Do we NEED corporations?

I would think not, because business was conducted for millenia absent the corporate form. After all, a corporation is just a legal ploy that shields shareholders from liabilities. If a small business goes under, then the owner is on the hook for all the debts, while shareholders in a corporation only lose stock value.

You would think that business wouldn't be as corrupt and greedy as it is now if we repealed incorporation laws. After all, do you think that Ken Lay or Bernard Ebbers would have been so wasteful and greedy if they were held liable for their respective companies' debts? I feel that they would be the very model of responsible businessman if they were the ones potentially on the hook.

I like the concept of the free market, but it is always corrupted in some way, either by government favoritism (steel tariffs, farm subsidies, etc.) or by corporate monopolies that can run amok without much restraint (Enron and the like). I would just like to hear what the board thought about abolishing the corporate form and allowing only sole proprietorships and partnerships. What would be the pros and cons of such a move?

to protect individual stockholders from the actions of the overall company... I think, but if it's true, then that whole setup is just weird to me. Plus, the whole concept of personhood for corporations just make it even weirder.

So to answer your question, I don't really think we need corporations




Dave (AmyStrange.com)

DU (slang/ folklore) Glossary (Dictionary): http://DUG.SeattleActivist.org/
Index of WMD Articles: http://WMD.SeattleActivist.org/

Here are some excellent resources and timelines of quotes and interviews and newspaper article quotes documenting the different things Bush and Co did and said for the last two plus years concerning the war in Iraq and WMDs (and other fun things) from the Howard Dean Website---even if you're not a Dean Fan, these are still excellent resources:

The Bush Administration And WMDs: Then And Now:
http://www.deanforamerica.com/site/PageServer?pagename=bush_wmd_summary

Niger-Uranium Timeline:
http://www.deanforamerica.com/site/PageServer?pagename=niger_timeline

Bush and WMD: Assumptions vs. Reality:
http://www.deanforamerica.com/site/DocServer/TikTok_-_Bush_-_Iraq_-_Side_by_Side.pdf?docID=781

The Bush Administration and WMD: What did they know and when did they know it?:
http://www.deanforamerica.com/site/DocServer/TikTok_-_Administration_-_Iraq_Deception.pdf?docID=762

The corp. exists to protect individuals. A loophole to do bad business.

Although shareholders are protected from most liabilities connected to decisions of the corporation, that may not always be an absolute shield. A corporate entity, whether a corporation, company, limited liability partnership, or one of many other forms of business entities, is primarily used to protect the individual assets of the incorporators. Those individuals may or may not be shareholders, though they usually are if stock has been issued by the entity.

However, I don't have a problem with an individual's personal assets being protected from seizure to pay debts of the corporation, absent some showing of fraud. Obviously if some sort of fraud or other illegal behavior is present, a plaintiff should be able to pierce the corporate veil and go after the personal assets.

A corporation is not an evil entity unto itself. The primary problems we have in our society in connection with corporate issues stem from the legal fiction which created corporate "personhood" thereby placing a corporate entity on the same plane as an individual for most issues. A corporation does need to have some rights, such as the right to sue to enforce a contract or to protect a legitimate patent. But a corporation should not have constitutional protections as though it was a natural person.

Revoke corporate personhood, regulate business entities and fully fund the SEC as an independent investigative body, and most of the problems associated with corporate America would disappear.

"Revoke corporate personhood"

I'm working on a court case right now...




Dave (AmyStrange.com)
http://www.SeattleActivist.org/MyLifeStory.html
DU (slang/ folklore) Glossary (Dictionary): http://DUG.SeattleActivist.org/
Index of WMD Articles: http://WMD.SeattleActivist.org/

Here are some excellent resources and timelines of quotes and interviews and newspaper article quotes documenting the different things Bush and Co did and said for the last two plus years concerning the war in Iraq and WMDs (and other fun things) from the Howard Dean Website---even if you're not a Dean Fan, these are still excellent resources:

The Bush Administration And WMDs: Then And Now:
http://www.deanforamerica.com/site/PageServer?pagename=bush_wmd_summary

Niger-Uranium Timeline:
http://www.deanforamerica.com/site/PageServer?pagename=niger_timeline

Bush and WMD: Assumptions vs. Reality:
http://www.deanforamerica.com/site/DocServer/TikTok_-_Bush_-_Iraq_-_Side_by_Side.pdf?docID=781

The Bush Administration and WMD: What did they know and when did they know it?:
http://www.deanforamerica.com/site/DocServer/TikTok_-_Administration_-_Iraq_Deception.pdf?docID=762

From Smith to Jeferson (ok they both wrote their most important writings in the same year, so from might be a strech) have opposed the idea of Corporatins or wanted them severly limited. Smith felt they were unfair monoplies of capital. Jefferson wanted a constitutional ammendment outlawing monoplies. Personally I would like to have weak corporations and strong unions.

businessmen would then only pursue enterprises assured of a profit. any risk of going belly-up and there would be no takers.

so, any business that could get sued would never get funded. oops.

also, any business that got low on cash would probably liquidate asap. only companies like microsoft, with huge cash hoardes, would be able to fund risky endeavors.

keep thinking....

you mean like what Enron did?




Dave (AmyStrange.com)

DU (slang/ folklore) Glossary (Dictionary): http://DUG.SeattleActivist.org/
Index of WMD Articles: http://WMD.SeattleActivist.org/

Here are some excellent resources and timelines of quotes and interviews and newspaper article quotes documenting the different things Bush and Co did and said for the last two plus years concerning the war in Iraq and WMDs (and other fun things) from the Howard Dean Website---even if you're not a Dean Fan, these are still excellent resources:

The Bush Administration And WMDs: Then And Now:
http://www.deanforamerica.com/site/PageServer?pagename=bush_wmd_summary

Niger-Uranium Timeline:
http://www.deanforamerica.com/site/PageServer?pagename=niger_timeline

Bush and WMD: Assumptions vs. Reality:
http://www.deanforamerica.com/site/DocServer/TikTok_-_Bush_-_Iraq_-_Side_by_Side.pdf?docID=781

The Bush Administration and WMD: What did they know and when did they know it?:
http://www.deanforamerica.com/site/DocServer/TikTok_-_Administration_-_Iraq_Deception.pdf?docID=762

but yes, anything can be abused, and enron is a glaring example of a corporation that abused a lot of privileges, including the protection of shareholders from liability from corporate loss beyond the stock going to zero.

but all "startups" involve risk, and it would be hard to manage that risk without the protection corporations offer investors.

If the perpuse of a coperation is to protect the shareholder from the liabilityes? Even as they claim the privliges of being reworded hansomly for "taking risks" that they are in fact, shelterd from.

The ones who take the risks, are the empleeyes who are layed off at the first hint of truble. Then the CEO's give themselves rases for saving the compnay from their own mistakes.

The modern bussiness corporation is I think the most successful method of organization in all history. I know, a bold statement.

First I will say by successful I mean in terms of gathering wealth and power. While corporations have existed in some form for 400 years or so only after the Civil War did they start to take off and the last century was one of their maturation.

The inexorable co optation of government by corporations is well over half done now. I see nothing that will stop it.


While it is fun to argue the nature of corporations; as a political issue it is ueeless. Only we of the so called left, and a big part of the wacko right care.

The success of corporations is due of course to their ability to shield owners and employees from liability and responsibility. Along with the advent of direct corporate lawmaking the end of the democratic experiment is at hand. In fact it is over already. Dead man walking.

"....While it is fun to argue the nature of corporations; as a political issue it is ueeless. Only we of the so called left, and a big part of the wacko right care...."

corporations were very different entities.

"In the early days of our country, we allowed the creation of corporations to fulfill specific needs of society. This shared financial responsibility facilitated projects desired by residents of the state granting the charter. We granted charters for purposes such as construction of roads and bridges.

The corporate charter is an operating license that citizens may give, and likewise, may choose to revoke. Our country's founders had a healthy fear of corporate corruption and limited corporations exclusively to a business role:

A charter was granted for a limited time.


Corporations were explicitly chartered for the purpose of serving the public interest — profit for shareholders was the means to that end.

They could engage only in activities necessary to fulfill their chartered purpose.

Corporations were terminated if they exceeded their authority or if they caused public harm.

Owners and managers were responsible for criminal acts they committed on the job.

Corporations could not make any political contributions, nor spend money to influence legislation.

Corporations could not purchase or own stock in other corporations, nor own any property other than that necessary to fulfill their chartered purpose."

The above is from:

http://free.freespeech.org/americanstateterrorism/plutocracy/CorporateHidden.html

Another site with lots of interesting corporate information is:

http://www.poclad.org/index.htm

I'm sorry--I'm afraid I will be banned for making these posts on DU, but yes...corps are necessary--I took three econ classes in college and no that without modern corporations, NOBODY would be willing to risk their cash on ventures...Corporations essentially spread the risk, and lessen the damage when the risks go bad. They allow cash and capital to be used in ways it couldn't be used otherwise...Many SMALL investors can create something BIG using a corporation....Without this ability, we would have no k-mart,wal-mart,target,bp, exxon,ford,dell,mci,coca cola, etc etc etc etc

I know SOME here consider diffused power a good thing, as do I...but I'm not stupid enough to advocate the end of corporations. That would mean the end of literally a BILLION+ jobs folks...no joke...jobs that would not be available without the shared/spread risk of corporations. Sure, there is corruption in many areas, but I think the vast majority of shareholders are honest businessmen, looking to make an honest return on the cash they risk.

Need is a strong word. In an absolute sense of course we dont need corporations.

It would be better to discuss not the need for them or their possible banishment but rather talk about their nature in a legal sense and how they relate to government.

I can do this, and so can many others. As I said in my above post however it seems like such a fruitless enterprise.

Here is one thing to remember if you ever happen to get into discussions of the nature and roll of corporations.

Corporations are CREATED by government. Libertarians and market fundamentalists always pretend to assume that corporations somehow preexist government. Corporations are legal entities and laws are a government function, obviously. This simple logical point cannot be over stessed. Government has the RIGHT to demand ANYTHING of corporations including the right to dissolve them. Argue we may about government limits on corporations but as a fist principal in arguements and discussions of this always start by making your opponenet concede this point.

Then throw in this. Corporations have nothing to do with individualism. They are heirarchical and both externally and externally they are NOT democratic.

(Good luck trying to find someone who even cares or will understand philosophical arguements about this stuff. It is pissing into a hurricane. I'm a pessimist obviously but this topic gets to the very heart of all things we care about economically, socially, culturally. And they have won. As proof look no futher than what I just said. Nobocy understands or cares to. It is game set match. History has moved on from the Democratic experiment)

You are correct. When discussing cooperation, the fact that cooperations are legal entities of government law must be recognized. Because this runs to the vary heart of the mater. The supply siders will defend this issue to the last for this is the final wall to their castle. Breach this wall, even in logical terms, and the whole vision of the supply sider's world caves in on itself, and exposes its true face. That of an aristocracy, of even a "divine right."

Where some argue that cooperation's predate the US government, they are in effect arguing that they lord over the US government. And that is still a hard argument for them to make, even to conservatives. So instead, the argue from adviser consequence, that "cooperation's bring jobs" and that if you oppose cooperation, you are in effect putting yourself out of a job.

Never the less, the supremacy of cooperation's over the government is impossible to disguise. Look at the Enron – Bush connections. When Bush was forced to defend California's interests, or Enron's interests, who chose to defend Enron at the expense of California. That is NOT democratic, but is in fact, feudalistic.

This is not just an argument worth making, but an argument that MUST be made. It is this issue that makes the DLC Democrats exactly the same as the GOP, for the DLC Dems still holds the notion that cooperation's are "divine" citizens.

Transactions costs.

Isn't owning your own business the American dream? Several types of industries are difficult to enter into because large corporations control the majority of the market. Unfortunately, this is extending to small restaurants and retail shops as the national chains dominate. Individuals owning businesses are more likely to take responsibility for the actions of their businesses because they are equated with the business. A corporation is exclusive of any person and is its own separate person. It is a limited responsibility entity that only seeks profit. The liberatarian ideal of a free market cannot be realized unless the corporation is unexistant or severely limited. Business and democracy do not need to be at odds if businesses is owned by individuals.

Yes, because large scale organizations and large scale investments are necessary to maintain the standard of living that we enjoy (and most of us want a bigger piece of). Limited liability and anonymous capital participation make that possible, and as somebody said, spread the risk.

But no, they don't have to be economic despotisms, as American corporations are now. Corporations could be democratic, with the board of directors and the president elected by the employees. (Yes, there would be problems to solve, but they can be solved. See

http://william-king.www.drexel.edu/top/polemica.html

again! for some possibilities).

If that goes too far for you, German corporations have for half a century had "Mitbestimmung mit paritat," meaning the employees elect half of the board of directors and investors elect the other half. Yes, I know the German economy has got some problems currently -- so has ours -- but that 50 year record is, on the whole, a record of success. And Germany stil out-exports us.

Nader has for years called for a federal corporation chartering law. We should have one, and it should set Mitbestimmung mit paritat as the minimum of corporate democracy!!

Corp can and should exist to SERVE THE PUBLIC INTEREST!!!! The problem is corporations and the rich who own them have far far to big a say in who gets elected.

Naturally those who agree with the big money have a far more likely chance of getting elected in out one dollar one vote system. Once elected those who had their seat bought for them by the corporation naturally continue to feel that the only problems that count are the ones their benefactors see. Of course you can take the other option and shun big money, given the state of the media's lack of coverage for all but the most important races, this relegates you to obscurity.

Campaign finance reform like Clean Money Reform should be priority number 1. Check out Public Citizen to see how "Clean Money Campaign Reform" works.

http://www.publicampaign.org/

:Kick:

Your main complaint is that "a corporation is just a legal ploy that shields shareholders from liabilities."
:think:
Creative suggestion: Change corporate law so that shareholders are proportionally liable. This would mean that a stock could potentially have a negative value. If a company goes under owing a bunch of money the stockholders have to pay up thier share, at least until they go bankrupt. I can see a lot of problems and some solutions with this one.

1) First off the people that lost thier stock portfolios to Enron also would have to pay off its debts. Seems even more unfair.

2) How would you know about credit ratings of the shareholders? This is the whole arguement against shareholder liablity. It's to hard to figuar out so we assume a corporation has only its assets(and backers)to prove it's reliablity.

If you take this line, a company's business partners are responsible for thier own dealings with an unstable company. If you sell equipment to "fly by night construction" and they never pay the bill, well it's your fault. If you buy a house from "fly by night construction" and pay before you get the house, guess what it's your fault. Until "fly by night construction" makes a name for itself (and even afterwards) demand payment on or before delivery and make them post bond before contracting them to build your house.

I would rather have a corporation owned by lots of shareholders than one rich billionare owning it as his private kingdom. Sure you can argue that Mr. Billionare would act maximally responsible for his empire because he reaps maximum reward and damage. Such arguements have been used to justify dictatorships and kings.

Yes, corporations do evil things. Make them laible for thier actions. Make them post bonds before taking social risks. Police the crap out of them. Develope good public auditing systems. It'll never be a perfect system, but in the end shareholder should be the one stuck with all the responsiblity.

One more thing, someone mentioned ENRON. About two years before it's collapse, the German company E-ON considered merging with them. They did some research and although it was unpopular at the time decided they weren't intrested. With enough energy you could have known something was up. The problem is that the big shareholders didn't want that getting out or they'd be screwed, AND the small shareholders didn't have the energy to do it individually.

Yup corporations suck.

I would rather have a corporation owned by lots of shareholders than one rich billionare owning it as his private kingdom. Sure you can argue that Mr. Billionare would act maximally responsible for his empire because he reaps maximum reward and damage. Such arguements have been used to justify dictatorships and kings.

Actualy, one persone DOSE own a corperation. They are called majority share owners. Just like you can buy 10 stocks in compnay A, a board member can buy up 50,000 shares or more. In fact, IPO's are always structured to give the insiders first crack at the issues before they go onto the market, where they usualy buy at least 50% or more of the total share issues or more. The public gets the rest.

He then tilts the ownership further into his favoer by stock options.

This isures that one man's vote is litterly worth more than the rest of the investors combined. And he dodn't even have to vote. One nasty letter is all that is needed to sway desistions these days. All he has to do is threaten.

Becareful what you wish for.

Sure that's a problem with corporations. Another problem along these lines is that small share holders don't ussually turn up at meetings and vote. There are also non-voting shares where the shareholders also just along for the ride.

My point is that I don't wish for a 100% shareholder; your point seems to be that a 51% shareholder is about as bad.

It'd be interesting to see better "powersharing" in the corporate world. One idea would be to apply alternative voting systems like proportional representation to were the board members are voted in proportion to thier shareholders for example, and some kind of qualified majority is required to pass decisions.

I'm not sure if the government should perscribe such things or if they could develope on thier own. If Mr. 51% can prove to the other shareholders that they too have a say perhaps shareprices will be better.

Often it's not that bad and there's a coalition of major shareholders controling a company. Having institutions do this though adds another neat layer of corruptablity since companies owned by the same institution may decide not to compete with each other, like a monopoly. I think anti-trust laws are supposed to fight that somehow.

Snip:
A corporation isn’t human. It has no fears, no dreams, no regrets and no hopes. It cannot be killed and therefore doesn’t fear death; it has no passion and therefore cannot be moved by love; it has no god and therefore has no faith; it has no meaning but the generation of profit and therefore excludes all meaning but its own.

Snip:
Where were the corporations at Valley Forge or Concord or Philadelphia when our progenitors pledged their sacred honor and their lives in this most noble and ennobling cause of “government ... from the consent of the governed.”?

They wrote the Constitution not for the recently born corporate aristocrats but for their posterity, “We the people.” They wrote the Constitution not for corporate profit taking but to “establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty.”

As Grover Norquist’s dream of drowning the government in a bathtub becomes so much closer to reality through the actions of the Bush Corporation, we might want to wonder the larger scheme.

Read more of this excellent post here (Aug1):
http://www.mahablog.com/