Economics Dictionary of ArgumentsHome
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| Corporations: Corporations in economics are legal entities separate from their owners, created to conduct business. They can own assets, incur liabilities, and enter contracts. Shareholders own corporations, but their liability is limited to their investment. Corporations aim to generate profit, often providing benefits like easier capital accumulation, perpetual existence, and limited personal financial risk for owners. See also Business, Economy, Cartels._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Corporations - Dictionary of Arguments
Rothbard III 642 Corporations/Rothbard: What happens when a partnership or corporation is formed? Individuals agree to pool their assets into a central management, this central direction to set the policies for the owners and to allocate the monetary gains among them. In both cases, the pooling, lines of authority, and allocation of monetary gain take Place according to rules agreed upon by all from the beginning. There is therefore no essential difference between a cartel and an ordinary corporation or partnership. It might be objected that the ordinary corporation or partnership covers only one firm, while the cartel includes an entire "industry" (i.e., all firms producing a certain product). But such a distinction does not necessarily hold. Various firms may refuse to enter a cartel, while, on the other hand, a Single firm may well be a "monopolist" in the sale of its particular unique product, and therefore it may also encompass an entire "industry." The correspondence between a co-operative partnership or corporation - not generally considered reprehensible - and a cartel is further enhanced when we consider the case of a merger of various firms. Mergers have been denounced as "monopolistic," but not nearly as vehemently as have cartels. >Mergers/Rothbard, >Cartels/Rothbard, >Cartels/Mises, >Monopolies/Rothbard. Rothbard III 644 Merger/cartel/Rothbard: Yet an industry-wide merger is, in effect, a permanent cartel, a permanent combination and fusion. On the other hand, a cartel that maintains by voluntary agreement the separate identity of each firm is by nature a highly transitory and ephemeral arrangement and (…) generally tends to break up on the market. In fact, in many cases, a cartel can be considered as simply a tentative step in the direction of permanent merger. And a merger and the original formation of a corporation do not (…) essentially differ. The former is an adaptation of the size and number of firms in an industry to new conditions or is the correction of a previous error in forecasting. The latter is a de novo attempt to adapt to present and future market conditions._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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