What would you propose as an alternative to the current corporations'-system, which would serve to both permit the formation of companies (in order to foster capitalist ventures) and yet also serve the needs of those who would make such investments?
HOW about what our founders allowed ???
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The Constitution only mentions two entities: We the People and the government. The people are on one side of a line, and we are sovereign and have individual rights. On the other side of the line is the government, which is accountable to the people and has specific duties to perform to the satisfaction of the people. We delegate some of our power to the government in order to perform tasks we want government to do. In a representative democracy, this system should work just fine.
A word that appears nowhere in the Constitution is "corporation," for the writers had no interest in using for-profit corporations to run their new government. In colonial times, corporations were tools of the king's oppression, chartered for the purpose of exploiting the so-called "New World" and shoveling wealth back into Europe. The rich formed joint-stock corporations to distribute the enormous risk of colonizing the Americas and gave them names like the Hudson Bay Company, the British East India Company, and the Massachusetts Bay Colony. Because they were so far from their sovereign - the king - the agents for these corporations had a lot of autonomy to do their work; they could pass laws, levy taxes, and even raise armies to manage and control property and commerce. They were not popular with the colonists.
So the Constitution's authors left control of corporations to state legislatures (10th Amendment), where they would get the closest supervision by the people. Early corporate charters were explicit about what a corporation could do, how, for how long, with whom, where, and when.
*Corporations could not own stock in other corporations, and they were prohibited from any part of the political process.
*Individual stockholders were held personally liable for any harms done in the name of the corporation, and most charters only lasted for 10 or 15 years.
*But most importantly, in order to receive the profit-making privileges the shareholders sought, their corporations had to represent a clear benefit for the public good, such a building a road, canal, or bridge.
*And when corporations violated any of these terms, their charters were frequently revoked by the state legislatures.