** The nature of corporations
Topics: FreeSpeech, Theory
12 Jan 1994
From: ervan
In our debate on free speech, you said:
> [ Corporations are legal fictions and should not have rights ]
I have been thinking about this some more, in a slightly different
context. In part, I agree with your statement and simply feel that
you are not willing to consistently apply it. I'd say that corporations
are merely collections of individuals with a common purpose and merely
that they choose a particular form of organization to represent that
interest in no way makes the corporation a first class entity with
any more or fewer rights than its constituents have as individuals.
I have two specific issues in mind, income tax & free speech. As an
analogy, I saw a quote by Milton Friedman recently which said (from
memory) something like: 'National health is a misnomer. There is
no such thing. They nation is not healthy or ill. Only people are.'
I think that's very true. Any program that talks about collective
good, particularly such phrases as 'the good of society' are instantly
suspect. Society per se cannot derive benefit from some 'good thing',
only individuals can. If one cannot, at least in principle, point
to which individuals profit, it's nonsensical.
Returning to the issue at hand, liberals seem to see corporations as
entities, albiet of a special sort. They believe those entities
can do good or ill and in trying to control their behavior have
regulated only the corporations and not the persons behind them.
This is just the opposite of my view. There are no evil corporations,
only evil persons. To take money from corporations is take money
from individuals. To regulate corporations is to regulate individuals.
Based on this, there is a notion of a corporate income tax. That's
silly, corporations do not have incomes. I, of course, don't mean
they have no money flowing in, showing up in an income column on a
ledger, and from which profits are disbursed. I mean that conceptually
they don't have income. As we have discussed before, taxing corporate
'income' merely taxes personal consumption. Regardless of whether or
not that's a good idea, the notion of corporations as entities leads
to this idea of taxing their often substantial income as if they were
rich persons. That's not what's happening. The results of this are:
1) a regressive consumption tax
2) Profits are shifted from dividends to interest (since interest payments
are not profit to the company) causing an inefficient amount of debt.
3) Companies squander profits on unnecessary perks, etc.
The second item is the one we already discussed, free speech. Once
one believes in this construction of corporations as entities, it becomes
plausible to reopen the censorship issue. From my point of view, it's
just nonsensical. I don't mean to reargue that point here, only put
in perspective for this post.
I want to make the case that despite your claim, it seems to me that you
do regard corporations as entities. Your policies flow consistently
from that premise. I regard them merely as collections and see my
policies as being consistent with that.
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