Okay, that makes some sense. I’m still somewhat in the dark as to what personal risk corporate officers are taking when they effectively borrow money in the name of their corporation and stick it on red in a roulette game…
I’m also not entirely sure that as an investor you should have completely limited liability either. As an investor, I presume you receive the company reports and are entitled to vote in the stockholder meetings. If you’ve bought a stake in a company that e.g. makes cyanide for gold mining, you should be paying attention to more than just the share price and the bottom line. Otherwise, what’s your motivation to vote against the prospective CEO who plans to move the plant to India where regulations are more lax?
Someone who was confident in their ability to actually straighten things up? As opposed to someone who could just draw a CEO salary for a year, let company X fold and shrug it away since shit happens? I’m pretty sure I could ruin a company just as effectively as anyone else, and I’d be a lot cheaper.
Think I’m in hijack territory now, so I’ll bow out. Maybe I’ll start a new thread.
Yeah, one of the misconceptions about this is that everyone in the corporation gets blanket immunity. This is not true. If you are personally negligent, you can be charged of a crime. If someone in authority in a corporation intentionally takes actions that violate the law, he can be prosecuted.
When you own stock in a company, you are delegating authority to someone else to run that company. You have a vote at the shareholder’s meeting, but ultimately the shareholders elect a management team and allow them to run the company. No one would do this if the actions of the management could create liabilities that are transferred directly to the shareholders.
So getting back to capitalism without capitalists - Sure, it’s possible to have companies that are completely employee-owned. You can have cooperatives and collectives and any other organization you want. So long as that group of people is playing by the rules of the market, that’s fine.
But are you going to stop wealthy people from hiring employees? Are you going to stop a group of investors from starting a company and hiring people to run it? Because unless you force this ‘cooperative’ style on capitalism, it’s going to remain a niche form of organization. Ask yourself this: If cooperatives and collectives are superior, how come they haven’t taken over? What’s to stop fifty people from getting together and pooling their resources and starting up their own company with themselves as the only employees, sharing in the profits equally? Nothing, other than the fact that people apparently find this a very difficult thing to do while remaining competitive.
The whole point to ‘capitalism’ is to allow for the accumulation of capital so that expensive things can be built. Why do you think auto assembly line workers make as much as they do? It’s not because of the union - it’s because each worker has his or her labor magnified by millions of dollars of capital investment. Robots, assembly lines, supply chains, dealership networks, design departments, R&D… These things cost big money to create, and their existence makes workers more productive and raises their incomes and standards of living. This is a good thing.
So what’s to stop workers from just pooling their money and doing the same thing? Lots of things, really. For one thing, they generally don’t have the capital. For another, lots of people want the security of a job but don’t want to risk their own money. For yet another, the workers are not necessarily the best judges of how to run a company. So they wind up hiring a management team anyway. GM is over 50% worker owned now. But does that really make a difference? You still have multi-million dollar executives at the top, and a hierarchy of people who make more or less money depending on their value to the organization. It’s not a collective, and it’s not egalitarian, and it never will be. If the workers of GM decided to vote themselves into an egalitarian collective where everyone was paid the same regardless of the job they did, I’d give GM about a year before it would collapse and be run out of the market by better-run companies.
So the answer is that nothing is stopping free markets from being dominated by worker’s collectives, other than the fact that they don’t seem to have managed it to date. You’re welcome to keep trying, though. As a libertarian, I certainly wouldn’t stop you. If you can make that model work, more power to you. I suspect you actually can make it work for very small businesses with low capital requirements and a work force that is very tightly aligned in terms of political principles and desires. You can probably dredge up an example or two of some small collective somewhere making tie-dyed T-shirts or bumper stickers or something and sharing the profit.
If they’ve operated above board, and followed accepted practices, and stayed within regulations, then nothing is stopping them from making stupid decisions. The board of directors is supposed to be paying attention to that.
You seriously want every investor in a corporation to fully vet every operation of that company to verify its full legality and risk? That’s crazy. And most investors do not themvelves vote at shareholder meetings. They vote by proxy. Or they own stock in the company through their 401(k) plan, which in turn is invested in mutual funds, which in turn maintain a balanced portfolio of many stocks and bonds.
There is no way controllership can be carried all the way down to the individual investor. Nor should it be.
Are you suggesting that the plant shouldn’t be moved to India? The motivation for approving or disapproving that act is whether it’s good for the company or not. And that’s as it should be. So long as the company is operating within the law, your job as a shareholder is to vote in such a way as to maximize the value of the company. I don’t want every corporation’s decisions being adjudicated by a council of political correctness. And there is nothing wrong with moving an office to India if that results in a better product or more profit for a company. Indians deserve jobs too.
Do you know any CEOs? Any high-up executives in any corporation?
You seem to have a very distorted view of corporate America. You think CEOs are all a bunch of greedy clowns, and that corporations are malevolent entities that are trying to rape and pillage the land and the people, with only the regulatory power of government to stop them or something.
But that’s not true at all. CEOs are generally the smartest, hardest-working, most knowledgeable people around. They are doing incredibly difficult jobs, and many are doing it spectacularly. For every British Petroleum executive getting a handjob from a Mines and Mineral Service employee, there are hundreds of Fred Smiths and Steve Jobs’s and Jack Welchs out there, creating our distribution networks, our computing and communications infrastructure, and our industrial capacity. There are thousands of corporations where the executives go to work every day and spend each day in hard work trying to make the company better. The vast majority of them, in fact.
You seem to think that corporations are structured poorly and that systemic change is required. I disagree. In the vast majority of cases, corporations deal responsibly and fairly with the rest of society, providing value in exchange for profit, operating wtihin the law and with respect for the environment and their neighbors. The largest corporations are also some of the biggest philanthropic sources in the country. Large companies like IBM, GE, Boeing, Apple, and Google donate time and money to charitable causes and sponsor education through grants and scholarships and do many other things that are good for the country and the world.
The existence of a criminal here or there or a poorly-run company there is no more an indictment of the free market or capitalism than the latest bribery scandal is an indictment of government. There are no utopias, and no matter how you organize people, there will still be bad and stupid people. Corporations are not all perfect, but by and large they serve us all very well.
How’s that? The Soviet-backed Republicans and the Anarchists were both squashed by Franco in the end. Before that, Anarchist units were fighting on the Republican side, or at least against the common enemy.
Certainly. I just wondered if there would be any benefit to making the personal cost of stupid decisions higher than just getting fired. And I’m not claiming that there would be a benefit - I honestly don’t know the answer. I do think that having people in charge who are essentially set for life whatever they do, and have a lot of lattitude before they stray into the zone of fraud, is asking for trouble. I don’t know the remedy though, or if the problem is big enough in the scheme of things to need a remedy.
I understand its impractical at some level, but where is the line drawn? Ownership of something usually implies some responsibility for it. If you own only 0.1%, maybe you should fall below some responsibility threshold, but what if you own 50% of a corporation and pay no attention at all to what it’s doing as long as you like the bottom line? Should you have the right to say it’s nothing to do with you, whatever that corporation does? You just voted for the tallest guy?
If the plant is moving to India to take advantage of the lower wages, fine. If it’s moving to take advantage of looser regulations, not fine in my book, even if it’s legal.
No to ALL of the above! Sorry if I gave that impression. But I know people and I know human nature. In your own words, “The motivation for approving or disapproving that act is whether it’s good for the company or not.” Thinking like that, and putting people who think like that in charge, is exactly in line with your parody image of corporations as malovent entities. You’re essentially saying that the law should act as a corporation’s conscience, or at least implying it. Both individuals and corporations can be utter arseholes without breaking any laws, but non-psychopaths usually have some kind of conscience. Who serves as the conscience of a corporation?
I will defer to your knowledge in this; my participation in this thread is only due to a misunderstanding of the nature of limited liability! However, I would point out that some of the activities you describe seem to fall outside the remit of just doing what is good for the company.
Anarcho-capitalism is a branch of libertarianism. Most mainstream libertarians are minarchists, believing that some sort of minimal state is necessary. Anarcho-capitalists don’t agree with that.
Towards the end, the Anarchist, Trotskyist, any non-Stalinist leftist parties were suppressed. Read George Orwell’s Homage to Catalonia – he happened to have volunteered with the militia of the POUM and got out of Spain just in time to avoid being arrested (by the Republican government, not by Franco). Yes, the infighting sapped the Republic’s ability to resist Franco; OTOH, putting down the non-Stalinists was a condition for Soviet military aid, on which the Republic was utterly dependent.
In the U.K., under certain circumstances, directors can be personally liable for the company’s debts.
Umm… no. If you buy a meal for $10 for a destitute man and during that meal he stabs someone and kills them, should you be liable? Of course not, despite that man being your agent. The company is liable to the extent of its resources, not that of its shareholders.
That’s because Rand viewed the company as an extension of its owner’s genius, drive, ambition and leadership. The modern concept of a corporation as an entity owned by some distant and disconnected board of directors who are legally separated from the consequences of their decisions seems to go against Rand’s beliefs.
To a certain extent the OPs question makes no sense. One of the defining definitions of “capitalism” is “supply, demand, price, distribution, and investments are determined mainly by private decisions in the free market.”
The other element of “capitalism” is private ownership of the means of production. I suppose it is possible to be in favor of an economy where a central government owns all the factories and industry but allows products to be bought and sold on the open market.
I don’t know why people would be against private ownership though.
MrDibble: re the mining equipment, I think the point is this: Where do you miners get the money to buy the equipment from in the first place, without a market?
I have to admit that while I can image a capitalist system without a free market, I can’t envision a free market system without capital. Capital, to me, seems like a necessary pre-requisite to a functioning free market.
The fatc that some people believe that that they can be anti-capitalist and pro-market doesn’t necessarily make it so. Some people delude themselves about their ideological beliefs.
A person who is opposed to the excesses of capitalism might end up throwing the baby out with the bath water and opposing capitalism itself. Then when confronted with a different situation (like a working free market) where capitalism is not producing bad results, they’ll have to rethink their position. Ideally, they’d realize that there’s good capitalism and bad capitalism. But if they’ve committed themselves too fully to the idea that capitalism is always bad, they may invent an arbitrary distinction that some capitalism is actually something different. When Haliburton sells biological weapons to the Pentagon, it’s capitalism so it’s evil. But when Farmer Brown sells his eggs at the local farmer’s market, it’s the free market so it’s okay.
I’ll admit I’m not familiar with the Spanish collectivist communs. But from the Wikipedia description it doesn’t sound like they had a non-capitalist free market economy.
Who set the prices? If it was some collective decision made from above then it was a socialist economy not a free market one. And if it was a free market where the workers could set the prices for their products, then it was a capitalist economy. The fact that workers collectives owned businesses doesn’t make them non-capitalist.