Ryan: You might want to check out "Gangs of America." (.com) The author is a liberal-left businessman, but he has a lot of good material. I did NOT, BTW, get my own analysis from him or anyone else. It is entirely my own. However, AFTER I came to my conclusions, I then discovered that there has been quite a lot of analysis, both good and bad, biased and objective, on the issue of children of the state.
For an objectivist, the issue here should be one of state theft. The corporation as such is evil, because it represents the involuntary (just to be redundant) theft of the value represented in the unbacked risk that is offloaded to the general populace. Risk is a real objective thing. It exists and can be measured. Limiting risk by state fiat is theft, as the unbacked risk does not go away, but is now dumped on largely unwitting victims.
Artificially limiting risk has another cost. Risk is a factor taken into account in every decision that anyone ever makes. Businesses, in particular, must factor in risk costs into their policies and investments. If risk is capped then possible costs above the cap are discounted, meaning that a rational accountant for that business will forgo taking measures to limit exposure to high-end risk, further skewing the risk factor from a rational assessment. This is particularly disturbing when one considers the $800 million cap on liabilities per incident for nuclear power plants. It means that the power plants basically have no economic incentive to take effective measures against terrorist attacks, which could run into the tens of $billions in damages. Do the math.
However, the same logic applies to all corporations, by virtue of the Ltd. Limiting risk to the assets of an artificial person who cannot and thus clearly does not do or chose anything but what real people direct it to chose and do is just a formula for theft via recklessness. As we have recently seen...
As to other business forms and contractual limitations on risk, the problem is that you can't include everyone in such a contract. People take actions. People should bear the consequences.
However, and this is the key point that only I have pushed, I think, the real issue is tort law. So long as damages were limited to actual costs to the victims, plus court fees, etc., which is how the common law worked, it was possible to run a single owner, partnership, trust, etc., without incurring killer liability from some crazy or politically motivated vindictive jury. Allowing unlimited punitive damages, however, meant that no matter WHAT your level of insurance, you could still be wiped out by such a jury.
This became the economic justification for the corporation as the preferred business model. In fact, it was the evil "progressives," the same jerks who gave us compulsory state schooling, prohibition (and thus organized crime) and got us into WWI, setting the stage for most of the evils of the 20th century, it was those creeps who pushed for the corporate model, so that a new, super-entity corporate state would emerge, an unholy alliance uniting the economic with state power. Anti-Trust was just that - Anti "Trust." Pro-corporation. Pro-"corporatism," another term for fascism, as Mussolini stated.
And the door that they crawled through to kill non-corporate business models was the new social-activist courts.
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