Saturday, May 9, 2009

State and Corporation

"The function of the state -- to record the creation of corporations -- is not essential to their existence any more than the registrar of births is essential to the conception or birth of a child.

This mere procedural requirement of filing the articles with a state official is equated with state creation. Procedural requirements, though, are not unique to corporations. On the contrary, procedural requirements apply to virtually all contracts. For example, to be legally valid, a marriage contract must follow specified procedural requirements: it must be performed by someone authorized by the state, it must be witnessed, and a signed certificate must be filed with the state If these requirements make the state a party to a contract, then every marriage is a menage a trois: bride, groom, and government. Quite literally, the government plays a smaller role in the creation of a corporation than of a marriage. Yet who, for that reason, would describe marriage as a creature of the state or claim that a marriage certificate contains a promise to serve the public interest?"

"The essence of capitalism is the inviolability of individual rights, including the right to use or invest wealth as one chooses and the right to associate with others for any purpose and under any mutually acceptable terms of association."
"Investment without control is not an evil if the owners freely consent to that relationship. Rather, it is an example of what has been called 'capitalist acts between consenting adults.'"
"Anyone whose professed goal is to give shareholders the widest possible range of choices would be unable to conceive of or to create the stock exchange system that spontaneously evolved over the past century. Far from being the antithesis of free choice and continuous accountability, the publicly traded giant corporation is the highest embodiment and expression of those ideals."

Robert Hessen. "A New Concept of Corporations: A Contractual and Private Property Model." The Hastings Law Journal 30 (1979)

No comments: