Libertarian Party Says Gov. Walker Made Right First Step

Press release from LPHQ; this is the first release since the election of the new chair and LNC last month:

Bring Government Labor Contracts In Line with Private Sector Compensation

WASHINGTON – The Libertarian Party supports measures taken by Gov. Scott Walker of Wisconsin to curtail collective bargaining rights of state unions in his bid to cut the state budget deficit. But it’s only a first step.

Government employee labor contracts in Wisconsin, like most made between unions and federal, state and local governments in the United States, are inherently illegitimate. Fulfilling their demands, therefore, is not obligatory.

“Governments and unions have an incestuous relationship in this country,” said Libertarian Party Chair Geoffrey J. Neale. “Politicians pass laws forcing millions of government employees to pay union dues while handing out lucrative government employee contracts. The unions pour money into the re-election campaigns of those politicians. Everyday taxpayers and workers are left holding the bag.”

A judge must recuse himself when adjudicating a case where he has a financial interest in one of the parties before him. Libertarians assert that, likewise, a lawmaker who takes campaign donations from contractors, unions or anyone else who profits from taxpayer money should not be allowed to vote for handing out government largesse. Nor should those who profit from government be allowed to donate to political campaigns.

But lawmakers routinely allow this conflict of interest, passing laws to mandate the terms of labor contracts and signing those contracts, rendering them invalid.

A valid contract is one where all interested parties agree to the terms of the contract. When elections can be bought by those who profit from Big Government, the taxpayers have, at best, weak representation. Yet they’re expected to foot the bill.

“To call such contracts ‘non-discretionary’ is a sham. Taxpayers never gave their consent to pay for labor union contracts that dish out high wages, generous benefits, and retirement packages worth two to fives times what private sector workers get for doing the same job,” said Chair Neale. “This keeps taxes high and promotes recklessly high government overspending. It’s also fundamentally unfair.”

The Libertarian Party calls for re-writing these contracts to bring government worker compensation in line with that of comparable private sector workers and to eliminate unnecessary and duplicate jobs that drive up government spending.

On June 5th Gov. Walker faced a recall election prompted by protests against his 2011 Budget Repair Act, which increased public employee contributions toward pensions and health coverage and restricted union powers of collective bargaining and dues collection.

While this was a move in the right direction, it’s only a start.

According to a study by the American Enterprise Institute and the Heritage Foundation, before the Budget Repair Act, Wisconsin state employees received total compensation (salary and benefits) about 29 percent higher than comparable private sector workers. After the act, the compensation premium remained at about 22 percent.

“The Wisconsin vote is an indication of whether Americans want to go the way of Greece — or do the right thing and start to bring government employee compensation down to earth before the U.S. becomes insolvent,” said Neale. “This will move money out of government coffers and back into the private sector where it belongs and where it will be invested in small businesses that create sustainable, private sector jobs.”

P.S. If you have not already done so, please join the Libertarian Party. We are the only political party with a mission to give voters a choice to downsize Big Government, to do so in the most humane way possible, to greatly reduce taxes, and to slash high government spending.

154 thoughts on “Libertarian Party Says Gov. Walker Made Right First Step

  1. O Rly?

    Let the Republicans fight their own battles. Don’t we have some battles to fight that the Top Two parties won’t help us with?

  2. just saying

    This seems inappropriate for an LNC release. I would be interested in seeing what LP-Wisconsin says though.

  3. wolfefan

    For those of you who know more about the LP than I do, what would official party views (if any) on unions be? Is there a consistent LP position that employees of the government should have fewer or different rights than employees of private companies? When one weakens the collective bargaining rights of public employees unions, one automatically strengthens the power of the state vs. it’s employees. This does not strike me as a terribly libertarian position. This seems like more of the Alinskyite (descriptive – not perjorative) isolation and demonization of opponents that we’ve seen often from a particular wing of the LP, as well as both of the major parties.

    Full disclosure – I am a member of the IAAF, although since I’m in Virginia they don’t bargain for us. The primary direct benefit we receive is assistance and representation in the greivance process. It’s nice to have someone in the room on your side when you are facing a government attorney.

  4. Trent Hill

    “More Republican-toned outreach again.”

    George, I suspect if I gave you the choice between a kazoo and a piano, you’d pick the kazoo.

    Because you’ve got one note to play.

  5. just saying

    @4
    For those of you who know more about the LP than I do, what would official party views (if any) on unions be? Is there a consistent LP position that employees of the government should have fewer or different rights than employees of private companies?

    There isn’t an official position. Let’s be realistic, the national LP office isn’t a large operation. This was probably written up by one guy, and then looked over by one other guy who either agreed or didn’t object enough to veto it.

    When one weakens the collective bargaining rights of public employees unions, one automatically strengthens the power of the state vs. it’s employees.

    The “public employees” *are* the state. They’re the ones with the guns and other accoutrements of state power. So one is automatically strengthening the power of the taxpaying individuals over the state — the state expressed as the people who consist of it. That is the counterargument.

  6. John Jay Myen rs

    In regards to Labor Unions here is the LP official position:

    2.7 Labor Markets

    We support repeal of all laws which impede the ability of any person to find employment. We oppose government-fostered forced retirement. We support the right of free persons to associate or not associate in labor unions, and an employer should have the right to recognize or refuse to recognize a union. We oppose government interference in bargaining, such as compulsory arbitration or imposing an obligation to bargain.

  7. Thomas L. Knapp

    wolfefan,

    It’s a difficult issue, because there are multiple distortions at work.

    On the one hand, many government employees find themselves in a de facto monopsony situation — only one customer, government, for the services they sell (teachers, police, firefighters, etc.).

    This would seem to make unionization more desirable even than in the private sector, so as to bring the bargaining power of a monopoly seller to the table versus that monopsony buyer.

    But it’s also dangerous to the extent that that monopoly BUYER isn’t the actual PAYOR. When faced by organized bargaining power, it’s easier for the state to give in and just go take more money from the taxpayer than to stand up in any way to that organized bargaining power.

    The obvious way out of these distortions is to get the state out of the business of middle-manning the services involved. But politicians don’t like giving up roles, because that means giving up power, and government worker unions are quite comfortable with the arrangement as well.

  8. Charles Lupton

    My personal thought on unions. Free association is a good thing, but modern public employee unions are far from free association. Closed shops are not free association, forced membership is not free association. My problem with most public employee unions is their only tactic is the use of force on both the employer and the employees. When one group monopolizes both sides of the equation in the public sector the tax payer loses.

    What ever happened to a group of like minded workers simply pulling together for a protest or strike?

  9. JT

    Phillies: “More Republican-toned outreach again.”

    Trent: “George, I suspect if I gave you the choice between a kazoo and a piano, you’d pick the kazoo.

    Because you’ve got one note to play.”

    Indeed.

  10. Thomas L. Knapp

    CL@11,

    “Closed shops are not free association”

    Closed shops by agreement of employer and union ARE free association.

    Closed shops — or open shops — by government mandate aren’t.

    “forced membership is not free association.”

    True. But forced membership is also non-existent.

  11. zapper

    @14 So, when the government itself closes its own shops by agreement with the unions in a marketplace where the government representatives were put their by the political power of the union, that is not a free agreement…

    And in Wisconsin, where the government has now voted to open its own shops against the wishes of only one side – the union – but supported by the voters, who re-elected Walker and therefore have ratified the open shop – meaning they refuse to make an agreement to close the shops …

    Then these government shops are now open shops as they should be.

  12. Nick Kruse

    “We support the right of free persons to associate or not associate in labor unions,”

    So I guess the LP is supportive of unions.

    “and an employer should have the right to recognize or refuse to recognize a union.”

    Oh, so I guess the LP doesn’t like unions.

  13. JT

    Nick, the LP doesn’t take a position on whether unions are good or bad. It takes a position in favor of voluntary association and against collective compulsion. That means each worker has a right to join or not join a labor union, as well as leave an employer at will (barring a voluntarily entered contract). Each employer has a right to deal with or not deal with a labor union, as well as fire a worker at will (barring a voluntarily entered contract). Current labor laws violate those rights.

  14. Mark Hilgenberg

    Here is what I wrote to Geoff.

    “I was very disappointed with today’s press release regarding the Scott Walker election and issues. Even though it was very well written, hit our issues properly and made a great case, it is unfortunately being looked at as a pro-GOP or pro-Conservative piece by many independents and those on the left. To the right it just reinforces why they need to continue to vote for Republicans people like Walker.

    Over my years of grassroots outreach and campaign work, I found it is best to stay out of the hotly debated and scripted left/right talking point issues. It does nothing to set us apart from the game. ”

    The Walker election was not a Libertarian issue. Taking sides with Government protected corporate interests over government protected Union interests is not an issue we need to pick sides on.

  15. langa

    Charles @11 and JT@17 are absolutely correct, at least IMO.

    Of course, Knapp is also correct that government shouldn’t be providing these services in the first place, but as I’ve argued with regard to other contentious issues (e.g. immigration, gay marriage), two wrongs don’t make a right. You can’t just say, “Well, the government shouldn’t be doing X or Y, but if it’s going to do X, it has to do Y as well.”

  16. langa

    If the LP insists on commenting on this situation (which is probably a mistake), the headline should read something like, “Walker right about problem, but wrong about solution”, and the article could then go on to explain that these conflicts of interest will always occur as long as the government is allowed to negotiate with other people’s (i.e. taxpayers’) money.

  17. Gene Berkman

    If anything is clear at this point in time, it is that government employee unions are a major force pushing for expansion of government. Anybody have evidence to refute that?

    Of course we also oppose the military industrial complex and the police unions that back Republicans.

    But to say that we cannot issue a statement opposing government employee unions because it might sound conservative or ‘Republican’ is just to ask for Libertarians to be neutral in the conflict over the size and power of government.

    Yes, what we say does sometimes sound like Republicans. Perhaps we can hope that someday Democrats will sound like us when we call for legalizing marijuana. If we are in competition with Republicans and Democrats, part of the competition is to reach out to people who oppose expansion of government power, which conservatives sometimes sound like they also oppose.

    The election in Wisconsin was a defeat for the government employee unions, and therefore at least a partial victory for Libertarians.

  18. Gene Berkman

    MH @ 23 – The reforms that Governor Walker pushed through in Wisconsin only apply to government employee unions – and exempt police and firefighters. They do not limit collective bargaining rights of private-sector unions.

    A second point in response to your question – unions don’t always act against corporations that have government privilege. The United Auto Workers for example supported the taxpayer guaranteed bailout of Chrystler many years ago, and the taxpayer funded bailout of General Motors more recently.

    It is widely believed that the bailout of General Motors was motivated by a desire to reward the UAW for support they gave to the Obama campaign in 2008.

  19. Gene Berkman

    MH @ 25 says “so who will Walker be contracting out the services to?”

    I guess this really does point to a conundrum. Since the government right now does many things, and Libertarians call for the government to do less things, some things that government now does will undoubtedly be done by private entities with government contracts.

    Does that make such private entities “mixed economy parasites” to use Ayn Rand’s phrase? Perhaps it does, and we should have muckraking journalists keep an eye on how contracting out is done.

    But the alternative to privatization and contracting out of government services is likely to be continuation of government programs. A complete removal of government to allow voluntary and competitive solutions is much less likely to happen in the near term, although it is clearly what we have to push for.

  20. Mark Hilgenberg

    Gene @ 26 “I guess this really does point to a conundrum. Since the government right now does many things, and Libertarians call for the government to do less things, some things that government now does will undoubtedly be done by private entities with government contracts. ”

    Hence why we need to stay far from these battles.

    Even if the contracts or completly privatized services go to companies, they will be politically connected corporatist entities. Not truly free voluntary associations taking on full liability and risk.

  21. Gene Berkman

    So Mark, you think we should stop calling for downsizing government, for contracting out, etc and we should oppose privatization, educational choice etc?

    What is the purpose of Libertarian political activity in your conception?

  22. Mark Hilgenberg

    If our only pitch is downsizing government in order to hand it over to government protected and privileged corporations, yes.

    We need to be promoting the idea of limiting corporate privilege as much as we do limiting government.

    If we don’t we are just looked at as conservatives.

  23. Gene Berkman

    Mark – what do you see as “corporate privilege”? That is a term that means many things to many people.

    Do you think that corporations should be allowed to exist at all? If not, why not?

    What kind of economic enterprises do you think should be allowed to exist?

    Why do you think limiting corporate privilege is as important as limiting government power?
    Has a corporation ever drafted you for a war, or put you on trial for marijuana possession?

  24. Mark Hilgenberg

    Yes, any voluntary association should be allowed to exist but they should have the same risk as individuals. Why should they and their executives receive limits on their liability, I don’t. Why should they be granted special benefits by government, I’m not.

    Limiting corporate power is as important as limiting government power because they are one in the same, concentrations of power.

    Yes, corporations draft by controlling our government and having us fight their wars for oil and banking.

    They also benefit from the drug war; we are jailed so big phara doesn’t need to worry about losing money on the government protected patented drugs.

    I am against all concentrations of power over the individual.

  25. Gene Berkman

    Mark – my own experience has been different.

    Corporations produce books, CDs and DVDs that I sell in my book shop. They produce other goods that I consumer, voluntarily.

    The federal government put me in the first draft lottery during the Vietnam War, and it was government agents that arrested me for refusing to go.

    It was a local government that prosecuted me for marijuana possession, not a corporation.

    The first federal marijuana laws were passed during the New Deal, along with various attacks on private business and corporate power.

    The first peacetime draft also came during the New Deal, in 1940.

    Limited liability does not protect a corporation against being sued. A corporation can be sued for up to the full value of their assets. Limited liability protects shareholders – including many middle class families, and even union pension funds – from having their assets taken as a result of a lawsuit against a corporation.

    Having been a victim of government, it is just clear to me that government is a bigger danger than corporations.

    We should end corporate welfare, and we should oppose activities of corporations that lobby for government programs. But to oppose a corporation benefitting from government power is not the same as opposing the many corporations that peacefully organize production and distribution of consumer goods that you probably consume as well as I.

  26. Thomas L. Knapp

    “[Privileged corporations] also benefit from the drug war; we are jailed so big phara doesn’t need to worry about losing money on the government protected patented drugs.”

    It’s even more direct than that. The “private” prison corporations that turn their buck by warehousing inmates for the government are major lobbyists and contributors toward keeping the drug war going.

    “Privatization” is probably largely responsible for the US now imprisoning more of its citizens per capita than any other nation on earth.

  27. JT

    Mark: “Limiting corporate power is as important as limiting government power because they are one in the same, concentrations of power.”

    Yikes. This is one idea that makes me want to avoid some libertarians.

    Great post 32, Gene.

  28. Gene Berkman

    Tom – if it makes you feel any better, both times I was arrested, I was held in a government cell.

    Every time I went to court, it was in a government courtroom. And my probation officers in both cases were government employees.

    If the implied contention of your statement is that we would have less intrusive goverment if the government ran all the prisons, perhaps, but it was not my experience.

  29. Michael H. Wilson

    Just one little comment. Libertarians seem to overlook other organizational structure, such as coops and partnerships, that people can use to engage in commerce.

    It ain’t always gotta be a corporation.

  30. Gene Berkman

    Michael – I have been a member of several buying clubs (a form of coop) and I was a paid employee of a coop grocery store. No problem there.

    Many coop grocery stores are incorporated, for liability reasons or because of financial issues. Joint stock companies are not the only enterprise that can incorporate to take advantage of limited liability.

    Some Coops issue stock as the form of membership. I held stock in Co-Opportunity Grocery Store when I lived in Venice, CA.

  31. Michael H. Wilson

    Gene one reason I mentioned it is because many on what we call the left hate corporation but love coops.

    I don’t see mentioning coops as a way so much get the left to see us in a different light but to get some Libertarians to open their eyes. Then when some of us wake up and learn to explain ourselves a bit better we might find that others are more willing to accept some of our ideas.

    And please pardon me. I have been involved in getting ready to spend the weekend petitioning for Johnson and my ass is tired. As a result I did not explain my thoughts fully. Or maybe I am lazy. 😉

  32. Thomas L. Knapp

    GB@35,

    “If the implied contention of your statement is that we would have less intrusive goverment if the government ran all the prisons”

    Not exactly.

    The implied contention of my statement is that “privatization” is not necessarily, to use the words of some who advocate it, “an incremental step toward freedom.”

    If government requires, or guarantees the provision of, service X, “privatization” of the delivery of that service may result in e.g. short-term cost efficiencies through competitive bidding, but it also creates a lobbying/contributing constituency for the government to purchase more and more of service X, to continue purchasing service X whether it’s really needed or not, etc.

  33. Gene Berkman

    Tom, actually you are correct in principle, but you overstate the influence of the private prison industry.

    In California for some years, the largest source of campaign funds was the California Correctional Peace Officers Association.

    CCPOA is the union for the guards at state prisons, and since the late 1980s state prisons have massively grown. CCPOA has supported politicians who promote prison growth.

    A variety of politican and economic interests lobbied for the policies that led to more prisons, but the private prison industry is a late-comer and down the list of influential groups, in California at least.

  34. Gene Berkman

    In reference to an earlier comment re pharmeceutical companies promoting the war of drugs to enhance their profits, well yes and no, maybe.

    Maybe some brewers and bar owners are worried about competition from marijuana. It is known that a variety of pharmaceutical companies contribute to Partnership for a Drug Free America, as dome some in the alcohol industry.

    Certainly a bad contribution to a bad organization, but it might be at least partly P.R. A company selling legal drugs might be as worried or more worried about seeming to be “pro-drug” than they are worried that a few pot farmers might drive them out of business.

    So maybe the drug companies contribute to anti-drug groups to show they are concerned about issues like their own drugs being abused.
    It is unclear what the real motivation for the drug companies is, but I don’t think their profit is the main reason for marijuana prohibition.

  35. Mark Hilgenberg

    @32 Gene

    The government is the front line on behalf of government granted corporate power.

    Just because corporations create consumer goods does not mean that we need to hold them up at all costs, these goods could be delivered just as well without the government promotion and protection.

    How many executives have gone to jail lately? How much money are energy companies on the hook for their nuclear plants?

    How much do corporations pay for their protection?

    Why is it that we provide FREE limited liability protection? I don’t get it for free as an individual.

    @ T.K. 33 & 39 Amen!

    @ JT 34

    Thanks, yes, I feel that way about conservatives also! 🙂

    @ Michael 36 & 38

    Exactly! I love markets! This is why I harp on this so much, the left love coops, farmers markets, etc. There is a big difference between “Markets” and corporatism; I make sure I present the difference to them.

    Unfortunately most Libertarians only promote corporatism to the left.

    @ Eric 42 LOL

  36. JT

    Mark: “Thanks, yes, I feel that way about conservatives also!”

    I not sure whether you’re implying that I’m a conservative. I think you are. If you’ve read some of my posts on this site though, you’d know that’s foolish. For example, I’ve chastised Wayne Root’s ideological attitude many times.

    Libertarianism isn’t against “bigness” per se, Mark. To the extent that (a minority of) corporations lobby for subsidies or trade barriers, that’s wrong. But most large corporations receive no such government favors, nor are they sued for infringing on anyone’s rights. They started out as small businesses & grew a lot. They produced goods that many people wanted at prices they were willing to pay while faring well against competition.

    The “power” that most corporations have is the power of production & sale of goods. The power that governments have is the power of force of law. It makes me ill when I hear Libertarians say that they’re equivalent. I love the big corporations that produce & sell so many things on a very wide scale that enhance my standard of living & that of so many other people.

  37. George Phillies

    One state legislature investigated corporatization, and discovered unsurprisingly that their corporatized prisons were considerably more expensive than their government prisons.

  38. Mark Hilgenberg

    @ JT 44

    Yes, that was my implication but more as a dig than an accusation. I have seen your posts re: Root.

    I said nothing about bigness, my point all along is government created, granted and protected privilege is an issue we can’t ignore. Most corporations have government granted protective shields for owners and executives, this is freely provided by the government.

    All I promote is consistency.

  39. Robert Capozzi

    46 mh, a justice system is inherently a shield. Otherwise, we’d have victims taking revenge on (alleged) perps all over the place.

  40. Mark Hilgenberg

    @ Robert 47

    The justice system is there to protect the rights of individuals.

    So what are you saying, we need a big government to grant entities special protections and privileges?

    Isn’t that what we are complaining about regarding Unions?
    Or is it just government protections for their team is bad, our team is good?

    We need to get out of the team business and start supporting the individual.

  41. JT

    Mark: “I said nothing about bigness, my point all along is government created, granted and protected privilege is an issue we can’t ignore. Most corporations have government granted protective shields for owners and executives, this is freely provided by the government.”

    You said “limiting corporate power over the individual.” Power means the ability to control or command others. That’s something governments do law backed up by police force. If a corporation could send out its own police force in order to make you to pay for what it produces & sells or to force you to invest in it, then that would be an issue of power that libertarians should find odious.

    As far a a government-granted shield, corporate executives do go to prison when found guilty of malfeasance in court. Corporate assets have been seized when the company is successfully sued. Some have been bankrupted. Sometimes these things happen when they aren’t even justified from a libertarian perspective.

    As Gene said above, limited liability for investors–including many, many middle-class families who hold stock–prevents them from having their personal assets seized and forced into bankruptcy if some corporate decision-makers are determined to be legally liable. However, those people can still lose their investments in the corporation without any knowledge of what was going on.

  42. Mark Hilgenberg

    @ JT 49

    I think many of you miss the connection, just because something has an “inc.” after the name does not mean it isn’t using the power of government coercion. A perfect example: Most candy and soda companies use ADMs corn syrup, why? Because the government sets the price of sugar higher than corn syrup. Sure, companies CAN still use sugar but at the government, not free market price.

    When regulations are in place to limit liability, even when harm happens, they are immune, unless they actually are found guilty of fraud.

    Go take tons of oil and pour it all over your neighbors’ houses, killing their pets, making families sick, running property. How fast would you be in jail? Oil execs stay behind the GOVERNMENT shield.

    Where in the constitution and bill of rights do they grant corporate powers and limits on liability?

  43. Robert Capozzi

    47 mh: So what are you saying, we need a big government to grant entities special protections and privileges?

    me: Hmm, not sure how you get THER

  44. Robert Capozzi

    oops…

    me: Hmm, not sure how you get THERE with my words. I’m a lessarchist, so I want government as small as possible until domestic tranquility breaks down.

    For now, the law is a shield that signals and prohibits a range of behaviors, INCLUDING exacting private justice by force. The law is a construct, a set of rules and procedures that have evolved over time to facilitate a civil society.

    The COMMON law tradition also includes the ability of individuals to invest in corporations to facilitate commerce, including limited liability. Yes, the construct could be overridden legislatively, but what’s to be gained by doing so?

  45. Robert Capozzi

    more…

    IOW, with so many things obviously broken, why expend energy on something largely neutral and benign?

  46. Robert Capozzi

    54 mh, offhand, I don’t know. As I recall, it evolved over time.

    Those involved are all dead, however.

  47. Gene Berkman

    Mark – if you want limited liability for a business enterprise, you can incorporate your proprietary company – it would be a close corporation, with no public shareholders, but your personal assets separate from the business would be protected.

    In California if you do so, you become subject to the corporate miminum tax of $800 a year. Or for the same amount you can form a Limited Liability Company (LLC). So the protection is available to you as an individual.

    The protection nuclear power companies get is a separate matter. Price-Anderson limits the liability of a nuclear power company in the case of an accident – in 1979 the limit was 560 million dollars.

    Repeal of Price-Anderson was proposed by the Ed Clark for President campaign in 1979. At the 1979 LP convention a “Committee to Repeal Price-Anderson” was formed with the goal of getting money from David Koch to push the issue. I think it did not survive the convention.

    Price supports for sugar were put in to guarantee income for American sugar farmers, not because ADM lobbied for them. ADM, which does lobby for many bad government policies, is just a profiteer off the situation created by sugar price supports.

    It is ironic, that price supports keep American sugar at ten times the world market price, leading to use of corn syrup as a cheaper substitute, which just adds to the sugar glut.
    Of course, both sugar and corn syrup are poison and nobody concerned with their health should use either one.

  48. Gene Berkman

    Returning the question of whether prison prison corporations promote policies that lead to bigger prisons, there are facts easily available which cast doubt on Tom Knapp’s thesis.

    The huge prison population we have now is largely a result of laws and policies passed in the 1980s and 1990s. The War on Drugs is part, and initiatives pushed by victim’s rights groups also added to the situation.

    There have been over the last thirty years some highly publicized murders, child-kidnappings and other big crimes which led to public support for harsher punishment.

    Some of the violent crimes are related to illegal drug sales, and would decline with legalization of course.

    But the harsh law and order policies were promoted by politicians looking for an edge, and by relatives of victims. There is little evidence that special interest groups that would financially profit are a significant part of the push for enhanced punishment and prison building.

    In any case, the companies that build government owned prisons are a bigger factor than companies that operate private prisons. If you have evidence to refute this, Tom, I would be glad to pay attention.

    The modern war on drugs has been traced to Richard Nixon’s 1968 campaign for President. In the wake of civil unrest following the Watts riots of 1965 and 1966, and some big antiwar protests, Nixon wanted to run on Law & Order as an issue. At the time, crime fighting was not considered a federal power, but, thanks to the New Deal marijuana prohibition, drug enforcement was a federal power.

    So Nixon expanded on that. You have to remember, prior to 1994, even with a number of Republican Presidents, everyone assumed the Democrat Party was the majority party, and the Republican politicos were seeking issues to get votes from normally Democrat voters, and law and order turned out to be a winning issue for almost 30 years.

    All this took place before there was any push to privatize prisons. Privatization as an issue began with libertarian think tanks – notably Reason, in the mid 1980s and was clearly separate from the push for law and order and new enhanced punishments.

  49. Mark Hilgenberg

    @ Robert 55 & 56

    Those who created the income tax, Federal Reserve, Social Security and hundreds of other agencies and programs we are against are all dead also. Does that mean we need to honor all of them by keeping their programs?

    Corporate power evolved along with all other government powers, we should be consistent in our fight against concentrations of power.

    Corporate charters used to be very different, if we are now giving them very generous privileges and protections, maybe we should only allow them to be as they once were?

    Corporate charters 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.

    Big government changed all of those things to give more protections and privileges to those entities.

    I have been making my point all along.

    Corporations are GOVERNMENT creations, Limited Liability is a GOVERNMENT creation, so anytime we are promoting corporate privilege as superior to government privilege we championing big government.

  50. Gene Berkman

    Mark – you say “Corporations were often terminated if they exceeded their authority or caused public harm.’

    You forget to add: Corporations were Aryanized if their owners were Jewish.

    Another country, admittedly, but an example of using state power to restrict corporations to what were thought to be “the public interest.”

  51. Gene Berkman

    Anyway, Mark, what privileges do corporations receive other than limited liability?

    If you mention various subsidies for business, trade protectionism etc, those are often also available to other forms of enterprise. When I was a paid employee of a Coop grocery store, they were collecting petitions in favor of a taxpayer funded “National Consumer Cooperative Bank” for example.

    Farm subsidies often go to privately owned farms, or to giant farming coops.

    I would like to hear specifically about privileges granted to corporations that would justify in libertarian terms giving the state the power to terminate corporations.

  52. Mark Hilgenberg

    @ Gene 61

    “Another country, admittedly, but an example of using state power to restrict corporations to what were thought to be “the public interest.””

    If they are trying to restrict the rights of individuals, that is wrong. Stopping a corp because of race is obviously a restriction on individual rights.

    “If you mention various subsidies for business, trade protectionism etc, those are often also available to other forms of enterprise.”

    Any entity which receives various subsidies, trade protections, intellectual property protections, etc. Is a problem.

    “I would like to hear specifically about privileges granted to corporations that would justify in libertarian terms giving the state the power to terminate corporations.”

    You really can’t think of any? How about harm persons or property?

    Also, I did not say I favored that, I just pointed out it was something the government used originally.

  53. Be Rational

    @50

    It seems that you may not understand what “limited liability” means for a corporation.

    Corporations do not have limited liability for their actions. If they pollute someone’s property, dump oil on their house, or cause some damage as you suggest, the corporation is fully liable to pay. There is no limit to the amount of damages that can be awarded in a court of law just because the actor being charged is incorporated.

    “Limited liability” means that if you own shares in a corporation as an investor, and the corporation causes damage for which the corporation is fully liable, and if the corporation goes bankrupt and after liquidation of all corporate assets it still cannot pay, then, under most circumstances the shareholders will not be forced to pay any additional amounts beyond the fact that their shares will be worthless.

    (There are certain special limited liability acts, for example, Price-Anderson limits the liability of nuclear power plants for their damages due to a nuclear accident, however, this is an industry limitation and if you owned a nuclear power plant as a personal asset you would have the same goverment limited liability. Similar limits have been established in the case of offshore oil spills such as the recent major spill in the Gulf of Mexico, which applies to non-incorporated individual owners as well as corporations.)

  54. Robert Capozzi

    60 mh, no, honoring precedent is not necessarily indicated. Yes, I support some government laws, am ambivalent about others, and advocate abolishing others. I’m ambivalent about the current corporate form.

  55. Mark Hilgenberg

    @ Be 64 “It seems that you may not understand what “limited liability” means for a corporation.

    Corporations do not have limited liability for their actions. If they pollute someone’s property, dump oil on their house, or cause some damage as you suggest, the corporation is fully liable to pay. There is no limit to the amount of damages that can be awarded in a court of law just because the actor being charged is incorporated.”

    I know exactly what it means, I also now about corporate shields.

    There may be limits, look at B.P.

    How many people are criminally liable as you and I would be?

    You guys keep missing it, I am not saying JUST FOR corporations, any privilege granted for any entity, group or individual is wrong.

    How much do shareholders pay for their privilege to not have liability?

  56. Be Rational

    The workers and officers at BP face the same criminal laws as you and I. There is no shield for them. Are you making the assumption that they did something criminal when in fact that may not be the case? Being stupid, making mistakes, and making wrong decisions are generally not criminal acts.

  57. Be Rational

    As for financial liability, directors, officers, managers and other employees of corportations can be sued and forced to pay for their part in any damages of they have contributed or are responsible as well as suing the corporation. Of course, just like the corporation, they can only pay to the extent they have assets to attach, after which they are bankrupt.

    Many directors, officers and managers take out special insurance policies to help pay damages in such cases, just as business, corporate and non-corporate take out insurance, just as private individuals take out insurance to cover themselves in case they cause any damage or injury – yes, even you can buy a general liability policy or a special policy if you feel the need.

  58. Mark Hilgenberg

    Criminal negligence: It is defined as an act that is: careless, inattentive, neglectful, willfully blind, or in the case of gross negligence what would have been reckless in any other defendant.

    I bet they would have built some form of container system around the drill sites had they worried.

  59. Be Rational

    As for not going after shareholders:

    It is a benefit to society in general to have a method by which businesses can secure investment capital in the form of equity that allows them to expand and create jobs and wealth, that also allows investors the chance to risk small amounts of capital without directly influencing or managing the enterprise. While the entire amount invested is at risk and can suffer a total loss, no additional amounts can be charged to the investor who is in such a passive role.

    Likewise, lenders are not liable for damages just because they provided capital in the form of debt.

    Imagine that you loaned someone some money for something … should you become liable for damages based on his actions just because that person owes you principle and interest payments?

    Corporations pay far more for damages they cause than individuals do for similar damages they cause precisely because they have “deep pockets” that can pay more. Often this results in excessive damages being awarded and the sharholders are looted.

  60. Be Rational

    @69 You are very confused on this.

    There is no special shield or privilege protecting any workers, managers or officers from their part in the Gulf oil spill.

    They are subject to the same laws as you and I. In fact, because they are experts and expected to be able to do a better job, they are not only subject to the same requirements to pay for their role in the damages, but they are held to a higher standard in determining negligence and fault.

  61. Mark Hilgenberg

    @ 70 Be

    “It is a benefit to society in general”

    Nope, never hear that line from the big government crowd.

    “There is no special shield or privilege protecting any workers, managers or officers from their part in the Gulf oil spill.

    They are subject to the same laws as you and I. In fact, because they are experts and expected to be able to do a better job, they are not only subject to the same requirements to pay for their role in the damages, but they are held to a higher standard in determining negligence and fault.”

    How much did they personally pay as opposed to shareholders and consumers?

  62. Robert Capozzi

    73 mh, true. Sometimes, though, there other ways to look at a fact set, especially a comples one.

  63. Mark Hilgenberg

    I have, hence my consistency. I would rather have people admit that they know it is hypocrisy to call for government privilege but they feel it is worth it.

    We either support limited government and protection of individual rights, or we don’t.

  64. Be Rational

    In the case of the BP spill, the government has targeted the corporations since they have such deep pockets and the amounts are so huge. BP paying something in the order of $30 billion – it probably should be more – and other corporations that are responsible facing billion dollar damage claims – means that going after a handful of managerial engineers whose assets and payments would be in the thousands would be a low priority and unless gross negligence is involved, would likely be inappropriate. Plus, their employers would likely make their payments for them.

    Shareholders have lost billions of dollars in stock valuation, BP having lost more market value than the amount of the damages assessed, as a result of the damage awards, so in essence, shareholders have paid the entire amount of the damage awards.

    “Is it enough?” is another question. It’s quite likely that many injured individuals have not been made whole and also that a few have managed to milk the settlement process for large profits. The penalties need to be large to encourage greater care and less risk taking on the engineering side.

    The environmental assets that were damaged are, unfortunately, socialist goods, so there are no private owners to guard and protect this valuable asset and no private owners to be compensated. So, the amount paid for damage to the environment is way too low. This is another example of why we need to privatize the seas, rivers, wetlands, wildlife, fisheries, etc. Fascist-socialist systems cannot properly manage, utilize, price or protect the Earth’s resources.

    Cost vs. risk is always a factor in design. Higher potential payments for damages and higher potential penalties encourage the use of safer but more expensive designs in engineering. These factors are included in every design decision for everything engineers create for the world: highways, bridges, tunnels, skyscrapers, elevators, cars, trains, buses, pipelines, supertankers, drilling derricks, oil platforms …

  65. Be Rational

    @72 If we didn’t have a form of limited liability ownership, there would be few opportunities for small investors to participate in large enterprises. As a result, small investors would be poorer and fewer jobs and fewer goods and services would be available. Economic growth would be slower.

    However, for the wealthy, rates of return would be higher on investments that would be highly concentrated in far fewer hands. Instead of having thousands of large companies available as investment vehicles, some of which have millions of individual shareholders, and tens of millions of individual investors participating through their retirement and insurance plans, nearly every large interprise would be controlled by a small family group or small investor group – imagine every large company set up as a private holding like Koch Industries.

    Limited liability shareholding is a true benefit to society.

  66. Be Rational

    “enterprise” – Hello Paulie, when will editing be available. I use other discussion sites that have editing possible for these stuped typos.

  67. Be Rational

    Limited liability ownership could be made available without any government law through voluntary contractual arrangements. It does not require government to be established and it should be neither sponsored nor prohibited by government edict.

  68. Robert Capozzi

    75 mh: We either support limited government and protection of individual rights, or we don’t.

    me: This is about as, frankly, simplistic a framing as I can imagine. Apparently, you don’t. Apparently, you think these ideas of “limited government” and “individual rights” are highly discrete and beyond discussion as to what they might look like in an “ideal” world.

    Regardless, these are constructs. They don’t exist. While constructs are not completely avoidable, my lean is always to assess “what is” and advocate change that moves the social order in the direction of what I believe to be “limited government.”

    The common and statutory laws that enable the corporate form seem incredibly benign to me in the big picture. Since I don’t waste time dreaming up an ideal world, I have absolutely no need to ponder whether the corporate form would exist in the “ideal world.”

    The obstacles to undoing the corporate form are vast; the benefits are non-apparent.

  69. Thomas L. Knapp

    BR,

    You write:

    —–
    “Limited liability” means that if you own shares in a corporation as an investor, and the corporation causes damage for which the corporation is fully liable, and if the corporation goes bankrupt and after liquidation of all corporate assets it still cannot pay, then, under most circumstances the shareholders will not be forced to pay any additional amounts beyond the fact that their shares will be worthless.
    —–

    A fair summation — if you own a business or part of a business, you are liable for that business’s debts, unless that business gets a piece of paper from the government saying otherwise.

    Not sure why you think it’s a good thing that state privilege is applied to hold some owners of some businesses less liable for the actions of said buinesses than other owners of other businesses though.

    The corporate form is explicitly and unintentionally a conveyance of state privilege, and accompanied by the inevitable economic distortions of same.

  70. Be Rational

    Establishing a system for limited liability shareholders is a financial arrangement that can be established in a free market by contract without government. This is one of the voluntary contractual arrangements that we can create in a state of liberty. The fact that government has stuck its nose in the current system doesn’t mean that we wouldn’t have similar arrangements in a free market.

    Having business organizations that secure financing in a variety of ways is healthy. Some investors make loans to busineses which also exempts them from liability beyond the value of the loan.

    Goverment has caused massive malinvestment in transportation infrastructure by building too many roads and highways and by puttting them in the wrong places (along with all other kinds of transportation malinvestment). But, we would still build some roads and highways in a free market.

    Getting government out of the food business doesn’t mean that we don’t need food.

    Getting government out of the regulation, control and manipulation of business structures doesn’t mean that we don’t need and won’t have corporations as voluntary free market organizations.

  71. Mark Hilgenberg

    BE

    I take a different tack, as opposed to privatizing our natural resources and have the government give them over to entities they protect. (Corporations) I would rather see individuals and entities pay user fees to the rest of us for their exclusive access to something they did not create. I don’t believe in royal decrees.

    http://geolib.com/essays/sullivan.dan/royallib.html

    The same could be done with government granted limited liability. They could provide it for a user fee paid out to the rest of us for backing their privilege.

  72. Be Rational

    We need to do away with the government, not institutionalize the looney ideas of Henry George.

  73. Mark Hilgenberg

    BE,

    You mean the loony ideas of Thomas Paine, Adam Smith and Thomas Jefferson.

    Plus you mean do away with the government except for all of the perks and benefits you enjoy along with the corpotaists.

    I want the government to protect my rights, I didin’t know we had to want to “do away” with all government in order to be a Libertarian?

  74. Aaron Starr

    I’m not particularly alarmed by government being in the business of recording limited liability entity formations any more than their recording of deed transfers, easements, or any other public recording of clearly delineated property rights (including contractual rights).

    It’s easy to conclude that the state does not actually grant limited liability to an entity.

    Rather, it is merely providing public notice to creditors that — unless they take additional steps – they are limited to satisfying their claims in that they may only go after the assets of the entity.

    Many creditors will bypass the limited liability protection altogether by requiring the owners or officers to sign personal guarantees.

    If the state actually granted limited liability, it would refuse to recognize and enforce personal guarantees intended to nullify that limited liability protection.

  75. Gene Berkman

    In the state of California at least, you do pay fees to incorporate. There is a minimum corporation tax of $800, which also applies if you form a Limited Liability Company.

  76. Thomas L. Knapp

    AS 86,

    “It’s easy to conclude that the state does not actually grant limited liability to an entity.”

    Yes it is. All you have to do is ignore fact, reality and history to reach that conclusion. Easy as falling off a log.

    “Rather, it is merely providing public notice to creditors that — unless they take additional steps – they are limited to satisfying their claims in that they may only go after the assets of the entity.”

    Bullshit. That might fly if said notice applied only to persons intending to do business with the entity. In the real world, limited liability applies to tort damages owed people who may have never in any way voluntarily interacted with the entity.

  77. Aaron Starr

    TK @ 89

    If I as an officer or employee of a limited liability entity (LLE) commit a tort – even if my actions are within the scope of my duties acting on behalf of an entity – I am not protected by the limited liability protection of the LLE. Someone can still sue me in my individual capacity and obtain a judgment against me.

    Justice is best served by having only those who commit wrongs held liable for their actions.

    It would be an act of coercion to require innocent bystanders, who merely own a piece of an entity but have no role in its operations, be held personally liable for another’s wrongdoing.

  78. Thomas L. Knapp

    AS@91,

    If you “merely own” a piece of an entity, by definition you have a role in its operations and are personally responsible for those operations and those consequences. That’s part of what ownership means.

    The coercion comes in when the operations of that entity cause damage to another and you, as an owner, hold up a piece of paper from the government saying “nyah, nyah, nyah, the state says you can’t recover from me.”

  79. Gene Berkman

    Mark – it’s $800 a year, and the only benefit is limited liability for the owners.

    So are you and Tom proposing that if you have a meritorious lawsuit against, say, Apple Computer, that you should be able to collect from each of Apple’s stockholders? Spell out what you think the best alternative to limited liability for joint stock companies is.

  80. Aaron Starr

    TK@92

    I believe you’re not making a distinction between ownership and control.

    Having control is what should determine liability.

  81. paulie Post author

    Hello Paulie, when will editing be available. I use other discussion sites that have editing possible for these stuped typos.

    You’d have to ask Trent Hill. I lack the level of access to fix that, which would require server access. I do not have server access, only dashboard access.

    You can fix comments if you sign up to post articles at IPR. If you do so I ask that you post some at least every once in a while.

    If you do so:

    Please post only articles that are related to alt parties/independents by subject or by author. If the connection is unclear please make it clear. Please do not post your own editorials. You can post other people’s editorials and submit yours for other people to post. Please post no more than 3-5 paragraphs of an article published elsewhere unless you get permission to repost the whole article. That’s the main rules.

    If you are unwilling to sign up to post articles, you’ll have to talk to Trent about making it possible to retro-edit your own comments; I lack adequate authority to fix that.

  82. Mark Hilgenberg

    @ Gene 93

    If the executives the owners hired caused things that were so damaging to others, why not?

    We could offer limited liability as a service and have those who want it pay a user fee, or buy insurance or self fund?

  83. Be Rational

    @96 Yes, sure. And when Mark Hilgenberg hires a dry cleaner, and when the dry cleaner shoots his neighbor, Mark Hilgenberg should go to prison for the murder. After all, he hired him. This idea of limited liability has got to go.

  84. Be Rational

    @85 No. Actually I mean the looney ideas of Henry George.

    This neo-geo earth-nazi stuff is a religion with its followers. There is no rational basis to follow it. The ideas are illogical. Taxes on property and especially taxes on land cause more economic distortion annually that the total value of the tax collected. Worse yet, these taxes cause the misallocation of resources through the mis-development of land that lays down footprints in the infrastructure that can cause perpetual damage to the economy and ecology lasting, at a minimum, thousands of years. Taxing land causes land that should be left vacant, especially in cities and other densely developed areas, to be developed or redeveloped far too soon and with the wrong structures or systems. Like all religions, the geo-neo-nazi-georgists spend too much time in their church reading their bible and worshiping their god and his prophets to actually examine the loonacy of their belief system in the light of day.

  85. Robert Capozzi

    92 tk: The coercion comes in when the operations of that entity cause damage to another and you, as an owner, hold up a piece of paper from the government saying “nyah, nyah, nyah, the state says you can’t recover from me.”

    me: Right. The law also sez spouses can’t be compelled to testify against spouses. There are a LOT of such rules in the “state’s” justice system. They may or may not be optimal, but they do facilitate the workings of a civil society.

    We could abolish the state, including the county clerk’s office where real property is registered. Whoever is in possession and keeps it by having the biggest gun could be viewed as the “owner.” Finders keepers in all things.

  86. Thomas L. Knapp

    GB@93,

    “So are you and Tom proposing that if you have a meritorious lawsuit against, say, Apple Computer, that you should be able to collect from each of Apple’s stockholders? Spell out what you think the best alternative to limited liability for joint stock companies is.”

    The best alternative to limited liability for joint stock companies is strict liability, just like for everyone else.

    If you don’t want to be responsible for something, don’t own that thing.

    AS @ 94,

    “Having control is what should determine liability.”

    Exactly.

    You have complete control of whether or not you choose to own part of a company.

    If you want to own part of a company, take responsibility for your property.

    If you don’t want to be responsible for that kind of property, buy a paddleball or a Rubik Cube instead of a share of stock.

  87. Robert Capozzi

    98 br: Taxes on property and especially taxes on land cause more economic distortion annually that the total value of the tax collected.

    me: Distorted compared with what? Is there such a thing as a completely UNdistorted civil social order? If so, show us….

  88. Aaron Starr

    TK @101

    You’re ignoring my point. I stated that there is a distinction between ownership and control.

    Let’s say that I am ordinarily a competent driver. I borrow a car and drive it into town. I don’t own the vehicle, but I have control of it.

    If I negligently run over a pedestrian because I was driving under the influence, I am the one who should be held liable, not the owner of the vehicle.

    Under your theory of justice, if ownership of property was the determinant of whether someone should be liable, then one can escape the consequences of all wrongful acts in life by not owning anything.

  89. Thomas L. Knapp

    AS@103,

    “I stated that there is a distinction between ownership and control.”

    And I state that the distinction is not a bright line.

    In your car analogy, for example, if I loan you my car when I know, or should know, that you just used a fifth of Jack Daniels to wash down a dose of mescaline, then yes, I should certainly be held liable in some measure for whatever happens after I hand you the keys.

    It’s MY car.

    I’M responsible for what’s done with it.

    In what measure I am responsible in any particular case is for a jury to sort out, not for the government to decide in advance by selling me a piece of paper.

    When you buy a share of stock, you are taking ownership in a company, and you exercise OR ABDICATE (which is a form of exercising) some measure of control of that company pursuant to that ownership.

    The fact that you may exercise said control merely by voting for directors, etc. is irrelevant. You own part of it, and you are partly responsible for what it does.

    If you don’t want the responsibility that comes with ownership, that’s fine — use your money for something other than buying stock. McDonald’s will be happy to sell you all the value meals you can eat, or you can take your family out for putt putt, or whatever.

  90. Ted Brown

    @103 Aaron, as an insurance claims adjuster, I can comment that the owner of the vehicle is considered negligent as well under those circumstances. Auto insurance normally follows the car, not the driver, so the car owner’s insurance would be on the hook for the damages. And, if the insurance won’t settle the claim for some reason, the injured party can sue the car owner and the driver equally.

  91. Jill Pyeatt

    Aaron @ 103: You could be held criminally liable, but, Ted’s right. The insurance of the car’s owner would pay the bills.

  92. Robert Capozzi

    104 tk: in any particular case is for a jury to sort out, not for the government to decide in advance by selling me a piece of paper.

    me: Is the “jury system” “omnipotent”? Your logic is cascading toward a cult of the omnipotent jury.

    What should be VERY clear is that the jury system IS ALSO the government deciding in advance. It’s all made up out of thin air. Is there something magical about 6 or 12 people deciding, sometimes unanimously, sometimes by majority, with different standards…sometimes beyond a reasonable doubt, sometimes the preponderance of the evidence.

  93. Thomas L. Knapp

    RC @ 107,

    “In my imagination, your logic is cascading toward a cult of the omnipotent jury.”

    There, fixed that for ya.

    I’ve mentioned the word “jury” once, and pretty clearly there as a general proxy for “post-incident investigation and determination of liabilitiy on the basis of the facts, as opposed to government fiat pre-determination that certain parties may never be held liable.”

  94. Robert Capozzi

    108 tk, right. Juries are one keystone of the property-rights institution/construct. It’s an EXCELLENT example of the fact that there are no “property rights”…it’s an invention, a contrivance. I happen to think it’s an very helpful invention.

  95. Aaron Starr

    Ted and Jill,

    Okay, let me change the fact pattern a bit. I didn’t borrow the car from a friend. Let’s say that I lease the car from a leasing company and I negligently crash the car into someone.

    Should I be the one held liable or the leasing company?

  96. Aaron Starr

    TK@104

    I can’t imagine you would be happy in a world where the person held accountable was other than the perpetrator.

    Your position is that ownership of property ought to be the main determinant of who should be held liable.

    My position is that the actual person who does the misdeed or whose actions can reasonably be foreseen as causing the damages should be held liable.

    If I understand your position accurately, we are never going to see eye-to-eye on this one.

  97. Deran

    It seems to me that all the hate toward the public employee unions and the talk of making them more like employees in the private sector has to do with the fact that the Right has already crushed and nearly extinguished the unions in the private sector. Now they can make the fake comparision and say: See, the private sector is all “free labor”, the public employees should be the same. When it would seem to me the argument is stronger if you reverse it. The private sector should be fighting for the unionized pacts that the public employees still have. It’s not as if the public employee unions were created as a thing only among public employees, public employee unionizing cames decades after the private sector employee unions were strong.

    It seems to me the public employee unions had the chance to grow because the private sector unions were already so strong. Now the Right, the Koch’s, want to finish of organized labor in the United States as a means of furthering their corporatist agenda.

  98. Mark Hilgenberg

    @11 Aaron,

    Leasing companies require high liability insurance by the individual.

    Maybe we should do the same to the owners of the companies we give protection to.

  99. Mark Hilgenberg

    Here is a good history of the government granting corporations privileges and protections. Big government started early. 🙂

    “The 1811 New York corporate law allowed for the formation of limited liability corporations with a simple registration system; however, this was only available for manufacturing companies.”

    “Until the late 19th century, the formation of a corporation usually required an act of legislature. State enactment of corporation laws, which was becoming more common by the 1830s, allowed companies to incorporate without securing the adoption of a special legislative bill. However, given the restrictive nature of state corporation laws, many companies preferred to seek a special legislative act for incorporation to attain privileges or monopolies, even until the late nineteenth century. In 1819, the U.S. Supreme Court granted corporations rights they had not previously recognized in Trustees of Dartmouth College v. Woodward. The Supreme Court declared that a corporation is not transformed into civil institution just because the government commissioned its corporate charter; and, accordingly, it deemed corporate charters “inviolable” and not subject to arbitrary amendment or abolition by state governments.”

    “Limited liability was a matter of state law, and in Delaware up until 1967, it was left to the certificate of incorporation to stipulate “whether the private property of the stockholders… shall be subject to the payment of corporate debts, and if so, to what extent.” In California, limited liability was recognised as late as 1931.”

  100. Aaron Starr

    “@111 Aaron,

    Leasing companies require high liability insurance by the individual.

    Maybe we should do the same to the owners of the companies we give protection to.”

    I suspect they require insurance against collision so that they can recoup the value of their vehicle, not liability insurance against the driver injuring someone else.

  101. Aaron Starr

    @118

    Reading your link:

    “Since the vehicle being financed is still technically owned by the leasing company, they can be held responsible for damages caused with that vehicle; therefore, high limits of liability coverage helps protect the leasing party against any legal lawsuits.”

    That’s fascinating. I wonder if the liability arose out of common law court decisions or if it was due to a statute adopted requiring that the leasing company be held liable.

    It seems patently unjust to me and violates everything I believe in.

  102. Andy

    Thomas Knapp said: “It’s even more direct than that. The “private” prison corporations that turn their buck by warehousing inmates for the government are major lobbyists and contributors toward keeping the drug war going.

    ‘Privatization’ is probably largely responsible for the US now imprisoning more of its citizens per capita than any other nation on earth.”

    Keep in mind that one of Gary Johnson’s “accomplishments” from his tenure as Governor of New Mexico which he has trumpeted is prison privatization.

  103. Andy

    Privatizing prisons is one of those “libertarian” reforms that doesn’t work out so well unless you combine it with other libertarian reforms, such as ending prosecution for victimless crimes.

  104. Robert Capozzi

    122 A, yes, that’s quite the challenge. Advocating for anything with conditions makes the advocacy all the more complex and difficult to enact. Sitting at the negotiating table is not as easy as it looks!

  105. Gene Berkman

    It is historically of questionable accuracy to fix responsibility for growth of the prison population on the privatized prison industry.

    Most the harsh laws requiring longer sentences for various crimes, violent and non-violent, were passed in the 1970s and 1980s, before there was any discussion of privatization. The Reason Foundation began promoting privatization in the late 1980s, and it did not begin be implemented for several years, and slowly.

    Politicians, mostly Republican but it was bipartisan, pushed law and order as a vote getting issue; victims rights groups and anti-drug groups lobbied for harsher sentences because they believed in them, and profiteering arose in the aftermath of the new government managed prison industry.

    I am not aware of any privatized prisons in California, but the prison popularion has grown from around 19,000 in 1981 to in excess of 120,000 today.

  106. Thomas L. Knapp

    Gene@124,

    “I am not aware of any privatized prisons in California, but the prison popularion has grown from around 19,000 in 1981 to in excess of 120,000 today.”

    Private prisons have been a pretty contentious issue in California, and most of them in-state are minimum security, for low-level offenders.

    However, about 10% of California inmates are actually being held in private prisons — in Arizona, Oklahoma and Mississippi, with another deal in the works or completed to send 2,500 more to a private prison in Michigan.

  107. Andy

    Private prisons do in fact lobby for more police state legislation, and against legislation that would rein in the police state. Why? Because it helps their bottom line. The more people that are locked up in private prisons the more money they make.

    How about this for a reform? Ban private prisons from contributing to political campaigns and lobbying. They’ve obviously got a serious conflict of interest.

  108. JT

    Andy: “How about this for a reform? Ban private prisons from contributing to political campaigns and lobbying. They’ve obviously got a serious conflict of interest.”

    Do you want to ban all private groups that have a stake in legislation (which is practically all of them that contribute/lobby) from doing that? That’s a hell of a lot of banning.

  109. Mark Hilgenberg

    @ Aaron 120

    “That’s fascinating. I wonder if the liability arose out of common law court decisions or if it was due to a statute adopted requiring that the leasing company be held liable.

    It seems patently unjust to me and violates everything I believe in.”

    I think it just follows ownership and responsibility. What if an owner lends someone a car with faulty brakes?

    Most likely the government has reduced liability overtime, this was probably a compromise. I know in CA back in the 80’s we passed a proposition that limited liability in lawsuits.

    To me it is a no brainer, make everyone even and responsible, and protect yourself through insurance.

  110. Andy

    JT said: “Do you want to ban all private groups that have a stake in legislation (which is practically all of them that contribute/lobby) from doing that? That’s a hell of a lot of banning.”

    Actually, that’s a good idea. Ban any group that receives tax payer funding from donating to political campaigns or lobbying, including all government employees.

    These people all have a conflict of interest. They have a vested interest in extorting as much tax payer funding for their government program as possible. Their political donations are essentially bribes to politicians so they can keep sucking more and more money from the tax payers.

  111. Robert Capozzi

    130 a: Ban any group that receives tax payer funding from donating to political campaigns or lobbying, including all government employees.

    me: At this point, that would be very large percentages of the population. Banning AARP from lobbying might have kinda interesting, positive results, but the degree of difficulty is approaching reducing gravity’s force by 1/8th.

    Can’t say I’d get behind this one; too many 1st Amendment implications….

  112. Gene Berkman

    TK @ 125 – yes California is paying other states to take our prisoners. This is a result of legislation passed in the 1980s and 1990s that has resulted in a massive upsurge in California’s prison population.

    If you or Andy or George Phillies can point to evidence that private prison companies were important in funding campaigns for such laws, please present it, or post a link. Assertion is not the same as evidence.

  113. Curious

    Did Gary J take private prison campaign money? No wonder he never pardoned anyone for cannabis.

  114. zapper

    “in Delaware up until 1967, it was left to the certificate of incorporation to stipulate “whether the private property of the stockholders… shall be subject to the payment of corporate debts, and if so, to what extent.”

    This is the way it should and would work in a free market.

    The individual(s) who establish a stock corporation would choose the level of liability of the stockholders. The rest of the individudals in the world would be free to associate with that stock corporation or not and to consider the level of liability of the shareholders as part of their decisionmaking process if they so desire.

  115. zapper

    Automobile insurance is not a valid example of what “limited liability” means or could or should be in a free market since Auto Insurance terms and coverages are thoroughly controlled and regulated by statutory requirements and regulatory processes.

    There is no free market left in the establishment of auto insurance terms, coverages and conditions.

  116. JT

    Capozzi: “Can’t say I’d get behind this one; too many 1st Amendment implications….”

    I agree. The Supreme Court has already ruled that independent group advertising is a form of political speech. A blanket prohibition on lobbying legislators & contributing to campaigns would likely be treated the same way.

  117. zapper

    The biggest Lobby is the government itself.

    I wonder if we could prohibit the government from lobbying for funds from itself?

  118. Thomas L. Knapp

    GB@132,

    “If you or Andy or George Phillies can point to evidence that private prison companies were important in funding campaigns for such laws, please present it, or post a link. Assertion is not the same as evidence.”

    Here’s a place to start.

    It covers only openly disclosed federal lobbying expenses and political contributions.

    It’s not like it’s a big secret what the private prison companies are spending their money to get. Here’s a paragraph from Corrections Corporation of America’s 2010 10k SEC filing:

    The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them.

    CCA, GEO, et. al certainly lobby for the obvious: “If you’re going to put people in prison, put them in OUR prisons, not government-run prisons.”

    However, they also clearly lobby for putting more people in prison for longer terms, and against putting fewer people in prison for shorter terms.

    For example, there was a strong correlation in Arizona between state legislators who received contributions from CCA and state legislators who voted for the Know-Nothing Appeasement bill. The clear goal was to increase immigration-related arrests and incarcerations in the state.

  119. Gene Berkman

    OK, I looked at the numbers, which don’t indicate the recipients of the contributions. The totals do not look impressive, when you consider an average election involves 2 to 3 billion dollars worth of contributions nationwide.

    Since recipients are not listed, I cannot know how many contributions from Corrections Corporation of American went to California candidates. But I can tell you that the Correctional Peace Officers Association and the California Teachers Association each give contributions every year that dwarf the total over ten years that Correctional Corporations of America has given.

    Just in one year, to defeat a voucher initiative, the California Teachers Association spent 18 million dollars. The total of contributions in the list you sent amounts to a couple hundred thousand dollars.

  120. Rob Banks

    @141 yep.

    Blackwater and Corrections Corp of America etc — using tax money that is routed for private profit, to commit actions that would often be criminal in a libertarian society such as waging war against, killing, destroying or taking the property of or locking up e.g. kidnapping peaceful people who have not initiated coercion, and being funded and protected in their actions by government — are not a step towards liberty.

    They are private when it suits them, that is they are not accountable in the same ways as direct government employees and they can draw private profits that would never be allowed as government salaries at the top levels.

    On the other hand they act as governments when it suits them, drawing their funding from tax collection and committing actions that a truly private business which is not contracting with the state/regime would find its owners and employees in prison for.

    Their lobbying to protect this incestuous arrangement is no more legitimate than the lobbying activities of the prison guard and police unions to feather their nests by locking up more people for longer periods of time for victimless “crimes.”

  121. Gene Berkman

    Of course if a “private” company engages in aggression, coercion or profiting from coercion, it is wrong. But there is no evidence – just assertion – that private companies profiting from the mixed economy amount to as significant a force for statism as the government employees and government employees unions.

    It is bad for a private company to give $100,000 to a politician so that they can get a government contract. Or a million dollars. But in the context of prison building, the prison guards unions are a lot more significant that private prison companies in promoting harsh sentences.

  122. Andy

    “Can’t say I’d get behind this one; too many 1st Amendment implications….”

    I don’t believe that 1st amendment implications apply here. Why? Because these campaign contributions by people who the beneficiaries of big government programs are bribing politicians to keep these programs going, and to in fact expand them. Bribery is one of three crimes that are specifically mentioned in the Constitution.

    If a person makes a lot of money because they have a contract with the government, or they work for the government, doesn’t it make sense that they are going to donate money to campaigns and/or lobbying to keep the flow of tax payers money going into their pockets? This is a clear conflict of interest. Duh!

  123. Andy

    “But I can tell you that the Correctional Peace Officers Association and the California Teachers Association each give contributions every year that dwarf the total over ten years that Correctional Corporations of America has given.”

    This is one reason why I favor abolishing government employee unions, and it is also why I think that government employees should be prohibited from contributing to political campaigns or lobbying.

  124. Andy

    “Mark Hilgenberg // Jun 12, 2012 at 3:58 pm

    It is amazing what some people fall for when you slap the ‘private’ label on tyranny.”

    I agree. There are too many “libertarians” out there who are automatically duped by the word private.

  125. Thomas L. Knapp

    GB@143,

    “But there is no evidence – just assertion – that private companies profiting from the mixed economy amount to as significant a force for statism as the government employees and government employees unions.”

    Actually there’s neither evidence nor assertion, since I argued no such thing.

    But if you really want to go there, we can.

    You assert (without evidence) that it’s small change in the scheme of things.

    Then you note that it’s just a few million when a national election can hit a billion.

    To which I counter: In 2010, DoD expenditures to private contractors exceeded $600 billion, and if you think that those contractors didn’t put major cash behind the pols forking over that money, you are fucking high on crack.

  126. Gene Berkman

    TK @ 143 – I totally agree that we should go after the military-industrial complex – they are among the biggest beneficiaries of the mixed economy. And there is real evidence that they spend money on campaign contributions and lobbying to get contracts and to get the feds to spend more money.

    I just contend that the evidence of the private prison industry being behind the build-up of the prison population is lacking, as compared with the very real record of politicians pushing law and order as a campaign theme, and police unions backing harsh punishment.

    When I ran for Congress in 1994, I received a questionaire from the California Sheriff”s Association. The first question was “Have you ever been arrested.”

    In 1996 I spoke at an AARP meeting on behalf of the Medical Marijuana Initiative. The opposing speaker was a Narc – not a representative of a pharmaceutical company.

  127. Robert Capozzi

    144 a: Because these campaign contributions by people who the beneficiaries of big government programs are bribing politicians to keep these programs going, and to in fact expand them.

    me: I have to ask – did you have any second doubts when you were typing this? Surely you see the gap here. Bribery is illegal, but illegal acts have to be proven in a court of law.

    Do you really want to circumvent the legal process? AARP “bribes” MCs, therefore AARP can’t lobby?

  128. andy

    If they receive tax payer funding they should be prohibited from making campaign contributions.

  129. Thomas L. Knapp

    Gene @ 148,

    “I just contend that the evidence of the private prison industry being behind the build-up of the prison population is lacking”

    I didn’t say they were the only, or even the primary, ones behind it. I just said they are “major” backers of it. And they are.

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