Labor Roundtable: Thoughts on a Libertarian-Labor Alliance

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Jason Kuznicki

Jason Kuznicki is a research fellow at the Cato Institute and contributor of Cato Unbound. He's on twitter as JasonKuznicki. His interests include political theory and history.

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  1. Avatar alkali
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    says:

    It seems reasonable to speculate that unions suffered as the welfare state grew, although the unions’ decline came a good deal later, and historians haven’t yet done the real documentary work here. (Beito is something of a pathbreaker.) Still, I’m pretty sure the case can be made, even if progressives sincerely intended welfare and unions to work side by side. Which clearly they did.

    It seems reasonable, and yet European countries typically have stronger unions and far more expansive welfare states.Report

  2. Avatar Barry
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    says:

    alkali, excellent point.

    Jason, could you please explain what the heck footnote (4) is about?Report

    • Avatar Jason Kuznicki in reply to Barry
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      says:

      I added as a defense against those who would show up saying, “See, he’s trying to exonerate Bernie Madoff.”

      I’m surprised they’re not here already, to be honest, even despite footnote four, which merely points out that it’s possible to be criminally liable for some actions in the marketplace, and that I’m very happy for this to be the case.Report

    • Avatar 62across in reply to Barry
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      says:

      The increases in income inequality sort of makes the “of course” in footnote 4 a little presumptuous, doesn’t it?

      Controlling the wealth means you get to write the rules, since the lawmakers need you to get elected. Once you write the rules, you can behave fraudulently, yet never commit Fraud – you can behave criminally and not “break the law.”

      Exhibit A – no one from AIG is in jail.

      Even if you break the law, you can escape consequences if you control the purse strings.

      Exhibit B – John Mack benefits from insider trading and he is not in jail.Report

      • Avatar Simon K in reply to 62across
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        says:

        Precisely what laws do you think should exist that would put anyone from AIG in jail? As far as I can see they were just phenomenally stupid, and while I would like to outlaw stupidity, it seems unlikely to be feasible.Report

        • Avatar Pooh in reply to Simon K
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          says:

          I’m hardly an expert in this area, but it seems a pretty good case could be made for fraud – for example if AIG knowingly sold CDS’s far in excess of what it was properly capitalized for, this is fairly straightforward fraud if not technically insurance fraud. Again the statutory landscape is tricky, and I’m not an expert, but there seems to be at least a plausible case there.

          I don’t think the problem is so much that the laws on the books are insufficient, rather that the enforcement of large scale white collar criminality seems to be pretty lax for both political and structural reasons (short version: this stuff is complicated, so people who can unravel the criminality could probably command a much higher salary in the private sector, so there tends to be something of a revolving door, which leads to fairly obvious situations where one might not be super keen on prosecuting a potential future employer.)Report

          • Avatar Dave in reply to Pooh
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            says:

            I’m hardly an expert in this area, but it seems a pretty good case could be made for fraud – for example if AIG knowingly sold CDS’s far in excess of what it was properly capitalized for, this is fairly straightforward fraud if not technically insurance fraud.

            I don’t agree:

            1. CDS contracts aren’t technically insurance and do not fall under the rules governing insurance (at least they didn’t at the time and I don’t think they do now).

            2. No one at AIGFP saw potential capitalization problems because they thought the likelihood of large payouts was next to nothing, at least that’s what their risk management models were telling them. Stupidity isn’t fraud though.

            I don’t think the problem is so much that the laws on the books are insufficient, rather that the enforcement of large scale white collar criminality seems to be pretty lax for both political and structural reasons

            To me, the financial crisis demonstrated that both issues were problems.

            this stuff is complicated, so people who can unravel the criminality could probably command a much higher salary in the private sector

            It’s also complicated to the point that the criminality may be in question, if it exists at all.

            Former Countrywide CEO Angelo Mozilo will never see prison. As much as Countrywide was the poster child for scumbag sleazy subprime lending (among other companies), proving that he was directly involved in what went on in the trenches will never happen, even if I think he and the other CEOs of some of the mortgage companies responsible for generating most of the toxic crap helped create a corporate culture where fraud can thrive (it’s what William Black refers to as “control fraud”).Report

        • Avatar sigh in reply to Simon K
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          says:

          Well actually there were accounting and other frauds allegedly committed by AIG that were arguably criminal even under existing law. Along with some borderline practices which were probably legal but more than mere stupidity.

          The industry as a whole engaged in a number of practices which were designed to avoid regulations designed to prevent (via limiting risk) precisely the kind of melt down which occurred.

          One can argue whether such actions should be illegal, and even argue that regulations which are aimed at limiting risk are bound to fail (personally, I am in favor of the Tyler Cowen approach favoring simple rules which place serious limits on leverage), but it’s abundantly clear that the melt down (AIG and otherwise) was not *just* a matter of stupidity. Though there was plenty of that to go around also.Report

        • Avatar 62across in reply to Simon K
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          says:

          Pooh and sigh pretty much cover what I had in mind – failure to disclose and misrepresentation. I’m no legal expert, either, but the lax enforcement of white collar criminality is what I was getting at. The revolving door between government and financial sector jobs is part of it, but campaign finance is a big part of it as well. Either way, the ones with the money get their own set of rules.

          Also, it’s hard for me to see what AIG’s Joe Cassano did as stupid rather than crooked. He helped bring about an epic financial crisis, made out like a bandit in the process and managed to get a pass on any consequences. That’s brilliant, if you ask me.Report

  3. Avatar Shannon's Mouse
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    says:

    “Corporate personhood is really just legal shorthand for saying that individuals don’t shed any of their other rights when they exercise the right to associate.”

    Uhh…. no. Before it’s that, it’s legal shorthand for saying that all of society must be forced to treat an association as a separate entity with the ability to hold title and avail itself of the legal system as if it were an individual person. Throw in the added benefit of “limited liability” where the members of the association aren’t fully liable for the actions of the separate entity beyond the investment they’ve contributed, and corporate personhood strikes me as quite a bit more complicated than your shorthand.

    I’ll start believing that denying free speech rights to a corporation is equivalent to denying free speech rights to the shareholders of a corporation as soon as shareholders of a corporation agree there’s nothing wrong with them going to prison when a corporation’s agents break the law.Report

    • Avatar Jason Kuznicki in reply to Shannon's Mouse
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      says:

      Shareholders are not legally responsible, but management is.

      This seems fair to me; by analogy, when you borrow money from a bank to commit a crime, the bank doesn’t become responsible for your actions.

      Shareholders are a lot more like lenders than they are like the owners of an animal or a piece of ordinary property.Report

      • Avatar BlaiseP in reply to Jason Kuznicki
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        says:

        Heh. Damned near everyone in a bank is a Vice President of something or other. By making all these people officers of the corporation, they open the barn doors to exactly what you’ve described.Report

      • Avatar Shannon's Mouse in reply to Jason Kuznicki
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        says:

        I don’t necessarily have any huge disagreement with the fairness of transferring obligations and liabilities from the shareholders of a corporation to the agents of the corporation. However, I don’t believe that a restriction on a corporation (or its agents) can always be construed to be a violation of the rights the shareholders of a corporation either.

        In any event, corporate personhood involves a lot more than saying individuals don’t forfeit their rights when they associate. A corporation is A LOT more than a simple association — it is government recognition of a separate entity that has a bundle of obligations, liabilities, and privileges that are different than those held by the shareholders individually.Report

      • Avatar Barry in reply to Jason Kuznicki
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        says:

        Jason, as a borrower from a bank, I don’t control the bank’s actions (in theory; as the say goes, ‘if you owe the bank a million dollars, you own the bank’).Report

    • Avatar Barry in reply to Shannon's Mouse
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      says:

      Shannon’s point is crucial, and it’s amazing how many people miss it. The authors at the LoOG can go around calling themselves ‘The League of Ordinary Gentleman’, and it doesn’t mean much. When they incorporate a LoOG, Inc, that means that they have used the state to create a legal entity which has rights and duties entirely separate from the authors, and which can deal with people (willingly or not) as if it were a person entirely separate from the authors (with certain limitations, etc.).

      It’s an insanely valuable thing, and is eagerly exploited by the financial elites.Report

  4. Avatar Salvador Dalai Llama
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    says:

    There’s a problem, though, with the part that the history leaves out: these fraternal organizations reached their peak in the early 20th century. Then the Great Depression happened. The ensuing financial and social breakdown simply overwhelmed the capacity of private charity and fraternal organizations to deal with.

    This is from the state of Illinois state archivist:
    http://www.cyberdriveillinois.com/departments/archives/hard_times/home.html

    Across the county people hunkered down and coped with the hard times. More and more became self-reliant by growing their own vegetables, canning produce, and cooking homemade soap. Marriage and birth rates declined while divorces increased. Very real physical images of the distressed economy appeared in the forms of foreclosures, evictions, Hoovervilles, soup lines, garbage picking, apple selling, drifting, and outright begging. Public school financing became problematic as teachers went unpaid and physical plants deteriorated. Private relief efforts quickly exhausted themselves as resources became depleted and renewed funding was found wanting.

    Report

    • “Overwhelmed” is a relative term—how many starved to death in the Great Depression?

      Further, this is not to say that government can have no role during disasters. The question is whether it should become the norm, and the ONLY safety net for society.

      What we see is that the more the government steps in, the more voluntary society steps out. This is the problem. The governmental sphere grows, and squeezes out that of the more informal, “organic,” society.Report

      • Avatar Mad Rocket Scientist in reply to tom van dyke
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        says:

        Exactly, government should be the last & final safety net, not the first & only.Report

      • Avatar Barry in reply to tom van dyke
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        says:

        ““Overwhelmed” is a relative term—how many starved to death in the Great Depression?”

        If that’s your standard, stick with it. I’d love to use that as your basis.Report

      • Avatar BlaiseP in reply to tom van dyke
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        says:

        I’ve dealt with actual starvation. There’s more to it than starving to death. Children’s teeth didn’t get enough calcium: a whole generation of denture wearers emerged. Rickets, beriberi, kwashiorikor, all appeared in the Depression. Children did die during the Depression, at about the same percentages they die in any other famine.Report

  5. Avatar sigh
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    says:

    “Corporate personhood is really just legal shorthand for saying that individuals don’t shed any of their other rights when they exercise the right to associate.”

    Absolutely untrue. It would be true if corporations were merely associations of individuals, but they are not. Limited liability is the big difference but not the only one. The state has defined the legal status of corporations in many respects which privilege them in ways that a mere association of individuals is not privileged.

    There are instrumental reasons for the state creation of the legal entity known as the limited liability corporation. But there is no reason (in terms of liberty) why such privileged entities should be treated as persons (there may be instrumental reasons there also, though there are not in my opinion).

    Of course, in a world where the government made the rational decision to deny the privileged entity of a limited liability corporation the rights enjoyed by individuals, there would be noting stopping the individual owners of of that corporation from associating with each other, and exercising their individual rights in association. under an entity other than the limited liability corporation.Report

    • Avatar Jason Kuznicki in reply to sigh
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      says:

      Limited liability is a different concept from corporate personhood. A sole proprietorship or a partnership has corporate personhood, but not necessarily limited liability.

      Sigh, indeed.Report

      • Avatar Shannon's Mouse in reply to Jason Kuznicki
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        says:

        “A sole proprietorship or a partnership has corporate personhood, but not necessarily limited liability.”

        No.

        Sole proprietorships, partnerships, and corporations are completely different legal animals. If you incorporate your business, you are BY DEFINITION no longer a sole proprietor — a sole proprietor is not legally distinct from her business. And individual members of a partnership are exposed to significantly more liability than if they were shareholders of a corporation.Report

        • Avatar Jason Kuznicki in reply to Shannon's Mouse
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          says:

          Again, you are talking about limited liability as if it were corporate personhood. It’s not. The two are distinct.Report

          • Avatar Shannon's Mouse in reply to Jason Kuznicki
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            says:

            Limited liability is a grant of privilege extended to the shareholders of a corporation. How does a sole proprietorship gain corporate personhood when it’s not a corporation?Report

            • Avatar Matty in reply to Shannon's Mouse
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              says:

              I can’t speak for the US system but when I set up as a Sole Proprietor in the UK a few months ago it was made clear to me that my business *does not* have a separate legal identity to myself. Property bought for the business is my property, debts incured by the business (none yet) are my debts etc.Report

          • Avatar Pooh in reply to Jason Kuznicki
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            says:

            The two are distinct yes, but you are still demonstrating a woefully lacking understanding of the terms of art here. You are eliding literally textbooks full of partnership, corporate and business law here.

            Corporate personhood and the liability shield are different things entirely – there are other forms of association (LLPs and LLCs, for example) that also provide liability limitations, but the only form which provides for “corporate personhood” is…a formally and duly organized corporation. Other forms of association have other bundles of rights based on the business form, but describing this as “corporate personhood” is incorrect either as a linguistic or legal matter, depending on your intended meaning.Report

            • Avatar Jason Kuznicki in reply to Pooh
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              says:

              I’ve been brief, yes. But when people straightforwardly equate corporate personhood and limited liability, I’m going to correct the mistake, not write treatises.

              The basic point is that nothing is lost — contract-making isn’t lost. The ability to hold property isn’t lost. The ability to speak isn’t lost.

              When liability is lost, this is from something other than corporate personhood. And it’s only lost for shareholders, not for management. If it were lost for everyone, I’d agree that that would be terrible. But if it were inflicted on everyone, that would be terrible too. Very few would be willing to invest in anything at all, and this would hurt everyone far beyond whatever gains you might think you’d be reaping.Report

              • Avatar Pooh in reply to Jason Kuznicki
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                says:

                The point is still that referring to “corporate personhood” and including “partnership” or “sole professorship” (or even labor unions) is inconsistent with the legal and/or colloquial use of those terms. If you are just referring to the single-entity status of a business, you shouldn’t use the term “corporate personhood” as a catch-all, since that implies some very specific things, one of which is limited liability.Report

              • Avatar Jay Daniel in reply to Pooh
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                says:

                The semantic accusations here are ridiculous. The terms “corporate” and “corporate personhood” do not derive from the term “corporation.” Pedantry is insufferable when it comes from ignorance.

                Jason is obviously talking about the separate, “corporate” existence of organizations from their members. This is apropos given the criticisms of and justifications for Citizens United and the conception of corporate entities underlying it.

                Legal recognition of the separate existence of a corporate entity (able to own property, sue and be sued, etc.) is a quality shared by common law partnerships as well as corporations — and indeed, it is even shared at common law by voluntary associations, like churches and the Elks Club. None of these organizational types shares limited liability with corporations.Report

              • Avatar Pooh in reply to Jay Daniel
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                says:

                I understood that to be his meaning as well, but it’s not “mere semantics” to point out that his words (unintentionally) allow for multiple interpretations, one of which makes a far stronger and more value-laden claim than the other.Report

              • Avatar Pooh in reply to Jason Kuznicki
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                says:

                And I’m not trying to pick nits here, as the fine print matters a great deal when we’re talking about specifics like this.Report

      • Avatar sigh in reply to Jason Kuznicki
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        says:

        Of course they are different concepts. The question is why the artificial, state created, privileged entity known as a limited liability corporation be given the artificial, fictional status of “personhood” by the state. You claim that this is simply “legal shorthand for saying that individuals don’t shed any of their other rights when they exercise the right to associate.” That is simply untrue, as (a) the corporation enjoys a host of legal privileges that individuals do not, and (b) denying them said artificial status in no way at all compromises the individual stockholders rights to associate with other stockholders, and exercise the whole panoply of individual rights in the context of that association, as long as they don’t do so under the specific form of the limited liability corporation. And, (c), it’s a legal, state created fiction.

        The above, it seems to me, is undeniable. There may be instrumental reasons for the status quo. There may even be a rights-based rational for providing corporate personhood, though if there is I’ve never seen the argument made or even attempted in any but a question begging manner.

        Most libertarians (other than the Kevin Carson, left, libertarians) have a real blind spot for the defense of the limited liability corporation. The less sophisticated libertarians simply ignore the state role in the creation of the legal concept, pretending that it is merely a form of free association. More sophisticated libertarianism make the instrumental defense of the concept (and it’s a good defense!), but then make the leap from this instrumental defense to an argument (or, more often, an unstated assumption) that these state created entities are somehow a bedrock of a free society.

        Of course, one could make the argument that for the same reasons that I set forth it doesn’t matter, one way or the other, because the individuals could engage in the same activities in a none corporate association. The kicker here – and one of the major reasons why corporate personhood is problematic (though not as problematic as progressive critics claim) involves corporate governance issues. Political speech by GM is not in any meaningful sense political speech by it’s shareholders in association, but is political speech by management, which as we all know is increasingly divorced from the shareholders.

        It’s certainly true that once the courts decided to grant the artificial status of persons to corporations – not a recent decision at all – the constitutional jurisprudence that follows is unremarkable and probably even correct. It’s the original decision to grant them that status that is problematic.Report

        • Avatar Jason Kuznicki in reply to sigh
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          says:

          The question is why the artificial, state created, privileged entity known as a limited liability corporation be given the artificial, fictional status of “personhood” by the state. You claim that this is simply “legal shorthand for saying that individuals don’t shed any of their other rights when they exercise the right to associate.” That is simply untrue, as (a) the corporation enjoys a host of legal privileges that individuals do not, and (b) denying them said artificial status in no way at all compromises the individual stockholders rights to associate with other stockholders, and exercise the whole panoply of individual rights in the context of that association, as long as they don’t do so under the specific form of the limited liability corporation. And, (c), it’s a legal, state created fiction.

          Many corporations have corporate personhood without limited liability. Confusing the two is like saying that all corporations have a cafeteria, because you’ve seen cafeterias in one or two of them, even despite the obvious evidence to the contrary that is all around you.

          If your beef is with limited liability, then say so. If it’s with the ability of corporations to hold property or enter into contracts, then say that instead. But the two have never been identical in law or in fact.Report

          • Avatar sigh in reply to Jason Kuznicki
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            says:

            No, you’re not getting it. Maybe the problem is my communication skills, but I suspect it’s mostly what I see as a huge blind spot in the mainstream libertarian world view.

            The fact that the fictional concept of personhood for non-individual entities is not problematic in some contexts does not mean it is not problematic in other contexts. Nor must we extend the concept to the corporate realm in order to protect the right of association in other realms.

            There is no logical reason why a state cannot as a general rule protect people’s rights of free association by giving groups of people the same rights as individuals (or acknowledging rights that already exist, however you want to characterize it), yet restrict the rights of one particular type of association that just happens (for purely instrumental reasons) to have legal privileges not enjoyed by individuals.

            Again, there may be reasons why the status quo treatment is “correct,” but the argument usually trotted out doesn’t prove anything. One could easily imagine a realm that fully protects individual rights of association without extending such protections to corporations.Report

            • Avatar Mad Rocket Scientist in reply to sigh
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              says:

              So create the legal protections of limited liability, etc. but strip away the idea that a corporation (or a Union) is acting as the association of individuals wills it?Report

              • Avatar sigh in reply to Mad Rocket Scientist
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                says:

                No … just because legally a corporation is acting as the association of the individuals that wills it, doesn’t mean that it should be given the same panoply of rights that an individual has.

                To put it as plainly as possible: there is no reason the government can’t say “we are creating this neat legal concept called a limited liability corporation – but in order to take advantage of it, you’re going to have to park some of your rights at the door. Not give them up, just not exercise them completely IN THIS SPECIFIC CONTEXT.

                Again, one can argue that the government SHOULD NOT do that. But there is no reason why a minarchist should categorically rule out those kinds of trade offs. ANY level of government involves some sorts of those kinds of trade offs. If you rule them out categorically, then you’re … an anarchist. And more power to you. But then you wouldn’t be okay with the concept of a limited liability corporation in the first place.

                And of course if you ARE making the argument that for whatever reason such trade offs should not be made, please don’t pretend that any individuals will lose their rights of association.Report

              • Avatar Mad Rocket Scientist in reply to sigh
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                says:

                That is what I was getting at (most of the defense of corporate person-hood I read is in the vein of “a corporation is a free association of individuals, thus it should have the same rights as the individuals that compose it”

                I’ve never found that explanation to hold water, since corporations are not managed democratically by the share holders, much in the same way that our government is not managed democratically (and our government, by design, has no rights, and numerous restrictions)Report

              • Avatar Pooh in reply to Mad Rocket Scientist
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                Legally, there are plenty of good reasons to treat corporations as person-like in terms of unitary action, but I think the steps from “person-like” to “person” to “person with the same constitutional rights as an actual person” get kind of muddled and not fully thought out. Sloppy adherence to the thought that a “person” is a person is nonsensical when you ask the question of how in practice would a corporate person be deprived of a given right and what would the appropriate remedy be?Report

              • Avatar sigh in reply to sigh
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                says:

                Well I think that’s true also, though you’re on somewhat more problematic ground there IMO, since arguably that’s “just” an issue of corporate governance, and not inherent to a corporation. Whereas my argument goes to heart of what a limited liability corporation is.Report

              • Avatar Pooh in reply to sigh
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                says:

                Regardless, we’re kind of in the weeds here, when the basic point is that Jason was at best careless with his language on this topic.Report

            • Avatar Matty in reply to sigh
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              I’m not familiar with a lot of this debate, can you clarify what legal privileges a corporation has that an individual does not?Report

              • Avatar sigh in reply to Matty
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                says:

                I’ll start by dinging myself for some marginally slipshod use of language. Probably the more accurate way to put it – I’m going to quote from wiki for reasons of time, but accurately: “A corporation is a legal entity that is created under the laws of a State designed to establish the entity as a separate legal entity having its own privileges and liabilities distinct from those of its members.”

                The biggest distinction is limited liability. Let’s say a corporation creates an environmental catastrophe that causes damages far greater than the value of the corporation You can’t go after the shareholders for the difference between the damages caused and the liquidation value (minus prior liabilities) of the corporation. Over simplified but basically accurate. This is not true for sole proprietorships, partnerships, etc.

                The other big one (though arguably less important in this context) is that corporations are immortal.Report

              • Avatar sigh in reply to sigh
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                And I really want to emphasize that I think this is less of a big deal than do many progressives. And to the extent that it is a big deal, it is a big deal precisely for reasons which libertarians of all people are the first to identify – our old friend rent seeking. But the simple fact is that there are certainly ways around this. The Koch bothers, love them or hate them, primarily are politically active as individuals (absolutely and properly protected), rather than through their corporate entities. And there is even the irony that corporate donations are somewhat more transparent than donations from non-corporate entities which may have fewer disclosure requirements than corporations.

                But it bugs me to see, time after time, the fallacious counter argument that removing said protection from limited liability corporations would somehow cause indidual shareholders to lose rights of association. It’s pure bunk.Report

              • Avatar James K in reply to sigh
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                The Koch bothers, love them or hate them, primarily are politically active as individuals (absolutely and properly protected), rather than through their corporate entities.

                This is what confuses me about the calls to restrict corporate speech. Really rich people can actually buy advertising to advocate their ideas without needed a corporate form to collate their money. But less wealthy people may need it since the average person can’t buy a lot of airtime on their own.

                So how does restricting corporate speech not primarily hurt middle class people more than rich people? If I were trying to bolster plutocracy in the US the first thing I would do is make it hard for people to coordinate political advocacy through corporations, that way only my fat cat buddies would be able to make their voices heard.Report

              • Avatar Pooh in reply to Matty
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                Not dying, different tax rules, no corporeal person to be made subject to many criminal punishments as a start.Report

          • Avatar Koz in reply to Jason Kuznicki
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            says:

            “Many corporations have corporate personhood without limited liability. “

            Really? So there’s corporations whose corporate liabilities flow through to the owners? I don’t know of any.Report

            • Avatar Jason Kuznicki in reply to Koz
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              They have already been discussed here. Proprietorships and unlimited partnerships are two varieties where the liability does flow through.Report

              • Avatar Pat Cahalan in reply to Jason Kuznicki
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                says:

                I was under the impression that in U.S. corporate law, sole proprietorship organizations and unlimited partnerships are not considered corporations; in U.S. corporate law, limited liability comes part and parcel with a state-recognized corporation. A sole proprietorship is a business entity, of course, but it is not a corporation. Is this incorrect?Report

              • Avatar Pooh in reply to Pat Cahalan
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                This is correct.Report

              • Avatar Jason Kuznicki in reply to Pooh
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                No, it’s not correct. Partnerships, even those that don’t have limited liability, are nonetheless legal entities distinct from the partners.Report

              • Avatar Pooh in reply to Jason Kuznicki
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                says:

                “No, it’s not correct. Partnerships, even those that don’t have limited liability, are nonetheless legal entities distinct from the partners.”

                That’s not the same thing as saying they are a corporation, which is the nub of the entire digression. All corporations are legal business entities but not all legal business entities are corporations. You might think we are saying the same thing, but we’re not. “Corporation,” at least in US law is a creature of (primarily state) statute with very specific requirements, duties and immunities, and is not at all coextensive with “Business entity”.Report

              • Avatar Koz in reply to Jason Kuznicki
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                says:

                I think Jay Daniel’s comment above clarifies the semantic issues. When people talk about corporations, most of the time they are distinguishing them from sole proprietorships or partnerships. In any case, the problem isn’t that corporate persons can’t be distinguished from actual persons. They are already, for the purposes of census and voting, at least.

                Or that this or that might violate the “rights” of corporate personhood. However, the there is significant tradition of jurisprudence, long antedating Citizens United, that corporate persons have mostly the same rights and privileges as actual persons. Even if we could change it, it’s not necessarily clear why we should.Report

        • Avatar David Cheatham in reply to sigh
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          says:

          | It’s certainly true that once the courts decided to grant the artificial status of persons to corporations – not a recent decision at all – the constitutional jurisprudence that follows is unremarkable and probably even correct. It’s the original decision to grant them that status that is problematic.

          Indeed. ‘Persons’ do not, and cannot, exist at the whim of the government…_as all corporations do_.

          Tomorrow, any state could, poof, magically uncreate all corporations that exist in it, by repealing corporation law and dissolving the corporations. Yes, yes, you’d run into issues with the taking of property from the _owners_ of the corporation, but those are solvable, and there’s no actual issue with the corporation itself.

          So, tell me…how does ‘someone’ have ‘free speech rights’ but not a ‘right to not be killed randomly by a change in the law’? This is utterly nonsensical. Entities created and destroyed by law cannot possibly, in any manner at all, have ‘rights’ that the law cannot touch.

          Whenever libertarians talk about how corporations shouldn’t be regulated, I nod, exclaim how it’s an awesome idea, and ask them how they plan to deal with such a massive change that dissolution of all corporations would bring to society, and if they’ve figured out how to replace them with private contracts, which seems tricky to me, but maybe they’ve figure it out.

          They tend to look at me in bafflement until I point out that failing to regulate corporations would result in them _not existing at all_, as they are, after all, the creation of regulations in the first place.

          Corporate personhood isn’t just ‘problematic’, it’s…well, you know that claim that ‘You can produce a reasonable facsimile of insanity by taking one nonsensical premise and extending it to the logical conclusion.’? Well, that’s the US’s ‘nonsensical premise’ of the century.Report

      • Avatar Pooh in reply to Jason Kuznicki
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        says:

        If that’s your answer, we’ll see you again when you retake the bar this summer!Report

  6. Avatar Francis
    Ignored
    says:

    1. Correlation is not causation. And causation in one direction (rise of the welfare state destroyed fraternal organizations) does not imply causation in the other direction.

    2. Statements like this one: “Corporate personhood is really just legal shorthand for saying that individuals don’t shed any of their other rights when they exercise the right to associate” cause moderately well-educated people to hate libertarians. It’s true, in the sense that very few people think of paying your debts as a right, not an obligation. But if you say that phrase often enough, people will start to believe it without questioning whether there isn’t a broader truth being hidden.

    A general partnership is really the term you’re looking for. But as some of the Names at Lloyds found out in recent years, being a partner in a g.p. means taking the bad with the good. A limited liability entity? Not so much. The owners (and managers) of that entity have kept their rights, but shed their obligations. Nice work if you can get it.Report

    • Avatar Simon K in reply to Francis
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      says:

      Limited liability only removes financial obligations, and only as far as the managers are acting on behalf of the corporation. If managers commit crimes in the course of their jobs, they’re personally liable. If the actively defraud people for their own personal benefit, they’re personally liable.Report

  7. Avatar Dan Miller
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    says:

    It’s pretty striking that you blame the welfare state for the decline of unions, and not the many more direct actions taken against them like Taft-Hartley, the utter lack of enforcement of labor law (especially under GOP-controlled government), or the breaking of the air traffic controllers and other unions under Reagan. You don’t have to posit a triple-bank-shot to explain the demise of unions, whether or not you think it’s a good thing. There’s been a concerted effort to undermine their power, and it’s got little to do with the rise of the welfare state.Report

    • Avatar Jason Kuznicki in reply to Dan Miller
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      says:

      I’m not at all saying that it’s the only factor at work. It could easily be a minor factor. Taft-Hartley, passed in 1947, seems less proximate than the welfare expansions of the 1960s, but I won’t discount it either. Anything sufficiently massive in history almost always has multiple causes behind it.Report

    • Avatar Will in reply to Dan Miller
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      says:

      Dan Miller –

      I think we can distinguish between the decline of unions’ welfare-providing services and the decline of unions writ large. Even in a world of social safety nets and government anti-poverty programs, there’s still a need for collective bargaining and workplace negotiations. After all, labor’s heyday in the United States coincided with the apogee of New Deal liberalism. But there is less need for union-directed charity if government provides a range of social welfare services.Report

    • Avatar Koz in reply to Dan Miller
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      says:

      Actually the triple-bankshot criticism applies to your hypotheses as well, more than Jason’s really. Organized labor lived perfectly well under Taft-Hartley, and was in terminal decline long before GWB.

      The Commentary blog as good item on this today: http://www.commentarymagazine.com/2011/02/28/ezra-klein-troglodyte/

      “If the employees of Microsoft and Intel wanted to unionize, they could easily do so, and unions are free to encourage them to do so. But the very idea is laughable.

      Klein quotes John Kenneth Galbraith (whose career as an economic thinker peaked in 1958 with the publication of The Affluent Society) that unions are a “‘countervailing power’ in an economy dominated by large corporations.” Of the 30 corporations that made up the Dow-Jones Industrial Average in 1958, exactly two are still in it, DuPont and Exxon. Many of those in the Dow in 1958 are bankrupt or have merged. The economy may (or may not) be dominated by large corporations, but the corporations doing the dominating are not the same. Intel, Microsoft, Google, Wal-Mart, and other “dominating corporations” today were not even founded (and in some cases, their founders not even born) in 1958. Unions, far from being a countervailing force in the economy, are a reactionary force, resisting change at every turn because their “business model” is so outdated.”Report

      • Avatar MadRocketScientist in reply to Koz
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        says:

        That is something I’ve noticed as well. Amongst degreed professionals, Unions are few & far between, and such Unions are more along the lines of designated negotiators & a labor debate society, who only bare their teeth when contracts are violated or when working conditions cause voluntary member attrition to climb. This is how my Union behaves, partly because the entire Union membership has at least a bachelor’s degree, and some concept of basic economics, and partly because the idea of being in a Union chaffs at a large percentage of the members (our Union leaders have a hard time rabble rousing).

        Most degreed professionals are more than capable enough to negotiate their own terms of employment without getting taken to the cleaners, and most private employers who want/need degreed professionals are willing to make the compensation attractive. As the US workforce becomes more & more educated, Unions are less & less attractive, and employees are more & more savvy. The days of being able to graduate High School & get a job at the factory & make a middle class living are coming to a close, and THIS IS A GOOD THING!

        As for WI, one thing to keep in mind (this coming from a former govertment worker manager from WI) is that for the most part, the WI PS Unions are pretty benign. A lot of times, during contract negotiations, the Union would ask for the world, and much to their surprise, they’d get it! Politicians may balk at pay raises, but job security doesn’t bother them at all (they have people to handle & navigate the bad employees), and fat pensions will most certainly be “someone else’s problem”. The Union has rarely gone on strike (that I can recall, I could be wrong, but I can’t find a good history of strikes), and aside from the nice benefits, the only real problem with the Union is a problems all Unions share – protectionism, of bad workers, and bad ways.Report

      • Avatar Barry in reply to Koz
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        says:

        Commentary magazine as a source?Report

  8. Avatar trizzlor
    Ignored
    says:

    The first-best solution is to fix the system, not to make our government depend on it staying broken.

    This is a great point, and your entire post is very thought-provoking. Certainly if the system is trending towards increased income inequality, simply scooping some of the income off the top and sending it back to the bottom isn’t the right solution. However, I would argue that one possible reason for the derivative income gap is actually lowered class-mobility. It’s not the easiest thing to measure, but there is some pretty good evidence that this rate is stagnating and well behind the other developed nations. In that case, more progressive taxation and programs certainly could go a long way towards improving class mobility by providing the lower/middle class with additional paths towards wealth (in the spirit of footnotes: I’m talking about education grants, worker re-training, child-care etc. and not gubmint funded t-bone steaks).Report

  9. Avatar James Hanley
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    says:

    From Freddie deBoer:

    A union provides more for its members by capturing value from corporations, not from taxpayers.

    Actually, that’s not necessarily correct. It assumes that corporations can’t pass the cost of the captured value on to consumers. In a competitive enough market, they may not be able to, as Detroit’s Big Three have learned in recent years. Of course in that case the union may just be contributing to the firm’s decline and not really helping their members. But if the corporation can pass the costs on, then the union is actually capturing extra value from the consumers.

    Anyone who is deeply concerned about corporate greed ought to pause to consider whether those greedy corporate bosses are going to willingly allow unions to take value from them. It seems unlikely, unless the corporate bosses just can’t manage to pass those costs on.Report

    • Avatar BlaiseP in reply to James Hanley
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      says:

      This presumes the union is just net friction to the whole process. The corporation stockholders ultimately own the company. In Germany, the Mitbestimmung laws say corporations of over 500 workers, the workers must have representation on the boards of directors.

      If the company has a well-paid workforce, it can start demanding a well-educated employee. Pay the workforce crap wages, you get crap product. Put it this way, would you rather trust Joe Schmo off the street or a union electrician to wire up your 220? Always hire a qualified specialist, you will ultimately get more value for money: there’s a reason he’s worth more.

      Efficiency wage theory means the productive get paid well and there’s less turnover because high wage jobs are in short supply and there’s always someone gunning for your job. Furthermore, better and smarter and more hardworking people will seek that job and you can run off the less-productive worker.

      So many begged questions in there. The trade union comes in many flavors and most of them are common sense. Workers and management will always have some conflicts, let the union work it out without roiling up the mob.Report

    • Avatar Simon K in reply to James Hanley
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      says:

      If the corporation is in a position to extract monopoly rents from consumers they most likely will be doing so whether the union is there or not. In this case the union really is capturing value from the corporations owners. This seems to have been the historically most common case – a monopoly union, capturing value from an employer that itself is a monopoly. Its probably true that this doesn’t happen as much as it used to, but there’s evidence that there’s still surplus value for labor to capture – eg, the relative inelasticity of prices and unemployment when faced with minimum wage laws.Report

      • Avatar BlaiseP in reply to Simon K
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        says:

        And the union doesn’t always occupy an adversarial position, though it often did, for historical reasons. If a corporation plays its cards right, its union workers understand the predicaments and opportunities of increasing market share, remaining competitive and especially the benefit of working with competent executives.Report

        • Avatar MadRocketScientist in reply to BlaiseP
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          says:

          A lot of that depends on the union membership & leadership. A body that understands business & basic finance is a body that will be more willing to deal fairly with a company.

          Too often, union leadership are interested in keeping the body ignorant of the realities of business. It’s much easier to rabble rouse when the body doesn’t have enough information to question the leadership. Rules/laws that restrict the ability of a company to communicate with it’s own workers are harmful (my company got into trouble during the last negotiations for publishing the full contract the membership was voting on, on a company website, when the union wanted to keep the actual text quiet).

          My own experiences with the two major unions at my company bear this out. The professional union is much more willing to work with the company, while the skilled union can’t see past the limits of their own contract (our business creates products that last for decades, so our business has to look that far ahead).Report

  10. Avatar Stephen Cusulos
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    says:

    “Mutual aid was one of the cornerstones of social welfare in the United States until the early 20th century.” I am not so sure as to what extend mutual aid organizations met the social welfare needs of those who were in most need. Can someone provide any data on this.Report

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