When you guys become true libertarians and start voicing objection to the government subsidization of capital through limited liability corporations I will probably at least consider you to be intellectually consistent. However, most of what I see coming from this site is simple right wing union busting. Corporations are subsidized because they are limited in their liability to the capital that is invested. Originally that was because that would encourage investment in major capital projects. There is absolutely NOTHING in economic theory that in any way requires corporations. In fact, almost by definition, corporations create externalities because there is not incentive to act in ways that increase liability beyond the original capital investment. Such liabilities are by definition and by design not accounted for because you cannot recover those costs from any of the investors.
To say that capital has the right to "incorporate" but labor does not is completely inconsistent. Neither should have that right.
But I am sure supporting right wing ideology and corporate oligarchy pays the bills for you guys.
I'm going to give you some concepts and authors to look into, as to why limited liability is critical: entrepreneurship; R. Coase and O. Williamson; risk-sharing; capital requirements.
Capital doesn't incorporate - people do. You clearly need to spend more time looking into economic theory before telling us what it does or does not say.
Agree. That I was perhaps a bit hasty.But the point is that there are questions about corporate power as well as union power. I do not necessarily agree that either of the two economists mentioned above viewed "limited liability" as essential to their economics. Also, it is true that limited liability "encourages" entrepreneurship. But that is usually the justification for any government subsidy that it "encourages" something. The question is whether it is a requisite for the a free market? I think the answer is no because there are obviously markets that exist without limited liability corporations. In fact, I would think that the fact that there is government involvement with corporations would make them suspect.
We are also not talking about economic utopias here but rather flesh and blood markets. Just because in a perfect world unions should not exist does not mean that in the imperfect word that we live in they do not serve a corrective function on the market.
I have spent some time in the past reading the likes Roderick Long and Kevin Carson and others of the libertarian left who oppose "the corporation". Henry George and Konkin are others with interesting and thoughful things to say. I find all their points interesting from a clean slate but, in the end, I don't think it's practical...whether the idea is for mutualism, agorism or whatever "ism" of an anarchic nature. It's not going to happen. We live in the world we live in. And nobody ever said corps and LLCs are requites for a free market. They are simply state-created entities as a matter of law to shield personal assets from business assets and facilitate risk taking. I see nothing wrong with that and libertarian "purity" doesn't affect my opinion. OTOH, I'm not that wedded to the idea either. But, like I said, it's going anywhere so why argue about it? And what's altenative? All self-proprietorships where a shop owner can lose his home because some slips on his sidewalk or in the store and sues him personally?
BTW, I'm not quite sure what you mean by "subsidized". If this is the argument that WalMart benefits from state-funded roads to prosper then you are getting into a murky pedantic topic that will never end....nor amount to anything. If you talking about tax-related matters such as write-offs or something else entirely, then I'd be happy to hear about it and have you explain it. But keep in mind that what amny unions are able to do with state power is far more beyond the limits of any "libertarian betrayal" of "The Corporation".
A "subsidy" does not need to be in the form of a payment. It can also be, as you say a "shield" of "personal assets" to "facilitate" something. For example, I may have a business idea that could work to improve automobile transportation. Imagine that I can invest in a some form of factory that might make cars more efficiently but could also result, once every 20 years or so, in some form of environmental disaster that could cause billions of dollars in losses. I stress the "might" because it might also simply keep running without such a disaster. Now, if the disaster does not happen, we all make lots of money. if it does, the corporation is wiped out but not us individually. Absent the corporation we would have the added risk of putting all of our fortunes at risk. If that were the case we might consider whether the risk was actually worth it. But with the "shield" we have no such compunction. That to me is a much a subsidy as the government saying, "if there is a disaster we will pay you..." I guess you could say that there is not really a "subsidy" because the costs are spread amongst the victims rather than amongst the investors or paid for buy the state, However, would those costs, in the end represent a tax at least?
"A "subsidy" does not need to be in the form of a payment. It can also be, as you say a "shield" of "personal assets" to "facilitate" something."
That's not a "subsidy". That's simply a mechanism to separate one's personal self from one's business self. In your example that follows, you seem to have a problem with that. Why? What's the issue exactly? The person still incurs a heavy loss in the event of disaster or failure.. Your simplifying things too much. Besides, if environmental law were less socialized and more put on the backs of people through private property based law, you achieve the same deterrent.
This is a tough one. The arguments for LLC is that it makes forming a corporation and being successful easier, but the same case can be made for IP laws. I suppose consolidating corporations can be consistent with liberty and would need to be upheld by contractual law by those who form it and by those who buy stock in the company. As long as shareholders are aware that they are not entitled to the personal assets of those who formed the corporation but just the assets of the corporation itself, I see no problem with it. I know it sounds like a cop-out but the market always finds a way to make things like this work.
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