Note to Larry Lessig on his “Anti-Corruption Pledge”: Limited liability corporations are the taproot of both growing government and anonymous rent-seeking.

1

[Note: This is cross-posted from my blog at The Ludwig von Mises Institute]

I refer to the very recently-launched “Anti-Corruption Pledgehere, which is the latest project by prolific Larry Lessig, now a Harvard Law prof and head of a corporate reform center there (and whom I have introduced and discussed in a number of preceding posts).

Larry further describes the purpose and motivation of the Pledge at his blog. (I note that I’m strongly in favor of pledges, as I noted in this blog post discussing the Kochs.)

I left the following comment on the discussion page of the wiki that Lessig created for The Anti-Corruption Pledge:

“Larry, you aren’t really attacking the chief problem, which the role that STATE-Created limited liability corporations play in centralization and aggrandizement of power in Washington, which then further attracts rent-seeking by increasingly anonymous (who owns and runs these corporations, anyway?) organizations that wish to use a bloated government to receive favorable inside deals and to raise barriers to entry in their respective markets.

“Corporations drive the growth of government because their LIMITED LIABILITY aspect means government protects shareholders from liability in the event of tort damage to workers/others/society. Citizens tired of holding the bag then must continually push legislatures and courts for “reform” that perversely helps to entrench the largest firms against newcomers.

“Corporations are not simply the “Health of the State”, but they’re created in STATES, which accordingly MUST be a main venue to seek to rein them in. States can stop creating limited liability companies, can deregulate for non-limited liability firms (where owners retain a large tail of risk), etc.

http://tokyotom.freecapitalists.org/?s=limited+liability

“Anonymity is not per se bad – the Federalist Papers and Anti-Federalist Papers were written anonymously – it’s the anonymity afford to those whom have already received important government privileges (viz., limited liability) that renders them and their agents unaccountable that is the problem.

“Thus I don’t see that public funding or limiting and requiring transparency of your broadly worded “political expenditures” (contributions? campaign ads?) really address the root problem.

“Fortunately, there are 50 states in which to start campaigning for responsibility owned businesses whose owners are NOT protected by governments from the communities in which they operate.

“Large, entrenched public companies are already seeing across-the-board declines in profitability and market capitalization (ask Robert Monks); they can be brought down by Schumpeter’s process of “Creative Destruction”.”

 

1 Comment »

  1. TT's Lost in Tokyo

    April 15, 2013 @ 8:50 am

    1

    Yes, there’s a problem with “Libertarian Wishful Thinking.” But there’s hope, even in Bob Higgs’ clear-sighted myopia….

    Robert Higgs , Senior Fellow in Political Economy and Editor at Large, The Independent Review , has a…

Leave a Comment

Log in