Abolish the Corporations?

[Craig234]

Originally posted by: Darwin333
If something at my home is not safe and a kid gets hurt because of it should my bank be held liable as well for any lawsuit? Since my bank is the one who invested in my home and they still own most of it.

What a fine analogy to a group of greedy bastards who start a corporation to make money, say pollute the environment for billions of costs to the public, then bail out.

Have to love the ideologues' arguments of extremism. If the FDA were being suggested today, they'd be posting how the government might use it to deny medicine to opponents.

The issue of corporations' cost to society has nothing to do wit liability of your homeowner accidents to the mortgage owner.

 

[Fern]

Originally posted by: techs

Exactly my point. If I borrow money, or I make a bad product or do bad job in my business I responsible. When I borrow money to run my company (my company, is NOT a corporation) I am responsible for my debts. I can be sued and I will have to give away my personal wealth(most of it). Yet the Corporations owners (stockholders) are not personally responsible?

Your answered your own question in the above statement - YOU make the product, YOU do the bad job, YOU make the decisions etc.

In the corporate model the shareholders don't do those things. Apples & oranges.

What you fail to grasp is that a corporation IS a legal person under the law. If you replace yourself with "corporation" in your above statement it works perfectly.

If a corporation borrows money, or makes a bad product or does a bad job in it's business it is responsible. When a corporation borrows money to run it's business, it is responsible for it's debts. It can be sued and will have to give away it's wealth/assets (most of it).

As has been noted, selling shares is a financing tool similar to borrowing money from a bank. But there are a few differences, whether or not you make a profit, the banks expects it's interest (guaranteed income). It expects it's principal. If you make an enormous profit, the bank only gets the agreed upon interest (rate).

OTOH, with capital raised by selling shares, no income (interest) is guarenteed. No principal is guarenteed. If there is an enormous profit made by the company, there will be an enormous profit made by the shareholders.

Seems like a perfect risk/reward model to me.

What peoples' (shareholders) personal assets (other than their investment) has to do with it strikes me as irrelevant.

WTH are they teaching in college these days?

Fern

 

[Gonad the Barbarian]

Originally posted by: techs

Originally posted by: Gonad the Barbarian
Investors' liability is limited because their influence on the company is limited. I'm not sure how this is supposed to be socialist.

wtf you talking about. Try and make a coherent idea. The stockholders have complete control of a corporation. And should each owe the companies debts to the proportion they own the company, i.e. the amount of stock they own.
Are you really that much of a Socialist you want corporate stock owners to be less responsible than other people? Or are you just a Socialist in wanting to protect Corporations?

I must admit the Socialist propaganda seems to have worked so well that people actually think Corporations are Capitalist.

Go buy some stock and start trying to tell whatever company you bought the stock in what to do. Generally stock holders have very limited input on a company. Once a year you might get a vote on a few structural issues, if even that. You are coming off like someone who sank their own business and is throwing a tantrum over the bill collectors showing up.

 

[Craig234]

Originally posted by: Fern

Originally posted by: techs

Exactly my point. If I borrow money, or I make a bad product or do bad job in my business I responsible. When I borrow money to run my company (my company, is NOT a corporation) I am responsible for my debts. I can be sued and I will have to give away my personal wealth(most of it). Yet the Corporations owners (stockholders) are not personally responsible?

Your answered your own question in the above statement - YOU make the product, YOU do the bad job, YOU make the decisions etc.

In the corporate model the shareholders don't do those things. Apples & oranges.

What you fail to grasp is that a corporation IS a legal person under the law. If you replace yourself with "corporation" in your above statement it works perfectly.

You answered your own question, too.

What you fail to grasp is that a corporation can't be put in jail, a corporation doesn't have to eat so it doesn't matter if it goes broke, if the owners don't.

So, where's the restraint on the owners/shareholders for taking risks that might have great liability to society? Gone in a legal fiction.

Read the excellent "Unequal Protections" by Thom Hartmann sometime for a history of wh corporations were created and the decline of regulation and oversight.

 

[Fern]

Originally posted by: Craig234
So, where's the restraint on the owners/shareholders for taking risks that might have great liability to society? Gone in a legal fiction.

Gimme some examples

 

[Whoozyerdaddy]

Originally posted by: techs

Originally posted by: Gonad the Barbarian
Investors have the risk of losing their investments. The bad thing about corporations currently is that the decision makers have too little liability. They can run a company into the ground, ruining investors and employess, and still retire with millions and millions.

But investors are not liable for a corporations losses. Unlike you or I in our private life or businesses. Absolutely the most socialist idea to ever come about.

I don't understand how you see this as socialist?

Investors don't actually own the corporation. They own a portion of control.

I start a company and incorporate. I need capital so I sell off some of my stock. People buy this stock in the hopes that I know what I'm doing and the company will grow and their investment will appreciate. At the same time they assume the risk that I don't know what I'm doing, the company fails and their investment becomes worthless.

In the case of a catastrophic failure the corporation is liable for all losses including any corporate bonds I may have issued. The investors now just have a share of the control of a sunken vessel.

In your example, anyone who loaned you $20 (hoping to get paid back) would share in the liability of your personal finances. It just doesn't work that way.

 

[Gonad the Barbarian]

Originally posted by: Craig234

Originally posted by: Fern

Originally posted by: techs

Exactly my point. If I borrow money, or I make a bad product or do bad job in my business I responsible. When I borrow money to run my company (my company, is NOT a corporation) I am responsible for my debts. I can be sued and I will have to give away my personal wealth(most of it). Yet the Corporations owners (stockholders) are not personally responsible?

Your answered your own question in the above statement - YOU make the product, YOU do the bad job, YOU make the decisions etc.

In the corporate model the shareholders don't do those things. Apples & oranges.

What you fail to grasp is that a corporation IS a legal person under the law. If you replace yourself with "corporation" in your above statement it works perfectly.

You answered your own question, too.

What you fail to grasp is that a corporation can't be put in jail, a corporation doesn't have to eat so it doesn't matter if it goes broke, if the owners don't.

So, where's the restraint on the owners/shareholders for taking risks that might have great liability to society? Gone in a legal fiction.

Read the excellent "Unequal Protections" by Thom Hartmann sometime for a history of wh corporations were created and the decline of regulation and oversight.

Stock holders don't make these decisions. But I agree those that do have too much legal sheilding in corporations.

 

[Harvey]

The basic reason for corporations is as a mechanism to raise capital to fund the coroporate entity/company. By definition they are defined as "corporate citizens," and as such, they should be subject to the same laws as individuals, including taxation on their income and criminal and civil liability for their wrongdoing.

The basic concept is fine. It's has the potential to enable accomplishing great and positive things that couldn't otherwise happen. The problem is, the laws as they stand, now, also create the potential for considerable criminal and civil wrong, and they protect and enable gross corruption of those politicians who should be overseeing them and protecting the public from their abuses.

 

[K1052]

Originally posted by: JS80
This thread makes me cry.

You aren't alone.

All this thread really represents is more veiled hatred/jealousy for companies that make profit (which is an inherently evil concept don't you know...).

Incorporating protects the large and small. It can be three guys who don't want to get sued out of all their personal assets on the whim of a judge or the largest of multinationals. There is still a lot of risk (capital of the investors).

 

[Craig234]

Originally posted by: Gonad the Barbarian

Stock holders don't make these decisions. But I agree those that do have too much legal sheilding in corporations.

We agree on the latter, but stockholders in a sense do make those decisions; they're part of the system, even if 'indirect'.

When a corporation comes up with a terrible scheme that would harm society, the shareholders both are tempted by the returns it can offer, as well as the electors of the board of directors who can actually set the policy to happen or not. If you dilute the responsibility too far, no one is responsible; the owners, even if distributed to many shareholders, are part of the issue.

The fact is that the system is broken now, and needs an overhaul, to where corporations once again operate 'for the common good', balancing profit and citizenship.

The current system is like removing the laws and police from a city, and expecting people to continue to act nicely.

 

[Fern]

Originally posted by: Craig234
[
What you fail to grasp is that a corporation can't be put in jail, a corporation doesn't have to eat so it doesn't matter if it goes broke, if the owners don't.

Corporations don't beat their wives, get drunk and drive, or get mad and shoot somebody either. Corporations don't break into homes and steal electronics for their crack habit.

What's your point?

Fern

 

[rchiu]

Originally posted by: Craig234

Originally posted by: Gonad the Barbarian

Stock holders don't make these decisions. But I agree those that do have too much legal sheilding in corporations.

We agree on the latter, but stockholders in a sense do make those decisions; they're part of the system, even if 'indirect'.

When a corporation comes up with a terrible scheme that would harm society, the shareholders both are tempted by the returns it can offer, as well as the electors of the board of directors who can actually set the policy to happen or not. If you dilute the responsibility too far, no one is responsible; the owners, even if distributed to many shareholders, are part of the issue.

The fact is that the system is broken now, and needs an overhaul, to where corporations once again operate 'for the common good', balancing profit and citizenship.

The current system is like removing the laws and police from a city, and expecting people to continue to act nicely.

No, the current system is not like removing the laws and police. Have you heard of SEC and Sarbanes and Oxley? There are rules governing corporate behavior, the only thing is that most of the rules and punishment are aimed at people who make direct decisions. Not shareholders who at best make indirect impact on what a corporation does.

 

[Whoozyerdaddy]

Originally posted by: Craig234

What you fail to grasp is that a corporation can't be put in jail, a corporation doesn't have to eat so it doesn't matter if it goes broke, if the owners don't.

But the people who run them can go to jail. Skilling, Waksal, the Rigas family, Kozlowski, Ebbers, etc, etc, etc...

People are held accountable for the actions of the corporation. This notion that corps and the people who run them are above the law is stupid. The corps themselves can he fined, forced to pay restitution and restricted from certain activites as well. You can't put an artificial person in jail but that doesn't mean you can't punish them.

 

[Craig234]

rchiu, to clarify, I didn't say it's like removing laws and police; I said it's like removing laws and police and then expecting people not to act badly as a result. What I meant was that people who profit from corporations are often able through a variety of mechanisms, including huge political influence, to have reduced accountability for those corprations' bad actions, and that expecting them not to take some advantage of that is silly and impractical.

 

[Craig234]

Originally posted by: Fern
Corporations don't beat their wives, get drunk and drive, or get mad and shoot somebody either. Corporations don't break into homes and steal electronics for their crack habit.

What's your point?

Fern

That's missing the point badly. Individuals and corporations tend to commit different crimes.

What's YOUR point?

Mine was that the concept that 'corporations are people' is inherently flawed, one of those ways being that corporations are not subject to the same deterrents like jail.

While you don't need to deter a corporation from beating its wife, you do need to deter its management from other criminal but profitable behavior.

While there are some situations where the management can be held accountable criminally, you won't see the stockholders held so accountable; they are incented to blindly pursue the maximum return on invesments, which increases the pressure on the management to take extra risks and get the higher returns. Any reduction in accountability for criminal behavior tends to increase criminal behavior.

I'd simply like to see the 'legal person' fiction, which was never intentionally enacted to begin with through law or court decision (again, read the book recommendation above for the info) abolished, and appropriate accountability - as I said, a balance of profit and public good for corporations.

 

[rchiu]

Originally posted by: Craig234
rchiu, to clarify, I didn't say it's like removing laws and police; I said it's like removing laws and police and then expecting people not to act badly as a result. What I meant was that people who profit from corporations are often able through a variety of mechanisms, including huge political influence, to have reduced accountability for those corprations' bad actions, and that expecting them not to take some advantage of that is silly and impractical.

Well, how corporations take advantage of political ties is a totally different topic. Yes companies like oil and big pharmaceutical companies make a tons of money through political connections. But that is really reserved for the very few and very powerful. In fact, you only see industries with monopoly or oligopoly that are able to do those things. Monopoly and oligopoly happens when capitalism is NOT working perfectly. I'd say 90% of companies out there neither have the power nor the resource to influence policy and take advantage of political ties. So to condemn all companies because of few ultra powerful companies is just silly.

 

[LegendKiller]

WTF is with this thread? I think Techs is on drugs.

What is capitalism? It's the belief that a free market exists where goods and services are traded and or rendered free of intervention of governments. It has nothing to do with the ownership or liability structure.

What is a corporation? A medium which transacts in the sale, purchase, or trade of goods and/or services.

Investors of most corporations do not control it's day to day activities, nor do they know everything about it's operation. Enron, for example, had nothing to do with investors. They purchased the stock and didn't know everything. Furthermore, the losses of Enron were borne by Enron investors, which is not a socialist concept, but a capitalist one.

I think that Techs doesn't know what the hell he is talking about. He is a person who tries to sound cool, but in reality has little to no knowledge of how the system works. Please stop posting so ignorantly.

 

[her209]

If stockholders don't have control over the corporation, then what incentive does the corporation have in returning the maximum amount of profit to its shareholders?

 

[Whoozyerdaddy]

Originally posted by: her209
If stockholders don't have control over the corporation, then what incentive does the corporation have in returning the maximum amount of profit to its shareholders?

The stock holders elect people to the board. The people on the board want to stay on that board. Beyond that, the stock holders do not have any say in the day to day operations of the corp nor do they participate in executive decisions.

 

[Fern]

Originally posted by: Craig234

Originally posted by: Fern
Corporations don't beat their wives, get drunk and drive, or get mad and shoot somebody either. Corporations don't break into homes and steal electronics for their crack habit.

What's your point?

Fern

That's missing the point badly. Individuals and corporations tend to commit different crimes.

What's YOUR point?

Mine was that the concept that 'corporations are people' is inherently flawed, one of those ways being that corporations are not subject to the same deterrents like jail.

I thought you libs didn't like the idea of putting people in jail anyway?

The concept of "jail" for a corp is stupid. Not just because it's an "intangible person", a corporation can't be created for an illegal purpose. Try filing out incorp documents and stating an illegal purpose for it's creation. See how far you get. A corporation has no "free will" etc. "It" can't have intent etc.

If management/owners wanna use one for illegal purpose, oh yeah baby they can go to jail. Incorp a drug dealing business and see how that works out for you.

Corporations are subject to all kinds of deterents. Fines, revoke charters & licenses and it's business being shut down. I'm talking a physical enforcement too. Every seen a business's doors padlocked?

Management can't use the corporate (civil) liability shield for protection against criminal statutes. It doesn't work that way.

Because some people may use a corporation to facilitate illegal activity doesn't mean a corporation is any more inherently "bad" than an automobile is because it's used a bank robbery, or rope/duct tape because it used to bind hostages.

If we got rid of everything used as a tool in crime we'd be sitting around grass grass huts (until someone was raped in one) pounding sand.



While you don't need to deter a corporation from beating its wife, you do need to deter its management from other criminal but profitable behavior.

See above

While there are some situations where the management can be held accountable criminally, you won't see the stockholders held so accountable; they are incented to blindly pursue the maximum return on invesments, which increases the pressure on the management to take extra risks and get the higher returns. Any reduction in accountability for criminal behavior tends to increase criminal behavior.

Why should shareholders be punished beyond losing their money? If they actually participate, they will be criminally punished.

Most shareholders lack any degree of control, hence fairly lack personal responsibility. If you do have control you will have personal responsibility etc.

Pardon me, but some of you are under a fairly niave assumption regarding the supremecy of the legal liability issue. It's not for no reason that E&O insurance policies exist for Officers & Directors. You can be personaly sued etc.

I'd simply like to see the 'legal person' fiction, which was never intentionally enacted to begin with through law or court decision (again, read the book recommendation above for the info) abolished, and appropriate accountability - as I said, a balance of profit and public good for corporations.

Now that's outright silly. Here in the US, corporations initially could be created only by the US Congress (I've personally seen corporate charters of the very 1900's granted by US Congress). Congress later decided they had better things to do and shifted that down to the state's governments.

So, corporations were intially authorized by US law then State law.

SCOTUS has on numerous ocassions addressed corporations and, in fact, extended to them many of the rights individuals are granted in the Bill of Rigts. See the following by ralph nader, hardly a right-wing capitalist.

Linky

 

[BoomerD]

From Cornell Law...

http://www.law.cornell.edu/wex/index.php/Corporations

"The law treats a corporation as a legal "person" that has standing to sue and be sued, distinct from its stockholders. The legal independence of a corporation prevents shareholders from being personally liable for corporate debts. It also allows stockholders to sue the corporation through a derivative suit and makes ownership in the company (shares) easily transferable. The legal "person" status of corporations gives the business perpetual life; deaths of officials or stockholders do not alter the corporation's structure. "

and fron nolo.com:
http://www.nolo.com/article.cfm/objectI...43D9-B3117C83BD1CCA82/111/182/241/FAQ/

"What sets the corporation apart from all other types of businesses is that a corporation is an independent legal entity, separate from the people who own, control, and manage it. In other words, corporation and tax laws view the corporation as a legal "person" that can enter into contracts, incur debts, and pay taxes apart from its owners. Other important characteristics also result from the corporation's separate existence: A corporation does not dissolve when its owners (shareholders) change or die, and the owners of a corporation have limited liability -- that is, they are not personally responsible for the corporation's debts"

IMO, the whole "corporations are legal persons" is pure bullsh*t, derived by the corporations to give them more power and less accountability. Corporations should not have the right to lobby government, nor the right to donate to political campaigns, PAC's or other political funding machines. Due to the large amounts of cash they control, both give them far too much influence in government, and dilutes the concept of "We the People", and is turning our government into one of "We the Corporations"...

 

[LegendKiller]

Originally posted by: BoomerD
From Cornell Law...

http://www.law.cornell.edu/wex/index.php/Corporations

"The law treats a corporation as a legal "person" that has standing to sue and be sued, distinct from its stockholders. The legal independence of a corporation prevents shareholders from being personally liable for corporate debts. It also allows stockholders to sue the corporation through a derivative suit and makes ownership in the company (shares) easily transferable. The legal "person" status of corporations gives the business perpetual life; deaths of officials or stockholders do not alter the corporation's structure. "

and fron nolo.com:
http://www.nolo.com/article.cfm/objectI...43D9-B3117C83BD1CCA82/111/182/241/FAQ/

"What sets the corporation apart from all other types of businesses is that a corporation is an independent legal entity, separate from the people who own, control, and manage it. In other words, corporation and tax laws view the corporation as a legal "person" that can enter into contracts, incur debts, and pay taxes apart from its owners. Other important characteristics also result from the corporation's separate existence: A corporation does not dissolve when its owners (shareholders) change or die, and the owners of a corporation have limited liability -- that is, they are not personally responsible for the corporation's debts"

IMO, the whole "corporations are legal persons" is pure bullsh*t, derived by the corporations to give them more power and less accountability. Corporations should not have the right to lobby government, nor the right to donate to political campaigns, PAC's or other political funding machines. Due to the large amounts of cash they control, both give them far too much influence in government, and dilutes the concept of "We the People", and is turning our government into one of "We the Corporations"...

Who are corporations owned by? I guess all of those funds like Calpers, mutual funds, 401ks and pension funds are just for rich people.

 

[techs]

And once again everyones posts prove beyond a shadow of a doubt.
Corporations are Socialist not Capitalist entities.

 

[BoomerD]

Originally posted by: LegendKiller
Who are corporations owned by? I guess all of those funds like Calpers, mutual funds, 401ks and pension funds are just for rich people.

What the hell does that have to do with the subject? Corporations have only one interest...profit...for themselves, their executives, and their shareholders. They use their extensive wealth to lobby for changes in the law that are beneficial to them, usually to the detriment of working people...creating a whole new class of "people"...
poor, middle-class, rich, and corporations. Our government is elected by "the people" bt controlled by the monied corporations. as if to give us the illusion of having something to say in how our government is actually run.

 

[techs]

Originally posted by: BoomerD

Originally posted by: LegendKiller
Who are corporations owned by? I guess all of those funds like Calpers, mutual funds, 401ks and pension funds are just for rich people.

What the hell does that have to do with the subject? Corporations have only one interest...profit...for themselves, their executives, and their shareholders. They use their extensive wealth to lobby for changes in the law that are beneficial to them, usually to the detriment of working people...creating a whole new class of "people"...
poor, middle-class, rich, and corporations. Our government is elected by "the people" bt controlled by the monied corporations. as if to give us the illusion of having something to say in how our government is actually run.

This issue of the thread was the idea that Corporations are not Capitalist but a Socialist creation by the State to manage the economy.
Therefore Corporations are Socialist.