NationStates Jolt Archive

Simple question. Are corporations a necessary part of a free market?

I'd be interested to know how many people here are for free markets but against corporations (in the sense of legal rights granted to a business entity).

No I don't. Lets recall that corporations are recent additions to the economic landscape. And that they only became dominant in my own nation (the US) after several acts of government were made against individual wealth. By it's very nature a large beuracratic entity is poorly suited to a competitive environment. It only operates well when the environment is dominated by a large beauracratic struture (like a large government). One of the reasons I am a free markeet advocate is that I beleive these dinosaurs will quickly be eaten alive by smaller smarter mammals.

See, that's the way I feel too. It always seems to me a lot of people, when criticizing the free market, are really criticizing corporate structures.

There seem to be a lot of downsides to corporations, including, mainly, a loss of accountability in management. That is, the person who runs the company doesn't own the company. If he fails, he's only lost his job. The mentality seems to be quite exploitable by frauds. You don't rise to the top of a business by being stupid, but you can be the new CEO of a corporation immediately after recently leading your last one into bankruptcy.

Not really. I actually believe business corporations are detremental to capitalism (old school, meaning Smith) as they insulate the person with the capital from the actual use to which that capital is put. While I think corporations are a great idea for many purposes, using them as means of investment is not one of them. Since business corporations are a sub-optimal form of usage of capital, it is apporpriate for a capitalist society (government?) to place restrictions on the way they can work, what they can produce and so on - this of course is completely opposed to a free market. What can I say, I'm a die hard capitalist.

In the sense that they are given limited liability and various protections by the government, no. In the sense that they allow for capital financing and collective ownership, yes.

Heh, I've been called a socialist (I prefer the term Socialy Conscious, as it sidesteps the idiotic adherence to ideals over practicality) but PaulJeekistan, Darksbania, and Squi have already said, for the most part, something extremly similar to my own views. I think big corporations are inherently anti-free market (I make a distinction between capitalism and a free-market, perhaps thats just me) A true free-market doesn't tolerate the kinds of resitrictions on true, open competition that so many of the big corporations have lobbied, and continued to lobby for.

A good example is the ongoing softwood lumber dispute between my country (Canada) and the USA. So the American softwood lumber producers feel they can't compete on a free-market without pocketing huge amounts of prfit? They feel they can't compete against the resource and skilled labour rich Canadian markets without unfair legal wrangling? They say they'd go out of business? Well tough shit. THEY are the ones with heavy subsidies, not Canada,....yet they use beurocracy to enforce rules contrary to free-trade agreements, using specious data to back up a hypocritical position. Thats about as Anti-Free Market as it gets.

In the sense that they are given limited liability and various protections by the government, no. In the sense that they allow for capital financing and collective ownership, yes.
My girlfriend actually remarked to me the other day, about how she found corporations to be a strangely socialist concept. One corporation can own a little bit of everything, and everybody owns a little bit of the corporation (which of course has governmental protections surrounding it).
A good example is the ongoing softwood lumber dispute between my country (Canada) and the USA. So the American softwood lumber producers feel they can't compete on a free-market without pocketing huge amounts of prfit? They feel they can't compete against the resource and skilled labour rich Canadian markets without unfair legal wrangling? They say they'd go out of business? Well tough shit. THEY are the ones with heavy subsidies, not Canada,....yet they use beurocracy to enforce rules contrary to free-trade agreements, using specious data to back up a hypocritical position. Thats about as Anti-Free Market as it gets.
Yeah, government subsidies are crap. I just love knowing my tax money gets spent on huge corporations so they can turn a bigger profit.

Perhaps one day peace will reign over the market. Corporations will put aside their petty differences, their competition, their wars, and form a new organisation: the United Corporations. The Managing-Director (not Secretary-General), the Security Council, the Making Money Council and the General Assembly will form the largest, most powerful organisation in the world.

Like after World War II, the UN resolved to create a world of freedom, equality and peace; the UC will be dedicated to the lofty principle of screwing the people for as much money as they're worth, and then some.

This day of peace and unity will bring a tear to my eye.

A good example is the ongoing softwood lumber dispute between my country (Canada) and the USA. So the American softwood lumber producers feel they can't compete on a free-market without pocketing huge amounts of prfit? They feel they can't compete against the resource and skilled labour rich Canadian markets without unfair legal wrangling? They say they'd go out of business? Well tough shit. THEY are the ones with heavy subsidies, not Canada,....yet they use beurocracy to enforce rules contrary to free-trade agreements, using specious data to back up a hypocritical position. Thats about as Anti-Free Market as it gets.

They are subsidized by government. Corporations do not require subsidies to exist, it is poor government that is responsible for subsidies.

You don't think it's happening now? Every corporation you see is owned by another corporation. I wonder how many "top level" coporations even exist anymore.

The way it's going, it'll all be owned by one corporation some day.

My girlfriend actually remarked to me the other day, about how she found corporations to be a strangely socialist concept. One corporation can own a little bit of everything, and everybody owns a little bit of the corporation (which of course has governmental protections surrounding it).

They do have a communist nature in that they are owned by society in a way. However, communists will say that any business that is not owned by the workers alone is a far cry from communism.

They are subsidized by government. Corporations do not require subsidies to exist, it is poor government that is responsible for subsidies.
Pft.

That doesn't stop them from taking subsidies though, does it? You must be an American. Only there are subsidies called something else, and people actually beleive there to be a difference.

Pft.

That doesn't stop them from taking subsidies though, does it? You must be an American. Only there are subsidies called something else, and people actually beleive there to be a difference.

You can't blame corporations for taking money that the government is squandering. Find an example of a corporation being a problem when the government is not supporting them unfairly.

And what do you mean by that last statement?

Simple question. Are corporations a necessary part of a free market?
It seems that corporations arise and dominate in every free-market economy.

Yeah, government subsidies are crap. I just love knowing my tax money gets spent on huge corporations so they can turn a bigger profit.
On the other hand, when corporations pull in more money with the help of subsisides, they end up repaying the government with greater tax revenues.

It seems that corporations arise and dominate in every free-market economy.
But a corporation has legal rights. If a constitution prohibited rights being granted to anything other than an individual, you wouldn't see corporations in a country.

...in the sense of legal rights granted to a business entity

Well that's the problem I have. In the U.S. corporations are treated as legal persons with priveleges that normal persons do not have.

I'm not against the idea of corprations, as V.O. pointed out they have useful functions, but we could do with some corporate law reform.

Simple question. Are corporations a necessary part of a free market?

I'd be interested to know how many people here are for free markets but against corporations (in the sense of legal rights granted to a business entity).

No, they are not a necessary part of the market. But they are a logical consequence of the capitalist desire to maximize profit and capital accrual while minimizing risk.

Those who argue that corporations are an aberration from the capitalist norm tend to forget that corporations have survived and thrived long before the era of "big government." The simple absence of government intervention into the market has historically been enough for marketeers to corner the market and run away with huge profits. To be honest, I'd say that it's just as naive to suggest that all the problems of capitalism would go away if we just got rid of corporations as it is to say that all our problems would go away if we just adopted communism.