My response is up at Cato Unbound, along with further responses by Steve Horwitz, Dean Baker, and Matthew Yglesias. Yet another response from me should be up tomorrow morning (well, today morning now).
Other responses to our debate are also popping up across the web, including contributions by Peter Klein, Will Wilkinson, and most recently J. H. Huebert and Walter Block. (The latter offers a rather odd interpretation of one of Charles Johnson’s blog posts.)
I plan to reply to these as well. But not tonight!
I don’t want this to come off as mean spirited, but I get the sense that Yglesias might be treading in waters somewhat over his head.
I’m sure there are other “leftist” matters upon which they would all agree. Isn’t eminent domain a problem? It just seems to me that people are relying too heavily on definitions. After all, human beings have free will.
Block and Huebert seem to be confusing the process of explaining how Wal-Mart benefits from government with blaming them for dong so. They then proceed to do the exact same thing to labor unions.
What’s up with Block’s point about labor unions killing people? Yeah, they probably have. What’s his point? That unionism qua unionism involves killing people.
Has he ever heard of the Homestead Strike? Or any other instance in which capital killed striking workers? Do I get to blur any differences between individual capitalists now?
That unionism qua unionism involves killing people?
I couldn’t make it very far into Huebert and Block’s piece. Between the bit on “power is governmental and cannot in any way be transferred to a corporation, full stop” and the bit where they seemed to be responding to an argument from some fascinating alternate universe where you said that Wal-Mart and McDonald’s would simply disappear in a puff of smoke without government influence … yeesh.
They lost me when they made it clear that they didn’t understand that Limited Liability would not arise without State backing for it. I have no problem with corporate personhood – but limited liability is ludicrous.
I find it hard to see how limited liability companies would come to dominate a genuinely free market as they dominate our current market structure.
Sure, there would always be no end of people wanting to participate as ‘equityholders’ if they knew that they had no downside apart from their contributed capital, but leveraged exposure to gains (since the corporation can leverage up by accruing debt in its own name, and equityholders are not on the hook for the debt).
However nobody in their right mind would extend credit to a Ltd in preference to a corporation without limited liability. I guess the counter to that is that firms are obviously willing to do so in the current environment.
GT’s Market Rant
mike: Block and Huebert seem to be confusing the process of explaining how Wal-Mart benefits from government with blaming them for dong so.
i have noticed the same. of course this is a consistent thread w/many ancaps who mistakenly think that the organization of firms under a freed market would remain unchanged. i have also noticed in these responses that walmart’s defenders talk of the generic “road” and not highways and there is an important distinction between the two.
They lost me when they made it clear that they didn’t understand that Limited Liability would not arise without State backing for it.
I don’t see why it couldn’t. An anarchist court could easily recognize that an investor who forgoes control should not suffer unlimited liability.
Responses from me and from Charles are up.
Hi there Joshua Holmes,
That first sentence of mine was sloppy. That said, it was clarified by subsequent paragraphs.
As to whether a court or tribunal would grant an investor relief from having to make creditors whole simply because he was dumb enough to appoint a bad agent… sorry, I can’t see it (unless the limited liability was known by the plaintiff in advance, in which case the plaintiff can go jump… the law of contract is paramount, in my view). Any anarchist court that was prepared to extend limited liability ex post facto, would be exculpating the agent for stupid decisions… we have enough of that now.
The agency co-ordination issue is a very very very bad justification for limited liability: it rewards the abrogation of responsibility. It’s the sort of thinking that would pardon American voters for the actions of their government. I wouldn’t: if you subscribe to a thing, you are on the hook for your share of the whole of any wrong it causes, not just the value of your shareholding.
Limited liability skews investment decisions, because investors are indemnified from the bulk of leverage-related losses.
GT’s Market Rant
Just to make sure this is clear: I did not say American people are responsible for the actions of their government: those who choose not to participate and whose money is extorted from them, cannot be held responsible for the subsequent behaviour of the government.
Those who VOTE, on the other hand, give their imprimatur to the system, and so are culpable for any damage that the system produces regardless of which side they vote for (because voting is a revelation of a preference for rule by whoever controls the largest gang). Between them they’re responsible for every last red cent and every last drop of blood shed and every last piece of flesh torn off someone else’s child.
That might be viewed as tangential to the issue limited liability – except that it’s not.
GT’s Market Rant
Couldn’t a libertarian court view an investment in a corporation as something not necessarily akin to ownership (which I agree would necessitate liability on the part of the investor, at least WRT tort liability), but rather more like a conditional loan?
In other words, I would loan Corporation X $100 on the condition that they repay me a certain amount each quarter, based on their quarterly profits. You can call that “dividends” or “interest”, but one seems to imply agency while the other does not.