The corporation is a socialist experiment:
Prior to this form of social insurance, the owners of a business were legally liable with their personal wealth for damages the business might have inflicted on others. With limited liability, the corporation’s shareholders are liable only up to their equity stake in the company. ... Beyond that, someone else in society — often the taxpayer — bears the financial risk for damages attributable to the corporation.
One wonders how many business executives and members of chambers of commerce ... realize that the limited liability of shareholders is social insurance.
Harvard business professor David Moss, quoted at
The Econmist's View, When the Going gets Tough, the Tough Run to the Government.
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Interesting article. But I think it mixes a couple of issues (kinda apples/oranges) and forgets a few other things.
ReplyDeleteMuch of what stands today is a the result of a multitude of actions of the past. What I mean is that when the consequences of one action manifests, the action is tweaked rather than changed outright for it's unforseen lameness. This will take far too long for me to articulate properly, but let me just say that there are many things for which the gov't handles that I don't think they should be handling at all. But on some level, doing nothing might not be the best tac either. If an entire industry collapses, what would it do to the economy in general considering the related businesses affected? If an entire town is devastated by, say, hurricane, what long term effect would THAT have, if no federal help is given? Yet such help does not mean that the feds have a place in every crisis, real or imagined.
In addition, it could be said that perhaps their help wouldn't be needed, or needed as often, if they weren't so badly in the way to begin with.
I believe that most, if not all, federal help with bailouts, natural disasters, etc, etc, should be loans if done at all. The feds have their constitutional responsibilities and shouldn't be interfered with over every little thing. It's like a father trying to keep the bills paid while the kids keep hittin' on him for bucks to go out on the weekend. Eventually, it's the father's duty to say "NO!"
As far a corps go, the whole idea of the corporation is to limit liability and/or to spread it around to all the investors. Any company should be compelled to cover the costs of any damage their actions or products inflict, even to the point of the corp going under if it comes to that. I do, however, think that there should be no rush to assume that a corporation was neglectful or malicious and that is the standard attitude. Sometimes in life, shit just happpens. And the whole problem we are now experiencing in this country is because of an attitude that someone should be bailed out at all when they suffer the unexpected. Nice if you can get it, I think sometimes people just have to face facts and bite the bullet.