I have a long, fairly detailed and systematic blog post up at The Libertarian Standard discussing the demands of the Occupy Wall Street (OWS) movement for an end to “corporate personhood,” and a host of related issues:
Corporate Personhood, Limited Liability, and Double Taxation
by Stephan Kinsella on October 18, 2011 @ 2:56 pm
The politics of the left-oriented Occupy Wall Street (OWS) movement, like that of the right-oriented modern Tea Party movement, is not very well defined. But one of the things some of the OWS participants are calling for in their list of “demands” is an end to “corporate personhood.” In this they echo the views of left-libertarians who contend that state-chartered “corporations” are the source of grave social ills.
Some of these issues were recently debated on the pages of Roderick Long’s blog, in the comments to his post “Double Standard.” Left-libertarians who oppose incorporation, and usually also “capitalism,” argue that firms derive some great benefit from the state by the privilege of incorporation. The standard leftist critique of the corporation is the “concession” theory outlined by Robert Hessen in his seminal study In Defense of the Corporation (see a key excerpt from pp. 18-21). They argue that the state grants to corporations three features: entity status, perpetual duration, and limited liability to shareholders, all of which are artificial and would not exist absent state intervention. Left-libertarians maintain that these privileges grant corporations more power than they otherwise would have, which distorts the market, nay, society in general. This gives rise to more “hierarchy” and “authoritarianism” than would prevail in what Hans-Hermann Hoppe calls a private law society, and indeed, to “exploitation” of the workers by the bourgeoisie.
The Alleged “Privileges” of Incorporation
Labor Theory of Value
There are several problems with the left-libertarian and leftist critiques of corporations. One is the acceptance of a Marxian-type labor theory of value—the idea that employers per se “steal” or exploit from workers the “social surplus product”—a discredited, hoary, unscientific view based on deeply flawed economics.
Entity Status
And as Hessen has pointed out,
{ 70 comments }
This is some tasty and strong stuff, brother.
Kinsella: “The problem with this theory is the assumption that in a private law society, “shareholders” should be vicariously liable for the negligence of others.”
Let’s not use the word “shareholder.” Let’s call the stockholder what he is: the (or, an) owner. There is nothing vicarious about the damage caused by the (an) owner of anything, whether it be a dangerous pit bull or a dangerous corporation, such as a nuclear-power generating corporation.
Kinsella: “We have to recognize that the prima facie answer—the default condition—is no: each person is responsible only for his own torts, not for those of others. To hold someone else liable requires some kind of “vicarious liability” theory. ”
The pit bull can’t pay, so his owner is responsible. Same with the owners of corporations. No need for any “vicarious liability” theory because there is nothing vicarious about the relationship nor the liability of an owner for his pit bull or her corporation. There is no “vicarious liability” theory involved because there is no “someone else.” There is only the owner.
Kinsella: “But holding employers—or shareholders—vicariously liable for actions of their employees relies on the offensive, paternalistic, feudalistic concept of respondeat superior—a master is responsible for his slaves’ or servants’ transgressions. As Hessen notes, this is just a vestige of the medieval mentality. Why would a shareholder be liable for actions of some employee?”
What is offensive is this is that this statement is deceptive and utter nonsense. The agent-principal relationship is alive and well in law and in relationships recognized as such throughout the world. It is ancient, of course, but most truths are, and modern lawyers are as unable to refute them as were their medieval predecessors down through the ages. Why didn’t the author or Hessen use this modern, non-offensive, non-paternalistic, non-feudalistic term? And since you repeat the same unjustified assertions over and over, let me also be repetitive: We are not talking about a “stockholder” liability for “some employee,” what the author is talking about is an owner’s responsibility for his or her potentially dangerous property or operation. The author would incise the owner from his property, but the ownership of property (viz., private property) is crucial to every libertarian theory I have ever encountered.
Kinsella: “On the other hand…he may have bought the share from a previous shareholder. ”
This is a silly argument. Whether one bought the pit bull as a puppy or a trained fighting dog is immaterial to our owner’s relationship to the property.
Kinsella: ” They assume that giving money to the corporation is akin to “aiding and abetting it…”
This is a strawman, one of so many in this article that I can’t even begin to count them let alone address them all. For this one let me just say, no one need assume anything of the sort, and I doubt anyone so assumes. No owner (stockholder) of a business “gives” it money. An owner either creates the business by an initial investing, or buys it as a going concern. Obviously how ownership is obtained has no affect whatsoever on the pit bull’s behavior nor on whether or not the reactor core melts during a tsunami. Nor does this point have any place in a *rational* argument. Like the argument in total, it is a lawyer-like attempt to ameliorate if not eliminate the personal responsibility involved in human action upon which liberty utterly depends.
If I were to characterize the argument in this article, as it characterizes any imagined opposing view, the kindest thing I could say is that it is silly. Not only is personal responsibility compatible with libertarian theory, it is the ultimate foundation of liberty. The author’s attempt to relieve owners of responsibility for their pit bulls or their dangerous operations engaged in for profit is essentially an attack on individual liberty in the manner of a lawyer defending a losing cause with one frivolous argument piled upon another until the judge finally orders her to “shut up.”
I could pick the rest of the article apart straw man by indirect ad hominem aimed at whoever might have the temerity to oppose this sanctimonious view, but suffice to say again that the only “vicarious” relationship is a figment of a creative imagination. And if my counter to this diatribe should be characterized as left-libertarian, I would have to classify this article as pure statist, but that would be adopting the methodology of this author’s endeavor to oppose personal responsibility and the individual liberty resulting therefrom.
There are other good reasons why corporations, which are purely products of State legislation, are harmful to liberty not addressed by the article. One big one is the so-called “legal fiction,” which holds that corporations are “persons” for the purpose of standing in legal proceedings. As a direct result of this fiction, many court rulings (including those of the Supreme Court) have been made in cases wherein the parties were the State and a corporation which established important precedents, which precedents were later applied to cases involving the State and individuals as though the latter were equivalent to corporations and without the human rights that can only be claimed by individuals. An example of this is the famous case of Brushaber vs. Union Pacific Railroad (http://laws.lp.findlaw.com/getcase/us/240/1.html), in which SCOTUS declared that the newly enacted federal income tax did not violate the Constitution as claimed in that case and therefor Union Pacific must pay it. From then (1916) until the present, that case has been cited in lower federal courts as having determined that the income tax was constitutional. It has been cited as precedent to deflect thousands of cases of individuals who have tried to challenge the constitutionality of the income tax as applied by the IRS against them, even though Brushaber never even considered the constitutionality of the income tax as applied to real individuals who are not legal fictions created by State legislation.
The State and corporations are so intimately tied to one another that defending the latter is virtually defending the State and its illicit powers, without which no corporation has ever existed.
Ownership of a pit-bull is more akin to owning a (potentially leaky, probably perfectly safe) propane tank than it is to partial ownership of a stockholding company. You yourself referred to the principal-agent relationship, the asymmetrical nature of which arises primarily because the latter commands faculties and resources unavailable to the former. This does not characterize an owner and his pet, which has (obviously) little by way of personhood but still generates liabilities for its owner. Tracing negligence from dog, which has no purposeful, rational action in the Misesian sense, to owner, who presumably does, is a trivial matter; establishing a causal relationship between (to use Kinsella’s example) the Pepsi driver and stockholders of Pepsi is not so trivial. This is not to suggest that liability is not, in some tenuous, circuitous manner, traceable, only that the claimant would encounter greater difficulty in trying. I can see a case being made for holding the employer responsible, and by extension, Pepsi Co., if the driver’s history or particulars about his habits are unearthed of which his superiors can credibly be shown to have been aware, or have overlooked. Perhaps the regional manager directed freighters to overload Pepsi fleet vehicles by an amount just above the optimal weight for safe braking distance. This seems actionable. However, this is a far cry from holding Pepsi’s boardmembers, and then stockholders, liable of same, beyond the diminished flow of rent by holding stock in a company now party to litigation. The relationship is there, but the existence of purposeful action on the stockholders’ part, bringing about an undesirable outcome, is not apparent.
Which cuts to the heart of my contention with this whole line of thinking. This seems to me more of a continuum problem, and more justifiably handled by the courts on an ad hoc basis rather than (as now exists) blanket immunity or (as Netterville suggests) enforcing total liability against all parties, regardless of participation. If the claimant can establish a causal relationship of purposeful action, bully for him; I doubt he can in any meaningful way, beyond the flow of capital and rent between the primarily responsible and the putative, peripheral parties. But I wouldn’t wish entirely to close off or open up the potential for liability.
The points you bring up regarding legal precedents are well taken, and I’ll read more about it—I’d love to see a response from Mr. Kinsella. Off the top of my head this seems moot if only because courts also find against individuals and thereby set unlibertarian precedents. The recent Angel Raich case comes to mind. A contentious issue like income tax, especially given the judicial activism surrounding its passage, would doubtlessly have found safe harbor in any number of cases. I’m not suggesting this particular case was not ultimately harmful, or that the modern conception of taxation does not turn on this decision, but merely that some court, somewhere, would doubtlessly have found in favor of the federal income tax, and that case would now serve as the precedent. Would the outcome have been materially different if textbooks instead referred to a conceivable case for the constitutionality of income tax withholding in which the court found against Vivien Kellems? I don’t know. We can’t say.
Thanks for the food for thought, both you and Mr. Kinsella. I am so novice about all of these concepts, I can really only bring up the untutored layman’s perspective and try clarifying my own position. I just wish the rhetoric weren’t so acerbic.
D. Storey, Thanks for engaging. See my reply to Wildberry below, which I think responds to you comment as well.
Ned,
I can see this has gotten you fired up, but your understanding is a little shakey.
Rarely have to rushed to the defense of Kinsella, but I think you are not deriving your criticisms from a correct understanding of the principles being discussed.
Shareholders are not employees, agents, or owners. They are shareholders, whose liabilities and powers are statutorily defined at the outset. Now you come along and want to change the nature of that in retrospect, not what the shareholder bargained for.
Your interpretation of vicarious liability is backwards, because the shareholders are neither employers or employees; they are investors whose proprtionality is a measure of share price.
A pit bull owner is liable for the tort of the Pit Bull, because it is the owner’s tort, negligence, which is at issue. The owner is not liable because of VL theory making the owner out to be the employer of the dog.
Also, an employee is not liable for the torts of the employer, and the employers is not liable for the torts of employees unless they are within the scope and course of their role as employee.
Shareholders are not “employers” precisely because they cannot exercise any control over the scope and course of the corporation, other than to vote and/or ratify materials acts of the BOD. They cannot ratify something that is illegal in the first place. The BOD controls the Executives adn the Executives control the employees. Shareholders buy in or sell off. That’s it.
I enjoyed your rant, but it would be helpful if you departed from some solid understanding of what you are criticising.
Wow, you must be off (or on?) your meds.
Did you not read the original piece either? ARe you, like the others, total naifs and inepts who know nothing about the business world they have the gall to weigh in on? Being a shareholder HAS NOTHING OT DO WITH BEING AN INVESTOR. Helllooooo. shares are tradeable. You guys are such amateurs. Jesus. Why do you have a public opinion about things over your station? Jesus.
Shareholders are not “employers” precisely because they cannot exercise any control over the scope and course of the corporation, other than to vote and/or ratify materials acts of the BOD.
Shareholders vote to rafity “material” “acts”of the Board? Really? I thought they voted for nominated shareholders. Hmm, where did you get this hodgepodge layman theory from?
What does this statement even mean?
Well the shareholders vote for board members, but I guess we cannot expect you to grok this.
@ Stephan Kinsella October 19, 2011 at 2:48 pm
You’re a funny guy, Kinsella. Watch out, I may be equivocating on the connotations of “funny”.
And here I am trying to support your battle against ignorance, and you say something like this:
Tradable for what? Money? Who issues the stock and for what reason? Raising capital?
When someone pays money for a share of an enterprise, what are they doing? Investing?
The fact that they are subsequently tradable goes to liquidity. Shares in a close corporation may not be tradable because there is no market save a few other shareholders. Right?
Just what is my station? I’ve always wondered about that. I know you think highly of yourself, but when did you starting signing stuff “Jesus”?
Well, let me pull some layman theory out of my bum; how about the corporation wants to sell off is primary assets, or accept a takeover bid? Is that material? Is that electing a BOD? Does it require a shareholder vote?
Oh, I don’t know. How about the BOD wants to invest in a nuclear bomb by selling off all its assets and puts it to a shareholder vote? If they vote yes, is that OK?
You know how us laymen are, sort of on the stupid side. And all this time I thought there was more that a shareholder could vote on besides directors.
Here’s what I do grok. You are pretty predictable. You focus on trivia and bark at the smallest provocation. It reminds me of one of those little doggies that bark whenever the doorbell rings. You know the type?
Excuse me for agreeing with something you said. It was a momentary lapse. The fact that most of the criticisms I’ve seen here and elsewhere about the evils of corporations are based on rather fundamental misunderstandings of how they work and what they can and cannot do because they are corporations and not people.
The state is not required for corporation, just like the state is not required for something like IP. Free humans are also free to arrange their affairs to structure their cooperation. As Herman Cain might say, you are talking about apples and oranges. But if you and I don’t agree about that, I’m sure it’s because I’m completely, utterly, and stupidly wrong. Do I hear an Amen?
This post reminds me of one of the most common objections raised to anti-IP advocates; they make fallacious statements about what IP law actually does, and then rail against their own creations. That is what Ned is doing, and, (ahem!) what you do regularly.
After me saying all of this, Kid Salami fires the shot that hits the mark with just a few sentences. I admire his succinctness. You don’t strike me as an “expert” who is interested in actually addressing objections that are raised on the basis of something you say or claim. You are much more interested in indulging you nasty attitude against those you perceive to be beneath the staggering heights of your self-declared station. Don’t look now, but I think the train has left that station.
Are shareholders “co-owners” of something in the libertarian sense that you employ the term relative to easements, servitudes, and the like? Since you are a “pure libertarian”, excuse me for testing your assertions against reality. Is the concept of good will consistent with pure libertarianism? Just asking.
Are you sure you don’t mean fungi?
As that is your m.o., I would not be surprised.
With friends like you, who needs enemas?
Who cares? Maybe it’s a gift. But even if I buy a share from an existing shareholder with cash, I do not pay the cash TO THE CORPORATION. HELLOOOOOOOOOOO. Why, why, why are you guys who are so clueless about the business world compelled to weigh in on it in public. Why.
Not always. Sometimes you give it to employees in the form of options. BUt that is really irrelevant. The point is an existing shareholder may not be an investor in the company: they may have acquired it from a previous investor. But anyway so wht? so what if A gives $$ to a company. CUstomers do this too when they buy things. ARe they now implicated too for all the torts of its employees?
Maybe, but they are not giving money to the company.
This is irrelevant. Stop trying to obscure the deficiencies in your overall business acument in an inept attempt to say something quasi-sensible about an irrelevant side-issue. It’s embarrassing. Oh, wait, I guess this is why you use a ‘nym.
Well you are just a nym, and a gadfly at that, so who really knows, or cares? Maybe you are an AS machine (artificial stupidity).
And that is what you are doing, as these diversions are utterly irrelevant to the point at hand.
The arguments are not analogous, you twit.
that you quote that moron in support of your positions does not commend itself well. His blabbering about apples and oranges was confused nonsense.
Yes. With a host of other people. Just as you are a co-owner of a Hertz rental car for a couple days when you rent it, just as you are a co-owner of a condo that you rent for a year to some tenants.
@Stephan Kinsella October 19, 2011 at 4:30 pm
Let’s see; opening monologue; cut to commercial; yada yada yada….
Let’s see now, a corporation makes an IPO or an offering of additional shares and makes them available to the public and guess who the money goes to? HELLOOOOOOoooooo….They are offered on condition that they are fully alienable. Is this where you start paying attention?
Let me try to respond in terms you might understand. Look stupid, for a lawyer you often fail get your facts straight. Did you actually have to pass the bar to do what you do? Did you only start paying attention after the first day was over? Didn’t that impact your score?
I detect a pattern. You start your analysis of shares after they have been issued and purchased for the first time, and then conveniently forget that the reason they exist in the first place is because a corporation issued them to raise capital.
This reminds me of your analysis of copyrights, where once you have a copy of an authors book, you conveniently forget that you only have it because the author produced it in the first place. That is why your property rights argument looks dumb. Mises himself showed you how dumb it is here: http://mises.org/libprop/lpsec5.asp
Shareholders and book readers don’t snatch their goods from the air. They belonged to somebody before you got them, and they exist for the economic benefit of those who produced them. Any analysis must acknowledge that fundamental fact. Of course, plugging your ears, stomping your feet and humming loudly while this is being pointed out must mean that it is safe to ignore whatever it was you didn’t want to hear. See the pattern?
Raising human capital.
Is it possible you just don’t understand that no matter how ridiculous your path here might be, I agree with your conclusion? Shareholders nor customers are liable. Neither did what they did (bought something) with the knowledge or understanding that they would be thereby liable of acts of the company that produced the product. That is the benefit of the bargain; an explicit understanding that liability is limited in a specific way.
So, I AGREE, it is stupid to argue that shareholders or customers should be liable in any way for the decisions and conduct of the corporations behind the share purchase transaction. Don’t let it go to your head. It looks like a ripe watermelon already. I’m concerned for bystanders.
Never? Really? Is this a joke? The money from an IPO goes where, initially????
I use a nym because you look a little bit like Freddy Krueger, and it scares me to think you might learn where I live. Nothing in your conduct assuages that perception.
Liquidity is a feature and benefit of shares, and one reason why people buy them. They are liquid. They can be easily traded for cash, especially if they are publicly traded. Think about how much harder it would be to raise money by selling shares if they weren’t. Owned shares in a close corp. lately?
No no no…You have to respond to the whole joke. No fair cutting out the punch line. What about the Jesus part?
You have made yourself, as is your MO, the point at hand. You exhibit little common courtesy or decorum. If you would grow up a little, we could cover more ground, in which you are clearly not interested. You seem to prefer to argue about things we seem to agree upon, and create points of disagreement for your own pleasure. That is my point. It was a pretty good image, don’t you think?
Ah, but they are. Did you read the link that Kid supplied from Brian Macker about the cows? Things that may and do arise in a free market do not assume a state, and are interesting for that fact. Corporations, a state enacted form of business organization, and IP, as state enacted form of property organization, are two such examples; both would naturally arise in a free society, with or without a state, as would a state itself.
By the way, your vocabulary for insults is almost a big as Don Rickles. That is not the only similarity.
He did not make up the analogy. Thanks for letting me know you watched. Got a favorite?
See, I ask a simple question and you make me argue with you.
Shareholders do not have an ownership interest in other people’s stock, do they? What do they “co-own” and with whom do they have this relationship?
You never obtain an ownership interest in a rental car. You are a licensee. Your rights to use are very tightly defined. You cannot sub-rent it, for example.
Tenants are leaseholders. They don’t own anything about the condo. They purchase a right of possession, not an ownership interest.
You are making this up, and it is some pretty thin gruel. There is such a thing as a co-owner, like tenants in common and joint tenants, but these are not the examples you bring.
Did you actually pass the bar? I don’t see you listed in the Texas Bar. Just asking.
Ahhh. It’s under NORMAN! Yep, member of the Texas Bar. There it is right there.
They are not “fully alienable” at all, but in any case this animadversion is irrelevant.
The initial subscribers give funding to the company. BUt not all shareholders. Being a shareholder does not mean that one gave money to the company one holds shares in. This is my simple point, which most laymen like you do not realize, and which you are now seeking to evade.
In any case: so what if A gave $100 to a company B? If you buy a $100 ipod you give $100 to apple. Congrats, you’re a shareholder now…?
Not all shares are issued to raise capital. Some are the result of exercises of stock options or warrants or stock grants to employees. BUt in any case we are not “ignoring” this or “forgetting” it–it’s just that the “reason the exist” is that it’s irrelevant. You guys try to smuggle in the claim that if you give money to a corporation that you are liable for what they do, presumably on the grounds that you aided and abetted them. But as I have argued, (a) you do not necessarily give money to the company at all, by virtue of “being a shareholder,” and (b) otehr people give money to or otherwise aid the corporation, like employees, customers, suppliers, creditors–are they all to be liable too for anything it does?
good for you that you on occasion see sense, but it’s not that impressive that you occasionally get something rihgt.
Not all shareholders get their shares by participating in an IPO. And not all shares are issued as part of an IPO.
The state has no right to incorporate corporations, or to grant patents or copyright. Now whatchoo gonna say?
They and the managers and directors are co-owners of the physical assets “of the corporation”.
You are thinking like a statist. If the state classifies it one way, that settles it for you, eh? Well ownership in libertarian theory means the right to control a scarce resource (I know you hate this clear, rigorous, operational definition, since it makes IP look so statist and ridiculous, but there you go). And if I rent a car and the legal system gives me a right to use it for some defined period of time, that is, guess what, a right to control, i.e. an ownership right.
” You cannot sub-rent it, for example.”
So? If I live in a neighborhood with restrictive covenants, that prohibits me from sub-leasing my house, I am still the main owner, and yes, the neighbors are co-owners—they have veto rights. Just like the veto rights you think IP socialists ought to have! Amazing how this all dovetails.
Nice of you to pay obeisance to statist legal classifications.
4 of them in a row, buddy, first time each: Louisiana, Texas, Patent bar, Pennsylvania. I have not achieved a nym identity like you have, however–kudos!
@Stephan Kinsella October 19, 2011 at 6:58 pm
I suspect that has something to do with why people buy them, right?
Is restating the obvious really that much of a contribution to anything? Yes, I agree with this, obviously.
Do you think that the secondary market that exists for securities has anything at all to do with the calculation the investor makes to buy in? Is it possible to buy share that hasn’t been part of either a private or public IPO? Honestly, why are you trying to make an argument about this?
Layman or not, you seem to be capable of missing the fact that I made my point of agreement to you clear three posts ago, but you continue to argue, and when you finally figure it out, somehow I’m seeking to evade something? Perhaps YOU should consider drugs, or is it rehab?
Anyone that can pass four bar exams in different states the first time is not a stupid person. So what is it? Why would I make such a stupid claim, and why do you claim I have?
One does not become a shareholder by buying a company’s products, you must buy shares. There is some fine print on the back that tells you exactly what you’ve bought. Right?
Ah, that what I said. Stock options are a way to attract and retain human capital. Right?
You are arguing with a fence post here. I oppose such a claim. On this we agree. Are you paying attention?
How gracious of you to finally get the point. I don’t expect you to be impressed.
Would you agree that before someone can buy a share, they must first be introduced? By whom or what? Once introduced, does every subsequent transaction accrue directly to the corporation? Do you think I grew up in a cave? I think we can agree on this point. The real question is, why do you think it is necessary to point out the obvious?
Gee, I think I’ve figured your position on this by now. You hate the state. Got it. Can I say “yo mama!”?
Do you believe corporations would arise in a “stateless” society? I believe you already took the position that they would; so would IP in one form or another. You just can’t keep freedom down.
As Kid has already said, you are just making this up. You are sweeping all forms of ownership into one grand term, which renders it meaningless. I can mean anything, as long as it means “some type of rights in something”. That would about cover everything.
You are daft. You think “co-ownership” is a “rigorous, operational definition”???
So when you take your watch to the repairman, he “co-owns” your watch? Isn’t it a little more convenient to invent the concept of bailor/bailee and actually define something that is a rigorous, operational definition? You are simply not thinking, or at least pretending that no one else is but you.
Yes, it is amazing how this all dovetails. I consider this a feature.
Well, well. If they are statist, that just about clinches it. That is a handy tool you have for winning any argument whatsoever. It is your equivalent of playing the race card.
Like I said, that is impressive. I never said you were dumb, you just act dumb for unexplained reasons. If I told you my real name, you would not be impressed, so let’s just skip it. But I have to ask, is there something you don’t like about Norman, Stephan?
“Wildberry,” or whoever you are:
More question begging–typical of the IP-statist crowd. Saying “buying” presupposes your conclusion.
Suppose I agree to pay you $100 tomorrow if the Mayflower arrives. Does that mean I own the Mayflower, or its arrival? Would it make sense to say you are “buying” the Mayflower, or its arrival?
I don’t understand this quesiton
Yes.
That the morons who say shareholders should be liable are relying on a crude and simplistic theory that if you give $20 to a company you are aiding and abetting their capitalist crimes so should be joint and severally liable with them for their acts of authoritarian exploitation.
what’s the question, exactly?
Why would you make it–I am not sure. Why you would use a cowardly nym–I do nt konw. Why I claim it?–because I see it and do not shy from stating the truth. You know, the Galtian face without pain or fear or guilt.
NO, but one does contribute funds to a company by buying their products.
I’ve never seen this fine print.
Who can say?
To you? not much.
Nobody cares what a loser nym “expects”.
What does this convoluted last sentence even mean? how does a “transaction” “accrue” “to” a corporation? ‘Vas?
“Do you think I grew up in a cave? I think we can agree on this point. The real question is, why do you think it is necessary to point out the obvious?”
Because morons, idiots, liars, and sociopaths like you exist.
And you dont hate it. You mock those who hate it. Because your side–the state–has power now. You pathetic tool.
No, not in their current exact form as being chartered by the state; but free market contractual versions could and woudl arise, sure.
NO, I am thinking conceptually. My apologies.
Sure. Ownership makes sense; co-ownership means that two or more people have made a contract to divide control of the good between them. As to the rest of the world they are owners as a group, depending on the manifest terms of their agreement. See? It’s not hard, after all. In fact you depend on a corrupted notion of this idea in your futile attempt to justify IP based on divided ownership.
Yes. He has the right to use it–within limits.
Yes, legal theory would develop various subsidary concepts to segment and organize various things like this.
I am sorry that it bugs you that I am a legal savant, a legal theoretician god.
Wait, no, I’m not (sorry, that is).
I actually know your real name. Remember when you complained about a banning here? Do you want to be banned again, troll?
You don’t have to ask, I think, and I don’t answer quesitons like this to losers, nyms, or statists, or cowards.
@Stephan Kinsella October 20, 2011 at 12:31 pm
You want me to say “value them”? Is that important to you?
How is this relevant or responsive to anything I’ve said? The answer is no. According to you, I “co-own” Mayflower, since this gives me “some rights to something”.
Of course you don’t. Let me help you: An IPO, say, is the first release to the market for new securities. The stock market (NASDAQ, NYSE?) is the mechanism for trading stocks previously acquired. What is the relevance of observing that is may be possible to buy shares some other way?
Since I am not making such a claim, why do you bother responding to it with me?
The implication was that you either needed to get on drugs, or off them. I’m not sure which. It might be called a humorous retort. Now what about it, when did you figure out I agreed with you?
Yes, that is why they exist. Don’t look now, but that’s a point of agreement. Should I do this: STEPHAN, I AGREE WITH YOU!!! ??
Me. I just said. Nevermind…even I can’t respond to the childishness that follows.
I’ll take that as a yes. See how much more fun it is to acknowledge the obvious and move on?
Now I have to ask, what does this mean? I get the concept. You are sweeping up a number of existing distinctions into a concept of “co-ownership” which you then define so broadly that it can mean anything you choose; hardly a rigorous operational term, which was my objection. The concept is neither rigorous nor operational, unlike say tenant/landlord, or bailor/bailee. Apology accepted.
Let me see if I can make some sense out of this. If people can be co-owners, then we have to understand what “owner” means, so they can share it, right? And we have to understand what you mean by “as to the rest of the world” since I cannot presume laws, state, police or “might-makes-right”. So I’m not sure how a contract between two people should be interpreted by the rest of the world, since I can’t possibly know what your world looks like or how it behaves.
If I use Crusoe and Friday, they can agree on a transfer of rights to things they each own without worrying about how the rest of the world sees them.
Let’s say Crusoe gives his watch (it’s a modern island) to Friday to repair. Before he gives it up, they sit down and draw up a contract. Friday has passed the bar 4 times the first try, so he gets the job.
Crusoe says he’s giving his watch to Friday only so he can fix it, but that he has no other rights to the watch. Friday agrees, fixes the watch, but refused to give it up. Crusoe pulls out the contract and says, “See? Clause 3: Right of possession and retained rights of ownership.” Friday gives it up without a fight and they each eat a coconut in celebration.
With all the sand and ocean mist, the watch keeps breaking down, and Crusoe and Friday do a lot of business in watch repair. One day Crusoe says, “Hey let’s not write up another contract. Let’s just agree to handle this like we did before”. They shake hands and all that time spent on writing a contract is avoided.
One day Thursday shows up, who can fix laptops. Crusoe has a broken laptop, and he asks Friday to explain how the watch deal worked. Much like Eskimos have many words for snow, Friday figures that this arrangement they have is a form of “co-ownership”, but to be quick about referring to all of the assumptions they each made and negotiated, Friday decides to call it a “bailment”.
From then on, whenever someone wanted to give some property to someone to fix, they just said the word “bailment” and shook hands. Everyone had more time to eat coconuts.
See? It’s not hard, and making distinctions can be so darn useful. And when we are discussing things like property rights, we can refer to these common terms to explain what we mean. That way, we don’t have to carry a dictionary with us everywhere to define terms that we already understand.
Agreement R us.
The hits just keep on comin’.
Whew! Drugs kicked in just in time.
That makes for a double deceptions doesn’t it? Once for implying that you don’t know who I am. I presume that you and Jeff talk, and that you can poke around the private parts of this site. I suppose if I was really concerned about it, I would try harder to keep it secret.
Second, you recently said you don’t ban people, when you and I both knew that you banned me, and then had to take it back, and went to the trouble of removing your declaration that you had banned me from the blog.
Now you are threatening me again with your power to ban. That is what you also did to Silas Barta. That’s what tyrants do. They use their power to squash opposition. So much for liberty and freedom in World Kinsella. Where do I sign up?
My daddy use to say, “If you can’t take it, don’t dish it out.” He was from Mississippi. Like Jeff, he had a high standard of decorum that is common in those from the deep south. How did you miss out on that?
Stephan,
Are you insisting on having the last word?
@Stephan Kinsella October 20, 2011 at 12:31 pm
This is a repost. There appeared to be a technical problem with my first attempt.
You want me to say “value them”? Is that important to you?
How is this relevant or responsive to anything I’ve said? The answer is no. According to you, I “co-own” Mayflower, since this gives me “some rights to something”.
Of course you don’t. Let me help you: An IPO, say, is the first release to the market for new securities. The stock market (NASDAQ, NYSE?) is the mechanism for trading stocks previously acquired. What is the relevance of observing that is may be possible to buy shares some other way?
Since I am not making such a claim, why do you bother responding to it with me?
The implication was that you either needed to get on drugs, or off them. I’m not sure which. It might be called a humorous retort. Now what about it, when did you figure out I agreed with you?
Yes, that is why they exist. Don’t look now, but that’s a point of agreement. Should I do this: STEPHAN, I AGREE WITH YOU!!! ??
Me. I just said. Nevermind…even I can’t respond to the childishness that follows.
I’ll take that as a yes. See how much more fun it is to acknowledge the obvious and move on?
Now I have to ask, what does this mean? I get the concept. You are sweeping up a number of existing distinctions into a concept of “co-ownership” which you then define so broadly that it can mean anything you choose; hardly a rigorous operational term, which was my objection. The concept is neither rigorous nor operational, unlike say tenant/landlord, or bailor/bailee. Apology accepted.
Let me see if I can make some sense out of this. If people can be co-owners, then we have to understand what “owner” means, so they can share it, right? And we have to understand what you mean by “as to the rest of the world” since I cannot presume laws, state, police or “might-makes-right”. So I’m not sure how a contract between two people should be interpreted by the rest of the world, since I can’t possibly know what your world looks like or how it behaves.
If I use Crusoe and Friday, they can agree on a transfer of rights to things they each own without worrying about how the rest of the world sees them.
Let’s say Crusoe gives his watch (it’s a modern island) to Friday to repair. Before he gives it up, they sit down and draw up a contract. Friday has passed the bar 4 times the first try, so he gets the job.
Crusoe says he’s giving his watch to Friday only so he can fix it, but that he has no other rights to the watch. Friday agrees, fixes the watch, but refused to give it up. Crusoe pulls out the contract and says, “See? Clause 3: Right of possession and retained rights of ownership.” Friday gives it up without a fight and they each eat a coconut in celebration.
With all the sand and ocean mist, the watch keeps breaking down, and Crusoe and Friday do a lot of business in watch repair. One day Crusoe says, “Hey let’s not write up another contract. Let’s just agree to handle this like we did before”. They shake hands and all that time spent on writing a contract is avoided.
One day Thursday shows up, who can fix laptops. Crusoe has a broken laptop, and he asks Friday to explain how the watch deal worked. Much like Eskimos have many words for snow, Friday figures that this arrangement they have is a form of “co-ownership”, but to be quick about referring to all of the assumptions they each made and negotiated, Friday decides to call it a “bailment”.
From then on, whenever someone wanted to give some property to someone to fix, they just said the word “bailment” and shook hands. Everyone had more time to eat coconuts.
See? It’s not hard, and making distinctions can be so darn useful. And when we are discussing things like property rights, we can refer to these common terms to explain what we mean. That way, we don’t have to carry a dictionary with us everywhere to define terms that we already understand.
Agreement R us.
The hits just keep on comin’.
Whew! Drugs kicked in just in time.
That makes for a double deceptions doesn’t it? Once for implying that you don’t know who I am. I presume that you and Jeff talk, and that you can poke around the private parts of this site. I suppose if I was really concerned about it, I would try harder to keep it secret.
Second, you recently said you don’t ban people, when you and I both knew that you banned me, and then had to take it back, and went to the trouble of removing your declaration that you had banned me from the blog.
Now you are threatening me again with your power to ban. That is what you also did to Silas Barta. That’s what tyrants do. They use their power to squash opposition. So much for liberty and freedom in World Kinsella. Where do I sign up?
My daddy use to say, “If you can’t take it, don’t dish it out.” He was from Mississippi. Like Jeff, he had a high standard of decorum that is common in those from the deep south. How did you miss out on that?
Here is the rest of the post.
Yes, that is why they exist. Don’t look now, but that’s a point of agreement. Should I do this: STEPHAN, I AGREE WITH YOU!!! ??
Me. I just said. Nevermind…even I can’t respond to the childishness that follows.
I’ll take that as a yes. See how much more fun it is to acknowledge the obvious and move on?
Now I have to ask, what does this mean? I get the concept. You are sweeping up a number of existing distinctions into a concept of “co-ownership” which you then define so broadly that it can mean anything you choose; hardly a rigorous operational term, which was my objection. The concept is neither rigorous nor operational, unlike say tenant/landlord, or bailor/bailee. Apology accepted.
Let me see if I can make some sense out of this. If people can be co-owners, then we have to understand what “owner” means, so they can share it, right? And we have to understand what you mean by “as to the rest of the world” since I cannot presume laws, state, police or “might-makes-right”. So I’m not sure how a contract between two people should be interpreted by the rest of the world, since I can’t possibly know what your world looks like or how it behaves.
If I use Crusoe and Friday, they can agree on a transfer of rights to things they each own without worrying about how the rest of the world sees them.
Let’s say Crusoe gives his watch (it’s a modern island) to Friday to repair. Before he gives it up, they sit down and draw up a contract. Friday has passed the bar 4 times the first try, so he gets the job.
Crusoe says he’s giving his watch to Friday only so he can fix it, but that he has no other rights to the watch. Friday agrees, fixes the watch, but refused to give it up. Crusoe pulls out the contract and says, “See? Clause 3: Right of possession and retained rights of ownership.” Friday gives it up without a fight and they each eat a coconut in celebration.
With all the sand and ocean mist, the watch keeps breaking down, and Crusoe and Friday do a lot of business in watch repair. One day Crusoe says, “Hey let’s not write up another contract. Let’s just agree to handle this like we did before”. They shake hands and all that time spent on writing a contract is avoided.
One day Thursday shows up, who can fix laptops. Crusoe has a broken laptop, and he asks Friday to explain how the watch deal worked. Much like Eskimos have many words for snow, Friday figures that this arrangement they have is a form of “co-ownership”, but to be quick about referring to all of the assumptions they each made and negotiated, Friday decides to call it a “bailment”.
From then on, whenever someone wanted to give some property to someone to fix, they just said the word “bailment” and shook hands. Everyone had more time to eat coconuts.
See? It’s not hard, and making distinctions can be so darn useful. And when we are discussing things like property rights, we can refer to these common terms to explain what we mean. That way, we don’t have to carry a dictionary with us everywhere to define terms that we already understand.
Agreement R us.
The hits just keep on comin’.
Whew! Drugs kicked in just in time.
That makes for a double deceptions doesn’t it? Once for implying that you don’t know who I am. I presume that you and Jeff talk, and that you can poke around the private parts of this site. I suppose if I was really concerned about it, I would try harder to keep it secret.
Second, you recently said you don’t ban people, when you and I both knew that you banned me, and then had to take it back, and went to the trouble of removing your declaration that you had banned me from the blog.
Now you are threatening me again with your power to ban. That is what you also did to Silas Barta. That’s what tyrants do. They use their power to squash opposition. So much for liberty and freedom in World Kinsella. Where do I sign up?
My daddy use to say, “If you can’t take it, don’t dish it out.” He was from Mississippi. Like Jeff, he had a high standard of decorum that is common in those from the deep south. How did you miss out on that?
Here is the rest of it.
Yes, that is why they exist. Don’t look now, but that’s a point of agreement. Should I do this: STEPHAN, I AGREE WITH YOU!!! ??
Me. I just said. Nevermind…even I can’t respond to the childishness that follows.
I’ll take that as a yes. See how much more fun it is to acknowledge the obvious and move on?
Now I have to ask, what does this mean? I get the concept. You are sweeping up a number of existing distinctions into a concept of “co-ownership” which you then define so broadly that it can mean anything you choose; hardly a rigorous operational term, which was my objection. The concept is neither rigorous nor operational, unlike say tenant/landlord, or bailor/bailee. Apology accepted.
Let me see if I can make some sense out of this. If people can be co-owners, then we have to understand what “owner” means, so they can share it, right? And we have to understand what you mean by “as to the rest of the world” since I cannot presume laws, state, police or “might-makes-right”. So I’m not sure how a contract between two people should be interpreted by the rest of the world, since I can’t possibly know what your world looks like or how it behaves.
If I use Crusoe and Friday, they can agree on a transfer of rights to things they each own without worrying about how the rest of the world sees them.
Let’s say Crusoe gives his watch (it’s a modern island) to Friday to repair. Before he gives it up, they sit down and draw up a contract. Friday has passed the bar 4 times the first try, so he gets the job.
Crusoe says he’s giving his watch to Friday only so he can fix it, but that he has no other rights to the watch. Friday agrees, fixes the watch, but refused to give it up. Crusoe pulls out the contract and says, “See? Clause 3: Right of possession and retained rights of ownership.” Friday gives it up without a fight and they each eat a coconut in celebration.
With all the sand and ocean mist, the watch keeps breaking down, and Crusoe and Friday do a lot of business in watch repair. One day Crusoe says, “Hey let’s not write up another contract. Let’s just agree to handle this like we did before”. They shake hands and all that time spent on writing a contract is avoided.
One day Thursday shows up, who can fix laptops. Crusoe has a broken laptop, and he asks Friday to explain how the watch deal worked. Much like Eskimos have many words for snow, Friday figures that this arrangement they have is a form of “co-ownership”, but to be quick about referring to all of the assumptions they each made and negotiated, Friday decides to call it a “bailment”.
From then on, whenever someone wanted to give some property to someone to fix, they just said the word “bailment” and shook hands. Everyone had more time to eat coconuts.
See? It’s not hard, and making distinctions can be so darn useful. And when we are discussing things like property rights, we can refer to these common terms to explain what we mean. That way, we don’t have to carry a dictionary with us everywhere to define terms that we already understand.
Agreement R us.
The hits just keep on comin’.
Whew! Drugs kicked in just in time.
That makes for a double deceptions doesn’t it? Once for implying that you don’t know who I am. I presume that you and Jeff talk, and that you can poke around the private parts of this site. I suppose if I was really concerned about it, I would try harder to keep it secret.
Second, you recently said you don’t ban people, when you and I both knew that you banned me, and then had to take it back, and went to the trouble of removing your declaration that you had banned me from the blog.
Now you are threatening me again with your power to ban. That is what you also did to Silas Barta. That’s what tyrants do. They use their power to squash opposition. So much for liberty and freedom in World Kinsella. Where do I sign up?
My daddy use to say, “If you can’t take it, don’t dish it out.” He was from Mississippi. Like Jeff, he had a high standard of decorum that is common in those from the deep south. How did you miss out on that?
Wildberry: your post is not worth replying to. I found 5 or more in the spam catcher and unlocked them. I guess they are all there now.
I never said I don’t ban anyone. I have on occasion banned trolls and others, but not peple who are just pests or taht I disagree with. However, I did not ban Silas, in fact the first time he was banned I prevailed on the power that be to reinstate him. The second time he was banned, I could not help him.
I am not threatening to ban you. But anyone who is dishonest, personally attacking or incivil risks that. I would however support a site policy change to permit only registered commenters posting under a real name, to fight off spam and trolls.
Stephan Kinsella,
You said
“I would however support a site policy change to permit only registered commenters posting under a real name, to fight off spam and trolls.”
I think this is going a bit too far. I’ve got nothing against things like ReCAPTCHA stopping adverts and such, and allowing an option for people to register to avoid having to CAPTCHA every time would then be very welcome, but I find that sites that require you to register to participate present themselves very much as a closed shop. This discourages new entrants to the conversations (as well as a few of the less-dedicated trolls, yes). Besides, how many websites do you really want to have accounts for? Will you give each one its own, distinct, memorable password? Let’s not force readers down that road unnecessarily.
Beyond that, why the insistence on real names? How would that even be enforced, by eliminating users whose names don’t look “authentic”? I know that I use multiple different names on different sites, for a variety of reasons. This site happens to be one of the few on which I use my real name, but so what? Nobody on this site knows me in real life anyway.
Besides, pseudonyms can be fun, and they’re not hurting anyone.
@Colin Phillips October 21, 2011 at 7:10 am
Your points are particularly good in this case, since Kinsella knows who I am and knows something about me.
Perhaps more practical would be to enforce some minimum standard of conduct, those in a leadership position or officially associated with the management of this site could serve as examples of the desired conduct, and call out those who insist on conduct falling below that standard, regardless of their views otherwise.
That would no doubt raise the standards of discussion for everyone, and get rid of much of the white noise.
@Stephan Kinsella October 21, 2011 at 6:42 am
Thank you. It was not necessary to post them all, as they are obviously duplicates.
You have to admit the timing was odd, given that we were engaged in an exchange when the spam filter suddenly reached out and grabbed me, but didn’t grab other post made to the same thread with the same id. Please excuse me for presuming moderation, but I see you are confirming that you can and do moderate and ban at your discretion.
I don’t know the facts concerning Silas, so I will not comment further. You and I both know the facts in my case. What I said was truthful.
That’s good to know. Sorry if I misunderstood this:
That sounded like a threat to me; but all’s well that ends well.
I might point out a couple of things. First, your first response to me was to a reply I made to someone else, so obviously it was you who chose to engage.
Second, you brought the vitriol. The thread makes that pretty clear. I responded in kind, (but with better jokes). There is a saying; you don’t have to be disagreeable to disagree. You seem to be disagreeable even when we agree. I think it is unnecessary and at the best a distraction from what is really interesting about his site and your articles. On re-reading some of the things I wrote in response, I have to admit I regret some comments. Please accept my apology.
For the record, I rarely have a chance to voice my points of agreement with you, and oddly there are many. Our points of disagreement are huge, and I do take issue when I feel that you are misrepresenting the facts, and it turns out that objecting to those situations is a full time job; I already have a couple of jobs. Could you help me out a bit?
I look forward to future exchanges.
Kinsella: “Being a shareholder HAS NOTHING OT DO WITH BEING AN INVESTOR. Helllooooo. shares are tradeable. You guys are such amateurs. Jesus. Why do you have a public opinion about things over your station? Jesus.”
Mr. Kinsella, during my ten years as a professional OTC securities trader, and five years as a member of the New York Stock Exchange, we referred to wannabe-traders and side-line lawyers like you as pluckable fowl, and welcomed your kind as the centerpiece of our trading, poker or backgammon feasts. So, stick to your intellectual property law and other areas where you are licensed-by-the-State and your statist expertise may win you some lucre. FYI, even if you’re were an algorithmic robo-trader, which you obviously are not, during the hours, minutes or nanoseconds that you are long shares, you is de owner, like it or not. Call it trading or investing, call yourself a shareholder, pretend you are a computer, or merely an intermediary, try as you might to avoid reality, the shares and all that goes with their ownership are yours during that interim. (The only exception being when you buy securities to cover prior short sales, in which case you never own the shares. And, unless it was a naked short, a trader’s liability, if any, during the interim of the short which might attach to the shares borrowed to make good delivery would make for an esoteric discussion, but obviously this is not an issue you are competent to address.)
But aside from a little fun and games dust up and go at each other in the rhetorical lists, my point is that both you and Wildberry are defending shareholders on the basis of corporate and securities law, both of which, like corporations themselves, are products of State or statist legislation. And IM(not)HO, your (plural) arguments based on legal theories that shareholders ought not be liable for this or that only serve to make or substantiate my contention that corporations are a State-created means of dispersing personal responsibility at the cost of individual liberty.
I’m not a wannabe trader.
what does this even mean? Methinks you don’t have a clue about what you are talking about.
This is no argument whatsoever. It’s just posing. Behind a nym, at that.
this is incorrect, as for me. I don’t defend anyone “on the basis of” any state law. What are you talking about?
So, what exactly are your arguments in opposition to the explanations of Rothbard, Pilon, and Hessen? Other than to hide behind a silly nym and say “I was a stockbroker for 5 years and we scoffed at high-falutin’ lawyers like you”? Wow some argument, “Ned.”
Wildberry, I’m sorry to have put you in a boat with Mr. Kinsella, which I know must be unconfortable–because, among other good reasons, his boat is about to sink even further when I respond to his silly, pit-bull rejoinder, in which he couldn’t resist attacking you as well. However to address your concerns directly:
“Shareholders are not employees, agents, or owners. They are shareholders, whose liabilities and powers are statutorily defined at the outset. Now you come along and want to change the nature of that in retrospect, not what the shareholder bargained for…Shareholders are not “employers” precisely because they cannot exercise any control over the scope and course of the corporation, other than to vote and/or ratify materials acts of the BOD. They cannot ratify something that is illegal in the first place. The BOD controls the Executives adn the Executives control the employees. Shareholders buy in or sell off. That’s it.”
Wild, you make my case. (As an aside, keep in mind, that the agent-principle relationship undoubtedly predates the state and human laws as does the ownership of private property. I believe both of these assertion can be deduced from the action axiom as Menger deduced that money predates the State, and, although I am neither an “economic anthropologist” nor an ethnologist, I doubt if there is any conflicting empirical evidence to the contrary.) The point is that before the State or in the absence of the State and its step child, the corporation, there was no such thing as a “stockholder.” There was the owner, responsible for his or her property. The corporation with its shareholder-owner, like the State itself, is a means of dispersing that all-important self-responsibility upon which liberty depends. Now if you’ll excuse me, I have to fit Mr. Kinsella with a new rectal orifice.
Ned,
It is possible I don’t understand your argument. It is certainly not intended to be an argument about liablility.
Perhaps what you mean is that the mere existence of the corporation as a business organization is offensive to you, because there is a limitation on liability resulting from the act of purchasing shares of a firm which undermines the general principle that we must be held responsible for the consequences of our acts. Is that it?
I disagree. If you value freedom, you acknowedge freedom of association. People are free, and would be free without the state as you point out, to form associations that are goverened by mutually agreed rules. There is no reason why a corporate form would not arise if it didn’t already exist. It is a form of business association that encourages investment by third parties that have no ability to control day-to-day events and decisions, and therefore enjoy limitations of liability for their acts.
Could we exist without corporations? Sure. We would be a system of regional cottage industries, becasue it woudl be difficult to accumulate sufficient capital without the abilty to attract investments in micro-increments from individual investors. Only titans would be capable of operating on that scale. I think perhaps you are not thinking about the big picture, and are only fixing your attention on limited liability of shareholders, and the principle of personal responsibility. I think even there you are somewhat confused. Shareholders still have SOME liability; insider trading, for example. That is liability which arises from THEIR acts, not the acts of others.
It is the causal connection between the acts of an individual, and the liabilities of that individual which you seem to be missing. It is the legal doctrine of proximate cause which is required to equate the acts of an individual with the damage those acts cause.
Corporations do not excuse liability that is proximately caused by the actor who is responsible for the act. You are trying to stretch that concept to include buying shares as consent to liability for the acts of others. This is not reasonable for very good reasons. If you understood those reasons better, I think you might look at this differently.
As for Kinsella, he would argue with a fence post. It took three posts for him to realize that I was agreeing with his conclusion from the outset, though not for the precise reasons he gave.
He is trying to make up a new form of equivocation, that “ownership” means “some from of control”, which lumps all forms of ownership into one meaningless concept where you can’t tell a tenant from a BOD from a shareholder. It is simiilar to his use of “idea” or “informtation” as being equivalent to the concept of “IP”.
When you destroy the abilty to distinguish one thing from another, you can come to just about any conclusion you want.
His conclusion is “I hate the state”, and he can convolute the meaning of just about anything to arrive at the justification for that conclusion. I would hate to see you fall into that pattern.
WB
Wild: “Perhaps what you mean is that the mere existence of the corporation as a business organization is offensive to you, because there is a limitation on liability resulting from the act of purchasing shares of a firm which undermines the general principle that we must be held responsible for the consequences of our acts. Is that it?”
No, not at all. What I means is that corporations are created by laws, which in addition to birthing ‘em also bestows limited liability upon ‘em. Whether or not we could have corporations or near imitations of them, and whether liability could be limited by contract as opposed to laws, have nothing to do with my argument. Corporations and their limited liability are unequivocally and entirely dependent upon the State and its laws. That is my objection. If a near equivalent to limited-liability corporations could develop absent the State, fine, let’s get rid of the State and see.
“I disagree. If you value freedom, you acknowedge freedom of association. People are free, and would be free without the state as you point out, to form associations that are goverened by mutually agreed rules. There is no reason why a corporate form would not arise if it didn’t already exist. It is a form of business association that encourages investment by third parties that have no ability to control day-to-day events and decisions, and therefore enjoy limitations of liability for their acts.”
Those who were not part of the association would not be governed by the association’s mutually agreed rules, nor could the association’s rules limit it liability those not part of the association. But let us get rid of the State and its laws and see what develops. I know the advantages that the corporate form offers and I suspect that many of those advantages could and would arise in the absence of the State, including perhaps the advantage of creating large pools of capital, which I suspect was paramount to the development of corporations and limited liability. Whether or not limited liability for small owners with no say in the business which today’s stockholders enjoy, thanks be to State laws, could be instituted absent the State is beyond anyone’s ability to say.
“It is the causal connection between the acts of an individual, and the liabilities of that individual which you seem to be missing. It is the legal doctrine of proximate cause which is required to equate the acts of an individual with the damage those acts cause.”
The act is ownership. No causal connection is missing. Legal doctrine develops out of the State. Absent the State there is no such thing as legal doctrine.
“Corporations do not excuse liability that is proximately caused by the actor who is responsible for the act. You are trying to stretch that concept to include buying shares as consent to liability for the acts of others. This is not reasonable for very good reasons. If you understood those reasons better, I think you might look at this differently.”
The proximate cause is the ownership by the owning actor who is responsible for all that he owns, unless the State makes laws exculpating the shareholders of corporations. I think what you and Kinsella are both missing is that owning property is an action that brings with it responsibility. The law may define ownership as control, but that, like limited liability, is a legal concept developed under the sway of the State and its laws. Ownership, IMHO, is possession. It is part and parcel of your being, for which you are also responsible. The law cannot change that.
“As for Kinsella, he would argue with a fence post. It took three posts for him to realize that I was agreeing with his conclusion from the outset, though not for the precise reasons he gave.”
Even a blind pig finds a strawberry now and then.
@Ned Netterville October 24, 2011 at 3:24 pm
I see. We have corporations because we have the state. This is similar (identical) to Kinsella’s argument that “we have IP because we have the state”.
On this point I think you are both wrong. This argument can be made against any social institution that is represented by agents of the state. You could say that “we have murder laws because of the state”. Getting rid of the state does not get rid of murder or laws (rules?) against it.
If a given institution would emerge in a free society because that society finds it useful, it is not reasonable to claim that it must be abolished because it is dependent upon the state, and since you hate the state, you hate the institution.
These are two separate issues. Raising capital for an enterprise through a system whereby investors are acknowledged to have liabilities stemming from their investment limited to the amount of their investment, (in the absence of some other illegal act, in which case the limitation of liability does not apply), is the purpose of a corporation. The form of the institution which enacts statutes which encode this rule, or is authorized to enforce this rule, is completely irrelevant. Imagine any other means of making and enforcing rules, and you are still left with the central question; is there some reason why such an association is unethical, immoral, a contradiction of rights, or economically inefficient?
I think you are mistaken. You, like many here, think that all social transactions can and should be governed by contract, and that it is “unlibertarian” (violates NAP) to attempt to bind third parties to a contract between parties to a contract. You neglect the very purpose of rights as the basis rules, and preexisting rules of law as a device designed in part, to make such negotiation for every conceivable transaction unnecessary. To assume otherwise is to also assume a huge transaction cost for every act of cooperation. This is the essential lesson of Coase.
Would you think reasonable if I suggested you play on the freeway and see what happens? A few thousand years of experience, evolution and accumulated knowledge means we don’t have to let it all crash to the ground just to see if we can re-create ourselves. That approach seems to me to carry unacceptable risks, especially when you are contemplating a scale of civilized proportions. Better to form a commune and see what happens.
My point precisely.
I don’t understand this. We have close corporations today. We have limited liability corporations, LL partnerships, etc. This is not a novel concept. Why would you say it is beyond our ability to say? I say obviously they would exist. They have advantages which would not disappear in the absence of the state, whatever that actually means.
This is complete nonsense. Sorry. Rothbard said something about this when discussing his model of strict liability legal philosophy base on homesteading and NAP; that a uniform legal code would have to be worked out by libertarian scholars. You think Rothbard was wrong about this?
You don’t understand the concept of proximate cause. It is the method of connecting liability for an act with the actor. “Buying something” is the act. What is the liability for buying something for the buyer?
Yes, I agree. What is the property in question? It is a share. Buying a share brings what responsibility? One is to take the loss like a man. The other is to take the profits like a drunken sailor, etc. Owning a share implies the responsibility for owning a share. If you are going to project beyond that simple fact, you have to make an argument. You cannot succeed beyond simply claiming your conclusion that you hate the state, therefore….etc.
Who wants to change it? You are just confused about the difference between “exclusive use and possession” and what is being owned. When I buy an orange, I don’t own the tree, and I don’t own the world. I own an orange.
Amen. But I’m not sure who the pig is you are referring to…
WB
“I see. We have corporations because we have the state. This is similar (identical) to Kinsella’s argument that “we have IP because we have the state”.”
Wrong.
Hessen has explained how you could have companies with similar features to today’s corporations, created solely by contract. Just as you would still exist as a person if the state did not grant you citizenship, so Walmart or McDonald’s could exist as a firm owned by individual shareholders, without the state granting it entity status or limited liability.
But you cannot create patent and copyright by contract, as I have explained repeatedly. That is why it is not similar. You are being disingenuous once again.
@Stephan Kinsella October 25, 2011 at 12:10 pm
I don’t disagree, but the transaction costs would be very high, since a contract would have to be negotiated, executed and enforced for each transaction, buy and sell.
It would be possible to create something like a corporation by contract, so that limited liability could be enforced (by indemnity, for example) between the parties, and that limitation would be good against third parties, because the corporation would indemnify shareholders against such claims as a condition of investment. Also, I suppose such an agreement to indemnify shareholders could be extended to any holder of good title to a share, through assignment theory.
So, (pay attention now) I AGREE.
Would you agree that you cannot create property rights by contract except as between the parties to the contract? What I mean is that unlike contract rights, which can only be enforced by parties in privity (and perhaps assignees/delagees and 3rd party bene’s), property rights are enforceable against anyone, regardless of privity. This cannot be recreated by contract.
I’m not so sure I agree with this.
First, as we have discussed before (Kid, are you there?), IP can be approximately re-created by something like a negative servitude, or more likely, a limited license that essentially recreates the terms of use of say, the Copyright Act.
The limitation of this approach is that it is enforceable only between parties. To make it work like property-based IP, the licensee of the subject matter (intellectual goods) would also need to indemnify the licensor (author) for damages caused by breach; say to pay all expenses and attorney fees for enforcement of his rights, and damages caused by the breach. Because it is an ongoing breach, and assuming the recipient of the unauthorized disclosure was an innocent purchaser (BFP), the damages could be huge and would fall squarely on the breaching party.
As you pointed out, no one in their right mind would accept this level of risk and personal liability, but that is not a limitation of contracts. It is a limitation of contracts to bind third parties, like property rights do, and the need to concentrate recovery entirely against the breaching party for all downstream consequential damages.
That is why IP is a form of property rights, because it cannot efficiently operate as a liability for breach, but can operate as an infringement of a property right, eliminating the need for privity and lowering transaction costs significantly.
This is also why trespassing is not handled as contract damages, but is predicated on the prior existence of a property liability in tort.
So the correct answer is that IP can be approximately recreated by contract, but it imposes very high transaction costs, which defeats its primary objective of facilitating access to literary works. Patent is a slightly different argument, but you get the point. This problem of transaction costs cannot be solved unless the “breach” is handled as an infringement of existing property rights.
Given that property is a human device, it is not problematic to secure a property right by legislative act, (or any other method of establishing rules of law and right of enforcement) and to presume (which is true over time) a context of common knowledge of this right, within a common knowledge of private property in general. Transaction costs of contracts drops away. This is one economic argument that favors IP.
It is not necessary (or accurate) to claim dishonesty as the only reason reasonable people can disagree. You presume that property is not a human device, but a “natural right” that is demonstrated by the act of homesteading, (itself a human device).
I reject this homesteading premise as false, impractical, and lacking sufficient rigor and operational utility as a means for handling conflicts of competing claims to a resource. I side with Mises on this point. I do not think he was disingenuous, and doubt you do either.
Wildberry:
Wrong. Wrong. For contractual liability, when you buy from, or loan money to, a “corporation” so-advertised, you are aware that you are agreeing to terms that limit your ability to sue contractually the shareholders–you agree to pursue only a defined set of assets owned by “the corporation.” You don’t get it.
The tort issue has nothing to do with negotiation: it’s simply that shareholders are passive and thus not liable in the first place for torts of other people.
@ Stephan Kinsella October 25, 2011 at 2:54 pm
Not sure why we have such trouble communicating. Under what assumptions is what you are saying above true? 1) “I am aware” because of current positive law; or 2)”I would be aware” under your (or Hessen’s) contract theory of corporations?
What you said is true for 1), and what I am saying is true for 2).
There really is no need to restate the obvious. I already told you that I understand and agree wtih this. It is standard tort theory; a person is not responsible for the torts of others, absent a special relationship and control.
That is not my point. I am saying that the problem with contracts/IP is that contracts cannot operate like property rights: privity v. property. That is the reason IP cannot be created by contracts, not becasue contract theory cannot cover the requirements of the transaction. We have argued about this before.
It is pretty obvious you didn’t read past the first few lines of my post. Whatever.
If I own a single $23 share of GM stock, the victim of a defective GM car should be able to seize my house? Nonsense.
D Storey makes an excellent point:
“Perhaps the regional manager directed freighters to overload Pepsi fleet vehicles by an amount just above the optimal weight for safe braking distance. This seems actionable.”
In this case, the principal had direct control over the circumstances that resulted in injury. If the pit bull analogy has any weight at all, it is here. The pit bull owner has complete and direct responsibility for the dog at all times. If the dog injures someone, the owner is rightly held liable because of his negligence. The shareholder, however, has no direct involvement in the actions of employees, and therefore have no liability under this standard.
Aside from direct involvement, as I recall, the principal is only held liable when the agent injures someone while performing duties within his scope of employment, or if the agent was only able to injure another party because of the means supplied by the principal. I.E. a truck driver crashes a company vehicle while making a delivery, or a hotel employee robs a guest. In the first case, the driver was performing his duty (and using means supplied by the company), and in the second, the hotel provided the employee with access to the guest’s property. In both cases the principal is only liable because he supplied means that were misused or abused. This is where shareholders bear some liability, and it is entirely appropriate that this liability is limited to their contribution/stake in the firm. If a Pepsi driver gets drunk and crashes, the principal’s relationship to the injury is strictly commercial. The means that were supplied that occasioned the injury were strictly commercial. So, it’s entirely appropriate that, when the principal had no direct involvement in the injury, that his liability be limited to his contribution to the injury. Strictly speaking, you might say the liability is limited to the truck itself, but since the entire commercial operation is interdependent, it’s appropriate to expand liability to the entire commercial operation. It is not appropriate, however, to expand liability to the personal property of the principal when that personal property was not involved in or tied to any property that was involved in the jury.
To what extent should shareholders be liable when they have no direct involvement in the tort? The extent that they supplied means to facilitate the injury, which is their stake in the company.
Well you are just buying into the state’s classificaiotns. Who says he “is” an “owner”? Ownership is the right to control. What resource does he have the right to control?
well if you call him an owner, as the state says, I guess you are done! How convenient for you. And why, again, does the right to control a resource imply that you are responsible for harms caused with that resource being used as a causal means? I realize you just want to rely on this without justifying it –but bear with me–how do you know this?
Is your chauffer or delivery man your property? do you own him?
Again, you are speaking simplistically. Did you read my post? I explained the problems with assuming ownership implies liability. And in any case, the owner of a corporation owns property, not people. Helloooo
So…. if a fedex truck driver runs you over, he is not really there?
Well that settles it, then! Let’s hang up libertarian theorizign–the “world” has “established” the “right way” to proceed!
Ah, well when you put it that way it’s all settled! Wow.
So… owning a piece of paper that represents a legal title to a sliver of a legal claim to the assets of a firm upon dissolution is … “dangerous”, “like” a pit bull? Wow.
It’s not a strawman at all. Since you ignorami cannot even articulate a coherent explanation of how corporations work much less what is your theory of rights or liability or causation, I am tyring to help you out by charitably articulating your implicit views for you.
This sounds like an amateur observation by a clueless grad student in a dorm room session bullshitting about stuff they have no clue about. With David Letterman playing in the background, and the whiff of Mary Jane from the suite-mate next door. Good for you! But when you buy a share of Exxon stock from a previous owner, using the stock market to facilitate the exchange, how do you “buy it”?–and what is “it?”; as a “going concern”–and pray tell, what is the relevance of GAAP terminology like “going concern” to libertarian theory? methinks you are utterly clueless.
Ok, that was funny, but now you see the problem with “co-ownership” that appeared from the clear blue sky a while ago, namely where you say
This statement is not sufficiently general. The owner of an easement does not have the right to “control” the “resource” ie. the land in which he has a property interest eg. to cross to get to the beach.
Kid: “now you see the problem with “co-ownership” that appeared from the clear blue sky a while ago, namely where you say
” Who says he “is” an “owner”? Ownership is the right to control. What resource does he have the right to control?”"
No, I see no problem with it at all. Ownership vests rights of control in a given resource to a given individual. Then this owner can transfer some or all of these rights contractaully to someone else, whether the rights are partial or limited or whatever. In some such cases the owner A becomes a co-owner with B. This is not hard to grok.
“The owner of an easement does not have the right to “control” the “resource” ie. the land in which he has a property interest eg. to cross to get to the beach.”
Yes, he has a defined right of control, related to other rights of control of other co-owners.
NEXT!
Yes, (oops! There I go again) just like all rights “relate” to other rights of control. Just like IP, and your right to use your bat and your paper and ink. Very good.
Stephan, see my reply to you above, written before this you’re more comprehensive response to my initial post, but after my reply to Wildberry, which for some cyber reasons appears following. And in my reply to Wild I wrote and reiterate: “The point is that before the State or in the absence of the State and its step child, the corporation, there was no such thing as a “stockholder.” There was the owner, responsible for his or her property. The corporation with its shareholder-owner, like the State itself, is a means of dispersing that all-important self-responsibility upon which liberty depends. Now if you’ll excuse me, I have to fit Mr. Kinsella with a new rectal orifice.” So, now let me don my surgical gloves:
First let me notice and address your use of the disparaging term “left libertarian” with a quotes from two prominent libertarians in Mises Wiki page on Libertarianism: “Like many libertarians, Leonard Read rejected the concepts of ‘left’ and ‘right’ libertarianism, calling them ‘authoritarian.’ Libertarian author and politician Harry Browne wrote: ‘We should never define Libertarian positions in terms coined by liberals or conservatives – nor as some variant of their positions. We are not fiscally conservative and socially liberal. We are Libertarians, who believe in individual liberty and personal responsibility on all issues at all times. You can depend on us to treat government as the problem, not the solution.’” Stephan, why do you use such a provocative term? You must begin to see government authority as the problem.
Kinsella: “Well you are just buying into the state’s classificaiotns. Who says he “is” an “owner”? Ownership is the right to control. What resource does he have the right to control?”
No, Stephan, you are the one defending the State, its corporations, and its stockholders–its creations. I can hardly be said to be buying into the State’s classification since the concept of ownership predates the state and corporations. Who says ownership is the right to control? Ownership is the responsibility of controlling what you own because you cannot have a right without the attendant responsibility, at least not for long.
Kinsella: “Is your chauffer or delivery man your property? do you own him?”
Nah, he is the employee of the owner(s) of the business, and you are responsible to him and, in respect to what he does on your behalf, you are responsible for his actions. That is the essence of the agent/principle relationship, which long predates the State and its efforts through laws to abate that relationship and its attendant responsibility. And because of its abatement no one is responsible for the “collateral damage” or other murders committed by State agents. And, btw, what are the responsibilities, if any, of shareholders?
Kinsella: “This sounds like an amateur observation by a clueless grad student in a dorm room session bullshitting about stuff they have no clue about. With David Letterman playing in the background, and the whiff of Mary Jane from the suite-mate next door. Good for you! But when you buy a share of Exxon stock from a previous owner, using the stock market to facilitate the exchange, how do you “buy it”?–and what is “it?”; as a “going concern”–and pray tell, what is the relevance of GAAP terminology like “going concern” to libertarian theory? methinks you are utterly clueless.”
Stephan, I’ve stated my experience in the securities investment (broker/dealer) industry. Your credentials as a a state-licensed (approved/indentured/subserviant/statist) lawyer virtually disqualifies you from commenting on libertarian principles. I read your article and I even read your citation to yourself as an authority, wherein you say, “For libertarians, the purpose of a legal system is to establish and enforce rules that facilitate and support conflict-free interaction between individuals. In short, the law should prohibit aggression.”
Stephan, you purport to speak for libertarians and yet you talk of “legal systems,” “enforce rules,” and what “the law should prohibit.” This statement of yours (and Patrick Tinsley’s) is a clear demonstration that you accept what Larken Rose calls THE MOST DANGEROUS SUPERSTITION, in his book with that title. He points out–and logically proves–that belief in authority is irrational and self-contradictory. Perhaps because your livelihood as a lawyer makes you utterly depends on the State and its laws, you have yet to shake that superstition. But not to worry. When I was a young and inexperienced libertarian like you back in the 1960s, I too had yet to realize how insidious and thorough the State’s and society’s subtle indoctrination of me into the cult of “legitimate authority” had been. The way I see you going, I’m confident you’ll get over it.
I would also like to comment on your lawyerly manner of arguing: Lately I’ve been reading Keynes GENERAL THEORY (re-reading, actually). Based on a comparison of his supercilious rhetorical style with yours, youngster, I believe if he was still around, K could secure you membership in the Bloomsbury Circle. However, don’t worry, when I was your age there were lots of things I hadn’t figured out yet. Stick with libertarianism; you’ll eventually get it.
“Ned”:
“Your” not “You’re”.
They call themselves this. I agree that we are neither left nor right. I think soi-disant “left-libertarians” are confused.
No I’m not, as I think the state should disband, and I think it should stop granting incorporation status. I am simply observing that in a free market there would be companies organized similarly to today’s corporations.
The dictionary? legal scholars?
From What Libertarianism Is: http://mises.org/daily/3660
This is confused and question-begging. What you are trying to argue is that because you own something you ought to be legally responsible for it. Whatever that vague assertion means. So if I steal your knife and kill someone, you are the murderer? After all, you still own the knife.
I’m not aware of any “responsibilities” libertarianism attributes to someone who owns a share.
Kinsella:
But owning a share entitles an owner to certain corporate assets, i.e., dividends, etc.
Would not these claims or disbursements carry certain “responsibilities” such as in my hypothetical fraudulent distillery?
Put another way; would the IRS try to recoup a corporation’s tax evasion by going after dividends that were payed out to shareholders from the portion of corporate profit the state claims?
Re: Ned Netterville,
Let’s NOT, because he or she would not.
So, you equivocate. The shareholders are not the owners, but you want them to be to dovetail the concept into your argument.
I own a little over a share of Wal-Mart stock (big investor that I am!) and yet I have no control over Wal-Mart property, employees, or policy (or I should say, no more control than any other customer can exert). Why should I be out more than the value of my share if Wal-Mart executives or employees do something wrong or objectionable?
Likewise, why should you be held liable if you hire a trader to make investments on your behalf, and she buys a single share of Wal-Mart stock without your knowledge.
Likewise, why should you be held liable if you work for a company that offers a pension that includes stock in Wal-Mart, but you have no direct involvement in the investment decisions being made on your behalf, other than your continued willingness to work for your present employer.
The heretofore analysis has been narrowly confined to tort exposure.
Is there any consideration of shareholder gains that directly result from fraudulent corporate activity? E.g., Distillery XXX has been selling watered down booze and paying handsome dividends as a result. Are the shareholders’ earnings available to pay claimants in a class action suit brought by defrauded customers? Is the decline in price of Distillery XXX shares as a result of the de-capitalization of the corporation due to settlement payments just recompense for shareholders’ fraudulent gains?
This seems to be the area where “liability” is most murky. Is the concept of “fraudulent conveyance” applicable, or are shareholders shielded from such exposure?
Crickets. . . . ?!
@jasontgordon October 19, 2011 at 1:06 pm
Would you hold the investors that Bernie Madoff swindled liable for his fraud?
Fraud woud apply to them only if they knew Bernie was a crook and relied on that knowledge in making their decision to invest.
Those that lost money don’t have to pay a penalty to others who also lost money. But those that did make money might have to disgorge their profits which may be used to pay restitution to those who lost, but not because they are liable in the way you are thinking of it, but becasue they were unjustly enriched by the fraudulent conduct of Madoff.
Liability is murky where the facts are murky. But for fraud to apply, someone has to knowingly deceive someone for the purpose of getting some of their stuff. Shareholders are not fraudulent by accepting dividends that as far as they know, are legitimate.
I don’t have a clue how or what you presume to be my thinking regarding investors, am I not clearly referring to shareholders?
So according to you Wildberry, dividends based upon fraudulent profits are justifiably owned so long as the shareholder accepted them in good faith? Give me a break. That logic would be convenient for a buyer of stolen goods, would it not?
Are shareholders in an actionable position to obtain damages related to their being payed dividends obtained fraudulently?
It’s pointless with you, but here is what you don’t get. Fraudulent profits are not justifiably owned; that is unfair enrichment. The profits may have to be returned. If someone robs a bank to pay off a legitimate debut, and the creditor knows nothing about the bank robbery, he has to return the money, but is not liable for the bank robbery. See?
The the person who bought them in good faith is not liable for the fraud of antoher person. It is not his fraud.
Since you [Wildberry] insist on avoiding shareholder-specific examples in your “explanations” I ask that others come to your aid.
That said, regarding the scenario of the the bank robber’s creditor, does the creditor have a legitimate case against the robber to recover damages in addition to the original debt (assuming it is legitimate) arising from expenses incurred during the returning of funds? (See the analogous question regarding dividends, etc. from my prior post.)
You mean you’ll get it if I use a shareholder example. Let’s see…
I buy shares of Ford because I think the Pinto is going to kick ass, especially with those Firestone tires that come stock.
Turns out there is a design “feature” that turns people into crispy critters when rear-ended.
According to you, I should be liable to the families of the incenerated. According to me, I should not, becasue I did not participate, much less exercise control over the design of the Pinto. I didn’t know about this feature, and if I had, I might have not invested. This does not mean that when I learned of it, while still owning stock, that I should then be liable. I still had no hand in the negligent act, or the coverup that followed. See?
The term is “unjust enrichment,” you illiterate statist tool. Pathetic how much you rely on existing postive law doctrine to justify your faux-normative “arguments”.
The legal term is “unjust enrichment”, a term from existing positive law doctrine. The concept is that it is unfair to be unjustly enriched.
Like correcting Ned’s use of “you’re”, it is a trivial point. You are making a trival point and ignoring the substance. Like I said, I detect a pattern.
It is not trivial. You are really dishonest. The statist concept is not compatible with libertarian theory. Which maybe doesn’t bug you as you seem to be a statist not a libertarian.
What exactly is dishonest here?
Mr. Kinsella,
It appears my last post to you has been blocked. Do you know anything about that?
I’ve said it before and I’ll say it again; I never get tired of watching laymen try to debate an attorney – and a corporate counsel to boot – on matters of corporate structures, liabilities, laws, restrictions, practices, etc.
And Steph, dude, tell us what you really think, please!
@Stephan Kinsella October 20, 2011 at 12:31 pm
This is a repost. There appeared to be a technical problem with my first attempt.
You want me to say “value them”? Is that important to you?
How is this relevant or responsive to anything I’ve said? The answer is no. According to you, I “co-own” Mayflower, since this gives me “some rights to something”.
Of course you don’t. Let me help you: An IPO, say, is the first release to the market for new securities. The stock market (NASDAQ, NYSE?) is the mechanism for trading stocks previously acquired. What is the relevance of observing that is may be possible to buy shares some other way?
Since I am not making such a claim, why do you bother responding to it with me?
The implication was that you either needed to get on drugs, or off them. I’m not sure which. It might be called a humorous retort. Now what about it, when did you figure out I agreed with you?
Yes, that is why they exist. Don’t look now, but that’s a point of agreement. Should I do this: STEPHAN, I AGREE WITH YOU!!! ??
Me. I just said. Nevermind…even I can’t respond to the childishness that follows.
I’ll take that as a yes. See how much more fun it is to acknowledge the obvious and move on?
Now I have to ask, what does this mean? I get the concept. You are sweeping up a number of existing distinctions into a concept of “co-ownership” which you then define so broadly that it can mean anything you choose; hardly a rigorous operational term, which was my objection. The concept is neither rigorous nor operational, unlike say tenant/landlord, or bailor/bailee. Apology accepted.
Let me see if I can make some sense out of this. If people can be co-owners, then we have to understand what “owner” means, so they can share it, right? And we have to understand what you mean by “as to the rest of the world” since I cannot presume laws, state, police or “might-makes-right”. So I’m not sure how a contract between two people should be interpreted by the rest of the world, since I can’t possibly know what your world looks like or how it behaves.
If I use Crusoe and Friday, they can agree on a transfer of rights to things they each own without worrying about how the rest of the world sees them.
Let’s say Crusoe gives his watch (it’s a modern island) to Friday to repair. Before he gives it up, they sit down and draw up a contract. Friday has passed the bar 4 times the first try, so he gets the job.
Crusoe says he’s giving his watch to Friday only so he can fix it, but that he has no other rights to the watch. Friday agrees, fixes the watch, but refused to give it up. Crusoe pulls out the contract and says, “See? Clause 3: Right of possession and retained rights of ownership.” Friday gives it up without a fight and they each eat a coconut in celebration.
With all the sand and ocean mist, the watch keeps breaking down, and Crusoe and Friday do a lot of business in watch repair. One day Crusoe says, “Hey let’s not write up another contract. Let’s just agree to handle this like we did before”. They shake hands and all that time spent on writing a contract is avoided.
One day Thursday shows up, who can fix laptops. Crusoe has a broken laptop, and he asks Friday to explain how the watch deal worked. Much like Eskimos have many words for snow, Friday figures that this arrangement they have is a form of “co-ownership”, but to be quick about referring to all of the assumptions they each made and negotiated, Friday decides to call it a “bailment”.
From then on, whenever someone wanted to give some property to someone to fix, they just said the word “bailment” and shook hands. Everyone had more time to eat coconuts.
See? It’s not hard, and making distinctions can be so darn useful. And when we are discussing things like property rights, we can refer to these common terms to explain what we mean. That way, we don’t have to carry a dictionary with us everywhere to define terms that we already understand.
Agreement R us.
The hits just keep on comin’.
Whew! Drugs kicked in just in time.
That makes for a double deceptions doesn’t it? Once for implying that you don’t know who I am. I presume that you and Jeff talk, and that you can poke around the private parts of this site. I suppose if I was really concerned about it, I would try harder to keep it secret.
Second, you recently said you don’t ban people, when you and I both knew that you banned me, and then had to take it back, and went to the trouble of removing your declaration that you had banned me from the blog.
Now you are threatening me again with your power to ban. That is what you also did to Silas Barta. That’s what tyrants do. They use their power to squash opposition. So much for liberty and freedom in World Kinsella. Where do I sign up?
My daddy use to say, “If you can’t take it, don’t dish it out.” He was from Mississippi. Like Jeff, he had a high standard of decorum that is common in those from the deep south. How did you miss out on that?
The limited liability corporation is entirely a creature of state power. In the absence of state power, no private contract could create it or enforce its privileges and immunities against the general public dealing with the corporation. Your entire defense of the limited liability corporation is really a disguised admission that it would not exist if not for the State, which is why—talking out of both sides of your mouth—you deny that State power has unduly advantaged capitalists via the corporate charter and call for abolition of the State-granted corporate charter. Also, the argument that corporations are not “net” beneficiaries of State power is sophistical: “subtracting” taxes and regulations from the State-conferred advantages of the charter and intellectual property laws is a classic apples and oranges fallacy.
Wildberry wrote: “The form of the institution which enacts statutes which encode this rule, or is authorized to enforce this rule, is completely irrelevant. Imagine any other means of making and enforcing rules, and you are still left with the central question; is there some reason why such an association is unethical, immoral, a contradiction of rights, or economically inefficient?”
Wild, you really are enthralled by the myth of authority. There is only one institution that “enacts statutes, “encodes rules” or “enforces rules,” and that is the State. And it is precisely because of its statutes, rules, enforcements, violence and coercion that it is the most dangerous myth known to man. Government is an unholy pseudo authority designed to justify agents of the State doing harmful things to others that those agents otherwise neither could nor would ever do without the myth of authority. Were it not for the fact that even the victims are beguiled into thinking the agents of the state have a “right” according to some “legal theory” to do them harm because the agents represent AUTHORITY. But if you will only ask yourself where the State gets the “right” to enFORCE its laws on you, you may be on your way to exploding a dangerous superstition that lays you open to exploitation. When that happens, you will begin to enjoy a degree of personal freedom you never though possible. And if you persuade more of your fellows to join you, the demise of the State and all the laws and other horrors it inflicts on mankind will be on the way to extinction. So too will be the spawn of statism, IP and corporations.
I said, “But let us get rid of the State and its laws and see what develops.”
To which Wild responded: “Would you think reasonable if I suggested you play on the freeway and see what happens?”
Wild, baby, I’d be much safer playing on any LA freeway than you would be in Hiroshima, Nagasaki, Tokyo or Dresden when the US State unleashed its vengeance upon the inhabitants of those cities during the States’ WW II.
Ned,
Congratulations, you have rendered me speechless. I have no idea how you can so thoroughly misunderstand me.
As for “only one institution”…have you ever heard of the boy scouts? Is that also an insidious state institution?
I was simply referring to the “unknown” implied in your suggestion, as if there could not possibly be a downside. I certainly didn’t mean to invite a discussion of the moral issues of WWII.
Certainly reasonable people can disagree, but by the same token, unreasonable people can never agree.
Nowhere to go from here…
Wild, you compared going without the State to playing on a freeway–dangerous. Mimicking you, I compared going with the State to being at ground zero when the State dropped an A-bomb there–deadly. What’s not to understand: No state: dangerous, like life in general. With the State: deadly, (read the gruesome statistics on the number of victims of democide–mass murder by governments–in R. J. Rummel’s, DEATH BY GOVERNMENT), like death in general. What’s not to understand? What is unreasonable?
Sorry Ned, you are off in lala land.
You may construct an interpretation of what I wrote if you wish; all I can say is that it is not my intended meaning.
The point I am making is that you ancap types are so willing to just claim that life is dangerous anyhow, so let’s abolish all social institutions that the state can be implicated in, and “see what happens”. That is a rather grand experiment, right?
By your logic, I can observe that humans murder, and so therefore humans should be eliminated, and then there would be neither murder or murderers. Problem solved.
More stupidity or dishonesty: “you ancap types are so willing to just claim that life is dangerous anyhow, so let’s abolish all social institutions that the state can be implicated in, and “see what happens”. That is a rather grand experiment, right?”
You are so unprincipled and such a consequentialist that you cannot apparently even grok that we are not all like that. We oppose aggression because we believe it is wrong. We have principles. We recgonize that we members of a civilized community value certain pre-libertarian norms, like peace and prosperity and cooperation, and that any non-libertarian political norm is incompatible with this. It is that simple. Our view is a moral one based on values and principles. It is not based on the consequentialist unprincipled statist central planning mentality of trying to experiment and come up with the desired outcome. As long as people are free to live their lives, and are not subject to the institutionalized aggression that statists like you are in favor of, we have utopia. But that’s the political side only. What people then do with their freedom is another matter–and outside the demesne of political theory.
@Stephan Kinsella October 26, 2011 at 2:36 pm
Thanks for the editorial comment. I don’t accept the choices, though.
I’ve concluded “grok” is one of your favorite words. You don’t strike me as a Stranger in a Strange Land type, though.
These are such sweeping generalities, they can mean nearly anything, but if I assume the common meaning of your words, then again you and I AGREE. I hold these principles to be self-evident. Given that we do seem to disagree on so much, what can this possibly mean? How can we agree on these words and reach such different conclusions on so many issues?
Yes, I agree this sounds terrible; more like a German concentration camp engaged in human experiments.
Like I tried to tell Ned, this is certainly not my view of my own position, despite your apparent need to paint me into such a despicable corner.
I am making reference to the “irrelevance of impossibility” argument espoused by your ilk, as you like to put it. It is an attitude of impatience with the difficult task of distinguishing one thing from another, and from such distinctions formulating a coherent theory meant to paint the alternative vision to the status quo that acknowledges that some institutions have value and purpose. Such broad, generalized and undistinguishable views such as “I hate the State”, and from this axiom asserting that if the state has a hand in something, it is de facto corrupt, vile, and disposable, are simply radical AND irresponsible. I have no problem with radical and responsible, but excuse me if I’d like to talk about it a bit before we agree to just pull the plug.
For what it’s worth, this is what has led to most of our heated exchanges; you take what I say, interpret through your own ideological blinders and feed it back in ways which are fully erroneous. You have made a habit of responding to the first sentence or two of my posts without making the slightest effort to try to see the distinction I’M making. That is unreasonable and unproductive, IMHO.
I’ve highlighted a few words and phrases in this one little paragraph just to illustrate how it all goes here. I am a statist like Mises was. Sue me. I am not really fascinated with the concept of utopia, since men are not angles, and won’t be any time soon, so what people do with their freedom is a rather important matter, and can’t be just waved away because you claim it is outside the scope of your concern. It is within the scope of my concern, for we define the “estate” differently.
In my view, I am a member of an estate that includes others in a context of cooperation and mutual dependency. I believe certain social institutions have value regardless of the way we conceive of the state. You, on the other hand believe in some vision of individual freedom that trumps all other considerations, as if this is the panacea that leads us to your utopia, while you openly admit that you simply fail to consider what the implications are for those views you advocate as policy. Under your utopian vision, unless humans become angles, the “volunteers” will become victims of the well organized and well armed. But like impossibility, that is irrelevant to your analysis.
Despite your strange need to characterize me as one without principles, I do hold some hard-won and fundamental principles; one of which is “look before you leap”. You are impatient with such a principle. Your principle appears to be, “Leap! Fear not! The free market will catch you!” This is no different, but more “consequential”, than the used car salesman who implores “Trust me!” No thanks. That’s how you buy a lemon.
no ideological “blinders” here (isn’t the phrase “blinkers”?). As for Stranger–I’ve read that one and maybe 15-20 other Heinlein books. Including Red Planet just recetly w/ my kid.
I don’t believe we agree. You (seem to be) an unprincipled, concrete-bound, fickle, anti-conceptual pragmatist.
Right. You give the state legitimacy; you give the status quo presumptive legitimac. Any change requires Deep Thought. You are just a conservative.
Nice way to disguise your worship of the status quo. We have a drug war. It kills people. But we can’t get rid of it without Deep Thought first. We must ponder it. While we do so, people die, but screw ‘em. Same for IP, conscription, wars, taxation. We mustnt’ upset the apple cart. The burden is always on anyone wanting any change whatsoever in the Official Regime.
You are truly an idiot. My principle is simply common sense, intuitively decent basic principles shared by any decent civilized people–honesty, truth, reason, consistency, peace, prosperity, cooperation–combined with merely a smidgen of economic literacy. This framework permits one to see what is just and what is unjust. And then it’s easy to oppose the things that are easy to see as injustice. You are tentative about it because you are beholden to incrementalism and the mainstream. We can’t have extremism, gasp!
And here you say I am selling something, as if to put the burden of proof on me. The burden is on you, buddy, and your statist friends, to justify the hell on earth you’ve come up with. Shame on you.
Stephan Kinsella: “Your” not “You’re”.
Very good. Thank you. With the demise of the State and the legal profession which utterly depends upon it, you should be able to find work as a proofreader.
Kinsella: “I’m not aware of any “responsibilities” libertarianism attributes to someone who owns a share.”
Stephan, let me enlighten you on libertarianism: Without the shareholders as a group, there would be no corporation. They are the owners who together can and often do exercise full control of the corporation, or rather as much control as is possible given that the State institutes many laws and regulations limiting the owners’ rights to control his own property. The fact that a small shareholder cannot realistically exert control of a large corporation, if she can persuade a sufficient number of her fellow shareholders to exert control, it will be done. So, even using your “legal” definition of ownership, that is what a shareholder is, and like the owner of a pit bull, they are responsible for keeping the beast on a heavy, tight leash.
I liken small shareholders’ responsibility for the behavior of large corporation to the responsibility of individual citizens, taxpayers, voters and others who accept the illicit authority of the State, and are therefore ultimately responsible for the States’ egregious actions. Given the States’ development of weapons of mass destruction and demonstrated willingness to use them, it is all the more important that citizens, taxpayers, voters and others who have for time immemorial have accepted the myth of State authority begin to debunk the myth and withdraw their support, without which the State must wither and die. It is a matter of individual responsibility in the absence of which the State thrives and corporations are more likely to misbehave. Anything that disperses, dilutes or otherwise diminishes personal responsibility is a threat to individual liberty. Both States and corporations do that.
The Occupy Wall Street folks patently do not fully understand how and by who they are exploited, and they may even spout a few of Karl Marx’s discredited economic nostrums, but when they identify “corporate personhood” as one of their evil oppressors they are not entirely off the mark, i.e., ADM, Goldman Sachs, BOA, GM, Solyndra and all other “stimulated” corporations. They are perhaps better served by their misguided intuition than are libertarians who think they are defending laissez faire by defending that spawn of the State–corporations.
I have replaced the work capitalism in my personal lexicon with laissez faire because capitalism is a word that has been tarnished by scoundrels posing as capitalists while sucking the State’s teats and committing other crimes, usually while occupying fancy corporate offices. Such corporatism and fascism is equated with capitalism in the minds of most Americans, and that is another reason why I deplore–not hate, Wildberry–the State spawned corporate form.
Stephan, feel free to correct any typos, misspellings, errors in grammar, legal theories or what have you,
“Ned”:
The legal profession as a whole does not depend on the state. In a stateless society there would be even more transactions and wealth and thus more need for and ability to hire lawyers.
It’s not “full control,” in the sense of “direct control.” They can’t use the corporate jet can they? Can they fire the truck driver, or make hiring decisions?
So you SAY that the owner of a pit bull is “responsible”. Why? what is your arguement, exactly? You are just asserting what you think are incontrovertible isolated truths, and trying to interpolate between them, since you have no theory to start from.
Stephan, I know Austrians don’t like it, but here is some mathematical economics:
Number of laws in the statist United States: 548,647,449,000–source NN Vital Statistics, Inc.
Number of lawyers in the statist United States: 1,143,000 (2007)–source: ABA via Wiki answers
Number of laws per lawyer in the statist US: 480,007 (all written in legal mumbo jumbo requiring a lawyer to interpret or, just as likely, misinterpret them)
Number of laws in the no-State of America: 0
Number of lawyers in the no-State America: ?
Number of laws per lawyer: 0
Stephan, if a corporation owns a jet, use of which is limited to corporate executives and excludes its use by small shareholders, that is corporate policy that has the tacit approval of the owners of the corporation and its jet–the shareholders–else they would change it. Shareholders have full and direct control of the corporation, excepting that degree of control that has been taken from them by the State to the detriment of liberty and all concerned.
There is no sanctioned aggression (viz., the initiation of the use of force in human relations) in a stateless society of free individuals. The individual is responsible for refraining from the use of force and violence as a prerequisite to her freedom. The agent/principal relationship, in which the State has no part, is a necessary concomitant of a stateless society. (You can figure out why.) My pit bull is my agent.
My theory (not really mine) is: individual liberty and individual responsibility cannot be divided. Eliminate one and the other perishes. Limited liability, forcibly imposed by the State, divides the shareholder from responsibility for the actions of the corporation he owns, which ownership his shares represent.
Prove my theory? It would be an interesting exercise in praxeology by someone well grounded in the methodology of the science to elaborate how the theory is deduced from the axiom of human action, as I am reasonably confident it is So, what are you doing this weekend?
Now I must confess its been fun. But since Wildberry thinks I’m unreasonable, and since you think I have no theory to start with, I’m calling it quits and gladly leave the field so that you both can have the last word, which I presume will include heaping a last load of invective on me. Believe me, I don’t mind. Give my love to Wild, and keep plugging on reforming or eliminating IP, although it might be more productive to focus on eliminating the State by not giving it any support.
This is stupid. Austrians are not opposed to math, and what you presented was not mathematical econoimcs, but just a grab bag of irrelevant statistics.
This is moronic. Of course there would be “laws” in a stateless society. Only if you are a throroughly brainwashed statist could you say this, by equating “law” with “legislation from a state.” Law need not come from the state. helloo. It would be against the law to murder people. There would be laws on property and contract and tort. Etc.
“Tacit approval”? Is this some new theory you just dreamed up? What pray tell is its relevance to libetarian theory?
Full and direct? wow, nice new legal concept you’ve dreamed up on the spot. Do they now? Wow.
Stephan, I can’t let you get away with calling me a “brainwashed statist.” Your “stupid,” and “moronic” epithets say more about you than about me and the discerning reader will have no problem seeing your comments for what they are. Calling me a brainwashed statist doesn’t bothers me either, because I know what I am, but it does demonstrate conclusively that you don’t know what you are, which happens to be a brainwashed slave of the ruling class. I take a little time to enlighten you because you may be worth saving.
Stephan, if you file returns and pay income taxes you support the state in the most critical way possible. You provide crucial support that makes it possible for the State to commit all of the crimes of State that you pretend to deplore. I can hear the politicians, bureaucritters and other agents of the State snickering at your impotent flailing against the State while they decide how best to use your money to oppress you and embarrass you by spending your money on things like wars and drug-law enforcement that you say you deplore. If your tax support of the state doesn’t make you a statist, it certainly makes you one prime patsy of the state. How do I know you pay your income taxes? Because you’re a lawyer. Authority tells you you have to and lawyers heed authorities.
Stephan, you’re a lawyer not a libertarian, or at least not a Voluntaryist or ancap libertarian. Lawyer and libertarian are incompatible because you as a lawyer are an officer of statist courts and required to do what statist judges tells you to do. You probably even call ‘em, “your honor.” Ho, ho, ho. Libertarians value their freedom too much to serve as servile officers of statist courts.
Stephan, as a lawyer you are licensed by and perforce beholden to the State. You do know the “legal” definition of a license, don’t you?
NEW YORK STATE RULES OF PROFESSIONAL CONDUCT
“Disciplinary Authority and Choice of Law
“(a) A lawyer admitted to practice in this state is subject to the disciplinary authority of this state, regardless of where the lawyer’s conduct occurs. A lawyer may be subject to the disciplinary authority of both this state and another jurisdiction where the lawyer is admitted for the same conduct.” Stephan, make sure your conduct doesn’t offend your masters.
Stephan, my boy, lawyers are as much a part of the State apparatus of control and compulsion as judges, juries, congresscritters and presidents. If you really want to be a libertarian–quit your day job (profession).
Oh, and btw, in the absence of the State and with the authority superstition dispelled, who is going to write all those laws you envision that no one need obey and no one can enforce? I ask that question, not to make you look stupid, but to point you in the direction of libertarian enlightenment. As of now, it is quite obvious you don’t even know what it is that you don’t know.
If you reply, as I know you will, try for a change to keep your response free of invective so as not to be an embarrassment to Mises.org.
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