the original historical definition that you presented in an earlier post: “In the beginning, corporations were solely government instruments by which political appointees were granted special dispensations to pursue a quasi-governmental policy.”

                  Perfect. I am in agreement.

                  "My central argument, that unincorporated business entities deserve to have the same protection as incorporated ones, is simply another way of saying that governments should not discriminate among the different types of business entities – or any other voluntary groups – in matters pertaining to protection of individual rights."

                  I think I have finally isolated the flaw in this contention. The author completely misunderstands the critical difference between criminal and civil law and thus draws erroneous conclusions. (I also outline the distinct difference between a civil and criminal offense in my book and why they are treated differently according to the law.)

                  Corporations serve a civil purpose - not a criminal one. This fundamental misunderstanding leads to author to conjecture that corporations provide some sort of protection from criminal prosecution unavailable to other "business entities." This leads further to the fundamentally-flawed conclusion that corporations are unjustified for any reason. Violations of individual rights are criminal offenses rather than civil ones. Criminal cases are always of one individual against another individual rather than corporations vs corporations; the notion of a corporation being a party in a criminal suit is completely moot/absurd. One does not prosecute corporations but rather the officers of the corporation - see Arthur Andersen or Enron (fraud is a criminal charge - not a civil one).

                  In regards to government protection of individual rights, I am in complete agreement that individual rights should be protected by government with zero disparity or preferential treatment.
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                  • Posted by $ CBJ 1 year, 6 months ago
                    I believe your arguments above are mistaken, both factually and in regard to the points that I brought up:

                    Criminal cases are always of one individual against another individual rather than corporations vs corporations; the notion of a corporation being a party in a criminal suit is completely moot/absurd.

                    Not true. Corporations can be, and sometimes are, convicted of criminal offenses. Here’s a recent example: https://thehill.com/opinion/criminal-...

                    “Many people are surprised to discover that a corporation can be found guilty of a crime — a testament, perhaps, to how rarely they are prosecuted.”

                    Corporations serve a civil purpose - not a criminal one.

                    True, but the same is true of partnerships, sole proprietorships and other forms of business organization. So this fact does not justify treating corporations differently from other businesses.

                    This fundamental misunderstanding leads to author to conjecture that corporations provide some sort of protection from criminal prosecution unavailable to other "business entities."

                    The article to which I referred was specifically concerned with the difficulty of suing a corporation, which is a civil action. It said nothing whatever about a corporation providing protection from criminal prosecution.

                    Violations of individual rights are criminal offenses rather than civil ones.

                    They can be either or both. Civil lawsuits can be brought for violations of a person’s property rights, for instance.
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                    • Posted by $ blarman 1 year, 5 months ago
                      PG&E is a public utility. By virtue of that the individuals running PG&E are protected as quasi-government employees. I wouldn't be surprised but that is common in the charter set up for many power companies - not just PG&E. I think you'll also find that if you want to refer to the penalties some banking institutions get charged for various schemes, they are covered under the same quasi-governmental protections. That's why I cited the Enron and Arthur Andersen cases as prime examples because those are the norm - not the exception.

                      “Many people are surprised to discover that a corporation can be found guilty of a crime — a testament, perhaps, to how rarely they are prosecuted.”

                      Not at all. It's because criminal prosecutions only apply to corporations in extremely rare situations - not because somehow they are immune or have special protections.

                      "True, but the same is true of partnerships, sole proprietorships and other forms of business organization."

                      Which are all corporations. S-Corps, LLCs, etc. are all forms of corporations. https://corporations.uslegal.com/type... There are a dozen different types of corporations which cover just about any management structure seen in business. Please cite a real structure of a company which does not conform to one of the linked structures. References to hypotheticals or vaguaries are not useful.

                      "The article to which I referred was specifically concerned with the difficulty of suing a corporation, which is a civil action."

                      Please cite some of the difficulties you claim exist solely because the business has incorporated and which aren't a result of government favoritism.

                      "They can be either or both. Civil lawsuits can be brought for violations of a person’s property rights, for instance."

                      Examples? Theft, larceny, fraud, vandalism, embezzlement, etc. are all criminal offenses - even if misdemeanors (petty theft, vandalism). Civil courts deal with contractual disputes - not criminal ones.
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                      • Posted by $ CBJ 1 year, 5 months ago
                        PG&E is a public utility.

                        So what? PG&E is also a publicly traded corporation, with stockholders. You said, “Criminal cases are always of one individual against another individual rather than corporations vs corporations; the notion of a corporation being a party in a criminal suit is completely moot/absurd.” I provided a clear counterexample, refuting your argument. My original statement stands.

                        "True, but the same is true of partnerships, sole proprietorships and other forms of business organization." Which are all corporations.

                        No they’re not. “A sole proprietorship is an unincorporated business with only one owner who pays personal income tax on profits earned.” (http://Investopedia.com) “A partnership is a form of business where there is more than one owner and the business is not operated as a corporation or a limited liability company (LLC).” (upcounsel.com) Details of these types of unincorporated businesses can be found on the above websites. My original statement is correct.

                        Please cite some of the difficulties you claim exist solely because the business has incorporated and which aren't a result of government favoritism.

                        Government favoritism is built in to corporate law. As the article I referenced states, “Suing a corporation is a difficult, expensive and time-consuming process — much more so than suing another person. A corporation can easily dissolve or go bankrupt, even as its owners continue to prosper. A judge’s approval is usually needed to “pierce the corporate veil” and sue the owners directly. Such approval can be difficult or impossible to obtain, especially in jurisdictions that advertise themselves as friendly to corporations. Since corporations can own, buy, and sell one another, a privilege rightly denied to individuals, it is easy to establish a chain of corporate ownership to conceal the identity of the true owners, by setting up the controlling corporations in different domestic jurisdictions or in other countries.”

                        Civil courts deal with contractual disputes - not criminal ones.

                        Civil courts can also deal with civil damages arising from violations of individual rights, such as property damage or noise from barking dogs. Not every violation of individual rights is a criminal offense or necessitates a contract between the two contesting parties. Once again, my original statement is correct.
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                        • Posted by $ blarman 1 year, 5 months ago
                          If you want me to say that my absolute statement has a few outliers I'll concede that because I didn't consider the corner case of public utilities. I shouldn't have used an absolute. If PG&E is the best example you can come up with, however - a governmentally-controlled utility - then your argument isn't half as solid as you claim. You're trying to present this as if this is a mainstream problem - the norm rather than the exception.

                          I gave you two very high-profile cases in which entire (massive) corporations were shuttered because their corporate officers were prosecuted individually and criminally. You're going to need to provide a LOT more than one outlier - especially one controlled by a governmental entity - to support your assertion.

                          "No they’re not."

                          Good grief. My point was not that you can't have an unincorporated sole proprietorship, but that every business structure has a corporate version. The difference is filling out some paperwork and submitting a small fee. The way you were using them was as if this - again - was mainstream and a huge problem. I have yet to be convinced. Again: I've read the article. I see lots of conjecture.
                          What I don't see are actual examples. Without those, the article falls far short of a compelling case. Repeatedly quoting the article only emphasizes the shortcomings in the argument. If the problem is really as pervasive as you claim, then coming up with examples to expand and bolster your argument should be a simple thing to do. Lacking those, however...

                          "Government favoritism is built in to corporate law."

                          The only complaint I see enumerated is that an individual's personal assets become separate from the corporate assets. If your only gripe is that you can't sue for Bill Gates' for his Redmond compound because Windows crashed and you lost 40 pages of your book and had to retype it, it's an incredibly weak (and petty) argument. Here's why:

                          Corporate officers are frequently the target of corporate lawsuits because of actions of subordinates. If there was no separation of assets, those officers' private/personal property would be subject to claims. Those are disastrous terms under which no one would ever agree to run a company.

                          Seriously. Bankruptcy laws are a corrollary to this. It is hugely chilling upon the formation of entrepreneurial enterprises if their personal assets are on the line when they go to start a business. I don't know too many entrepreneurs who say "you know, I'm 100% willing to risk my home and my investment portfolio because I have a great idea." If you want to persuade me to your position, you need to provide a MUCH better example of favoritism than merely a legal separation of property - which has very practical uses.

                          "Since corporations can own, buy, and sell one another, a privilege rightly denied to individuals, it is easy to establish a chain of corporate ownership to conceal the identity of the true owners, by setting up the controlling corporations in different domestic jurisdictions or in other countries."

                          Individuals can purchase corporations. Rush Limbaugh wanted to purchase an NFL team. Mark Cuban owns the Dallas Mavericks. The reason individuals don't purchase corporations again goes back the legal liability issue: smart people aren't going to risk their homes and retirement savings on a lawsuit.

                          Can corporations intentionally create chains of ownership which are hard to unravel? Yes. But unless there are illicit activities going on, why does that matter? It's actually very smart to incorporate every distinct business enterprise separately because - again - you are able to separate corporate assets from individual assets. It's actually very common in startups even within an established company - again - because in so doing one is limiting one's legal liability. If that's the primary objection, I can completely understand why there's very little traction for such - even in this forum.
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                          • Posted by $ CBJ 1 year, 5 months ago
                            I’m not trying to persuade you to my position. I simply want to point out to other readers the nature of the corporatist con game masquerading as a free-market economy.

                            Since you read the article I cited, please re-read the section that says: “Although libertarians disagree about the extent to which individual stockholders should be held responsible for corporate misconduct, that is not the issue here. The issue instead is that, by granting limited liability to owners of corporations and denying it to unincorporated firms, the government is creating a double standard in the marketplace, one that favors corporations over individuals.”

                            If limited liability has a proper place in a free-market economy, as you assert, then it should apply equally and impartially to all legitimate businesses, not just ones that are willing to register with the government and submit to its rules for the “privilege” of obtaining limited liability. In other words, no double standards.

                            My point was not that you can't have an unincorporated sole proprietorship, but that every business structure has a corporate version.

                            That’s not what you said, and it’s not the case anyway. An unincorporated sole proprietorship, for instance, is not required to have a registered agent, a board of directors or an issuance of stock as part of its business structure.

                            The difference is filling out some paperwork and submitting a small fee.

                            The “small fee” is typically hundreds of dollars or more per year, and ongoing paperwork is required.

                            You're going to need to provide a LOT more than one outlier - especially one controlled by a governmental entity - to support your assertion.

                            Here are some news items relating to criminal charges against other corporations (and none of them are public utilities):

                            https://www.theguardian.com/environme...

                            https://www.justice.gov/opa/pr/adm-su...

                            https://www.lectlaw.com/files/cas60.htm

                            https://www.newsweek.com/sorry-side-s...

                            Are these enough examples?
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                            • Posted by $ blarman 1 year, 5 months ago
                              "I’m not trying to persuade you to my position. I simply want to point out to other readers the nature of the corporatist con game masquerading as a free-market economy."

                              Uh, you are trying to persuade anyone reading this. That's why you brought attention to it.

                              There's nothing shameful or wrong in this process at all. Quite the opposite. I think that it is important to bring out our positions and try to persuade others to agree. And despite our disagreements on the merits of this particular issue, I applaud you for sticking to the arguments at hand. This has been a great example of just the kind of debate that should be taking place on any controversial subject. My hat is off to you as a worthy debater!

                              "...The issue instead is that, by granting limited liability to owners of corporations and denying it to unincorporated firms, the government is creating a double standard in the marketplace, one that favors corporations over individuals.”

                              When one incorporates, one is paying for a legal service. That service is a fixed cost and provides fixed benefits and is generally applicable. But a complaint that one should be able to take advantage of such without doing what is necessary to qualify is just like arguing that illegals should be treated just like citizens even though they fail to go through the proper immigration procedures. It's an inherently contradictory argument prima faciae.

                              It's not a double standard, however. The author of the article is complaining that business ventures (individuals, etc.) which don't pay for a service should be able to get the same benefits as ones who do. That argument directly calls for a double-standard while trying to argue the contrary. It's absurd. It's not favoritism, either, since everyone has to follow the same laws on incorporation and pay the same fees. You would have a substantiated argument if some applications for incorporation were given different treatment than others (fees waived, etc.) or if some were only available to the politically-connected (as happens in China or arguably in Japan with the kairetsus).

                              "An unincorporated sole proprietorship, for instance, is not required to have a registered agent, a board of directors or an issuance of stock as part of its business structure."

                              You can structure an unincorporated business about any way you want, sure. What's your point? I've sat on the Board of Directors of an LLC. It consisted of my father-in-law (who owned all the shares and all the voting rights since he started the company), myself, and another brother-in-law. We met once a year to discuss and vote on which health insurance plan to go with for the 30 employees of our small tech firm. It cost us about two hours every year. Yawn.

                              Businesses adopt management structures which fit their needs whether they incorporate or not. My point was that there is an incorporated version of any unincorporated structure you want to bring up. The barriers to incorporation are extraordinarily low IMHO. If the argument is that certain individuals weigh the costs of incorporating against the benefits and find the benefits lacking, I can completely understand and respect such a decision. That's a personal evaluation of a risk-reward scenario. What I fail to see adequately justified are these claims of unfairness.

                              "The “small fee” is typically hundreds of dollars or more per year, and ongoing paperwork is required."

                              Depends on where you incorporate. Where I live, it's a one-time fee and one-time paperwork - aside from filing tax statements every quarter. There may be some jurisdictions (like California and New York) where incorporation is much more onerous. No disagreement there.

                              "Here are some news items relating to criminal charges against other corporations"

                              BP - a regulated industry which gets grants to mine on public lands and is therefore under direct government purview and contractually obligated to maintain their equipment, etc.
                              ADM - violating the Corrupt Practices Act which concerns businesses who fail to follow the proper procedures in international business dealings, i.e. governed by government treaties (contracts).
                              Daiwa Bank - I don't think you actually read this one because although it names Daiwa Bank, the suit is actually a criminal case against a specific employee: MASAXIRO TSUDA.
                              Sears - This one is prosecuted against a bankrupt company for fraud. Of the four, this one is by far the most compelling example of the criminal prosecution of a corporation.

                              What I am seeing is that the three in question (ignoring the personal case against Tsuda) were all subject to government conditions - ie contractual obligations. That includes a company going through bankruptcy proceedings. When the government is one of the parties to a contract, it acts as both a party and arbiter (through separate branches) and all cases are by their very nature criminal because it is the government which prosecutes them - even though the terms are for breach of contract against the "People." Yes, its a middle-ground area and a legal technicality. What I'm missing in any of these is what shows these companies were granted special rights or privileges from incorporation as claimed by the author. (Again, separation of property has been justified as a legitimate and equally-available service.)
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                              • Posted by $ CBJ 1 year, 5 months ago
                                My hat is off to you as a worthy debater!

                                As are you.

                                When one incorporates, one is paying for a legal service.

                                One is paying for enhanced legal protection against individuals one may have wronged.

                                That service is a fixed cost and provides fixed benefits and is generally applicable.

                                Which says nothing about whether it is a proper “service” for a legitimate government to offer.

                                But a complaint that one should be able to take advantage of such without doing what is necessary to qualify is just like arguing that illegals should be treated just like citizens even though they fail to go through the proper immigration procedures. It's an inherently contradictory argument prima faciae.

                                No it isn’t. Protection of the rights of its citizens is the defining responsibility of government. That’s what governments do, it’s the reason for their existence. This protection is properly extended to those that the government, acting as an agent of and on behalf of its citizens, willingly allows within its borders. Qualifying for enhanced legal protection of certain rights is a whole different kettle of fish. Governments exist solely to protect individual rights. Either separation of personal assets from business interests is a right, or it isn’t. If it is (and that case can definitely be made), it must apply to (and be paid for by) all citizens - currently most people pay for this service through various taxes. If it isn’t, such enhanced protection should not be made available at all. Paying the government extra for the “privilege” of exercising a “right” is inherently contradictory. It’s a double standard.

                                You can structure an unincorporated business about any way you want, sure. What's your point? I've sat on the Board of Directors of an LLC . . . It cost us about two hours every year. Yawn.

                                I’ve been through the process also. The amount of inconvenience involved in incorporating is immaterial. We are discussing the application of free-market principles here, not the degree of inconvenience demanded by the government for the “privilege” of incorporation. My contention is that allowing corporate double standards into the free-market tent has undercut the validity of our defense of the free market, and allowed our opponents to capitalize on our theoretical weaknesses (which they have proceeded to do, big time). Again, there is nothing in free-market theory that requires the existence of corporations, and we gain nothing in the real world (and lose a lot) by continuing to defend their existence.

                                Daiwa Bank - I don't think you actually read this one because although it names Daiwa Bank, the suit is actually a criminal case against a specific employee: MASAXIRO TSUDA.

                                Read down a bit, and you’ll find a separate indictment against the bank itself.

                                By the way, I didn’t bring up the issue of civil vs. criminal liability, and it’s not central to my position. I was simply responding to your assertion that “the author completely misunderstands the critical difference between criminal and civil law and thus draws erroneous conclusions.”
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                                • Posted by $ blarman 1 year, 5 months ago
                                  "One is paying for enhanced legal protection against individuals one may have wronged."

                                  Protection that is available to all at the same price. The only argument you are making here is one of personal preference regarding what you are willing to pay to obtain the service. I have not seen a justified argument which alleges that the offering is unfair in any way.

                                  "Which says nothing about whether it is a proper “service” for a legitimate government to offer."

                                  Granted. I've laid out the arguments for why it is beneficial to business. It isn't being offered by the Federal Government so it doesn't run afoul of either the Ninth or Tenth Amendment. The offering isn't prejudicial or favoritistic so far as I can determine. If you would like to offer up your opinions on why it is not a "proper" service, please do so.

                                  "Either separation of personal assets from business interests is a right, or it isn’t."

                                  It isn't. And I'm not sure where the notion came from that it should be. When one creates a corporation, they are creating a legal entity - under the control of specified individuals - which may then take ownership of property. I'm not really sure why this is so controversial. We register infants at birth to recognize their existence and their rights to own property, etc. (Note that we recognize those rights, not grant them.)

                                  Again it boils down to the choice of arbiter: arbitration happens according to the terms of the third-party arbiter rather than those of the contractual parties. That's what's being set when one incorporates: which legal entities may be involved and as a result which assets of those legal entities may be subject to attachment, lien, or other judgement.

                                  Incorporation is the process of creating that legal entity which is separate and apart from the individuals who may oversee its operations. This greatly facilitates the sale and transfer of control of such entities (even within a corporation) without the interference of government (barring monopoly or strategic interests) precisely because those assets are not the private assets of any given individual. (It also means that any internal change of control doesn't result in a tax assessment to the individual. Can you imagine how disastrously messy that would get?)

                                  Does the government have a responsibility to protect property and property rights? Absolutely. And executing that responsibility relies wholly on the government's ability to properly ascertain who owns what so as to be able to adjudicate claims of wrongdoing.

                                  "My contention is that allowing corporate double standards into the free-market tent has undercut the validity of our defense of the free market..."

                                  Then demonstrate that there actually exists a double standard here in the US. (I noted that if one is referring to Japan or China that I accept that those two nations - among others - have created a preferential environment for business.) Without that, the entire rest of your premise falls.
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