Public corporate ownership makes a lot of sense to me.
(I was hoping this would spur interesting discussion)
If liability is unlimited, would you really hand over unlimited liability to managers without extremely close oversight? No. So shareholders would have to directly run the business. Worse, would the shareholders hand over unlimited liability to a voting process in which they might lose to other shareholders?
Conversely, it's both unfair and pointless to make the mere managers, who are staff and not contributors of capital, liable for the business operations.
There are exceptions to this but they tend to be small to medium low-capital businesses. Accountancy and law firms often operate as partnerships, for example.
No, the LLC is a primitive of operation on which the economy is built. It's not going anywhere. But if people start using it as an excuse to dump externalities on the public, there is going to be a policy response imposing some kind of "corporate social responsibility".
But none of that is relevant here. This is the good old fashioned over-investment by the over-wealthy in schemes they thought would pay back by monopolizing future profits.
> If the product is something else and cannot produce software gross margins then it needs to be valued like other similar businesses with similar margins, but maybe at some premium to recognize the leverage it can get through software.
Why this bubble can not be popped in seemingly any other case, especially when criminal acts have been committed, is what GP is complaining about, and was the expected outcome by critics of limited corporations when they were introduced.
You're quite right in that corporate structures do disperse liabilities. It's there in the name - limited liability company. However there are well established standard mechanisms for balancing out that real and tangible benefit, which are taxation and regulation.
Public corporate ownership is all very well, I'm not in principle against it in certain areas. However what I suspect you are advocating is enforced public ownership, i.e. the prohibition of private companies and socialisation of the entire economy. That hits two big problems.
The first problem is purely practical really - it doesn't work. It's been tried over and over again, and is a recipe for disaster. Now I'm not saying all public companies will fail, not at all it can work fine for some activities particularly utilities and social services. I'm saying that resorting to public ownership across whole economies fails. Every time.
The second issue should really be the first in terms of priorities really. Forcing universal public ownership and prohibiting private enterprise is oppression, pure and simple. Capitalism is just the exercise of individual freedoms and rights of ownership over property and capital, and free association with others. That's it. That's all it is. You don't even really need limited liability, although I think that is a reasonable and well proven enhancement when balanced by appropriate regulation in the public interest.
I assume you're not against the publicly traded stock market, just clarifying since others may interpret this as such.
> However what I suspect you are advocating is enforced public ownership.
This is not the conclusion I come to, I do not believe my original post suggests this.
> Forcing universal public ownership and prohibiting private enterprise is oppression, pure and simple.
This was not my viewpoint. I am imagining quite the opposite. If the liability is dispersed, so should ownership. If the ownership is private, the liability should be private. I believe both are critically necessary. These feels like a conservative(dictionary version) viewpoint.
The term public ownership generally means owned by the government, it’s public in the sense that it’s therefore owned by the people. See the Wikipedia article on public property.
Dispersed private ownership is new to me. Huw would that work, mandatory dispersal of shares to all citizens? What happens for new citizens? How do citizens take advantage of their rights, just like any shareholder? What if the vast majority simply sell their shares? I’m not clear how this would all work.
I also don’t see how this brings corporate behaviour under control, without taxes and regulation which we can do anyway.
That could work as long as the shares don't come with rights of information (financial disclosures) or control (board seats) - if they did no startup would ever be able to do anything, and if they did manage to do something their competitors could buy up 1 share and get full access to their books. It opens another can of worms though: if the shares don't come with any rights of information or control, there is a strong incentive and ability for insiders to take actions that cheat the public out of their shareholder rights. For example, they could claim that they "lost" the shareholder certificates and have no record of you as a shareholder (as in the recent Mary Poppins sequel), or they could issue new shares to dilute your ownership down to nothing (as in the Facebook movie), or they could take your money and not deliver a working product (as in Theranos), or they could take your money and then spend it on overpriced leases of buildings owned by the founder (as in WeWork). The reason we have accredited investor provisions is that presumably anyone with a million in liquid assets has the ability to hire lawyers to enforce their rights, and the sense to be aware of these scams and carefully document everything.
Interestingly, the selling point of blockchains & ICOs was that you could delegate the enforcement of rights to a computer and not need a lawyer to ensure you don't get screwed. It only really worked for the first two cases, though, and the SEC shut it down pretty quickly because the latter cases (like taking your money and running off to the Cayman Islands) became a real problem.
Second, property itself is oppression, since it is the artificial exclusion of people from resources, and thus allowing it is more of a tradeoff, not some fundamental right. I would say that personal property (property you actively and personally use) could be a legitimate natural right, but that is directly at odds with the more artificial and modern private property (enclosure of everything guaranteed perpetually by the state) as it excludes rent.
On your "point zero", maybe the most interesting one... you point out that regulation can help mitigate the problems of private ownership. I would go one further and say this points out a false binary... every corporation I'd somewhere between fully public and fully private, because the more regulation you add the more public it becomes. I am wondering how you reconcile a the freedom narrative with the fact that regulation is partial forms of oppression? Personally, I've dropped that concept long ago, and am more interested in finding the most democratic (ie public) we can go along that scale while still providing just enough minimal flexibility and rewards to those operating it to maintain as many of the benefits of unfettered capitalism as possible.
The question of private property is an interesting one. Sorry but I hoped to come back and write more but I’m out of time to address it at the moment.
On the balance between private ownership versus public responsibility you’re quite right. It’s not a matter of absolutes. Its important to recognise that every right incurs an obligation on others to recognise, protect and provision the conditions to exercise it. I don’t think there’s anything absolute about rights. They are a vital, indispensable concept, but they are hard work and all the more valuable and worthy of respect because of it, both by those granting them and those exercising them.
I’ve already addressed the question of how to reconcile corporatism with regulation. Corporations are limited liability bodies, which confers on them significant legal and financial benefits. I think taxation and regulation are a reasonable and fair quid pro quo. To expand on that, corporations, individuals and companies in general also benefit from the protection and services of government and society. That includes things like access to an educated work force, protection by the legal system, etc, etc. All of those things create an obligation that can be reasonably discharged through paying taxes and following regulations in the service of the public good.
Of course they can always exercise the ultimate freedom - to leave and go elsewhere. From time to time some do.