posted
So... I think you all know that I didn't vote for Barack Obama. That said, he's doing a number of things that I like. The visibility of his http://www.change.gov/ site seems good. And now he's created a thing called the Citizens' Briefing Book. This is basically a suggestion box. Ideas that are voted for by a lot of people will be presented to Obama each day.
Yes, it's possible that this is just a stunt. That these suggestions will be thrown into the garbage and never see the Oval Office. But maybe it's legit.
In any case, I posted a suggestion on that site. You can see it here.
If I ask people to go there and vote for it, is that a violation of the TOS?
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Well, first, I don't agree that corporations existing as individuals under the law is a major problem, either economically or philosophically. But, perhaps more importantly, I don't think it's worthwhile issue to be seriously considered by the President at this time. To change corporations' legal status at any time would radically shake up the economy, almost certainly cost billions of dollars, and almost certainly create some rather perverse incentives. This is really not a good time to do any of that.
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I think billions of dollars is a severe underestimate. Just the idea of every single stockholder suddenly becoming fully liable for the actions of the corporations they own a bit of is incredibly amusing.
Heck, probably at least 100 million people in the US own bits of the largest corporations one way or another, and would suddenly be subject to complete liability.
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In terms of what to use the scarce resources of Presidential attention and political capital on, I'd much rather devote it to dismantling the TSA, or better still agricultural subsidies.
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Wouldn't even 100 million people in the US be an underestimate?
At least in Canada, our CPP (Canadian pension plan) invests in a pretty normal portfolio including equities. http://www.cppib.ca/Investments/
For the US equivalent, wouldn't anyone that ever works and thus contributes to social security become indirectly a stockholder?
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No, social security is both not an investment program and a government entity. Either reason would prevent it from being a vehicle for liability.
Now, many, many people will be invested in pretty typical mutual funds, any one of which would own (and thus, the owners of the mutual fund would own) numerous well-known companies, thus making every mutual fund owner fully liable for the debts of all those companies.
Anyone with any assets worth suing over would never buy stock subject to US laws again.
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Agreed. In fact, I can't think of a single other measure so perfectly designed to make litigation explode, kill our economy and ensure no one does business in the U.S. again.
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Very few people would buy stocks if they thereby become completely liable for the debts of the company; but this is surely not the only possible way to organise the raising of capital. How about loans? That is, if you think Company X is going to have a good year, you buy a loan certificate in that company. It pays you a regular return in interest - this is more or less equivalent to dividends being negotiated in advance - and can be sold if you need cash. In other words it would work much like a stock except that there is no ownership.
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fugu13: Isn't your government both "for the people" and more importantly "by the people"? Seems kind of a cop-out if the people aren't then liable for the actions of, well, themselves
But what do you mean social security isn't an investment program? Would you consider CPP an investment program?
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Whatever one's philosophical position, the policy proposal here would only remove corporate personhood, so stuff through governments would still be separate.
And I mean social security isn't an investment program: people paying the social security tax are not funding an investment, they are paying a tax that is immediately paid out (up to the amount of the entitlement; the rest might be invested, but that's a side effect. And it is usually invested in things like US bonds, I believe) to those qualified to receive the entitlement. How much people receive at the end of their lives is partially determined by how much they pay in, but is not limited by it; people frequently receive more out than they pay in (even assuming generous market gains), which could not happen under a true investment program.
The CPP seems to be a true investment program. The pension payments that people make support their future payouts. That is more like the (government-supported but optional) pension plans the US has, though those pretty much let people choose who they want to manage their money rather than having the government manage it all.
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quote:Originally posted by fugu13: I think billions of dollars is a severe underestimate. Just the idea of every single stockholder suddenly becoming fully liable for the actions of the corporations they own a bit of is incredibly amusing.
Heck, probably at least 100 million people in the US own bits of the largest corporations one way or another, and would suddenly be subject to complete liability.
I was trying to be, um, rather conservative 'cause there wasn't any detail in the proposal about how this would happen or what would take it's place or anything like that. You know, "the little things."
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Ah, I think I understand then, I was incorrectly matching programs between the two countries. Your social security is more like our Old Age Security ( http://en.wikipedia.org/wiki/Old_Age_Security ) in that there are little or no investments funding OAS or Social Security respectively.
And from what you're saying, I guess your equivalent of CPP is optional. What do you guys call that?
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quote:Originally posted by King of Men: In terms of what to use the scarce resources of Presidential attention and political capital on, I'd much rather devote it to dismantling the TSA, or better still agricultural subsidies.
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The closest would probably be an IRA, since that's not tied to a given employer. The 401(k) is also similar, though tied to your employer somewhat.
Nothing is really completely analogous, since there is no generally available program where the government manages the investments. All of the largest programs (such as the ones above) allow the investor to pick how his or her investment is managed (sometimes subject to constraints by who is offering the 401k or IRA).
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Hmmm, I don't think the IRA matches CPP. Reading the Wiki entry it looks more like its a better match for our RRSP http://en.wikipedia.org/wiki/RRSPPosts: 7593 | Registered: Sep 2006
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I clearly don't know that much about this sort of thing, but why would removing corporate personhood make it any more likely that a small investor would be sued for the actions of the officers of a company? Just because, hypothetically, my friend and I have joint ownership of a car doesn't mean I should be held responsible if my friend runs someone over.
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Because there's a difference you're omitting. Investors are the company's owners, and under a scenario such as this, would be liable to pay what ever percentage of a settlement was leveled against the company.
In your analogy, while you own the car, your friend is operating it, similar to a CEO. For companies, while the CEO can be held criminally liable for his actions, he's rarely associated with lawsuit settlements, that would fall to the corporation (or investors / owners, if corporations ceased to exist). For you, it's entirely possible that even though you co-owned the car out, civil damages and in some states the insurance companies may be aimed at you as well. (For Example, say the brakes failed because a lack of maintenance. All owners will be named as defendants).
EDIT: To add one last connection between the two. In a civil lawsuit, someone is going to be financially responsible to pay damages. That falls upon those with financial control of the company, which can only be the investors.
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I was going to link to Briefing Book this very day, but realized that I used an alias and it's one I've used in this forum before, and I'd rather not have anyone put two and two together. I'm thinking about your idea Lisa, I may put it up 10 points. It's pretty radical.
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Thanks for the explanation, AW. It seems to me that it should be possible to create a system that retains the benefits of limited liability without the crazy that is corporate personhood.
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If I were a poli sci doctoral student, I would so totally write my thesis on this Citizen's Book. I wonder what sort of statistics they're collecting via this.
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That's the thing; it isn't clear that corporate personhood is particularly crazy. It only means that, for many purposes, a corporation acts as an entity unto itself under the law. The ways in which that functions are set out and specified; they aren't exactly like a person at all, just loosely like a person in a way that is called limited liability.
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Why should people be granted limited liability like that? Imagine me writing a contract that states that I'm responsible for your actions generally. So that if you kill someone, I can be arrested and thrown in jail and you bear no responsibility.
That's laughable, but why is it any different conceptually? Our society is rotten with ways to avoid/evade responsibility for our own choices. Corporations are simply the monster at the top of the heap. If you take a chance, you should be responsible for it.
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Even if I agreed with the concept (and I'm not sure I do), suddenly changing a whole legal structure like that - *poof* - would be incredibly destabilising. Which I don't think is a good idea.
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Lisa: do you own any stocks or mutual funds? If the answer is yes, without limited liability you would be responsible for all their losses (and in the case of mutual funds, the losses of all companies held by the fund). Any creditor could get their money out of you, personally and directly.
And people in corporations are not abrogated of their personal responsibilities. Individuals are prosecuted for crimes they commit as part of corporations (such as killing people). Could you provide some examples of people who were not held responsible who you feel obviously would have had there not been limited liability?
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Anyone who held shares in companies like... what was it, Pacific Bell? Southwest Bell? The one that got sued by Erin Brockovich.
You say that any creditor could get their money out of you... well, why shouldn't people bear responsibility for their choices? Right now, you invest in a company solely on the basis of whether you think it'll make you money. Maybe people should have to do a little more due diligence than that.
Edit to add: whether I have money in funds like that or not isn't at issue. I have some money in a 401k, so yes. When I think something is right on the basis of principle, the fact that it might affect me adversely is irrelevant.
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The general setup still has some resemblance of Capitalism still, so you can vote with your wallet. If you don't support a company on moral principles, don't invest in them. Do your due diligence and don't invest in funds that include them. There is a fair bit of backlash against Walmart centered around this very thing right now. But forcing what would be a majority of the people in the country (and many in the world) to become full-time investors out of fear that they're going to wind up being liable for damages doesn't seem like a the correct goal for this. How would you treat, say, government entities that use investments as a pool for retirement / health care? They're already paying for their actions because of the general market, making them liable for a corporations damages (and it could be a significant amount) would wind up being the last nail in the coffin.
I would love to see those responsible for a corporation's actions held more accountable, and in general to stop people from using corporations as a shield and excuse for exceptionally crappy behavior, but there's a reason the current system was developed (and yes, it's to protect the investors).
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quote:Originally posted by Architraz Warden: The general setup still has some resemblance of Capitalism still, so you can vote with your wallet. If you don't support a company on moral principles, don't invest in them. Do your due diligence and don't invest in funds that include them. There is a fair bit of backlash against Walmart centered around this very thing right now. But forcing what would be a majority of the people in the country (and many in the world) to become full-time investors out of fear that they're going to wind up being liable for damages doesn't seem like a the correct goal for this. How would you treat, say, government entities that use investments as a pool for retirement / health care? They're already paying for their actions because of the general market, making them liable for a corporations damages (and it could be a significant amount) would wind up being the last nail in the coffin.
I would love to see those responsible for a corporation's actions held more accountable, and in general to stop people from using corporations as a shield and excuse for exceptionally crappy behavior, but there's a reason the current system was developed (and yes, it's to protect the investors).
I'm sorry, how do I feel about government entities that using investments? They shouldn't be doing so.
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