The three main goals of libertarianism

[Quantum Windbag]

Any ideas on how this could be done?

We'd need a bill or amendment to the current laws around stock market, share holder regulations. The law would give the owner's of the company, possibly all of the owners, the right to vote on executive compensation plans.

Additionally, we could investigate and prosecute executives that collude with other executives to give themselves massive bonuses at the expense of the owner's profits. Any evidence that this is being done cross company should be seen as a monopoly on executive pay rates. Typically the way it works is the executives decide how much to pay themselves, presumably based in part on how much the other executives are paying themselves. Nutz. Board room of execs sitting around deciding they should all get 50% of what the CEO gets... hey let's give the CEO massive bonus. CEO scratches their back giving them a massive bonus. Nutz.

In my view, the biggest problem with corporate law is limited liability. It's the root cause of most corporate excesses, including outrageous executive compensation.

How does limiting the liability of investors, aka stockholders, who have no part in day to day operations of the corporation, lead to corporate excesses?

 

[dblack]

We'd need a bill or amendment to the current laws around stock market, share holder regulations. The law would give the owner's of the company, possibly all of the owners, the right to vote on executive compensation plans.

Additionally, we could investigate and prosecute executives that collude with other executives to give themselves massive bonuses at the expense of the owner's profits. Any evidence that this is being done cross company should be seen as a monopoly on executive pay rates. Typically the way it works is the executives decide how much to pay themselves, presumably based in part on how much the other executives are paying themselves. Nutz. Board room of execs sitting around deciding they should all get 50% of what the CEO gets... hey let's give the CEO massive bonus. CEO scratches their back giving them a massive bonus. Nutz.

In my view, the biggest problem with corporate law is limited liability. It's the root cause of most corporate excesses, including outrageous executive compensation.

How does limiting the liability of investors, aka stockholders, who have no part in day to day operations of the corporation, lead to corporate excesses?

Well, if I owned a business and I hired someone to manage that business for me and I told them, "Do what ever you have to make a profit. I don't wanna hear about it, just do it." And then they went out and committed all manner of heinous acts to make that profit - I'd be held accountable. I could lose my business. I could lose everything I own. I could even go to jail on account of the actions that manager took on my behalf.

Yet limited liability laws are set up such that investors can do essentially the same thing and get away scott free. The most they'll ever lose is their investment. I've yet to hear a moral justification for this lack of accountability. The only rational defense of the policy is the pragmatic one. If we didn't do it that way, investors would be wary of investment and our corporations couldn't raise the bejillions of dollars in capital it takes to run their multi-national empires. Well, too ******* bad. That's no more defensible than the South insisting that slavery was justified because their plantations depended on it. If our prosperity is truly dependent on an immoral foundation then just maybe we don't deserve so much prosperity.

FWIW, I don't think that's the case. While we may take a short term hit, the moral high road makes for a stronger, more virtuous nation and I believe taking it would put us ahead in the long run.

 

[Quantum Windbag]

In my view, the biggest problem with corporate law is limited liability. It's the root cause of most corporate excesses, including outrageous executive compensation.

How does limiting the liability of investors, aka stockholders, who have no part in day to day operations of the corporation, lead to corporate excesses?

Well, if I owned a business and I hired someone to manage that business for me and I told them, "Do what ever you have to make a profit. I don't wanna hear about it, just do it." And then they went out and committed all manner of heinous acts to make that profit - I'd be held accountable. I could lose my business. I could lose everything I own. I could even go to jail on account of the actions that manager took on my behalf.

Yet limited liability laws are set up such that investors can do essentially the same thing and get away scott free. The most they'll ever lose is their investment. I've yet to hear a moral justification for this lack of accountability. The only rational defense of the policy is the pragmatic one. If we didn't do it that way, investors would be wary of investment and our corporations couldn't raise the bejillions of dollars in capital it takes to run their multi-national empires. Well, too ******* bad. That's no more defensible than the South insisting that slavery was justified because their plantations depended on it. If our prosperity is truly dependent on an immoral foundation then just maybe we don't deserve so much prosperity.

FWIW, I don't think that's the case. While we may take a short term hit, the moral high road makes for a stronger, more virtuous nation and I believe taking it would put us ahead in the long run.

That is not how limited liability works, it doesn't protect the owner of a business from criminal activity just because he says he doesn't want to know about it, it protects investors from financial liability that exceeds their investment. Perhaps you should do a little research, you are obviously thinking of something else.

 

[dblack]

How does limiting the liability of investors, aka stockholders, who have no part in day to day operations of the corporation, lead to corporate excesses?

Well, if I owned a business and I hired someone to manage that business for me and I told them, "Do what ever you have to make a profit. I don't wanna hear about it, just do it." And then they went out and committed all manner of heinous acts to make that profit - I'd be held accountable. I could lose my business. I could lose everything I own. I could even go to jail on account of the actions that manager took on my behalf.

Yet limited liability laws are set up such that investors can do essentially the same thing and get away scott free. The most they'll ever lose is their investment. I've yet to hear a moral justification for this lack of accountability. The only rational defense of the policy is the pragmatic one. If we didn't do it that way, investors would be wary of investment and our corporations couldn't raise the bejillions of dollars in capital it takes to run their multi-national empires. Well, too ******* bad. That's no more defensible than the South insisting that slavery was justified because their plantations depended on it. If our prosperity is truly dependent on an immoral foundation then just maybe we don't deserve so much prosperity.

FWIW, I don't think that's the case. While we may take a short term hit, the moral high road makes for a stronger, more virtuous nation and I believe taking it would put us ahead in the long run.

That is not how limited liability works, it doesn't protect the owner of a business from criminal activity just because he says he doesn't want to know about it, it protects investors from financial liability that exceeds their investment.

Yeah. That's what I'm saying. An individual owner would be accountable (individual owner's don't enjoy limited liability). But distributed owners (aka 'investors') are protected by limited liability and would not be accountable. They have virtually no accountability. Obviously, not every owner should suffer the full weight of guilt for the actions of their company, but they should shoulder their share. And it's the fact that they don't that incentivizes corporate excess. Company CEOs get such high salaries because they are, essentially, hired fall guys. They are culpable for their actions. When investors turn to them and say (in so many words) "Do whatever it takes to turn a profit" the CEOs say "Ok, but it's gonna cost you. If get caught, I have to face the music, and all you chumps will walk".

If, for another example, a company owned by an individual goes under, the owner stands to lose much of their personal wealth, in addition to the direct assets of the company, to pay the debts incurred by their company. If a corporation goes under, the most investors lose is the money they paid for stock. If a corporation goes bankrupt, then each of the investors who stood to profit from that company should be accountable as well, and either pay their share of the outstanding debts of the corporation, or go bankrupt themselves.

Perhaps you should do a little research, you are obviously thinking of something else.

No, I think I understand the concepts involved. I might not be making my case clearly enough, but I don't think my understanding of limited liability regarding corporate law, is grossly out of line.

 

[Quantum Windbag]

Well, if I owned a business and I hired someone to manage that business for me and I told them, "Do what ever you have to make a profit. I don't wanna hear about it, just do it." And then they went out and committed all manner of heinous acts to make that profit - I'd be held accountable. I could lose my business. I could lose everything I own. I could even go to jail on account of the actions that manager took on my behalf.

Yet limited liability laws are set up such that investors can do essentially the same thing and get away scott free. The most they'll ever lose is their investment. I've yet to hear a moral justification for this lack of accountability. The only rational defense of the policy is the pragmatic one. If we didn't do it that way, investors would be wary of investment and our corporations couldn't raise the bejillions of dollars in capital it takes to run their multi-national empires. Well, too ******* bad. That's no more defensible than the South insisting that slavery was justified because their plantations depended on it. If our prosperity is truly dependent on an immoral foundation then just maybe we don't deserve so much prosperity.

FWIW, I don't think that's the case. While we may take a short term hit, the moral high road makes for a stronger, more virtuous nation and I believe taking it would put us ahead in the long run.

That is not how limited liability works, it doesn't protect the owner of a business from criminal activity just because he says he doesn't want to know about it, it protects investors from financial liability that exceeds their investment.

Yeah. That's what I'm saying. An individual owner would be accountable (individual owner's don't enjoy limited liability). But distributed owners (aka 'investors') are protected by limited liability and would not be accountable. They have virtually no accountability. Obviously, not every owner should suffer the full weight of guilt for the actions of their company, but they should shoulder their share. And it's the fact that they don't that incentivizes corporate excess. Company CEOs get such high salaries because they are, essentially, hired fall guys. They are culpable for their actions. When investors turn to them and say (in so many words) "Do whatever it takes to turn a profit" the CEOs say "Ok, but it's gonna cost you. If get caught, I have to face the music, and all you chumps will walk".

If, for another example, a company owned by an individual goes under, the owner stands to lose much of their personal wealth, in addition to the direct assets of the company, to pay the debts incurred by their company. If a corporation goes under, the most investors lose is the money they paid for stock. If a corporation goes bankrupt, then each of the investors who stood to profit from that company should be accountable as well, and either pay their share of the outstanding debts of the corporation, or go bankrupt themselves.

Perhaps you should do a little research, you are obviously thinking of something else.

No, I think I understand the concepts involved. I might not be making my case clearly enough, but I don't think my understanding of corporately is grossly out of line.

Corporations are associations of people. They exist for multiple purposes, none of which involve skating legal liability for criminal actions.

 

[dblack]

That is not how limited liability works, it doesn't protect the owner of a business from criminal activity just because he says he doesn't want to know about it, it protects investors from financial liability that exceeds their investment.

Yeah. That's what I'm saying. An individual owner would be accountable (individual owner's don't enjoy limited liability). But distributed owners (aka 'investors') are protected by limited liability and would not be accountable. They have virtually no accountability. Obviously, not every owner should suffer the full weight of guilt for the actions of their company, but they should shoulder their share. And it's the fact that they don't that incentivizes corporate excess. Company CEOs get such high salaries because they are, essentially, hired fall guys. They are culpable for their actions. When investors turn to them and say (in so many words) "Do whatever it takes to turn a profit" the CEOs say "Ok, but it's gonna cost you. If get caught, I have to face the music, and all you chumps will walk".

If, for another example, a company owned by an individual goes under, the owner stands to lose much of their personal wealth, in addition to the direct assets of the company, to pay the debts incurred by their company. If a corporation goes under, the most investors lose is the money they paid for stock. If a corporation goes bankrupt, then each of the investors who stood to profit from that company should be accountable as well, and either pay their share of the outstanding debts of the corporation, or go bankrupt themselves.

Perhaps you should do a little research, you are obviously thinking of something else.

No, I think I understand the concepts involved. I might not be making my case clearly enough, but I don't think my understanding of corporately is grossly out of line.

Corporations are associations of people. They exist for multiple purposes, none of which involve skating legal liability for criminal actions.

That might not be the nominal purpose of limited liability, but surely you can see how it can function that way. Are you saying it never happens?

 

[Quantum Windbag]

Yeah. That's what I'm saying. An individual owner would be accountable (individual owner's don't enjoy limited liability). But distributed owners (aka 'investors') are protected by limited liability and would not be accountable. They have virtually no accountability. Obviously, not every owner should suffer the full weight of guilt for the actions of their company, but they should shoulder their share. And it's the fact that they don't that incentivizes corporate excess. Company CEOs get such high salaries because they are, essentially, hired fall guys. They are culpable for their actions. When investors turn to them and say (in so many words) "Do whatever it takes to turn a profit" the CEOs say "Ok, but it's gonna cost you. If get caught, I have to face the music, and all you chumps will walk".

If, for another example, a company owned by an individual goes under, the owner stands to lose much of their personal wealth, in addition to the direct assets of the company, to pay the debts incurred by their company. If a corporation goes under, the most investors lose is the money they paid for stock. If a corporation goes bankrupt, then each of the investors who stood to profit from that company should be accountable as well, and either pay their share of the outstanding debts of the corporation, or go bankrupt themselves.

No, I think I understand the concepts involved. I might not be making my case clearly enough, but I don't think my understanding of corporately is grossly out of line.

Corporations are associations of people. They exist for multiple purposes, none of which involve skating legal liability for criminal actions.

That might not be the nominal purpose of limited liability, but surely you can see how it can function that way. Are you saying it never happens?

Actually, I can't. The reason for that is that the government aggressively prosecutes people for things that they had little or no control over all the time. Additionally, since stockholders only enjoy limited liability when it comes to the debt of the corporation, the government often pursues civil remedies against stockholders who were aware or should have been aware, of illegal activities.

 

[dblack]

Corporations are associations of people. They exist for multiple purposes, none of which involve skating legal liability for criminal actions.

That might not be the nominal purpose of limited liability, but surely you can see how it can function that way. Are you saying it never happens?

Actually, I can't. The reason for that is that the government aggressively prosecutes people for things that they had little or no control over all the time. Additionally, since stockholders only enjoy limited liability when it comes to the debt of the corporation, the government often pursues civil remedies against stockholders who were aware or should have been aware, of illegal activities.

OK.. I must not be explaining myself clearly, because my point seems to be sliding right past you. Let me try another approach. You seem to be agreeing with me that limited liability gives the shareholders of a corporation protections that owners of an ordinary company don't get - simply because of its government granted corporate charter. I'm asking, what is the justification for that? Why must the owners of a non-incorporated company follow a different set of rules than the owners of one that is incorporated?

As I said, the only answer i've heard is the pragmatic one - we do it that way so investors will be more willing to invest and fuel the growth of large corporations. But it comes at a cost, and that cost is the very accountability that limited liability severs.

 

[Bfgrn]

I'm not really disputing the relative harm of wealth disparity (not here at least). I'm saying that the taxation power shouldn't be used as backdoor legislation to manipulate people, regardless of the excuse. The problem, in my view, is that the taxation power has been used to do an end run around Constitutional limitations. It allows the state to dictate behavior in ways that wouldn't pass Constitutional muster - and would likely be very unpopular - if they were framed as legitimate laws. But because it utilized the superficial trappings of a 'tax incentive', it flies under the radar of both the Court and voters.

Look at the individual mandate of the PPACA for a glaring example. If the mandate were passed as a real law making it illegal for people to go without health insurance and punishing them with fines if they refused, I suspect it would have been declared unconstitutional, and would have been even more unpopular with voters.

Our government uses discriminatory taxation to radically expand its power to reward its friends and punish its enemies - all the while hiding it in something most people don't even recognize as an exercise of state power.

I can't really dispute much of what you're saying.

On a slightly different topic since you seem to be a pretty good spokesman for libertarianism, does collective bargaining fit into the libertarian ideology?

Libertarians would of course defend the freedom of workers to stage walkouts, call strikes, protest unsafe or unfair working conditions, etc... The problems begin when labor law becomes a corporatist device to grant special privileges to politically powerful groups. And sadly, that's mostly how it's been used. Labor law that grants specific groups rights the rest of us don't enjoy is antithetical to equal rights and individual liberty.

In my view, the problems with labor law are prompted by fundamental imbalances created by corporate law. In our Hamiltonian zeal to maximize our economic prowess, we've granted corporations far too much power. Rather than curtail that power, and risk our global economic hegemony, we instead parse out complimentary power to competing interest groups (unions) in hopes of 'balancing' the disparity. That makes sense to those who want to see government 'run' society like a business - maximizing GDP and our nation's ability to compete in a global market. But it's a direct threat to just government and a free society. It leads, pretty consistently, toward totalitarian governments - which is why fascism is so hard to eradicate, why it keeps creeping back around, albeit in different forms we often don't recognize.

Where do you get this shit? Do you just make it up? Unions were not part of any 'parsing out' process by government. Unions came about because of totalitarianism, not by government, but by corporations and robber barons. Many courageous men were beaten and even died creating a union labor movement. You desecrate their lives and their sacrifices.

"With all their faults, trade unions have done more for humanity than any other organization of men that ever existed"
Clarence Darrow

 

[flacaltenn]

Well, if I owned a business and I hired someone to manage that business for me and I told them, "Do what ever you have to make a profit. I don't wanna hear about it, just do it." And then they went out and committed all manner of heinous acts to make that profit - I'd be held accountable. I could lose my business. I could lose everything I own. I could even go to jail on account of the actions that manager took on my behalf.

Yet limited liability laws are set up such that investors can do essentially the same thing and get away scott free. The most they'll ever lose is their investment. I've yet to hear a moral justification for this lack of accountability. The only rational defense of the policy is the pragmatic one. If we didn't do it that way, investors would be wary of investment and our corporations couldn't raise the bejillions of dollars in capital it takes to run their multi-national empires. Well, too ******* bad. That's no more defensible than the South insisting that slavery was justified because their plantations depended on it. If our prosperity is truly dependent on an immoral foundation then just maybe we don't deserve so much prosperity.

FWIW, I don't think that's the case. While we may take a short term hit, the moral high road makes for a stronger, more virtuous nation and I believe taking it would put us ahead in the long run.

That is not how limited liability works, it doesn't protect the owner of a business from criminal activity just because he says he doesn't want to know about it, it protects investors from financial liability that exceeds their investment.

Yeah. That's what I'm saying. An individual owner would be accountable (individual owner's don't enjoy limited liability). But distributed owners (aka 'investors') are protected by limited liability and would not be accountable. They have virtually no accountability. Obviously, not every owner should suffer the full weight of guilt for the actions of their company, but they should shoulder their share. And it's the fact that they don't that incentivizes corporate excess. Company CEOs get such high salaries because they are, essentially, hired fall guys. They are culpable for their actions. When investors turn to them and say (in so many words) "Do whatever it takes to turn a profit" the CEOs say "Ok, but it's gonna cost you. If get caught, I have to face the music, and all you chumps will walk".

If, for another example, a company owned by an individual goes under, the owner stands to lose much of their personal wealth, in addition to the direct assets of the company, to pay the debts incurred by their company. If a corporation goes under, the most investors lose is the money they paid for stock. If a corporation goes bankrupt, then each of the investors who stood to profit from that company should be accountable as well, and either pay their share of the outstanding debts of the corporation, or go bankrupt themselves.

Perhaps you should do a little research, you are obviously thinking of something else.

No, I think I understand the concepts involved. I might not be making my case clearly enough, but I don't think my understanding of limited liability regarding corporate law, is grossly out of line.

Well if I didn't check the poster name, I would have figured this as one of our board leftists with a limited knowledge of basic free market capitalism..

CEOs don't make "outrageous salaries". The salary portion of their compensation is usually trivial compared to your Justin Biebers, or Michael Jordans or J.K Rowlings. MOST of their comp pkg is an EQUITY SHARE in the company. Suitable to make them feel a sense of OWNERSHIP in the venture. They are not a peg-leg pirate with a dagger in their mouths. They are MADE de facto owners..

The controls on their behaviour in office are DEEPER than the controls we have on our political leaders or the media or even our own family members. These include not only keeping the stock holders out of deep crap and happy, but also the customers, their vendors, and the pressure from their competition. Not to mention civil litigation and regulation.

THe equity holders WILL PAY a concommitant penalty for bad corporate behaviour. ESPECIALLY if they are holding less liquid assets like corporate bonds. The fact that the MANAGEMENT has immunity from contract law and civil litigation related to PRODUCTS and SERVICES --- doesn't embolden them to cook books, attempt to fool the investors or screw employees or do any of stuff that they DONT have immunity for.

All is right with the world.

 

[Quantum Windbag]

That might not be the nominal purpose of limited liability, but surely you can see how it can function that way. Are you saying it never happens?

Actually, I can't. The reason for that is that the government aggressively prosecutes people for things that they had little or no control over all the time. Additionally, since stockholders only enjoy limited liability when it comes to the debt of the corporation, the government often pursues civil remedies against stockholders who were aware or should have been aware, of illegal activities.

OK.. I must not be explaining myself clearly, because my point seems to be sliding right past you. Let me try another approach. You seem to be agreeing with me that limited liability gives the shareholders of a corporation protections that owners of an ordinary company don't get - simply because of its government granted corporate charter. I'm asking, what is the justification for that? Why must the owners of a non-incorporated company follow a different set of rules than the owners of one that is incorporated?

As I said, the only answer i've heard is the pragmatic one - we do it that way so investors will be more willing to invest and fuel the growth of large corporations. But it comes at a cost, and that cost is the very accountability that limited liability severs.

The justification for that is to limit the financial liability of investors because, under our legal system, vicarious liability makes business owners liable for the actions of their employees, and even their customers, through vicarious liability. It also allows people to start a company without losing their homes if the company flops and creditors can't recover all they are owned from corporate assets.

It does not decrease criminal, or civil, liability for wrong doing, it simply separates the personal assets from the business assets.

 

[dblack]

Actually, I can't. The reason for that is that the government aggressively prosecutes people for things that they had little or no control over all the time. Additionally, since stockholders only enjoy limited liability when it comes to the debt of the corporation, the government often pursues civil remedies against stockholders who were aware or should have been aware, of illegal activities.

OK.. I must not be explaining myself clearly, because my point seems to be sliding right past you. Let me try another approach. You seem to be agreeing with me that limited liability gives the shareholders of a corporation protections that owners of an ordinary company don't get - simply because of its government granted corporate charter. I'm asking, what is the justification for that? Why must the owners of a non-incorporated company follow a different set of rules than the owners of one that is incorporated?

As I said, the only answer i've heard is the pragmatic one - we do it that way so investors will be more willing to invest and fuel the growth of large corporations. But it comes at a cost, and that cost is the very accountability that limited liability severs.

The justification for that is to limit the financial liability of investors because, under our legal system, vicarious liability makes business owners liable for the actions of their employees, and even their customers, through vicarious liability. It also allows people to start a company without losing their homes if the company flops and creditors can't recover all they are owned from corporate assets.

I'm asking why is it justified for corporations, but not non-incorporated companies. This sounds like buying special privilege from the government by incorporating.

It does not decrease criminal, or civil, liability for wrong doing, it simply separates the personal assets from the business assets.

My claim isn't so much that limited liability decreases liability for wrongdoing (though I'd still argue that it obviously does), but rather that, as you acknowledge, it artificially protects those who profit from it. Shielding those who profit from corporate malfeasance from the fallout makes it more likely such malfeasance will occur. Not sure how anyone can deny that. It sure as hell doesn't encourage prudence.

 

[dblack]

I can't really dispute much of what you're saying.

On a slightly different topic since you seem to be a pretty good spokesman for libertarianism, does collective bargaining fit into the libertarian ideology?

Libertarians would of course defend the freedom of workers to stage walkouts, call strikes, protest unsafe or unfair working conditions, etc... The problems begin when labor law becomes a corporatist device to grant special privileges to politically powerful groups. And sadly, that's mostly how it's been used. Labor law that grants specific groups rights the rest of us don't enjoy is antithetical to equal rights and individual liberty.

In my view, the problems with labor law are prompted by fundamental imbalances created by corporate law. In our Hamiltonian zeal to maximize our economic prowess, we've granted corporations far too much power. Rather than curtail that power, and risk our global economic hegemony, we instead parse out complimentary power to competing interest groups (unions) in hopes of 'balancing' the disparity. That makes sense to those who want to see government 'run' society like a business - maximizing GDP and our nation's ability to compete in a global market. But it's a direct threat to just government and a free society. It leads, pretty consistently, toward totalitarian governments - which is why fascism is so hard to eradicate, why it keeps creeping back around, albeit in different forms we often don't recognize.

Where do you get this shit? Do you just make it up? Unions were not part of any 'parsing out' process by government.

I get this "shit" from personal observation and reading books. I also worked as a union sheet metal worker for ten years. Via labor law, workers who join a government authorized union get rights and privileges other workers don't get. Are you denying that?

Unions came about because of totalitarianism, not by government, but by corporations and robber barons. Many courageous men were beaten and even died creating a union labor movement. You desecrate their lives and their sacrifices.

Bullshit. My grandfather was one of those men. I'm not denigrating anyone. I'm pointing how government has co-opted the labor movement in the name of corporatism.

"With all their faults, trade unions have done more for humanity than any other organization of men that ever existed"
Clarence Darrow

Agreed. That's why it's so sad to see them become part of the machine.

 

[dblack]

CEOs don't make "outrageous salaries". The salary portion of their compensation is usually trivial compared to your Justin Biebers, or Michael Jordans or J.K Rowlings. MOST of their comp pkg is an EQUITY SHARE in the company. Suitable to make them feel a sense of OWNERSHIP in the venture. They are not a peg-leg pirate with a dagger in their mouths. They are MADE de facto owners..

Well, 'outrageous' is a matter of opinion. I'm not making the jealousy argument here, and I'm fine with them making a lot of money for what they do. But a large part of what they 'do' is make profits for people who are shielded from the liability incurred in generating those profits.

The controls on their behaviour in office are DEEPER than the controls we have on our political leaders or the media or even our own family members. These include not only keeping the stock holders out of deep crap and happy, but also the customers, their vendors, and the pressure from their competition. Not to mention civil litigation and regulation.

Right, that's my point. That's why they're paid so much. They're the fall guys for the stockholders, who don't face any of these.

The equity holders WILL PAY a concommitant penalty for bad corporate behaviour. ESPECIALLY if they are holding less liquid assets like corporate bonds. The fact that the MANAGEMENT has immunity from contract law and civil litigation related to PRODUCTS and SERVICES --- doesn't embolden them to cook books, attempt to fool the investors or screw employees or do any of stuff that they DONT have immunity for.

The stockholder's personal wealth and freedom are never at risk based on the actions of the company they invest in. That's the point of limited liability.

All is right with the world.

I wish I lived in your world.

 

[RKMBrown]

CEOs don't make "outrageous salaries". The salary portion of their compensation is usually trivial compared to your Justin Biebers, or Michael Jordans or J.K Rowlings. MOST of their comp pkg is an EQUITY SHARE in the company. Suitable to make them feel a sense of OWNERSHIP in the venture. They are not a peg-leg pirate with a dagger in their mouths. They are MADE de facto owners..

You want to argue about the manner in which CEOs and the co executives receive compensation? What the hell does it matter how he gets paid?

ROFL... CEO walks into a fortune 500 company... is given tens of millions (to hundreds of millions) in annual compensation for waving his hands around, agreeing with the plan to offshore / layoff half the companies workers, and acting as company representative at lavish functions. All the while, one guy's compensation is equivalent to all of the layoffs of the company, all of the benefit cuts.

The issue isn't just the CEO it's the dozens of executives at these companies that operate autonomously, with no to very little control by the owners.

You think company executives are incapable of setting their own salaries? Dude they propose some savings for moving our jobs then bank the profits. The owners get screwed, the workers get screwed, the customers get screwed, and the executives... they go to the bank.

How much do you think the Jordans would earn if the teams were public, and the Jordans could set their own salary at the expense of the owners of the teams who had no say in the matter? How many people would have to suffer to give Jordan what he takes in that scenario?

 

[Bfgrn]

Libertarians would of course defend the freedom of workers to stage walkouts, call strikes, protest unsafe or unfair working conditions, etc... The problems begin when labor law becomes a corporatist device to grant special privileges to politically powerful groups. And sadly, that's mostly how it's been used. Labor law that grants specific groups rights the rest of us don't enjoy is antithetical to equal rights and individual liberty.

In my view, the problems with labor law are prompted by fundamental imbalances created by corporate law. In our Hamiltonian zeal to maximize our economic prowess, we've granted corporations far too much power. Rather than curtail that power, and risk our global economic hegemony, we instead parse out complimentary power to competing interest groups (unions) in hopes of 'balancing' the disparity. That makes sense to those who want to see government 'run' society like a business - maximizing GDP and our nation's ability to compete in a global market. But it's a direct threat to just government and a free society. It leads, pretty consistently, toward totalitarian governments - which is why fascism is so hard to eradicate, why it keeps creeping back around, albeit in different forms we often don't recognize.

Where do you get this shit? Do you just make it up? Unions were not part of any 'parsing out' process by government.

I get this "shit" from personal observation and reading books. I also worked as a union sheet metal worker for ten years. Via labor law, workers who join a government authorized union get rights and privileges other workers don't get. Are you denying that?

Unions came about because of totalitarianism, not by government, but by corporations and robber barons. Many courageous men were beaten and even died creating a union labor movement. You desecrate their lives and their sacrifices.

Bullshit. My grandfather was one of those men. I'm not denigrating anyone. I'm pointing how government has co-opted the labor movement in the name of corporatism.

"With all their faults, trade unions have done more for humanity than any other organization of men that ever existed"
Clarence Darrow

Agreed. That's why it's so sad to see them become part of the machine.

You don't know what the **** you are talking about. You have some contrived view of the union labor movement. You talk about 'government authorized union(s)'. In 19th century, government almost always intervened in labor disputes on the side of employers, often using force to crush strikes. After 1890, courts used antitrust law to rule unions illegal. Lack of legal status made it difficult for unions to achieve gains

In the earliest days of the labor movement, there were few laws that addressed the new phenomenon of national unions. Employers labeled union activity, particularly strikes, as illegal conspiracies. At first, judges agreed.

 

[dblack]

Where do you get this shit? Do you just make it up? Unions were not part of any 'parsing out' process by government.

I get this "shit" from personal observation and reading books. I also worked as a union sheet metal worker for ten years. Via labor law, workers who join a government authorized union get rights and privileges other workers don't get. Are you denying that?



Bullshit. My grandfather was one of those men. I'm not denigrating anyone. I'm pointing how government has co-opted the labor movement in the name of corporatism.

"With all their faults, trade unions have done more for humanity than any other organization of men that ever existed"
Clarence Darrow

Agreed. That's why it's so sad to see them become part of the machine.

You have some contrived view of the union labor movement. You talk about 'government authorized union(s)'. In 19th century, government almost always intervened in labor disputes on the side of employers, often using force to crush strikes. After 1890, courts used antitrust law to rule unions illegal. Lack of legal status made it difficult for unions to achieve gains

In the earliest days of the labor movement, there were few laws that addressed the new phenomenon of national unions. Employers labeled union activity, particularly strikes, as illegal conspiracies. At first, judges agreed.

Yep. That was 100 years ago. Things have changed. That's part of my point actually.

 

[flacaltenn]

CEOs don't make "outrageous salaries". The salary portion of their compensation is usually trivial compared to your Justin Biebers, or Michael Jordans or J.K Rowlings. MOST of their comp pkg is an EQUITY SHARE in the company. Suitable to make them feel a sense of OWNERSHIP in the venture. They are not a peg-leg pirate with a dagger in their mouths. They are MADE de facto owners..

You want to argue about the manner in which CEOs and the co executives receive compensation? What the hell does it matter how he gets paid?

ROFL... CEO walks into a fortune 500 company... is given tens of millions (to hundreds of millions) in annual compensation for waving his hands around, agreeing with the plan to offshore / layoff half the companies workers, and acting as company representative at lavish functions. All the while, one guy's compensation is equivalent to all of the layoffs of the company, all of the benefit cuts.

The issue isn't just the CEO it's the dozens of executives at these companies that operate autonomously, with no to very little control by the owners.

You think company executives are incapable of setting their own salaries? Dude they propose some savings for moving our jobs then bank the profits. The owners get screwed, the workers get screwed, the customers get screwed, and the executives... they go to the bank.

How much do you think the Jordans would earn if the teams were public, and the Jordans could set their own salary at the expense of the owners of the teams who had no say in the matter? How many people would have to suffer to give Jordan what he takes in that scenario?

It does matter that the BULK of their compensation (in stock) is a stake in the SUCCESS of that operation. The value of that stake is explicitly tied to performance.

CEOs "wave arms and do lavish functions" eh?

Caterpillar makes everything from shoes to financing and mining equip. It doubled in size from 1960 to 1970. Now has 93,000 employees. $70Bill assets.

Caterpillar products and components are manufactured 110 facilities worldwide. 51 plants are located in the United States and 59 overseas plants are located in Australia, Belgium, Brazil, Canada, England, France, Germany, Hungary, India, Indonesia, Italy, Japan, Mexico, the Netherlands, Northern Ireland, the People's Republic of China, Poland, Russia, Singapore, South Africa and Sweden.

110 Manufacturing facilities, over a dozen different businesses.. Suggest you try that gig for a week. He doesn't get 4 months off like the NBA players either..

You could tar and feather the guy in the parking, take the MONEY part of his salary and divide it up between employees and each would MAYBE get a couple pair of Cat Work boots and hat and tee shirt..

 

[Quantum Windbag]

OK.. I must not be explaining myself clearly, because my point seems to be sliding right past you. Let me try another approach. You seem to be agreeing with me that limited liability gives the shareholders of a corporation protections that owners of an ordinary company don't get - simply because of its government granted corporate charter. I'm asking, what is the justification for that? Why must the owners of a non-incorporated company follow a different set of rules than the owners of one that is incorporated?

As I said, the only answer i've heard is the pragmatic one - we do it that way so investors will be more willing to invest and fuel the growth of large corporations. But it comes at a cost, and that cost is the very accountability that limited liability severs.

The justification for that is to limit the financial liability of investors because, under our legal system, vicarious liability makes business owners liable for the actions of their employees, and even their customers, through vicarious liability. It also allows people to start a company without losing their homes if the company flops and creditors can't recover all they are owned from corporate assets.

I'm asking why is it justified for corporations, but not non-incorporated companies. This sounds like buying special privilege from the government by incorporating.

It does not decrease criminal, or civil, liability for wrong doing, it simply separates the personal assets from the business assets.

My claim isn't so much that limited liability decreases liability for wrongdoing (though I'd still argue that it obviously does), but rather that, as you acknowledge, it artificially protects those who profit from it. Shielding those who profit from corporate malfeasance from the fallout makes it more likely such malfeasance will occur. Not sure how anyone can deny that. It sure as hell doesn't encourage prudence.

There is nothing artificial about restricting financial liability to the amount invested in the company. The artificial part is forcing people who had no part in the business decisions that were perfectly legal, yet still resulted in the company going bankrupt, to be liable for the losses.

Seriously dude, get your head out of your ass.

 

[flacaltenn]

RE: RKMBrown's statement about "what the hell does it matter how the CEO gets paid"..

I left out the most important (and what should be obvious) reason why the difference between salary and stock options matters..

Salary does directly compete for cash flow with employee salary and benefits. STOCK ownership transfers do not.. The bulk of CEO compensation pkg is simply a method for distributing a reasonable ownership share in the ventures that the person is knocking him/herself out for. Doesn't compete with employee compensation at all.