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KOL 026 | FreeDomain Radio with Stefan Molyneux discussing Corporations and Limited Liability

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Kinsella on Liberty Podcast, Episode 026.

This is FreeDomain Radio episode 2336, in which host Stefan Molyneux and I discussed libertarian aspects of corporations and limited liability law. (Originally recorded Feb. 22, 2013, released by FDR on Feb. 26.)

For more on this issue see my Libertarian Standard post Corporate Personhood, Limited Liability, and Double Taxation; and KOL100 | The Role of the Corporation and Limited Liability In a Free Society (PFS 2013).

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  • Alan Chapman February 28, 2013, 7:56 pm

    I don’t think that massively huge firms would exist in a free-market. Mega corporations engulfing the planet is science fiction. The dissociation of internal transaction costs from market prices, and diseconomies of scale, would impose an upper limit on size. I think it was Roderick Long who referred to them as “islands of central planning in an ocean of markets” and you mentioned the ECP in the video. Among the reasons why some firms grow so large is because State impediments function like cordons which funnel capital in their direction. The unnatural revenue stream offsets losses.

    Scaled Composites and SpaceX are examples of small firms which build airplanes and space vehicles.

  • Cory Klein May 22, 2014, 12:20 pm

    @Alan – could you explain “dissociation of internal transaction costs from market prices”? What does this mean, and why would it prevent mega corporations?

    • Vanmind June 10, 2014, 3:21 pm

      This avatar is going to make a sort of ignorant guess.

      Perhaps in a world of free market pricing mechanisms, any leftover huge corporations would no longer be able to compensate for intra-bureaucracy gear-grinding by reaching out to political connections (“Our R&D center has become an entrenched bureaucracy and isn’t coming up with any more innovations, so please pass a law against innovation — I mean, a law to protect consumers from pig-in-a-poke merchandizing”). Pricing matters, even inside a company’s interconnected departments, so under hypothetical “things have changed overnight” conditions of free markets all existing mega-corporations would implode in the same way that a government implodes when it can’t enact legislative coercion. After the megas had fallen, free market pricing mechanisms would put a limit on the logistics marshaling that any one business could afford (juggling a thousand balls becomes easier for you when a vizier can force the harafish to relieve some of your juggling duties).

      The growth and sustenance of mega-corporations is possible because of one thing: regulation. A proverbial useful idiot allows the NWO to trick him into blaming everyone but the State for the effects of regulation (UI: “Private offshore mega-corporation banksters are behind it all!”), but the State has aces up the sleeve should any of its cronies in the rigged market become too uppity (“Emergency nationalization!”). In other words, there is no such thing as a society in which corporations “own” government (as the Alan Chapman avatar suggested: such nonsense is the stuff of movie scripts that the NWO prefers for keeping useful idiots blaming its plunder on everything but the regulations).

      Aside: this avatar doesn’t think much of the Long quote (possibly misattributed or taken out of context), for even under complete freedom each business remains an island of central planning in an ocean of markets. Perhaps he was just trying too hard, but that is the very “boo hoo” factor which imposes an important specter of bankruptcy: can a group of individuals cooperate on a plan to keep their current employer afloat when facing innovative market competition? The State, of course, says “Yes, we can,” which is an obvious collectivist con intended to trick useful idiots into admiring the State’s legislative confidence.

      A con man doesn’t defraud you by taking away your confidence. A con man defrauds you by tricking you into considering his confidence as a reflection of your own. Whenever the State manages to trick enough people into believing that its “Yes, we can” confidence reflects their own personal-is-the-political confidence, absolutism is about to kick in the door.

  • Brian July 24, 2017, 5:49 pm

    Stephan,

    I listened to this podcast three times to catch your point about net vs relative subsidies again. Do you have other references to this discussion topic?

    Thanks,
    Brian White

    PS – that website is pending 🙂

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