Comments (62)

• Manuel Lora

  I do not understand the purpose of the scare quotes. He calls himself a mutualist.

  Published: March 22, 2009 11:00 AM

• Mike DiBaggio

  Whence all this enmity between the two camps? I sympathize with the libertarian localist perspective in a lot of things as well as your argument about the good of long-distance trade, so I just can't see why this is so acrimonious. I accept the importance of the scholarly discussion, of course, but it's a mistake to let it get so heated.

  Published: March 22, 2009 11:26 AM

• Stephan Kinsella

  Mike, there is no acrimony at all in my post. I am stating disagreement with one of the claims of mutualists. Where is the "heat"?

  Manny, good point. I removed the scare-quotes on "mutualist." Carson is indeed a soi-disant "mutualist," as you note.

  Published: March 22, 2009 11:38 AM

• lukas

  Why does this point need to be discussed at all? Can we pretend to know what would have happened in the absence of state coercion? If not, might we not as well dispute how many
  angels can dance on the head of a pin?

  Published: March 22, 2009 12:00 PM

• theblob

  I agree with lukas.

  1) If we could predict the future and a stateless society in such a way, it would be one of the best arguments for central planning.

  2) This discussion seems to only reflect the personal preferences of its participants.

  Published: March 22, 2009 1:15 PM

• Stephan Kinsella

  Lucas-- it is not is libertarians who are complelld to predict. We have principled reasons for favoring liberty and rights. It is the mutualists and leftlibs who make these perdictions and then make normative claims based on them. In effect they argue that in a free society there wd be no big firms--therefore the ones that exist are in essence arms of the state and not legitimate owners--this they refuse to condn vandalism such as macys window breaking. It is this anti-property viewpoint that is unlibertarian and the reason they need to be countered.

  Published: March 22, 2009 1:39 PM

• AJ Witoslawski

  The way I see it, mutualism is only good insofar it attracts leftists to free market anarchism.

  How anyone can hold mutualist views for long is beyond me. First of all, the labor theory of value is ridiculously outdated. Secondly, incorporation (aka "corporate personhood") is vital to economic growth. Thirdly, although governments promote corporate largess in some areas, large businesses would still benefit from economies of scale. There were many large businesses which used vertical integration to lower prices and serve the market better. Lastly, as you point out, national and international trade are vital for economic growth and prosperity. There were railroads and roads which never received subsidies and greatly expanded transportation, making shipping much cheaper.

  You can count me in as a "right" libertarian or as a "paleolibertarian."

  Published: March 22, 2009 1:51 PM

• John Ess

  He uses subjective value theory and time preferences, too (I think he has some connection with the labor theory of value, but I don't understand yet so I won't comment). And "incorporation" being good for economic growth is an argument from effect. Like when people say the state is key to economic growth. Maybe due to some experience or simply opinion. Or those that tout monetarism as key to economic growth (without explaining what growth actually is in itself or how moral or actually free market monetarism is either).

  I think the mutualists (the first I ever read being Clarence Lee Schwartz) are the closest anarchists to the Austrian school of economics. I mean they were opposed to gold standard when it was around as not being free market enough! Similarly to Lysander Spooner. And wrote of the evils of IP as one of THE greatest of the evil monopolies.

  I think we take for granted how radical the Austrian school is compared to other groups of libertarians. As far as I know, they are the only group that actually has consistent economic and philosophical principle written explicitly. Believe it or not, most of the libertarians out there are not. Most are the wishy-washy Friedmanites who can make good sense on some things and then seem to easily separate macro and micro economics from each other. Or fall prey to empiricism as a dominant tool of demonstrating economics (which they then have to reprove again and again with every bad administration).

  Published: March 22, 2009 3:01 PM

• Brent

  "And "incorporation" being good for economic growth is an argument from effect."

  True, but the qualm is with limited liability, which can be established through voluntary contracts, so the assertion that it is not libertarian is at most semantics (though mutualists think limited liability through incorporation proves corporations are the statist devil).

  Published: March 22, 2009 3:15 PM

• BeFreer

  Carson's mutualist "subjectivized" labor theory of value holds that the price of a good tends to correspond to the subjective disutility of the labor needed to produce it. Thus believe that "profits" to capital are protected by privilege and that without privilege costs will be driven to price and labor would then get it's just due by receiving it's full product. So exploitation of labor is the result of unequal exchange caused by the state

  Published: March 22, 2009 3:30 PM

• Niccolo

  Well, I am a left-libertarian and I certainly want no agrarian society.

  Just the opposite, in fact! I want the cities to be bigger, I want the small agrarian towns of less than 100,000 people to either show their worthiness by surviving, or disappear completely.

  So, I don't get your suggestion that all left-libertarians are somehow simpleton environmentalists in disguise.

  
  That said, however, I often diverge with many other left-libertarians on several issues, so don't take my exception to be the rule.

  Published: March 22, 2009 3:36 PM

• AJ Witoslawski

  "incorporation" being good for economic growth is an argument from effect. Like when people say the state is key to economic growth.

  No, not at all. We can argue that incorporation is good for economic growth deductively. Without limited liability, shareholders would not have as much of an incentive to invest. Investment would fall, slowing economic growth.

  Published: March 22, 2009 4:23 PM

• Mike

  "No, not at all. We can argue that incorporation is good for economic growth deductively. Without limited liability, shareholders would not have as much of an incentive to invest. Investment would fall, slowing economic growth."

  That's also an argument from effect. Learn what words mean.

  Published: March 22, 2009 4:31 PM

• DNA

  Re. BeFreer's comment: the idea that a price "corresponds" to subjective (dis)utility is in pretty serious conflict with fundamental Austrian concepts, as are a number of Carson's positions (as pointed out by Walter Block), so whatever else one thinks of Mutualism, there are very good reasons for Austrians to reject it.

  Published: March 22, 2009 4:44 PM

• stephan Kinsella

  Brent-- anyne who thinks "limited liability" grants by the state are responsible for the success of capialism is an idiot. Hessen has demolished the confused ideas about this for anyone who cares to read and think. I'm a bit tired of explaining this over and over again to newbs and leftoid innocents.

  Published: March 22, 2009 4:49 PM

• Sam

  Kinsella, as much as I appreciate your posts, sometime you get way to defensive. Is it really productive to cast around terms like "idiot, newbs, and leftoids"? Especially when you could just have easily said "Hessen has demolished the confused ideas about this..." or linked to your many posts detailing limited liability and corporations, or even not justified Brent with a response at all?

  It just seems to ruin the spirit of the website when one of the adjunct faculty members of the Institute is using slang terms like "newb"...

  Just my two cents.

  Published: March 22, 2009 5:19 PM

• Juan Fernando Carpio

  "Mutualism" is economic illiteracy. I think Kinsella should keep the scare quotes. Just call it economic illiteracy, for the sake of precision.

  Published: March 22, 2009 5:40 PM

• Stephan Kinsella

  "sam": "Kinsella, as much as I appreciate your posts, sometime you get way to defensive."

  I assume you mean "too"?

  "Is it really productive to cast around terms like "idiot, newbs, and leftoids"?"

  The question is: who is correct? What is the right position, substantively (no offense, emotion-ridden leftoids).

  Published: March 22, 2009 5:59 PM

• Sam

  Oops, yes, I did mean "too".

  For the record, I think you are certainly more correct than the mutualists. Perhaps I am just nitpicking, but your response to Brent was devoid of any intellectual content and seemed to be more of an excuse to use silly and unnecessary slang.

  *shrug*

  
  

  Published: March 22, 2009 6:58 PM

• Greg

  "For the record, I think you are certainly more correct than the mutualists. Perhaps I am just nitpicking, but your response to Brent was devoid of any intellectual content and seemed to be more of an excuse to use silly and unnecessary slang. "

  Last week he accused Brad Spangler of an "argument fail," and he seems to love talking about "broken windowz" (sic), so I think you may be on to something.

  Published: March 22, 2009 8:06 PM

• Brent

  "Brent-- anyne who thinks "limited liability" grants by the state are responsible for the success of capialism is an idiot. Hessen has demolished the confused ideas about this for anyone who cares to read and think. I'm a bit tired of explaining this over and over again to newbs and leftoid innocents."

  That was my point.

  Published: March 22, 2009 9:24 PM

• newson

  i can't understand the heat generated by the limited liability question.

  here in australia, partners in professional practice were generally penniless (wife, or trusts held all assets beneficially). personal bankruptcy could prejudice careers (depending on the professional charter), and this was incentive enough to be good, but if it hit the fan big-time, then you just had to be nice to the wife whilst you served out your bankruptcy.

  so unless mutualists are in favour of debtors' prison, i can't see why limited liability can't be achieved de facto (i could just as easily appoint strawmen as directors/partners, whilst i maintain the beneficial interest, if i don't trust the wife.)

  Published: March 22, 2009 10:03 PM

• Gil

  Is it me or when Mr. Burns (in The Simpsons) said that his company was owned by a canary before Homer released it and conned Mr. Burns to make him the owner. does that mean Mr. Burns was running his company as a Sole Proprietorship?

  Published: March 23, 2009 1:31 AM

• Brainpolice

  "Lucas-- it is not is libertarians who are complelld to predict. We have principled reasons for favoring liberty and rights. It is the mutualists and leftlibs who make these perdictions and then make normative claims based on them. In effect they argue that in a free society there wd be no big firms--therefore the ones that exist are in essence arms of the state and not legitimate owners--this they refuse to condn vandalism such as macys window breaking. It is this anti-property viewpoint that is unlibertarian and the reason they need to be countered."

  First of all, your statement implies that mutualists and left-libertarians are not libertarians. That is not fair. Secondly, your statement is simply false - the normative preferance for certain forms of organization is not exclusive to the libertarian left. The claim that the libertarian right does not make normative assumptions of this sort is simply false. Hans Hoppe, for example, makes plenty of normative claims about the relationship between libertarianism and conservatism. Hence, I find your one-dimensional claim that left-libertarians make predictions of this sort while others don't to be misleading. In fact, you yourself are implying here that a particular normative conception of property rights is required for one to be a libertarian, and you are characterizing those who don't completely agree with your normative conception of property rights as being "unlibertarian".

  There is no "anti-property viewpoint" - noone here is "anti-property" in any absolute sense, and it would be no more sensible to be "pro-property" as an absolute either. Clearly, it would be silly to be "anti-property" or "pro-property" without concern for context (such as how it is aquired). Property is hence neither intrinsically good or bad in this sense. Your reaction to the libertarian left tends to be knee-jerk and reactionary, without really trying to understand our perspective. I have principled reasons for favoring liberty and rights - and left-libertarianism is what I see as having a more consistent application of those reasons! Something like anti-corporatism is merely an extension of such principles.

  Published: March 23, 2009 7:40 AM

• Brainpolice

  "How anyone can hold mutualist views for long is beyond me. First of all, the labor theory of value is ridiculously outdated."

  Not all mutualists adhere to a labor theory of value. Furthermore, there isn't a single labor theory of value. Furthermore, Carson uses a subjectivized theory of value.

  "Secondly, incorporation (aka "corporate personhood") is vital to economic growth."

  Really? It seems to me that you are the one here who is making a predictive statement and deriving a norm from it. The question that left-libertarians tend to ask is - what context are you drawing this conclusion from? A free market? We don't have a free market. It therefore would seem fallacious for you to point to the results of an unfree market in which incorporations is linked to "growth", and then conflate that with a free market. This seems obvious.

  Furthermore, I don't care about "growth" for its own sake.

  "Thirdly, although governments promote corporate largess in some areas, large businesses would still benefit from economies of scale."

  Have you actually read Carson's book? This is addressed in great detail.

  "There were many large businesses which used vertical integration to lower prices and serve the market better."

  In a free market? But wait, it wasn't in a free market. So the assumption may be false.

  Published: March 23, 2009 7:47 AM

• Cybertarian

  Lukas,

  "Can we pretend to know what would have happened in the absence of state coercion?"

  Oh, but we know what HAPPENED in the absence of state coercion.

  In the absence of state coercion came state coercion. If you go back 10,000 years and review history from past to present, you will see that government is encroaching ever and ever more.

  That's because free market capitalism has no mechanism to defend itself from the plunder and micro-management of armed organizations.

  The weak spot, the Achille's Heel of free market capitalism is that there is always a middle man involved between a transaction.

  Either through the search of vendors, advertisement to customers and when the transaction occurs, the organization of commerce is pyramidal and therefore the government can easily trace back the higher-ups and force them to pay taxes and regulate what's being sold and bought.

  If commerce could be done directly and anonymously between commercial actors without having to go through a middleman or higher up, then it would be the end of government coercion.

  On the internet, you can buy products and services you would not be able in the "real" world. But still there is the middleman called the Internet Service Provider and you have the middleman called PayPal or the Credit Card company etc.

  All those weak spots are easily attacked by the government to tax and regulate the consumer.

  If the consumer could directly interact with the seller without having to go through an ISP or payment processor, then it would be the end of government coercion.

  It may appear as we are losing the battle, but keep in mind that government coercion was much more possible when we did not have the internet and all other communication mediums.

  Now, we are freer than ever to do subversive things.

  Libertarianism will only become real through subversion, any law-abiding "libertarians" are not libertarians.

  At some point, in order to bring forth libertarianism, laws will have to be broken.

  People will have to avoid paying taxes and break the tax code, people will have to circumvent trade laws in order to buy and sell prohibited substances, people will have to use violence to defend themselves against government aggression.

  If you are not prepared to do this, you cannot advance the cause of libertarianism and you deserve to be crushed by the tyranny we live in, so stop complaining.

  Published: March 23, 2009 7:52 AM

• Brainpolice

  "Brent-- anyne who thinks "limited liability" grants by the state are responsible for the success of capialism is an idiot. Hessen has demolished the confused ideas about this for anyone who cares to read and think. I'm a bit tired of explaining this over and over again to newbs and leftoid innocents."

  Kinsella, your statements and behavior is getting more and more childish and over the top. I'm an idiot for pointing out that the state grants privileges to certain buisinesses that allow them to restrict their competition and hence cartelize capital?

  The success of "capitalism"? What do you mean by "capitalism" - the success of state-capitalism? But presumably we don't favor state-capitalism, so how can this be considered "success"? Do you intend to defend the current or past economic system? Why are you using either contemporary or 19th century America as a libertarian success story when it isn't?

  Published: March 23, 2009 7:52 AM

• Brainpolice

  By the way, I disagree with the bolded assertion as well - but it seems like nitpicking to pick that single statement out of the entire article, and neglect what Carson says in the rest of it.

  The claims about primitivism and agrarianism also simply doesn't apply to me - I think primitivism is ridiculous and I tend to think of anarchism in industrial and post-industrial terms.

  That being said, I don't think that opposing the predominance of monstrous multi-national corporations (which I do oppose) is the same thing as being a protectionist or an agrarian.

  Published: March 23, 2009 8:02 AM

• P.M.Lawrence

  AJ Witoslawski wrote 'incorporation (aka "corporate personhood") is vital to economic growth'.

  This is, if I may say so, Vulgar Libertarianism. As has often been pointed out on these threads - and not just by me - the Industrial Revolution in Britain simply wasn't achieved that way, which we should know because the only corporations in that time and place were a few special cases. It is a counterexample that disproves "We can argue that incorporation is good for economic growth deductively. Without limited liability, shareholders would not have as much of an incentive to invest. Investment would fall, slowing economic growth." Quite simply, people invested through non-corporate channels when corporate ones weren't an option, e.g. through loans or as partners, and that effect only came into play when they could have their cake and eat it with corporations - squeezing out the non-corporate channels. So whether that claim was made without knowledge of or in disregard of the historical facts, or whether it was meant as a description of our day and age but was cavalier in not making that qualification, it is Vulgar Libertarianism. "It ain't what you don't know that'll hurt you, it's what you do know that ain't so".

  Brent supposes that "the qualm [with corporations] is with limited liability", a no doubt inadvertent straw man. That isn't so, though that is a harmful feature. There is another problem, that these artificial entities squeeze or crowd out the activities of natural persons, whether individually or in free association. It isn't actually true that "limited liability... can be established through voluntary contracts"; that only happens with respect to contracting parties. However, de facto limited liability can be achieved for anonymous partners in partnerships without a corporation structure - but the partnerships can only work if some partners are out in the open, and those can't escape liability (though presumably their returns would reflect their greater risk). What Newson described comes under this general heading.

  Published: March 23, 2009 8:25 AM

• Kevin Carson

  Thanks for the link, Stephan.

  As I said in response to a comment at the C4SS post, the "no national market" thing was hyperbole. I believe that absent the railroad land grants and other subsidies, there would be (as John Medaille recently put it) a much, much smaller national market overlaid on a primary economy of decentralized production for local markets.

  My belief in that regard is based on the following:

  1) The extreme unlikelihood that a national system of trunk lines remotely approaching the scale or capacity actually created would have come into existence without top-down state intervention, given the extremely high capital outlays required and the hand-to-mouth financing Matthew Josephson describes even *with* those massive subsidies; and

  2) The historical development of national industrial firms serving a national market, as described by Chandler: first a national wholesale market emerged, piggybacked on the national railroad system; then a national retail market; and only then, when the creation of a national market and a high-volume transportation system made it possible, mass production for a mass market.

  I think there would be less long-distance trade for the simple reason that when you subsidize something, you get more of it. And the dominant sectors in the global economy today, BTW, get their profits from artificial "comparative advantage" created by "intellectual property."

  As for the Macy's thing, which you've been dragging out for some time, I believe your original objection was simply that I didn't condemn the window-breaking for the right reasons, or using the right words, or with the required incantation of "I double-dog denounce it, so help me Mises."

  Published: March 23, 2009 9:09 AM

• Kevin Carson

  BTW, Hessen is hardly holy writ. Piet-Hein van Eeghen, among others, has challenged his case. I for one am an agnostic on the issue of whether the corporate form (including not only limited liability but entity status separate from the shareholders severally or collectively, with management representing the entity) could be achieved by private contract, although I lean toward Hessen's position.

  But that misses the whole point: the state, by providing an automatic and ready-made procedure under general incorporation laws, has reduced the transaction costs of negotiating the corporation by purely private contract, and made it artificially prevalent--thus presenting third parties with a fait accompli. Although I won't gratuitously throw around any obnoxious terms like "idiots," I'm getting a bit tired of explaining this over and over as well.

  AJ Witoslawski: Economies of scale are not absolute. They depend on a preexisting package of costs, of which marketing and distribution are one. In fact, the savings in unit production cost achieved by the "second industrial revolution" from the late 19th century on were offset by increased costs of distribution, mass marketing and push distribution. Absent state intervention to make distribution artificially cheap, the greatest economies of scale could arguably have been achieved on the Emilia-Romagnan "industrial district" model: integrating small-scale electrically powered machinery into craft production, with small batches and frequent switches between products in response to orders. That's opposed to the Sloanist mass production model of using extremely expensive, product specific machinery, running it 24/7 to achieve "economies of speed" and minimize unit costs from idle capacity, and then relying on push distribution and planned obsolescence to dispose of it (not to mention all the pathologies of GAAP accounting, with production for inventory without regard to orders in order to keep the machines running, and then having costly inventory markdowns).

  Published: March 23, 2009 9:29 AM

• DJF

  Limited liability of corporations in a free society only applies to those who have agreed to that limitation. Third parties who have no contracts with the corporation and have claims against the owners of that corporation are not bound by those contracts. For example

  You own a corporation which delivers vegetables to stores, one of your trucks runs into one of the contracting stores and caused $500,000 in damages. Your corporations assets including insurance is only $250,000 so when the contracting store demands payments your corporation is liquidated and the store gets the $250,000 and loses $250,000. Your personnel fortune because of limited liability is not effected.

  You own the same corporation and one of your trucks runs into a non-contracting store and causes the same damages. The corporation is once again liquidated and the store owners is offered $250,000 but because they have not agreed to any limited liability they don’t care about any such limited liability and demand that you pay the full amount. That corporation and its limited liability is meaningless to the non-contracting store owners, as far as they are concerned the corporation does not even exist, they only see you the real owner who owes them $500,000.
  

  Published: March 23, 2009 9:31 AM

• Brainpolice

  Yes, and when it's in such a context "limited liability" is a completely different thing than "limited liability" as it currently exists and as we know it - which is not a mere "inside" contract among directly involved parties but uniformly applied through a state legal system to everyone. To equivocate the two is misleading.

  Published: March 23, 2009 9:41 AM

• Brent

  P.M.Lawrence: "Brent supposes that "the qualm [with corporations] is with limited liability", a no doubt inadvertent straw man."

  Uh huh... and wait...

  P.M.Lawrence: "That isn't so, though that is a harmful feature."

  Okay, is it a qualm or isn't it? You say it isn't true, accuse me of a straw man, then agree that it is true. Make up your mind.

  Reading these responses, I stand by my point that this is a fanatic semantical disagreement, exaggerated way out of proportion in order to try to justify the left "libertarian's" hate of large firms.

  Published: March 23, 2009 9:58 AM

• newson

  kevin carson says:
  "by providing an automatic and ready-made procedure under general incorporation laws, has reduced the transaction costs of negotiating the corporation by purely private contract, and made it artificially prevalent--"

  i'm not sure that this is true.

  i think we can agree that in anarcho-world, private parties would package and sell standardized, business structures (much like private operators now provide shelf-companies and trusts), with whatever liability characteristics consumers demand.

  we will also agree that the private business-structure-vendors will be vastly more competitive than any state company-licensing agency in marketing their product.

  so, although non-government-charter-vehicles will be structured differently to achieve similar outcomes, the greater efficiency of the private operators may well mean that there is no decline in the prevalence of limited liability, with respect to nowadays.

  Published: March 23, 2009 10:25 AM

• newson

  to kevin carson:
  if the state is the only body who can license university degrees, and subsidizes massively, you cannot conclude that more people pursue tertiary education than would be the case if the state were absent.

  that would depend on the courses offered and prices in anarcho-world. a crap, heavily state-subsidized product may still be less acceptable than the free-market analogue, on the basis of either quality or price, or both.

  Published: March 23, 2009 10:47 AM

• DJF

  Newson says

  “”””“i think we can agree that in anarcho-world, private parties would package and sell standardized, business structures (much like private operators now provide shelf-companies and trusts), with whatever liability characteristics consumers demand.””””””

  No, it can only provide whatever liability characteristics that mutually agreeing parties agree to. Third parties are outside these agreements and therefore the limited liability aspects and even the corporate personhood aspects are meaningless in that situation,

  The problem with today’s limited liability and corporate status is that it is imposed by the State on all by force And there is no way short of that force to impose such things on a free society. Without such State force the benefits of limited liability and corporate status is limited to those who have agreed to it so there is also no way for limited liability and corporate status to have the same benifits in a Free Society as it has in a State Capitalistic system
  

  Published: March 23, 2009 11:29 AM

• Alexanka ( Alexandra K)

  The most virulent form of vulgar libertarianism is left-libertarianism.
  Left-libertarianism is really quite a vague term and it unites people of different world views and mindsets. Some of them are perfectly in line with main libertarian principles. If you understand left-libertarianism as a form of cultural liberalism ( that is nothing but individual subjective values) or an idea that there are non-statist forms of coercion which we must oppose I'm a left libertarian myself.
  But the fact is, when people are speaking about left-libertarianism they mostly mean opinions of its most belligerent adepts like Kevin Carson and Brad Spangler. And it is not good.
  Not because “mutualism” is based on silly and childish views about economics, society and history ( like their ridiculous ideas about zero interest rates and the absence of profits in anarchic society). People are free to paint their favorite versions of the future in any colours they wish. The bad thing is their ideals are based on collectivist ethics, collectivist distortions ( or using the infamous term by Roderick Long, “thickness”) of libertarianism. That is a brutal punch in my libertarian and individualistic face.
  For me, there is not a big difference between leftist and rightist screwed and twisted versions of libertarianism. Hoppean “covenants” and Carsonian “workers' democracy” are the same, they are both based on collectivist ethics where the will of “community”, “kinship”, “collective” whatever you name it effectively trumps property rights and individual sovereignty.
  Again, it is not about somebody's visions of their favorite utopias, it's about practical actions like the support of man-hunt for so called “illegal immigrants” or a street vandalism in the name of anti-corporatism . ( didn't Dr. Long himself name those barbarians “free-lance archists”?)
  But I think that leftist “thickness” is more dangerous than its rightist tween brother. Because the world we are living in, at least this “western” world ( I use the word “western” in its broad meaning including countries like Israel, Japan, Russia etc) is getting culturally and socially more and more liberal. Rightism is actually a dying ideology. But I can't say the same about leftism, alas.

  Published: March 23, 2009 4:28 PM

• P.M.Lawrence

  Brent wrote "the qualm [with corporations] is with limited liability" [emphasis added], and when I rebutted that but acknowledged it was still problematic, asked "is it a qualm or isn't it?" [emphasis added].

  I was pointing out that Brent was wrong in his focus, not disputing that there was something wrong with that at all. The inadvertent straw man is to suppose that that is what is wrong, all by itself, with no other problems. In fact the main problem lies elsewhere, in these artificial entities crowding out natural persons.

  Alexanka, just what is so belligerent about people like Kevin Carson and Brad Spangler? They are the ones being careful not to call others idiots, and so on. And how do you get "based on collectivist ethics" out of anything they actually said or wrote, as opposed to what others are accusing them of?

  Published: March 23, 2009 8:45 PM

• newson

  to djf:
  nowadays, in certain instances, the corporate veil can be lifted, and directors of limited liability companies can be pursued individually.

  with a bit of cynicism and a good lawyer, i can or could synthesize an operating structure that affords me limited liability without using the corporate form.

  by way of example, i've got a friend who works in dubai. he's careful always to use a driver, even though he drives fine. if the driver injures someone, my friend has no part in the ensuing legal/police action. the driver factors this contingency into his tariff. voilà - limited liability - cheap and cheerful!

  Published: March 23, 2009 9:52 PM

• Stephan Kinsella

  Brainpolice:

  "Brent-- anyne who thinks "limited liability" grants by the state are responsible for the success of capialism is an idiot. Hessen has demolished the confused ideas about this for anyone who cares to read and think. I'm a bit tired of explaining this over and over again to newbs and leftoid innocents."

  Kinsella, your statements and behavior is getting more and more childish and over the top.

  Let's stick to substance.

  I'm an idiot for pointing out that the state grants privileges to certain buisinesses that allow them to restrict their competition and hence cartelize capital?

  But the grant of corporate status is not one of these; first, it's open to all, so not a privilege. Second, as Hessen has shown, it's just coopting what could be done in a free market. Third, even if you abolish the corporate form or its grant of limited liability, things won't change that much. Ever heard of insurance? Jesus.

  
  

  By the way, I disagree with the bolded assertion as well - but it seems like nitpicking to pick that single statement out of the entire article, and neglect what Carson says in the rest of it.

  But I was not interested in the rest of it, and/or I did not disagree with it.

  I focused on the part i disagreed with. this is as I said a source of an error on their part. It leads to unlibertarian conclusions, such as the view that "corporations" do not "really" "own" their property, so that worker strikes, sit-ins, vandalism, and I guess even taxation and expropriation are not viewed as violations of the nominal owners' rights.

  The claims about primitivism and agrarianism also simply doesn't apply to me

  Good for you!

  That being said, I don't think that opposing the predominance of monstrous multi-national corporations (which I do oppose) is the same thing as being a protectionist or an agrarian.

  Agreed, it's not hte same, but they are flawed in similar ways. What do you mean that you "oppose" the "predominance" of MNEs? I have no idea what this even means. Is it some prayer you say when you eat your mueslix every morning?

  Kevin Carson:

  As I said in response to a comment at the C4SS post, the "no national market" thing was hyperbole. I believe that absent the railroad land grants and other subsidies, there would be (as John Medaille recently put it) a much, much smaller national market overlaid on a primary economy of decentralized production for local markets.

  I'm glad to hear it was hyperbole. But even your modified claim is suspect. You are welcome to it, but it is not, in my view, as scientific or grounded as you appear to think it is. to my mind, it is as if you are picking just a few data points out of a huge invisible array, and jumping to conclusions based on this. But this in itself--personal preference and prediction--is harmless, unobjectionable, and not unlibertarian. Not so far as it goes.

  
  

  As for the Macy's thing, which you've been dragging out for some time, I believe your original objection was simply that I didn't condemn the window-breaking for the right reasons, or using the right words, or with the required incantation of "I double-dog denounce it, so help me Mises."

  I actually don't remember what you yourself said in this regard, but I do remember that some of your comrades put their money where their mouths were and hurled stones; others cheered it on; others explicitly stated that Macy's is "just a big corporation" and an exploiter blah blah blah and does not really own its property so it's apparently unowned and open for homesteading by brick-throwing unemployed disaffected losers who are apparently the most qualified homesteaders of non-abandoned, productively employed-yet-unowned property. And I do recall that many of your comrades refused to condemn the vandalism on principled grounds,--the most you could muster was "perhaps it's not a good idea." Well. How stirring.

  I am not one for shying from clear statements of implications and conclusions. If I believed Macy's and WalMart were in essense criminal conspirators with and part of the state, I'd agree that they are not legitimate owners; and that physical attacks or squatting on the properyt is not aggression. But I don't. But the refusal to condemn this type of vandarchism on property rights grounds leads to the inference that your views on ... road subsidies ... does influence your views and lead to unlibertarian conclusions.

  BTW, Hessen is hardly holy writ. Piet-Hein van Eeghen, among others, has challenged his case.

  Hessen is not holy writ but it is a knock-down case; and van Eeghen does nothing in response.

  I for one am an agnostic on the issue of whether the corporate form (including not only limited liability but entity status separate from the shareholders severally or collectively, with management representing the entity) could be achieved by private contract, although I lean toward Hessen's position.

  I'm not agnostic about it--limited liability, yes; separate entity status, no, as Hessen himself argues.

  But that misses the whole point: the state, by providing an automatic and ready-made procedure under general incorporation laws, has reduced the transaction costs of negotiating the corporation by purely private contract, and made it artificially prevalent--thus presenting third parties with a fait accompli.

  This shows nothing. The state causes all kinds of damage. In a free market we would all be much richer. who konws what we would do with this wealth? And there would be increased catallactic interaction, no doubt.

  
  DJF

  \You own the same corporation and one of your trucks runs into a non-contracting store and causes the same damages. The corporation is once again liquidated and the store owners is offered $250,000 but because they have not agreed to any limited liability they don’t care about any such limited liability and demand that you pay the full amount. That corporation and its limited liability is meaningless to the non-contracting store owners, as far as they are concerned the corporation does not even exist, they only see you the real owner who owes them $500,000.

  This presupposes both the validity of the doctrine of respondeat superior, and the idea that shareholders ought to be resopnsible for torts committed by employees of the companies they own shares in. Why should they?

  Published: March 23, 2009 10:12 PM

• P.M.Lawrence

  Newson, what you are describing delivers limited liability to certain individuals, but only by moving liability elsewhere, not by eliminating it. That means that people on the receiving end always have somewhere to go for redress; there are no limited liability entities doing the end stage interacting with others. It's just the sort of alternative I was referring to.

  Published: March 23, 2009 10:50 PM

• newson

  to pml:
  you're right that i don't eliminate liability, but if i am cynical, i can offload it onto someone whose meagre resources frustrates restitution (unless you bring back bonded labour).

  this process could be commercialized; if you consult the back of the economist, for example, you'll find losts of "facilitators" who will set up structures to shelter from tax, law-suits, divorce proceedings. they'll provide you with dummy directors, mailing service, secretarial and other services. presently, most of the vehicles are companies, but i'm convinced the very same good folks would be able to synthesize limited liability at reasonable cost in a corporation-free-world.

  Published: March 23, 2009 11:14 PM

• Greg

  "Let's stick to substance."

  Great idea, Mr. "Arguent Fail."

  Published: March 23, 2009 11:24 PM

• DJF

  Stephan Kinsella says
  “”“Third, even if you abolish the corporate form or its grant of limited liability, things won't change that much. Ever heard of insurance? Jesus.””””

  Last time I checked, you have to pay for insurance and pay in relationship to how much insurance you get. While government granted limited liability is granted with a simple fee and with no relationship to the amount. So its not the same as insurance.

  
  “””””This presupposes both the validity of the doctrine of respondeat superior, and the idea that shareholders ought to be resopnsible for torts committed by employees of the companies they own shares in. Why should they?””””

  Because they own the truck and the corporation. Above you claim that the shareowners own the company and have ultimate rights to it, yet now you claim they have little or no responsibility for it. So your idea of ownership is that you get the benefits from ownership and someone else pays the costs of ownership? Sounds to me that this is not being libertarian but being libertine.

  So what is your definition of “ownership”? Is it just benefits and if so who pays the costs of your ownership of something since everything is a balance of benefit and costs, if you don’t pay the costs of that ownership then who will?

  Are you saying that the truck driver is an independent contractor driving his own truck? If so this greatly limits your corporations worth since that independent contractor gets little from you and so you need to pay more for his services and are in constant danger that he will take his truck and truck route and start his own service since you supply little in benefit to him

  Or are you saying that some insurance company will take care of everything? That also has huge costs to you since such unlimited insurance has unlimited costs.

  By limiting your risk in a free society you also limit your benefits, in the case of the two examples I give, you either pay out more for independent contractors or you pay out more in insurance
  

  Published: March 24, 2009 6:05 AM

• Peter

  Because they own the truck and the corporation.

  So? The guy driving the truck crashed it, not the guy who owned it. Why is the latter at fault?

  Published: March 24, 2009 7:20 AM

• DJF

  Peter asked?
  “””””So? The guy driving the truck crashed it, not the guy who owned it. Why is the latter at fault?””””

  Its depends, if the truck driver is your employee and the truck is yours then that truck driver is your agent and the truck that is stuck inside the store is your problem. Is it your truck or not. If you own that truck don’t you have responsibility for that truck? And just because you might have had a contract with the truck driver saying that he takes full responsibility you have no contract with the owner of the store so that contract of with the driver is worthless.

  As I asked above, what is ownership? Is it all benefits or is it a mix of benefits and costs. I say that saying that ownership is all benefits and no cost is libertine not libertarian, what is your opinion?

  If the truck driver is an independent contractor and the truck belong to the truck driver then your liability is nill, but that truck driver is going to demand a bigger return from you for delivering your products and you have to watch out that he might decide that you are an unnecessary middleman and either go with another company or expand his own business so that you are no longer needed.
  

  Published: March 24, 2009 7:44 AM

• Brian

  DJF,

  You seem to be claiming that responsibility for damage is somehow linked to the inanimate object that was involved in the accident, and from there proceeding to making it the owner's responsibility. Why is it not the driver's responsibility since he is the actual cause of the accident, not the truck or the owner of the truck?

  What if the driver had stolen the truck? Is the owner of the truck still responsible? What if the driver had rented the truck? Is the owner still responsible?

  Published: March 24, 2009 9:50 AM

• DJF

  But the truck was not stolen and the driver was your employee who was doing the job that you paid him to do. And if you want an employee to take responsibility for $500,000 in damages then that employee is going to have to be paid enough to afford $500,000 in liability insurance. So in the case of the employee you pay one way or another, either directly or through paying the employee enough to pay for insurance. But I already pointed out that insurance alone did not cover the debt.

  .And if you don’t pay enough then you are still stuck with the problem that your truck is sitting in somebodys store. Now in all probability as a property owner the store owner has an interest or contract with the road owners where his business is located. These road owners have little interest in allowing truck owners to ruin the businesses of the store owners along the road so they may take action against the truck owner. For example they may charge you more for operating your trucks on their roads or by simply banning your trucks from their road in cases where you have a pattern of your employees and trucks causing damage and you not paying up.

  As to inanimate objects, they are your inanimate objects being used to conduct your business.

  So where do you come down on my question. Do owners only get benefits from ownership or do they also have responsibility for ownership? If they don’t have responsibility then who does?

  If you say the operator then they will demand additional payment for taking on this risk and since it is still your truck you will still find yourself being held responsible by those who are damaged by your employee and truck if they do not pay enough

  As to rentals and thief’s, there is no set rule since in a free society there is no government to enforce set rules on all, so it would depend on individual contracts and the ability of others to get compensation, either from you or others
  

  Published: March 24, 2009 10:50 AM

• P.M.Lawrence

  Newson wrote "you're right that i don't eliminate liability, but if i am cynical, i can offload it onto someone whose meagre resources frustrates restitution (unless you bring back bonded labour)".

  But see what DJF wrote on a related aspect: "But the truck was not stolen and the driver was your employee who was doing the job that you paid him to do. And if you want an employee to take responsibility for $500,000 in damages then that employee is going to have to be paid enough to afford $500,000 in liability insurance. So in the case of the employee you pay one way or another, either directly or through paying the employee enough to pay for insurance."

  Something similar applies. With, say, limited liability anonymous partners, the active partners would be getting a risk premium for assuming the liability - and soon, they wouldn't have such meagre resources, any more than today's insulated managements (whose role they would fill). Similar things would come up with other approaches, even though you're absolutely right that "i'm convinced the very same good folks would be able to synthesize limited liability at reasonable cost in a corporation-free-world". The point here is that there would always be a real place for the buck to stop, not that individual investors couldn't be arms length.

  There's a larger point, inherent in DJF's "If the truck driver is an independent contractor and the truck belong to the truck driver then your liability is nill, but that truck driver is going to demand a bigger return from you for delivering your products and you have to watch out that he might decide that you are an unnecessary middleman and either go with another company or expand his own business so that you are no longer needed". That point is that there wouldn't be the dynamic for such large firms as we currently get with corporations. It would be far more realistic for skilled but under-rewarded active partners to set up for themselves, taking on new passive investors if need be.

  Regardless of whether firms would be smaller, they wouldn't be free standing entities but associations of natural persons. That means that rather than acting independently of natural persons under the direction of insulated managements whose members could always move on while leaving the firms under their replacements, there would be a continuity and identity with the people acting. The crowding out of natural persons would be reduced or even eliminated. That is, there wouldn't be artificial entities with their own interests and their own pools of resources getting in the way of natural persons - crwoding them out - but associations that natural persons could get into. Even if those took up resources, on the one hand the resources wouldn't be deployed in ways that neglected or hurt those individuals, and on the other hand individuals who got in would leave the outside less crowded, so other individuals would have more opportunities.

  Published: March 24, 2009 8:51 PM

• newson

  yes, pml. but djf is painting a scenario without the state-chartered corporation, leaving in the doctrine of "respondeat superior".

  my scenario is based on the premise that neither ltd companies nor "respondeat superior" exists. in my scenario, it's quite possible that the driver under-insures, or forgoes insurance. then what? the limited liability is effected by personal bankruptcy of the driver.

  Published: March 24, 2009 10:11 PM

• Stephan Kinsella

  I replied on Carson's blog here, to the comments of one "Brainpolice:"

  ***

  Brainpolice: I'm of course open to rational discussion. Like some others, I am not bothered at all at mere preferences different from mine, or mere predictions about what would be. I will say I am not persuaded by assertions that in a free market we'd have localism, etc. Maybe so, maybe not. But they have not persuaded me. Sure, roads are subsidized. Why this helps Wal-Mart more than a local store I'm not sure. I happen to think the state regulations destroy wealth and cause overall harm, and that without them most people and businesses would be better off--yes, some subsidies would disappear, but other, greater penalties would too. I have no reason to think this would mean less international trade and mass production.

  But so what--so what if someone wants to think that in a free society a Macy's could not exist. Good for them. Fine. The problem I have is when self-proclaimed libertarians--those who are against the first resort to violence as a means of resolving disputes--use their personal preferences and half-baked predictions to cobble together some model of the "ideal" so*nociety and to declare that companies like Macy's are not "really" private because they could never exist on a free market--and, therefore, that they are not the real owners of their property... and thus brick-throwing, worker sit-ins, etc. are not in principle objectionable.

  So, if you want to publicize your personal preferences, if you want to give us your off the cuff "predictions" about "what would be"--I have *no* problems with this. I might even agree with some--some--of them. It's when you take it a bit too far, when you assume you know more than you actually do, when you use this as a basis to justify violence against nominally peaceful people and firms (or when you refuse to condemn it on principled grounds--yes, yes, muttering that maybe "it's a bad idea" but not really opposing it on libertarian grounds)--this is when I object.

  Published: March 25, 2009 12:02 AM

• Stephan Kinsella

  People here seem to be unaware this has been hashed out already. I'd suggest to people who just assume the validity of vicarious liability and respondeat superior review these posts: Corporations and Limited Liability for Torts; Legitimizing the Corporation; and The Over-reliance on State Classifications: "Employee" and "Shareholder"; also Left-Libertarians on Corporations "Expropriating the Efforts of Stakeholders" and In Defense of the Corporation.

  DJF:
  "But the truck was not stolen and the driver was your employee who was doing the job that you paid him to do. And if you want an employee to take responsibility for $500,000 in damages then that employee is going to have to be paid enough to afford $500,000 in liability insurance. So in the case of the employee you pay one way or another, either directly or through paying the employee enough to pay for insurance. But I already pointed out that insurance alone did not cover the debt."

  First: read the posts above. Second: this buttresses my point. Let's suppose the anti-industrialist left succeeds in getting the state to impose liability on shareholders, even if in a free society this would not happen. Let's suppose the limited liability of corporate shareholders vanishes. Big deal. Companies already provide liability insurance to their directors and officers (D&O insurance). With your proposed system, they'd buy D&O&S insurance--a slight increase in cost of doing bidniss, and a slight increase in prices. So what. Who really thinks this would make us start buying bananas locally (or foregoing them) instead of buying them remotely? Puh-lease.

  Published: March 25, 2009 12:13 AM

• P.M.Lawrence

  Stephan Kinsella wrote "I replied on Carson's blog here..."

  He is wrong, that is not Kevin Carson's blog (I think Kevin Carson has another Arkansas-oriented one as well).

  I will address the subtler errors in his recent comments later (I think the abuse of spelling and so on is self evident).

  Published: March 25, 2009 2:33 AM

• DJF

  Stephan Kinsella writes
  “””””With your proposed system, they'd buy D&O&S insurance--a slight increase in cost of doing bidniss, and a slight increase in prices.””””

  Who says it will be a slight increase? If its just going to be a slight increase then the risk is tiny and so we could get rid of government granted limited liability today and not even have it in a Free Society since why bother with it if its only protecting against a slight risk. Why bother even defending limited liability if its involved with such a minor risk?

  But would it be a slight risk? Would you want to be a shareowner of Enron stock, or AIG or GM without their bailouts? Without limited liability your ownership of those stocks would put you at great risk of owing huge sums of money since these corporations owe huge sums of money.

  Without limited liability stock prices would be depressed because the risk is no longer limited for the people buying the stock, with lower stock prices the corporation would be worth less which means it would not have as much advantage over natural person businesses since it would not be able to raise as much money.

  Also I disagree with those who say that concerns about limited liability are leftist, since from what I see limited liability is a collectivist idea and often defended with “greater good” arguments saying that it increases business. The biggest user of limiting liability is the government and its employees who also use the “greater good” as its justification for protecting itself collectively under the banner of a paper “person” called government. It comes from the “sovereign immunity” of the king who declared he was above mere liability and then this immunity was first transferred in part to the first limited liability corporation in British legal history, the “British East Indies Company” which consisted of a bunch of British government insiders who got part of the British Sovereigns immunity transferred to their company. So the theory and history of limited liability comes from government.

  And as posters above have pointed out, there is no such thing as actually limiting liability, you can shift liability to others but once a liability is created it cannot be limited. Some want to shift the liability to employees, which will result in one of two things. The employee will demand extra compensation for taking on such risk and at the same time open up opportunities for the employee to strike out on his own and take over at least part of the business since if they are going to take the risk why not take the business. The second is to have the employee default on a liability they cannot afford which means that the cost will be born by the person who is owed the money. But as I pointed out this does not end the situation since that person will want his money and you being the employer are an obvious target and especially if you develop a reputation for dumping liability on employees who can’t afford the risk your will in all probability lose business since nobody wants to deal with someone who costs you money.

  And I have yet to hear from anyone concerning my question. Does ownership involve only benefits or is ownership a mix of both benefits and responsibilities? In the example I give above does owning a truck and employing a driver entail any liabilities for the owner of the business? Or is the truck driver solely responsible. If a business owned truck ran into your house and was sitting in your living room would you only sue the driver or would you sue the business and owners as well?

  Published: March 25, 2009 5:47 AM

• Stephan Kinsella

  DJF: "And I have yet to hear from anyone concerning my question. Does ownership involve only benefits or is ownership a mix of both benefits and responsibilities?"

  I pointed you to several other threads that deal with this, and others here have responded to this, e.g. w questions about whether owners are responsible if a thief uses it in commission of a crime, etc. Ownership is right to control. Responsibility flows from action--employing means to achieve an (illicit) end. These are obviously not the same things. Just b/c the state categorizes shareholders as "ultimate owners" (whatever that means) does not mean they are the only owners--there are a vareity of people with the right to control various resources owned by the firm--the truck driver being one.

  The issue for responsibility is action: who employed means to violate others' rights? The kneejerk assumption that "the owner is responsible" confuses and evades this issue. Having the right to control does not mean you caused harm. In fact you can cause harm even if you employ means you have no right to control. In the case of negligence by corporate employees, presumably they are not directed by their managers to commit negligence. If so, why is the corporation itself resopnsible at all? Why are his managers? The directors? Customers? Vendors and suppliers? Creditors? fellow employees? Shareholders? They all have various degrees of influence (control), and they all "aid and abet" the corporation in certain ways. The question IMO is who caused the harm: prima facie, it's the individual who was negligence. Next in line would be his supervisers, and the executives at teh company--if you can make out a good argument. Next would be members of the board of directors. Maybe. But what did a given shareholder do to cause the harm?

  Published: March 25, 2009 7:40 AM

• newson

  how can mutualists not see the contradiction in demonizing limited liability companies, and yet predicating their arguments on the doctrine of respondeat superior, whose common law origins are in the master/servant relationship?

  what possible justification of vicarious liability can there be, unless one presumes that employees are children? isn't this a little demeaning?

  Published: March 25, 2009 9:25 AM

• DJF

  Stephan Kinsella writes
  “”””The kneejerk assumption that "the owner is responsible" confuses and evades this issue.”””””

  I did not give any kneejerk assumptions, you seem however to give the kneejerk assumption that the owner is not responsible. Isn’t ownership ultimate control and therefore ultimate responsibility?

  The owner is the one who authorized the driver to drive the truck, he paid him to drive the truck, he chose the route of the truck, he chose what is to be carried on the truck, he chose the time that the truck would be driven, he chose the actual truck itself, and he chose how much maintenance that truck receive, yet you seem to imply that that ownership is of no consequences when determining responsibility for liability

  So your idea of ownership is the same as that of kings, they own, yet they have no responsibility, they have total power over what they own, yet they bare no cost when their truck sits in my living room

  As to who “who employed means to violate others' rights”, the owner turned over a truck loaded with vegetables to a driver who ended up with the truck in my living room.
  Do I at the very least get to keep the truck and vegetables since after all its on my property and the owner refuses any responsibility for the truck?

  As to “shareholders”, the real terminology should be “shareowners” since they actually own the shares. “Shareholders” would be more appropriate for brokers who might hold the actual paper shares for the owners. And as to shareowners responsibility, they are collectively the owners. I did not force them to collectively own that company, they voluntarily did so, and as part of that voluntary collective they agreed that they would vote in boards of directors and management. So they are collectively responsible for who the management is and they are the ones who determine what the goals and business practices will be. If they don’t want to be part of this voluntary collective then they should not be shareowners in that collective.

  “””Just b/c the state categorizes shareholders as "ultimate owners" (whatever that means) does not mean they are the only owners--there are a vareity of people with the right to control various resources owned by the firm--the truck driver being one.””’

  So this means that the drivers at your company can simply drive off and use that truck whenever they want since they are in control and control = ownership according to you? Or say they don’t want to deliver your vegetables, but want to deliver furniture instead, its their truck since they are driving it, so that must be ok as well. So you buy the truck, fill it with gas and vegetables, pay for the maintenance, yet the truck driver controls it for as long as he drive it and in fact is the defacto owner for that time period. What happens if the driver never returns it, is it his since he controls it?

  This is an interesting concept, paper ownership seem not to give much benefit at all, and mere possession is as they say not just 9/10 of the law but 10/10. So I should only deal with the driver and we can make a deal which says that he will pay me as much as he can for damages and he will throw in the truck and the vegetables (which he controls = owns) to sweeten the deal and you have no claim on these.

  Personally I think you should rethink your ideas about control=ownership since while this is really great at shifting liability onto others it also shifts ownership to those same others and as you say many people at a company may control something but I don’t think you want them owning it. But if you don’t rethink it, could you hire me as a driver, I would like to possess a new truck.

  Published: March 25, 2009 11:30 AM

• Stephan Kinsella

  DJF:

  Stephan Kinsella writes
  “”””The kneejerk assumption that "the owner is responsible" confuses and evades this issue.”””””

  I did not give any kneejerk assumptions, you seem however to give the kneejerk assumption that the owner is not responsible.

  Actors are responsible for their actions--for causing harm to others. Ownership is a right to control a particular resources--the status of "having a better claim to" control a given resource than any other person. I don't see how having this status ties in directly with causing harm. Harm can be caused by using a variety of means, some owned, some not owned, some owned by others.

  My theory is not kneejerk; it is based on my careful theory of causation and responsibility as adumbraged in various articles mentioned in the blog posts I linked above, e.g. my "Causation" article w/ Patrick Tinsley.

  Isn’t ownership ultimate control and therefore ultimate responsibility?

  I don't know what you mean by "ultimate." Ownership is a right to control. It's not always the ability to control, and it's not the same *as* control. And just assuming that right-to-control implies "responsibility" is question-begging.

  The owner is the one who authorized the driver to drive the truck, he paid him to drive the truck, he chose the route of the truck, he chose what is to be carried on the truck, he chose the time that the truck would be driven, he chose the actual truck itself,

  If by "owner" you mean the shareholders--do you really understand what it means to be a shareholder? Do you really think Wal-Mart stockholders make these choices? Do you think that if you own Exxon stock you are entitled to just to take gasoline from one of its gas stations for free, or to just start driving one of its trucks around, or tell its driver what to do?

  and he chose how much maintenance that truck receive, yet you seem to imply that that ownership is of no consequences when determining responsibility for liability

  Someone chose these things--and if they are done negligently, whoever did it ought to be responsible, presumably. Why do you assume this is the shareholders? Just because the law calls them "ultimate owners"? Do you agree with every legal classification the state puts out there?

  So your idea of ownership is the same as that of kings, they own, yet they have no responsibility,

  As I elaborate in my Causation article, of course people are resonsible for border-invasions they cause by their actions.

  As to “shareholders”, the real terminology should be “shareowners” since they actually own the shares. “Shareholders” would be more appropriate for brokers who might hold the actual paper shares for the owners.

  So... now you want to come in as a newb-amateur and rewrite corporate law and its terminology? What else would you change in the law?

  And as to shareowners responsibility, they are collectively the owners. I did not force them to collectively own that company, they voluntarily did so, and as part of that voluntary collective they agreed that they would vote in boards of directors and management. So they are collectively responsible for who the management is

  The "So" does not follow--this is question-begging. I gave you examples of others who also influence the company--why single out shareholders?
  

  Published: March 25, 2009 12:08 PM

• Andrew

  Kinsella: If by "owner" you mean the shareholders--do you really understand what it means to be a shareholder? Do you really think Wal-Mart stockholders make these choices? Do you think that if you own Exxon stock you are entitled to just to take gasoline from one of its gas stations for free, or to just start driving one of its trucks around, or tell its driver what to do?
  ----

  The shareholders are responsible for choosing the board of directors. So yes, the shareholders are responsible for the corporation's behavior albeit in a very indirect way.

  Published: March 25, 2009 4:44 PM

• Stephan Kinsella

  andrew: "#
  #

  Kinsella: If by "owner" you mean the shareholders--do you really understand what it means to be a shareholder? Do you really think Wal-Mart stockholders make these choices? Do you think that if you own Exxon stock you are entitled to just to take gasoline from one of its gas stations for free, or to just start driving one of its trucks around, or tell its driver what to do?
  ----

  The shareholders are responsible for choosing the board of directors. So yes, the shareholders are responsible for the corporation's behavior albeit in a very indirect way."

  Have you read the previous posts on all this? What *exactly* is your theory of causation and responsibility, and your criterion for applying it here? What if you are the owner of a non-voting share? What if you own a share but sell it before the annual meeting? What if you vote for a good directory who is not elected? What if you abstain? What if the vote is 90 to 10 so your vote doesn't matter?

  If voting matters, presumably it's b/c of the influence it has on who the directors are. What if a major customer, vendor, or creditor pus

  Published: March 25, 2009 9:39 PM

• Stephan Kinsella

  andrew: "#
  #

  Kinsella: If by "owner" you mean the shareholders--do you really understand what it means to be a shareholder? Do you really think Wal-Mart stockholders make these choices? Do you think that if you own Exxon stock you are entitled to just to take gasoline from one of its gas stations for free, or to just start driving one of its trucks around, or tell its driver what to do?
  ----

  The shareholders are responsible for choosing the board of directors. So yes, the shareholders are responsible for the corporation's behavior albeit in a very indirect way."

  Have you read the previous posts on all this? What *exactly* is your theory of causation and responsibility, and your criterion for applying it here? What if you are the owner of a non-voting share? What if you own a share but sell it before the annual meeting? What if you vote for a good directory who is not elected? What if you abstain? What if the vote is 90 to 10 so your vote doesn't matter?

  If voting matters, presumably it's b/c of the influence it has on who the directors are. What if a major customer, vendor, or creditor pushes a company to nominate a given director--that influence is as great as any shareholder's votes. Are they liable too? What about customers and employees?--they are economically benefitting the company, thus "aiding and abetting" its torts. Where do you draw the line? What are your standards and criteria?

  Published: March 25, 2009 9:40 PM