Monday, October 13, 2008

Why Regulation of Corporations Doesn't Bother Me so Much

Corporations are monstrous creatures of the state that permit and promote large, impersonal, and unaccountable organizations that could not survive without the corporate fiction. If you want to do business as a corporation and accept the "benefits" granted by the state, you should expect to be regulated out the wazoo. It's only right. Corporations lack consciences and minds. They are designed to allow individuals to hide behind fictions and justify actions that they would never be able to pull off as individuals.

I reckon states can put any conditions on corporate activities that they want. It's their creature, their gift. You should expect it to come with strings.


iceberg said...

Please pardon my ignorance, but can you specify what unjust actions become doable under the veil of corporatehood?

Carson points out that incorporation laws give unjust leverage by making limited-liability defacto, instead of having negotiations start from a neutral standpoint (of course limited liability can still be a negotiated matter -- like recourse which is common on real estate transactions.)

The one common transgression that corporations are said to be guilty of is "pollution". Needless to say that this has less to do with corporations per se, and a more to do with poorly defined property laws (be them Lockean, Rothbardian, Georgist, etc) so long as the "commons" of today exist, so will pollution continue to remain a *problem*.

Vache Folle said...


It's not that the unjust actions aren't doable without the corporate veil, it's that they are easier to pull off when you're just a cog in the corporate machine. Things you'd never dream of doing on a person to person basis can be done in the name of the corporation. Just as with the state, bureaucrats can justify action or inaction in the name of the state.

When you get layers of corporate bureaucracy, you tend to lose accountability. Publicly held corporations are easiest to fleece as they are the largest and ironically least transparent. It's shareholders I'm thinking of when I think of victims, not the public at large in such cases.

I'm a tool in a global conglomerate with corporations owning other corporations in layer on layer. Fortunately, they aren't evil. They're not accountable, either. Actors within the conglomerate pursue their own agendas, but not on the basis of business considerations. Rather, on the basis of bureaucratic, institutional considerations.

If you can contract freely for a "corporate" form, then go for it. But if you're using a state created form, expect regulations.