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What is the libertarian view on Corporatism?

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Novus Zarathustra posted on Fri, Sep 18 2009 2:37 AM

People against Capitalism often say that a lack of Government regulation results in monopolies and Corporatism, where greed is put before people when they have the freedom to intoxicate teenagers with cigarettes through mass advertising, or dump toxic and cause lots of environmental damage or health problems.

Corporatism is also the ruling power when Government isn't, because they have politicians by the balls through lobbying anyway.

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Suggested by Laotzu del Zinn

Any libertarian who is not wholly opposed to corporatism is not a libertarian, given that corporatism is defined as "the organization of a society into industrial and professional corporations serving as organs of political representation and exercising control over persons and activities within their jurisdiction" [1] or the "theory and practice of organizing the whole of society into corporate entities subordinate to the state" [2] or the "control of a state or organization by large interest group." [3]

 

1. Merriam-Webster

2. Brittanica

3. Princeton Wordnet 3.0

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AJ replied on Fri, Sep 18 2009 2:52 AM

I think the general answer is that corporatism is only possible when there is a monopoly on force for large companies to piggyback onto. So it's not really accurate to say that "Corporatism is the ruling power when government isn't," if by that you mean corporations have the ruling power. If corporations had the ruling power, politicians would be lobbying them, not the other way around. If you really analyze what's going on, however, eventually it becomes clear that when there is a territorial monopoly on force, in an important sense all those attached and intertwined with the monopoly become part of it. That is the nature of a monopoly on force, as contrasted with other types of monopoly.

As for environmental damage, this too is arguably a result of government policy suppressing property rights as a way to encourage the Industrial Revolution. It used to be that individual property owners could sue factory owners for pollution effects more easily, but this changed sometime in the 1800s. Tom Woods mentions this in one of his talks. The libertarian view on advertising is a little more subtle and controversial, I think, because it gets down to the issue of whether advertising really violates property rights, and under what circumstances.

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AJ:

I think the general answer is that corporatism is only possible when there is a monopoly on force for large companies to piggyback onto. So it's not really accurate to say that "Corporatism is the ruling power when government isn't," if by that you mean corporations have the ruling power. If corporations had the ruling power, politicians would be lobbying them, not the other way around. If you really analyze what's going on, however, eventually it becomes clear that when there is a territorial monopoly on force, in an important sense all those attached and intertwined with the monopoly become part of it. That is the nature of a monopoly on force, as contrasted with other types of monopoly.

As for environmental damage, this too is arguably a result of government policy suppressing property rights as a way to encourage the Industrial Revolution. It used to be that individual property owners could sue factory owners for pollution effects more easily, but this changed sometime in the 1800s. Tom Woods mentions this in one of his talks. The libertarian view on advertising is a little more subtle and controversial, I think, because it gets down to the issue of whether advertising really violates property rights, and under what circumstances.

 

 

How do the two relate at all? Advertising = Freedom of the press.

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Democracy for Breakfast:
How do the two relate at all? Advertising = Freedom of the press.

There is no such thing as freedom of the press.  All rights are property rights.

"When you're young you worry about people stealing your ideas, when you're old you worry that they won't." - David Friedman
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This is one of the most difficult distinctions to make, corporatism vs. capitalism.  From the eyes of interventionist, they are one and the same.  As many can attest to here, they are vastly different.  The former re-appropriates property rights, the latter protects property rights.

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Corporatism would not be compatible with libertarianism, which opposes government interference in the economy. Corporatism relies upon it (indeed, many large corporate entities in real life lobby and benefit from regulations, due to costly regulations stamping out smaller businesses), as well as subsidies, patents and licensing cartels like the American Medical Association. The two are as incompatible as laissez faire capitalism and a command economy.

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AJ replied on Sat, Sep 19 2009 1:19 AM

The quick answer is that Corporatism is just another form of Statism.

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In a sense, yes. Corporatist economies bear resemblance to the command economies and government-pseudoprivate partnerships promoted by fascists, but the relationship here is more of a cooperative than a hierarchical one of ostensibly private owners being commanded by higher planning commitees or government officials. Italian capital F Fascism, though, is a different pot of fish, in as much as it also promotes laborer syndication from the grassroots, a view that seems eerily similar to that of anarchist syndicalists like Noam Chomsky.

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Answered (Not Verified) Stranger replied on Sat, Sep 19 2009 10:27 AM
Suggested by liberty student

The regulations are the monopolies. The politicians are the corporatists.

The only solution is to abolish politicians.

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Cal and AJ gave excellent replies. I would only add that corporate crime has to be prosecuted effectively. It's up to the effectiveness of the judiciary system; the integrity of Justices and the intelligence of juries to ensure that both corporations and the wealthy businessmen are as equally subject to common law as the rest of us. Legal egalitarianism is the foundation of a free market economy IMHO.

Regulations (including anti-trust laws) always backfire and are used by the largest corporations to suppress competition. Expensive regulations, for instance, reduce the ease of entry into the respected market such that they actually lead to increased market share and profits for the largest firms.

Ron Paul on Anti-Trust Laws: http://www.youtube.com/watch?v=8C4gRRk2i-M

Socialism Vs. Corporatism: http://www.thedailybell.com/997/Ron-Paul-Socialism-vs-Corporatism.html

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Kaz replied on Fri, Jan 14 2011 12:51 PM

People against Capitalism often say that a lack of Government regulation results in monopolies and Corporatism, where greed is put before people when they have the freedom to intoxicate teenagers with cigarettes through mass advertising, or dump toxic and cause lots of environmental damage or health problems.

Corporatism is also the ruling power when Government isn't, because they have politicians by the balls through lobbying anyway.

Modern corporations are a form of socialism. This is their intended function. That's the reason the "progressives" advocated their institution in the first place.

The public corporation nationalizes an industry, by duplicating all of the conditions that would exist if the government nationalized it directly:

The "public" owns the corporation, the way they imagine they own the government. They buy shares of it, controlling it by majority rule. It's no longer a private company...it's no longer, in reality, a form of private industry at all. Public corporations are an assault on private ownership of businesses.

The corporation, like a government, is exempted from its bureaucrats being liable for any wrongs or crimes committed by the organization. This is not something you could ever have in a free market...there is no "power to be exempt from liability" that a private owner could ever transfer to an organization.

As I noted above, corporations are run by the tyranny of the majority. They are a "democracy", but with a constitution imposed by force, by the existing government. You are only allowed to organize your public corporation in a specific way, defined by the socialist government.

Corporations also cause the abnormal pooling of resources in an oligopoly that would never occur in the free market. This happens because they are the only legal way to pool resources that hugely...note that Facebook is struggling to get around that, using Goldman Sachs' banking manipulation, which illustrates the difficulty of doing so. This creates a small pool of industry-dominating corporations that can become oriented on "greed" instead of consumer responsiveness.

Check here for an article on the topic:

http://pithypontifications.wordpress.com/2010/07/08/corporations-are-socialism/

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Kaz:
The "public" owns the corporation, the way they imagine they own the government. They buy shares of it, controlling it by majority rule. It's no longer a private company...it's no longer, in reality, a form of private industry at all. Public corporations are an assault on private ownership of businesses.

The phrase "public corporation", if used at all, is shorthand for "publicly-traded corporation".  That simply means the corporation issues shares of stock that are sold to anyone able and willing to buy them.  Stock exchanges facilitate this buying (and selling) of stock shares.

I think there are two problems with the modern corporation.  One is that it enjoys universally limited liability.  This is a privilege granted to it by the government, which could be said to be (in the words of Frank van Dun) the original limited-liability corporation.

The other problem is that modern corporate law apparently muddles the actual ownership of the corporation.  According to Frank van Dun, in the absence of this muddled legal environment, the founder(s) of the corporation would be the original owner(s), and transfer of this ownership would be separate from the sale of stock shares.

Now with that said, I have no problem with the owner(s) of a corporation giving shareholders certain voting rights and/or other special privileges that amount to partial control over the corporation's affairs.  However, such privileges do not amount to transfer of ownership.

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F.A. Hayek:
Yet, though all the changes we are observing tend in the direction of a comprehensive central direction of eonomic activity, the universal stuggle against competition promises to produce in the first instance something in many respects even worse, a state of affairs which can satisfy neither planners nor liberals: a sort of syndicalist or "corporative" organization of industy, in which competition is more or less suppressed but planning is left in the hands of the independent monopolies of the separate industries.  This is the inevitable first result ofa situtation in which the people are united in their hostility to competition but agree on little else.  By destroying competition in industry after industy, this policy puts the consumer at the mercy of the joint monopolist action of capitalists and workers in the best organized industries.  Yet, although this is a state of affairs which in wide fields has already existed for some time, and although much of the muddled (and most of the interested) agitation for planning aims at it, it is not a state which is likely to persist or can be rationally justified.  Such independent planning b idustrial monopolies would, in fact, produce effects opposite to those at which the argument for planning aims.  Once this stage is reached, the only alternativ to a return to competition is the control of the monopolies by the state--a control which, i it is to be made effective, must beome progressively more complete and more detailed.  It is this stage we are rapidly approaching.

 

Road to Serfdom, Ch.3

 

The libertarian view on Corporatism is that it is a result of destruction of competition.  Is destruction of competition a tenet of capitalism?

 

The problems listed were (1) cigarette use being encouraged by mass advertising and (2) toxic waste dumping being the cause of environmental damage or health problems.

 

To adress #1, I don't know if this is a huge problem anymore. When health risks became widely known, many people avoided them for that reason.  I don't think it takes seeing a Surgeon General's warning and saying "oh, the government doesn't want me to do this so I shan't."  Most of the people I knew in high school didn't smoke cigarettes to be cool, but to rebel.  They did so because they knew it was "frowned upon."  Therefore, discouragement hardly seems like it would be effective.  And of course many continue because it is addictive.  If they want to do so, I see no reason to stop them.  They are no slaves to cigarettes, it is certainly possible to quit.  Would regulation of cigarettes or their advertisement be the solution?  I don't think so.  In regards to teens, I'm pretty sure marijuana is quite a bit more popular than cigarettes.  And marijuana is outlawed.

 

Also, I'm not quite sure of their specific regulatory environments, but here are advanced countries with higher cigarette use than in the U.S.: Greece, Spain, Japan, Poland, Belgium, South Korea, Switzerland, Austria, Italy, Denmark, and Ireland.

 

To adress #2, it's a simple matter of property rights violation.  Not to necessarily support the Libertarian Party, but here's their environmental page:

http://www.lp.org/issues/environment.

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Autolykos:
Kaz:
The "public" owns the corporation, the way they imagine they own the government. They buy shares of it, controlling it by majority rule. It's no longer a private company...it's no longer, in reality, a form of private industry at all. Public corporations are an assault on private ownership of businesses.

The phrase "public corporation", if used at all, is shorthand for "publicly-traded corporation".  That simply means the corporation issues shares of stock that are sold to anyone able and willing to buy them.  Stock exchanges facilitate this buying (and selling) of stock shares.

^^^^^^^^^^^ This.

To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process.
Rabbi Lapin: "Let's make bricks!"
Stephan Kinsella: "Say you and I both want to make a German chocolate cake."

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