After a spell of travel-induced inactivity, I return with some more half-baked musings loosely inspired by Nicholas Shaxson’s Treasure Islands.
If corporations are people, then shouldn’t they pay the same taxes as everyone else? Why should corporate tax rates generally be lower than personal income tax (the US is an exception here, though exemptions and loopholes mean that many companies pay far less than the 35% rate)? If corporations are people, then why can they relocate from one jurisdiction with relative ease, without having to go through immigration and naturalization? Why, for that matter, can they split themselves into pieces and be in several countries at once? I certainly can’t do that. If corporations are people, then why can they live forever? And why shouldn’t they be beholden to those who brought them into being (viz., the government—”The state is the only institution in the world that can bring a corporation to life. It alone grants corporations their essential rights, such as legal personhood and limited liability….Without the state, the corporation is nothing. Literally nothing.”—Joel Bakan, The Corporation)? My parents had enormous authority over me through my first eighteen years, but corporations, we are told, should be free from regulation by the legal regime that brought them into being.
If we’re going to push the concept of corporate personhood to insist on “human rights” like “free speech” for corporations, then perhaps we should be consistent. As it is, corporations are not simply persons, but highly privileged persons provided by law with opportunities and powers unavailable to most people.
On a related note—
If competition is the essence of a free market, then why should the market be exempt from the constraints we apply to other forms of competition? If I wanted to participate in the Olympics, then I would have to go through a rigorous selection procedure to ensure that I was a legitimate participant and would have to meet relevant national and international codes and standards merely for the opportunity to compete. Once I was in, I would be subject to general rules established to minimize opportunities for cheating, bribery, etc., and to extensive tests to prove that I was not using performance-enhancing drugs. To comply with regulations against such drugs, I would have to avoid even a number of perfectly legitimate drugs that contained restricted substances (as Andreaa Rudican so tragically learned at the 2000 Olympics). In addition, my particular sport would be governed by a lengthy list of rules that established the manner in which I was to compete and restricted me from taking any unfair shortcuts or conduct that would unfairly sabotage my rivals. These rules would be enforced by referees who would closely oversee the whole event and would be authorized to nullify my results or eject me from the competition if necessary.
Of course, no doubt we could complain in some cases about bureaucratic overkill, obsessive and demeaning drug-testing, and hyperactive refereeing. But surely we would all admit that without extensive rules setting both the terms of participation, the nature of the game, and the legitimate means that could be employed in competition, most of the organized sports that we love would be impossible. If sprinters could dope as much as possible, they might be incredibly fast, but no one would bother to watch—the races would no longer be athletic competitions, so much as medical experiments in responsiveness to drugs. If football players could do whatever they wanted to get the ball to the end zone, then football would degenerate into rugby. Ok, just kidding—even rugby has rules, and plenty of them. Football would degenerate into a brawl.
To be sure, in an amateur pick-up game, referees will probably be unnecessary, and even rules can be somewhat loose and flexible; general goodwill and commitment to gentlemanliness may ensure that competitiveness does not get out of hand. But the higher the level and the higher the stakes, the more precise rules are necessary—exactly when does the race start? exactly what comprises the strike zone? when is a foul a flagrant foul?—and the less one can rely on the participants to self-regulate. Indeed, the employment of outside referees should not be seen as an insult to the integrity of the players, but as doing them a favor—with an outsider charged with making sure the rules are followed, the players can focus on playing the game, rather than always watching the other players out of the corner of their eye for violations. They can rest assured that, even if they get carried away by emotions in the heat of competition, there’s a reasonably objective third party who will still judge clearly.
Free marketeers love to invoke the idea of competition. Competition is what makes capitalism work. But then they are prone to turn around and deny that this competition needs the kind of rules and refereeing that any other competition needs. And yet, if anything, in business, the stakes are far higher than in football or gymnastics. A trophy or a gold medal might be exciting, but in the end, how much depends on it? But businesses are engaged in creating and destroying people’s livelihoods; indeed, in developing countries, business competition can be a matter of life and death for some people. And yet, we are assured, even if football players shouldn’t be allowed to regulate themselves, corporations should. Again, if markets are all about competition, then let’s get real and start treating them like one.