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End Immortal, Limited Liability Corporations
The Right Honourable Stephen Harper
Office of the Prime Minister
80 Wellington Street
Ottawa K1A 0A2
Dear Mr. Harper:
I have discovered, Mr. Harper, that one of the delights of having a 4½-month old daughter is looking into her face and trying to discern the character of the little person in there. I could do it for hours.
What I don’t spend hours doing, is trying to discern the character of the person inside the curious legal entity known as a limited liability corporation. My business school education breathlessly explained the brilliance behind several aspects of corporate law, so I know enough not to expect anyone looking back out at me.
First, in common law countries a corporation is recognized as a legal individual, entitled to the many of the same so-called rights and protections as flesh-poop-and-blood people, like Eloise.
Second, a limited liability company protects its owners from being personally accountable for the corporation’s obligations. Shareholders are only on the hook for the amount they paid for their share of the company, and no more. This enables corporations to become involved in higher risk endeavours than might otherwise be palatable to its owners. These risks are then borne by the corporation’s creditors, customers, and occasionally other people entirely.
Third, a corporation has an infinite lifespan. They don’t expire at the end of their founders’ lifetimes, and although it is conceivable that a corporation could have its charter revoked, this never happens. In the event of a bankruptcy—the exercising of the previously described get-out-of-jail-free card—much of the corporation can be restructured to continue on, zombie-like, as though nothing had ever happened.
To sum up, corporations have been granted the rights of individuals, ultimate freedom from responsibility, and immortality.
Sounds like a recipe for disaster, Mr. Harper, and like most such recipes, it wouldn’t be possible without the backing of government legislation.
Mr. Harper, I would like to ask you to amend the Canada Business Corporations Act, to remove the three bizarre artifacts of common law that allow for the creation of these government golems.
There is no place in a libertarian society for the creation of non-corporeal beings, whose (non-natural) rights must be respected by all others. This is because laws in such an assembly of individuals are founded on two very simple precepts:
- Do what you said you were going to do. (Contract law)
- Don’t hurt anyone. (Tort law)
Creating a perpetual legal entity which can act on behalf of its owners without holding them ultimately responsible for its actions is a loophole in the consistent application of these two principles, and there’s simply no need for it.
Without the blanket protection that corporations provide, people will still be able to enter into contracts to achieve ends greater than they would be able to as individuals. Novel new associations will develop, structured equitably to share risk and reward, and to provide for the joint ownership of assets. (Think Lloyd’s of London.) Insurance will fill the void where liability can no longer be externalized from the corporation.
Mr. Harper, I admit that removing companies’ personhoods, immortality and blamelessness would create momentary chaos. In very short order however, people would begin arranging themselves to do business in the resulting new and fair legal climate where the government no longer preserves special rights for some.
I can pick up Eloise, hold her on my knee and stare into her grey-green-blue-brown eyes. To a libertarian, this haptic test is enough to grant to her the only right that truly exists: the right to her person. From this natural right we can construe every moral attitude required for a peaceful and productive existence. (I’ll spare you the exercise for the moment.) A limited liability company, by its non-corporeal nature, cannot possess these same natural rights, and so has no place among individuals like my daughter.
Mr. Harper, Eloise exists, corporations shouldn’t.
Evan Spence
October 23, 2007
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