Thursday, September 12, 2013

Free Markets And More

Free Markets And More

Creative Commons License
Free Markets And More by drew Roberts is licensed under a Creative Commons Attribution-ShareAlike 3.0 United States License.

Free markets, limited liability corporations and other distortions.

This will hopefully be a good beginning in setting down some of these ideas. Also hopefully, I will continue to add to and refine these ideas with time and quality feedback.

I have been putting forward the idea for some time now that a limited liability corporation is in fact a government meddling in a free market and that said meddling gives us in effect a non-Free market. At the minimum it is a distortion of the Free market caused by the government.

I cannot seem to get too much discussion going around this point, especially with respect to some of my more pro Free market, pro libertarian, pro capitalist friends. Take me up on this guys. It might be a worthwhile discussion.

Now, limited liability corporations may be a worthwhile meddling in a Free market, but they are a meddling and if you are a Free market proponent, and especially one on the more strict end of things, the case needs to be made.

Also, when people want to have the government step in and deal with what they see as abuses of living people by corporations, you need to be open to the possibility that they may not in fact be calling for any initial government meddling in the Free market but rather wanting to government to correct the abuses made possible and arising from the initial meddling done in creating these limited liability corporations in the first place. (Even if they do not make the argument in these terms.)

Let's move on from the mere fact of limited liability corporations and the inherent meddling in and distortion of the markets by governments when they allow for the creation of said corporations to businesses that need to government to step in and "force" rights of way and other similar things to make things "work".

Let's take a phone or electric company. Did the government force any private land owner to sell some land or grant a right of way through or over some land in order to make the effort viable? If so, we are already not dealing with a Free market situation. The government has already meddled in that market with possibly long lasting consequences. This meddling needs to be at least acknowledged when discussing problems relating to the company and its effects on people.

Then we come to the calls to privatize government corporations and services. Fine and dandy. Unless we simply replace a government monopoly with a privately owned monopoly. You will have to make a much stronger case to try and justify that situation.

What benefits does society derive from a private monopoly, possibly overseen by government regulators? What negatives arise?

What benefits does society derive from a government owned monopoly, possibly overseen by semi-independent regulators?

Or do you not want to see any monopolies at all? Do you not buy the idea of natural monopolies?

That is enough for tonight. Hopefully more thoughts to come.

1 comment:

WeblogBahamas said...

Weren't Limited Liability Corporations outlawed in the 1700's? While I can see the merit of limited liability - owner losing everything they have - it can also lead to unscrupulous owners getting away with dishonesty. It might have also lead to more corporate lawyer and accounting work :0) I would have to do some research to comment more fully. I suspect you have more to say on it? Let's hear it (or read it) please.