Corporate accountability (was Re: Free-Market Economics)

James Rogers (
Sat, 12 Jul 1997 18:32:09 -0700

At 01:16 PM 7/12/97 PDT, Bobby Whalen wrote:
>On Sat, 12 Jul 1997 Ken Lanterman writes:
>>A true anarcho-libertarian society wouldn't have corporations, since
>>they are products of the state, chartered and protected by them. True
>>capitalism is one without corporations. Abolish the laws that establish
>>corporations and even though you may still get big powerful companies,
>>its owners would be directly responsible for their actions.
>Now we're talking! I couldn't agree more. As an extropian, I'm for
>individual liberty/responsibility over corporate 'entity'
>liberty/protection. If a large group of individuals want to form a huge
>company and amass huge fortunes in the process that's great and I'm all
>for that. To give all of them protection under the Law, without they as
>individuals being accountable - is bullshit!

I disagree strongly with this line of thought for a number of reasons.

First, it is simply not true. High-level officers *can* be held
accountable for the actions of the corporation.

I find the "accountability" argument against the existence of corporations
to be poor. If a large aerospace company (say 100,000 employees) builds
and sells a plane that by some definite fault of their own crashes and
kills 250 people, who is liable? In an organization that large, with
thousands of people directly or indirectly responsible for the design and
safety of the aircraft, how do you determine the liability of each
individual? Are mere employees directly liable for a fault of the company,
or do you have to be a owner/stockholder (who usually are NOT employees) to
be "directly liable"? In either case, it is very easy to argue that
*neither* the employees nor the owners/stockholders should be directly

In civil cases, it makes no legal or logical sense to sue the employees of
a company whose individual responsibilities are not justification for a
civil suite. Many corporate civil suites are generated by situations that
are an accumulation of actions and decisions by hundreds of people that
were correct in their local context but not correct in the organizational

Corporations are not inherently evil or even bad. They are an
organizational form that has serious practical advantages for large
companies. Corporations encourage investment in business. A corporate
structure allows you to share the profits of a corporation without being
responsible for the activities of individuals you cannot control (*NOTE: by
legal definition of a corporate stockholder you are NOT ALLOWED to have
direct control unless you are also an employee*). The corporate liability
exists so that an entity can be held responsible when no individual clearly

You seem to be operating under the assumption that 1) Most employees of
corporations are also owners, 2) most owners are also employees, and 3)
owners of corporations are in direct control of the employees.
These conditions are rarely true for large companies. And in cases where
the owners are also employees with significant control, they owners *are*

This corporate accountability thing sounds like a version of the ever
popular "Corporate Conspiracy Theory" to me.

-James Rogers