Corporations Violate the Free Market

Corporations legally have special government privileges and protections against liability, which violates the free market. So, corporations as we know them now could not exist in a free market, by definition. However, it is still possible for large jointly owned businesses to exist in a free market, but they wouldn’t have the special government privileges that they get now.

4 thoughts on “Corporations Violate the Free Market

  1. Can you explain what privileges a Corporation has that violates the Free Market?

    Also do you feel a small business owner should be liable for injuries that happen in thier store?

    • (First, FYI, when we speak of “free markets”, we are usually also including property rights protection, even if it’s not explicitly stated). To answer your question, one of the more prominent examples is limited liability law. Sometimes a company does some damage to life or property, but there is a legislated cap on how much the company has to pay for such damages. The government is essentially granting partial immunity to a company even though it’s responsible for harming others or property. Another example is that sometimes the government grants authority to a company to confiscate property or land from private owners if the government thinks that the company’s business is sufficiently useful and beneficial to the public (example, a Costco store). Also, historically speaking, some governments explicitly granted monopoly power to a corporation (British East India Company). There are many other ways that governments privilege big business, thus enabling them to violate the free market, but the above examples are more directly related to the typical character of a corporation.

      As for the injuries in the store, I would refer back to the definition of libertarianism here. If the store owner is “responsible for” the harm done to the person, then they should be fully liable. Although there are many cases throughout daily life where it is clear whether someone is responsible for something, I understand that there are some cases that are difficult and unclear. The store situation depends on the specifics of the case. However, I will say this: if it is clearly understood that the shopper enters the store and is aware of some risk, and it can be established that the shopper voluntarily accepts such risk, then an accident is not the fault of the store. For example, maybe the “store” is a cheap gym, and the membership agreement specifically states that the gym has some old equipment that is not maintained, and that that equipment may break, and that the customer accepts this risk, and that the gym is not liable for an accident with the equipment breaking, and the customer agrees and signs, then that situation just became voluntary. So, the customer shouldn’t be able to sue the store if he gets hurt if the equipment breaks when he’s using it. In libertarianism, all is well in voluntary, consensual interactions among adults.

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