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Author Topic: Corporate Limitation Amendment
Lisa
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Print this out, take it to your friends and get signatures. Yes, it will change our economy hugely. But it's the only way to start us on a real road to recovery.

quote:
CORPORATE LIMITATION AMENDMENT

1. Personhood within the context of the fourteenth article of amendment to the Constitution of the United States shall pertain solely to individual human beings, and no corporation or corporation-like entity, whether established within the United States or without, shall enjoy the rights of personhood in the laws of the United States.

2. No corporation or corporation-like entity shall own another corporation or corporation-like entity.

3. No corporation or corporation-like entity shall be established without a declaration of purpose, consisting of a single enterprise, which shall limit the permissible activities of the corporation or corporation-like entity. Corporations or corporation-like entities existing at the time of the passage of this amendment which shall not have adopted such a declaration of purpose within one year of the passage of this amendment shall be dissolved.

4. The duration of any corporation or corporation-like entity shall in no case extend beyond twenty-five years. Corporations or corporation-like entities existing at the time of the passage of this amendment shall exist for no longer than twenty-five years after the passage of this amendment.

5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.


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Darth_Mauve
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#1 I can get behind. There is a case before the Supreme Court about whether corporations have Freedom of Speech.

#2 Not sure. I would need to see some studies about the chaos that this would cause the economy. I wish there were a lot less of this, but to make it illegal all together?

#3 No. If you limit a company to just one product, one item, then you lose all sorts of savings, and increase costs many-fold.

#4 No. this condemns groups and organizations as well as employees to uncertainty and chaos. Who is going to work for 20 years at a company when it will be out of business in 15. How does a company in the last two or three years of its corporate life find talented people to hire? Why do any R&D after 15 years, since it won't come to profitability until 5 years after the corporation is folded.

One of our biggest problems, one thing that was a major cause of this present recession, was short sighted thinking by people--from house buyers to CEO's after a quick fix. The "I'll be gone by then, so the consequences just don't matter" attitude almost killed us. How is giving a deadline of profitability going to make that better?

Joe starts a corporation dumping Toxic Waste in approved safe ways. For the last 5 years of his corporation he makes much more money dumping it in the street at night. By the time its discovered, Joe's company is gone. Not good.

The Special Olympics is a corporation celebrating its 40th year. Where would we be if it had been dismantled after just 25? How about the Philharmonic, MDA, The Smithsonian?

#5) Well and good, but Congress has no power to create such legislation for international corporations. Do we outlaw them? How can we make them illegal in the US? Do you think that Microsoft will remain in the US with all its jobs and revenues, it it will be legally forced to close? It will just jump to Taiwan or France or India.

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fugu13
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The path to recovery means destroying the economy and putting strict yet ridiculously vague limitations on individuals' rights to free association?
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TomDavidson
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I'm not entirely sure what this is meant to ensure. Here are my quibbles:

1) I'm largely okay with this, depending on what exactly the "rights of personhood" are considered to be. It's my understanding that mainly this consists of a shield against personal liability for the officers of a corporation -- but it also ensures corporations of the right to due process and non-commercial freedom of speech (including political donations). This right is also what permits them to enter into contracts and own property in common, as I understand it. I would be happier with specific restrictions on corporate "rights" than a denial of entity-hood.

Wikipedia makes an interesting note: it is only because a corporate charter is a contract that creates an entity that states cannot simply dissolve corporations based within their boundaries at whim.

2) I'm not really sure what, in practice, this might mean. Could the individual shareholders in one corporation purchase a majority of the shares in another?

3) Could this purpose be as broad as "to generate profit?" If not, why not?

4) A corporation can only exist for 25 years? Does that mean it can re-incorporate at that time? What happens to its common stock? Does it have to liquidate its assets at auction if it can't re-incorporate?

5) As a libertarian, this doesn't scare the crap out of you?

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Lisa
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quote:
Originally posted by Darth_Mauve:
#3 No. If you limit a company to just one product, one item, then you lose all sorts of savings, and increase costs many-fold.

The purpose could be "to manufacture health and beauty products." Or "to manufacture breakfast foods." The legislature would be able to determine what counts as a single purpose and what's an obvious attempt to evade the intent of the amendment by trying a purpose such as "to make craploads of money."

quote:
Originally posted by Darth_Mauve:
#4 No. this condemns groups and organizations as well as employees to uncertainty and chaos. Who is going to work for 20 years at a company when it will be out of business in 15. How does a company in the last two or three years of its corporate life find talented people to hire? Why do any R&D after 15 years, since it won't come to profitability until 5 years after the corporation is folded.

I disagree. It simply doesn't allow the corporate mechanism for such companies. Partnerships are something else entirely. Individuals, singly and in the aggregate, have their own personal rights. Company does not equate to corporation.

quote:
Originally posted by Darth_Mauve:
One of our biggest problems, one thing that was a major cause of this present recession, was short sighted thinking by people--from house buyers to CEO's after a quick fix. The "I'll be gone by then, so the consequences just don't matter" attitude almost killed us. How is giving a deadline of profitability going to make that better?

It isn't. But you make a good point. This is actually one of the problems with the eternal corporation. It's a Frankenstein's monster with no conscience and no moral sense. And individuals who work for it have a legal obligation to make it profitable. An obligation which comes before personal morality. The problems we've been having lately with CEOs and other execs stems to a considerable degree from that.

quote:
Originally posted by Darth_Mauve:
Joe starts a corporation dumping Toxic Waste in approved safe ways. For the last 5 years of his corporation he makes much more money dumping it in the street at night. By the time its discovered, Joe's company is gone. Not good.

Joe starts a company dumping Toxic Waste in approved safe ways. He gets investors to partner with him in this enterprise. They all make gobs of money, and keep going pretty much forever.

quote:
Originally posted by Darth_Mauve:
The Special Olympics is a corporation celebrating its 40th year. Where would we be if it had been dismantled after just 25? How about the Philharmonic, MDA, The Smithsonian?

And the Special Olympics neesd to be a corporation exactly why?

quote:
Originally posted by Darth_Mauve:
#5) Well and good, but Congress has no power to create such legislation for international corporations. Do we outlaw them?

You don't outlaw them. The only part of this that would apply to international corporations is that they wouldn't have any corporate-personhood rights under law.

It's not uncommon for corporations to create structures in different companies to represent them. Corporations in the US would simply have to be represented by individuals or partnerships of individuals.

quote:
Originally posted by Darth_Mauve:
How can we make them illegal in the US? Do you think that Microsoft will remain in the US with all its jobs and revenues, it it will be legally forced to close? It will just jump to Taiwan or France or India.

I should have specified that companies and corporations aren't the same thing.
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Lisa
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quote:
Originally posted by TomDavidson:
5) As a libertarian, this doesn't scare the crap out of you?

Not in the least. Libertarianism is about freedom and rights for people. Not for corporations.
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Christine
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I was with you on #1, not sure about #2, but you lost me on the other 3. Could you explain the purpose of doing these things?
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BlackBlade
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Under Lisa's proposal the LDS church could only exist 25 more years upon the passing of this sort of bill. [Wink]

More accurately it would simply cease to be a corporation and would have to become something else.

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fugu13
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Out of curiosity, what is the boundary of "corporation-like"?
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The Pixiest
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I'd rather see corporate officers, board members and individual employees who break the law be held accountable to the law.

Unfortunately, Lisa, I think this would encourage more short term thinking and less long term thinking. It's short term thinking that causes many of the problems today. Corporate officials go more for jumps in stock price than for slow, steady growth.

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King of Men
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Eh, I don't know; it seems to me that thinking 25 years ahead (or even 12.5 on average) would be a bit of an improvement on what we've got now.

With that said, there's an obvious workaround: Sign contracts such that there are shareholder dividends and limited liability much like now, but vest all the stuff that requires corporate personhood in one particular officer of the corporation. (Probably the CEO.) In other words, the CEO agrees to pay out some share of the profits of the company in proportion to the investors' money, and to maximise that profit to the best of his ability. The company assets are owned by the CEO, but the shareholders have claims on them in any bankruptcy. The only difference is that you now have one particular officer who goes personally bankrupt if the company does; in other words, you've gone from limited liability to one-man liability. The incentives of the stockholders and employees are unchanged.

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fugu13
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I'm trying to figure out how a group of people with a business solely empowering the holders of certain certificates to vote on who would govern the running of the business, and writing into the purchase requirements of the certificates agreement to the business's bylaws, would be anything other than corporation-like, and anything other than a free association of people having their choices restricted by this nonsensical amendment.
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Raymond Arnold
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If corporations didn't exist as we know them now, I'm sure something else would take their place. The problem isn't even that "corporations" run everything. The problem is that the top 1% of corporations run everything. 99% of corporations are not the problem.

One thing I've heard suggested which makes a lot of sense to me is to limit the amount of money any given corporation is allowed to spend on advertising. One of the things that make the economy so lopsided is the ability of Big Food or whoever to introduce some random product and then create demand for it by ludicrously outspending smaller companies who can't drop millions of dollars on advertising.

The other thing I've heard that makes sense to me (with the issue that it could drive companies off of American soil rather than actually get them to change their policy) is to replace minimum wage with maximum wage - the most a company can pay their highest paid employee is X times (not sure what the ideal value of X is) the salary of their lowest paid employee, so if a CEO wants millions of dollars a year they have to increase the salary of their janitors accordingly first.

One last thought, which I'm unsure what the ramifications would be: What would happen if we required any company who operated in the US or wanted to trade with the US to comply with a universal safety and environmental standards (I kinda disagree with minimum wage in the first place so I'm not as concerned about establishing that as universal).

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King of Men
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No particular comment on enforcing such things by law, just adding data: In Norway, the average CEO pay (quoting from memory, don't hold me to the exact numbers) is something like 10-12 times the average employee pay, while in the US the ratio is more like 40 or 50. (Again, the exact numbers might be wrong but I feel reasonably confident of their ratio.) Notice that this is not enforced by law or even taxation; it's a cultural phenomenon. Notice also that, although I am generally in sympathy with Norwegian over American customary practices, I don't necessarily recommend the social attitudes that lead to this. There's a reason Jante's Law, of which Thou shalt not think thou art anything is the first commandment, is named for a Scandinavian town. There's also a reason there are few Norwegian corporations you've ever heard of, and it's not all because the population is roughly half of New York's.
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Mucus
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I don't think that the explanation is really on the Norwegian-side here:
quote:
Today, however, average public company CEO compensation is 400 times that of the average employee. And thousands of senior managers in addition to CEOs are drinking at the same frothy trough, especially, as we have all just seen, senior managers in the financial services industry. (By contrast, the ratio of CEO pay to that of the average employee has remained around 22 in Britain, 20 in Canada, and 11 in Japan.)
businessweek link

I think it is more an, ahem, uniquely American phenomenon.

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Kwea
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Hell no.
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Samprimary
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This is a pretty silly set of regulations, and the intended restrictions of the bill could be bypassed by your average corporate legal team while yawning.
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Blayne Bradley
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I agree I think with number 1, the others just seem wierd and the 25 years one I think could be highly damaging, where would Japan be today without its Zaibatsu's?

Unless it can be extendable/renewed after a ethics adn efficiency review.

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Kwea
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Worst thing possible, IMO. As bad as some companies are, I don't think I'd want to live in a country where this happened, as it would only force them to become less honest and less respectable, and would punish them for doing business.
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