Libertarians: Stop Using Logic

[iron81]

Adanthar, I'm sure PVN belives big business is fine, its just that the stockholders will have unlimited liability and the businesses won't have the legal constructs set up for them now.

[adanthar]

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Adanthar, I'm sure PVN belives big business is fine, its just that the stockholders will have unlimited liability.

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Is this "stockholder" meaning "a guy who bought one share of Ford today and is liable for a whole bunch of exploding gas tanks tomorrow before he can sell it?"

If that's the case, I guess we need insurance that covers us from all of the unknowing risks we take from trading in the wrong company before we ever trade a stock?

Anybody wanna estimate the transaction costs in that stock market?

[IsaacW]

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Try raising capital for any large enterprise without it. Would you invest $1000 in a company with the knowledge that such an investment was really open-ended and you could be called on to fund an additional $1,000,000?

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No, but I might invest $900 and spend the other $100 of my available capital on an insurance policy against that $1m judgment coming in. Policies for investment in dangerous (in this sense of potential liability) businesses would cost more so I would be less inclined to invest in those companies.
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The copororate veil does not protect officers/management from negligent actions that would be a detriment to and therefore "spread the burden" to society.

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This is true, though they still receive limits of liability on their investments in the company. If a corporation racks up a lot of debt and becomes insolvent under inexpert management, that manager is not liable for the excess debt of the corporation after all assets have been liquidated. All he can lose in this case is his job and the amounts he paid for stock in the corporation.

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The lack of understanding of the necessity for the corporate form is equivalent to the lack of understanding of the critical importance of IP protection.

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I'm not arguing that the corporate form, as you put it, would not exist if there were no government. I'm arguing that in a free market investment would be properly constrained by the risks of the business operations. In the current system, a $100 million liability judgment against a company with $1 million current value leaves the winners of that judgment out to dry.

[adios]

On the child labor practices, don't know how we'd ever know for sure about how imports are produced. Let's say that what's happening in Malaysia is very bad for children there and the U.S. insists that Malaysia regulate industry practices there to prevent the abuse of children. How does the U.S. enforce their edict? I realize that banning Malaysian imports is the obvious answer but I'm fairly certain that Malaysia would state more or less that they've changed and put on a good "dog and pony show" to demonstrate their changed practices. Doesn't mean that they actually have all that much. I guess the implication is that the U.S. not only needs to regulate labor practices within it's borders but also needs to regulate labor practices within other countries borders that export products to the U.S. Don't see that as workable but could be convinced otherwise.

On the car safety factors, why not give consummers a choice with full disclosure of what those choices entail? I realize the points you make about the Pinto and the role government lawyers played but I'm not sure why that example precludes offering consummers a choice.

[adanthar]

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No, but I might invest $900 and spend the other $100 of my available capital on an insurance policy against that $1m judgment coming in. Policies for investment in dangerous (in this sense of potential liability) businesses would cost more so I would be less inclined to invest in those companies.

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How do you even have a clue about what's dangerous? Obviously, we're never ever having a > 1 man shop that makes explosives in Libertopia, because for liability purposes, that's suicidal. But how about food (always prone to that pesky e-coli), or drugs? Is there a pharmaceutical company in this brave new world? Anybody wanna imagine the type of venture capitalist that puts 10 million dollars into research knowing that, if the drug turns out to have unforeseen side effects in a decade, it'll cost him a hundred?

What's with this whole "I'm Superman, but when I'm not, I'm perfectly willing to have 4 different layers of insurance companies riding herd over every action I take" mindset?

[valenzuela]

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If there is enough demand for companies that dont use child labor then companies that dont use child labor will take care of telling customers which of their rival companies use child labor.

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1)And they know this how?


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Because companies will have an official "I dont use child labor" badge, that badge is given to them by a private company, kinda like the certificates you see at the bottom of poker sites.
However since those badges dont exist now they wont exists on Libertopia, people dont really care about child labor.

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2)I now see 6 ads from different sneaker companies, all saying that every other company uses child labor. Every company officially denies it. Should I personally buy a ticket to Malaysia to check?

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If you really care about child labor, yes.
Since the costs of finding out if there is child labor in Malasya are preety high then supply for finding out if there is child labor on Malasya is kinda low.
Ill go there and investigate for 25K plus airplane tickets, accomodation ,food , I will also need a budget to hire a team of people to help me out in my investigation. PM me for details.

[IsaacW]

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Issac do you have anything that can back this assertion up, I've heard you use it several times now.

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Corporations are chartered by the government and the liability of shareholders is limited to the amount of their investment by fiat. More information is available from Wikipedia. Note especially the first paragraph under the heading Economic and social justification and criticism. There is even a quote from Murray Rothbard on the issue, essentially saying that limited liability should be contracted by the investors themselves and should not be provided by government. This would be similar to my "special type of insurance" against the risks of investing in unsound businesses.

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So everything will be a sole propiertorship? And once people (who I assume can read a history book) see that big companies make alot more money what's to stop them from growing their business and saying "we don't have liability anymore".

All they'd need is a security force, and certainly their money could buy one. People will still buy their goods, because it's exactly like life now.

I don't get these arguments, PVN's "Money only rules those who allow it to rule them" nonsense. It rules everyone, that's the idea. Profit motivates good business. In actuality, it only motivates further profit, but usually the two goals allign so it's all good.

Where does this idea that every store will be "Mom and Pop" level come from. Certainly people would be afraid, with total responsibility, to open another store. After all, they can't be in two places at once and if someone messed up at the other store, they go to jail/are out alot of money. But at the same time, as people gather wealth (to say nothing of those that already have it) they'll just become above the "law" (Law here is in quotes as it's not a promise we'll have laws for large, wealthy corperations).

Cody

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Why would you buy products from a company that said "hey, if this hurts you, you can't sue us?" If there was another company that accepted its liability in exchange for a slightly higher price, wouldn't you buy from that company as well?

Risks like those you cite will be either be borne by the business owners and investors or will be transferred in manageable chunks to insurance companies, much like is done today. I think that the overall size of companies would be limited as the costs of insurance would go up quickly for large and complex businesses.

[adanthar]

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I guess the implication is that the U.S. not only needs to regulate labor practices within it's borders but also needs to regulate labor practices within other countries borders that export products to the U.S. Don't see that as workable but could be convinced otherwise.

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Who needs to regulate other countries? Most of the 'no child labor in our shoes' movement has been the US prodding Nike to do it, not Malaysia. The corporation is the one doing the bad thing here, which leads us back to 'why is the CEO of Nike, being the perfectly rational and well informed consumer that he is, employing children in his factory when that's bad for him and clearly bad for the company's PR?'

[adanthar]

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If you really care about child labor, yes.
Since the costs of finding out if there is child labor in Malasya are preety high then supply for finding out if there is child labor on Malasya is kinda low.
Ill go there and investigate for 25K plus airplane tickets, accomodation ,food , I will also need a budget to hire a team of people to help me out in my investigation. PM me for details.

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In other words, it's not economically feasible for me to boycott child labor.

Or unsafe working conditions. Or slave labor. Or genocide. Or any other thing that, in Libertopia, I'm supposed to be able to avoid via the rational decision of not buying the stuff associated with it.

So, Libertopia is a hellhole. Got it.

[Richard Tanner]

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Is there a pharmaceutical company in this brave new world? Anybody wanna imagine the type of venture capitalist that puts 10 million dollars into research knowing that, if the drug turns out to have unforeseen side effects in a decade, it'll cost him a hundred?

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Ah a Pharm example, a man after my own heart. Pharm examples were great in dealing with IP and they work well here. It all relates to the large scale needed for some projects and the large numbers in the risk/reward calculations.

Certain things take large amounts of resources to accomplish and without certain protections they won't come about. Add to that the risk of something like Vioxx or Prozac (I'm sure some courts would find fault with Eli Lilly there, even though it's not correct) and their side-effects, and no ones investing.

Cody