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When were the corporate charters expanded in scope? Would you have something to read about along those lines?
I used to help out a corporate charter reform group back in the 90's, I can't find any of their stuff on line any longer. This may be the same or similar group but I am not sure.
I don't agree with all of their solutions but many of them I do.
* Corporate charters (licenses to exist) were granted for a limited time and could be revoked promptly for violating laws.
* Corporations could engage only in activities necessary to fulfill their chartered purpose.
* Corporations could not own stock in other corporations nor own any property that was not essential to fulfilling their chartered purpose.
* Corporations were often terminated if they exceeded their authority or caused public harm.
* Owners and managers were responsible for criminal acts committed on the job.
* Corporations could not make any political or charitable contributions nor spend money to influence law-making.
I used to help out a corporate charter reform group back in the 90's, I can't find any of their stuff on line any longer. This may be the same or similar group but I am not sure.
I don't agree with all of their solutions but many of them I do.
* Corporate charters (licenses to exist) were granted for a limited time and could be revoked promptly for violating laws.
* Corporations could engage only in activities necessary to fulfill their chartered purpose.
* Corporations could not own stock in other corporations nor own any property that was not essential to fulfilling their chartered purpose.
* Corporations were often terminated if they exceeded their authority or caused public harm.
* Owners and managers were responsible for criminal acts committed on the job.
* Corporations could not make any political or charitable contributions nor spend money to influence law-making.
And one of my first blogs was on corporate charters and exactly along the lines you mention. In fact, I've used an argument several times in the past that if the old corporate charters were brought back, it will be the self-defeaters, the tea party kind, who will be running around screaming socialism. No?
THAT is the problem, and why capitalism CANNOT take the shape and form of a tiny little instance on a national scale.
And one of my first blogs was on corporate charters and exactly along the lines you mention. In fact, I've used an argument several times in the past that if the old corporate charters were brought back, it will be the self-defeaters, the tea party kind, who will be running around screaming socialism. No?
THAT is the problem, and why capitalism CANNOT take the shape and form of a tiny little instance on a national scale.
Of course, the parrots will always yell what they are told, the elite will see to it. If they take the time to learn about it, they would realize it is allowing markets to function freely and efficiently with little regulation and top down control.
I am not sure what you mean in your last point, please elaborate.
The only way that Capitalism will work is if those that back it enforce ethical stands on it, so that the power brokers can't manipulate it. That means no bail outs and no corporate welfare. Real capitalism doesn't need to be supported by anything but investments, and the companies that run under this system needs to be as obligated to the needs of their employees as they are to the stockholders. By this, I don't mean unions. Unions are as governments, a sponge of the revenue of a corporation, without sharing in any of the risks.
I am specifically curious from the economics standpoint. Obviously there are differences from a sociological point of view.
O.k. I'm back...
First I have to retract the mercantile modifer because in the strictest since it doesn't apply. Instead I would like deal with the latter argument that this has more in common with a cooperative farm support system than anything approaching market capitalism.
The author argues that Community Supported Agriculture (CSA) program is akin to purchasing stock in a company. If that were the case, each member of the CSA would in effect would become an equity holders, owners, in the farm/company, In this case the "investors" are not equity share holders, they have no legal ownership of the land, or the equipment, just the farmers produce. By pooling their resources they have in fact become a buyers cooperative whereby they can exert greater buying power of the farmer's produce (much like Walmart). In some years this can reap greater price savings while in other years it could result in much higher prices based upon the yield of any given years harvest. The farmer interestingly enough, bares no financial risk for a poor quality harvest, nor does he realize greater profitability during bountiful ones. The program is what it says that it is, a market stabilization program that insulates local agriculture from market forces by insuring that they will have the capital to bring produce to market and a guaranteed buyer for that produce.
The author also attempts to make the argument that this program is similar to commodity markets. But unlike commodity markets where commodities are purchased with the intent to be resold for a profit in this case the buyers have no impact on the price of the produce. A member of the CSA pays in advance for a share of the produce at a price that appears to be the same year in year out. This is so contrary to how commodity markets operate that it would seem that no further explanation would be needed. Suffice it to say that the price of goods sold in a commodity exchange are based upon buyers predictions of future harvests, or on current market demand which is not determined not by some preset price but rather an evaluation of the quality and size of the harvest and how they will be affected by demand or lack thereof. Even the author admits that in some years their "investment" is rewarded with produce far exceeding any possible demand. That isn't how a capitalist market is suppose to work, because it is a buyers cooperative, not a mutual fund.
So not only do market forces not exist for the farmer, they don't exist for the buyer as well. The members of the CSA have made a choice that they gain greater satisfaction from maintaining locally based agriculture than trying to find the best product for the best price at any given time. Quite progressive idea actually, but not something that a true capitalist would admire, which once again leaves my scratching my head at the economic thinking of the so-called Austrian school of economics.
Last edited by ovcatto; 04-18-2011 at 07:00 PM..
Reason: edited for clarity.
First I have to retract the mercantile modifer because in the strictest since it doesn't apply and allow me to draw the distinction between a capitalist and cooperative system.
The author argues that Community Supported Agriculture program is akin to purchasing stock in a company which makes them an equity holder in the company, thus they become part owners of the company. In this case the "investors" are not equity share holders, they have no legal ownership in the land, or equipment of the farmers just in their finished product. In this case produce. By pooling their resources they can exert greater buying power of the farmer's produce. In some years this can reap greater price savings while in other years it could result in much higher prices based upon the yield of any given years harvest. The farmer interestingly enough, bares no financial risk for a poor quality harvest, nor does in produce higher profits during bountiful ones. The program is what it says that it is, a market stabilization program that insulates local agriculture from fluctuations in prices in short it frees the farmers from all market forces.
But this simply isn't true. the CSA holder is an equity partner for their year long term. Within that time frame, they are an equal partner. The farmer absolutely bears financial risk. A farmer buys a plot, and gains no return if there is a poor harvest. The medium of exchange simply is not money as an output, but rather is vegetables. You seem to be reaching here.
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The author also attempts to make the argument that this program is similar to commodity markets where commodities are purchased with the intent to be resold for a profit. Again in this case market forces simply do not exist. A member of the CSA pays in advance for a share of the produce at a price that appears to be a standard from year in year. This is so contrary to how commodity markets operate that it would seem that no further explanation would be needed.
In commodity markets, buyers are bidding on future or present harvests. The demand for the product will be determined not by some preset price but rather an evaluation of the quality and size of the harvest and how they will be affected by demand or lack their of. A bumper year will result in lower prices, a smaller harvest may command higher prices. The same would hold true based upon the quality of the products being produced as will a combination of all the above factors. In the case of this program the level and quality of produce produced is insulated from any market pressures since the buyer assumes all risks or benefits of a given harvest.
The author never mentions commodity markets. Where did you come up with this?
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This has absolutely nothing to do with free market capitalism, in fact it is just the opposite because there are no market forces to determine price.
I am not sure what to say to this statement other than it seem you do not know what a free market is. A free market is simply an economy where all markets within it are unregulated by any parties other than those players in the market. A free-market is simply a market free from market intervention or regulation, of which concerning the CSA there is none. The CSA is the truest form of a free market which could exist. Where on earth did you come up with the idea that there are no market forces? There are absolutely forces of supply/demand for short-term land rentals (the market forces) which represent the self-interest of the buyers (those utilizing CSA) and sellers (CSA itself). That is the DEFINITION of a market force.
These market forces determine a market price (which was actually given in the article) of $275 per medium share per season. The CSA example given in this article is the epitome of a free market economic system.
The only way that Capitalism will work is if those that back it enforce ethical stands on it,
Well that would be inherently anti-capitalist. Even under the most ethical standards economic power and wealth will concentrate into smaller and smaller hands as one company finds ethical ways to dominate a given market. And it is inherent that any company that has gained such dominance will not freely give that dominance away. Adam Smith knew this and warned of it.
There are only two ways to curb capitalism's excesses, strong labor unions and the government to play referee between the two.
But this simply isn't true. the CSA holder is an equity partner for their year long term.
"To join a Community Supported Agriculture program, you buy a share of the farm's produce each season, which entitles you to a weekly box of locally grown vegetables and fruit. In a sense, members are not purchasing produce per se, but the rights to a certain proportion of produce should it be successfully delivered."
No further comment needed.
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The farmer absolutely bears financial risk. A farmer buys a plot, and gains no return if there is a poor harvest.
"Additionally, and perhaps most importantly, in the event of crop failures, there is shared risk between the farmer and the consumer. If they have a bad year with some particular crop, then you receive less;"
No further comment required
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