Capitalism without capitalists
October 1, 2021
Originally published at pluralistic.net
One of the most exciting, eye-opening articles I’ve read in AGES. Showing how shareholder capitalism is a lie BY ITS PROPONENTS’ OWN TERMS…Genius.
Marx thought individual property would end up being socialized, and he was right…but also wrong. The state hasn’t socialized property, corporations have. Corporatism is “capitalism without the capitalist.”
The corollary of “limited liability” is “entity shielding.” Shareholders aren’t on the hook for the company’s debts, but the company can’t be dunned for the shareholders’ debts, either.
Shareholders “cannot use the [company’s] assets, exclude others from them, lend them out, borrow on them, sell them, and they have no legal claim to the proceeds from the sale of assets or to company profits.” They are not, in short, owners.
Who owns the company? The company owns itself. “The corporate entity is the residual claimant, and this residual profit is then allocated at the discretion of management.”
Shareholder capitalism is a word-game: “All the specialized law-and-economics vocabulary for corporate firms is but an artifact of the false premise that the stockholders are its owners.”
Corporations can only exist at the largesse of the state, which charters them. Limited liability and entity shielding cannot be accomplished by contract alone. Corporations are the original public-private partnership.
Boards don’t derive their power from stockholders, they get it from the state. The board is formed BEFORE the company has stockholders.
“Our world teems with abstract legal entities, chartered by public authority as owners & principals, managed by fiduciaries.”
“Corporations are not creatures of the market, but public-privatehybrids licensed to colonize the market. This greatly heightens the ‘political’ in ‘political economy.'”
This is such a crisp articulation of what some sf writers have assayed as a way of thinking about the AI panics of our billionaire class, such as Charlie Stross and his “Slow AI”:
Or Ted Chiang:
Or my own modest contribution: