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Streetwise Professor

January 19, 2013

Further My Last

Filed under: Economics,Politics — The Professor @ 7:03 pm

The extremely democratic, open access aspect of incorporation and limited liability in the modern US is hard to exaggerate. I set up an LLC yesterday.  It took less than an hour with a lawyer and a three figure sum to set it up.  Much of the time with the lawyer was spent yakking about UH and personal history and other chit-chat. I am sure I could have done it cheaper online, but the cost of doing it old school was so low I figured-why take the chance of making a mistake?  It was easier to set up an LLC than picking up a prescription.

It is easier and cheaper-by far-to incorporate than to become a fricking barber or beautician.  I defy you to identify anything that the state has erected fewer obstacles to obtain.  Anything.  There are few things that are so equally accessible to all Americans.

One should be suspicious of entry barriers, and embrace the things that are accessible to all.  The anarcho-libertarians who demonize corporations overlook this.  The open access corporation represents a triumph of open access and small-d democracy. Anyone can be an owner.  Anyone can be a CEO.  Do you anarcho-libertarians have any idea how rare that is? Do you really think that circumscribing or proscribing the ability to incorporate and limited liability will constrain elites and empower the ordinary?  If so-think again.

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12 Comments »

  1. http://finance.yahoo.com/news/fed-official-alleges-geithner-may-051010487.html then there is this…..and we worry about HFT’s.

    Comment by Jeff — January 19, 2013 @ 8:37 pm

  2. @Jeff-I saw that. Disgusting. But Timmy! and his ilk are looking out for our interest.

    The ProfessorComment by The Professor — January 19, 2013 @ 8:44 pm

  3. Don’t forget the US’ advantage of bankruptcy to restructure capital, as opposed to liquidate. But one must question first amendment rights for corporations, as opposed to just the owners of the corporations.

    Comment by vbounded — January 19, 2013 @ 10:06 pm

  4. Go easy on the Anarcho-Libertarians. They are very pro free market business. It’s the Crony capitalists that they hate! That’s the easy part that you described Professor Collectivist, Statist, Crony Capitalist and defender of Neo Cons! Take your pick of poison position descriptions. Just KIDDING on the collectivist statist part. John Stossel did a show on this and determined that Hong Kong was the cheapest and fastest place to incorporate and conduct business in. This was post British control. So the Chinese Communist are the best for business following your logic? Libertarianism is the future whether by choice or collapse of state supported ponzi schemes like the present Fed propped up banks, businesses or social welfare programs that are headed to bankruptcy.

    Comment by Bob — January 20, 2013 @ 3:02 pm

  5. @Bob. Yes, we all hate crony capitalists. But the specific ones with whom I take issue in this post are indiscriminate in their attacks. They have fundamental logical problems. Even if (and this isn’t even correct) all crony capitalists are limited liability corporations, not all limited liability corporations are crony capitalists. They also focus obsessively on the few diseased trees, and miss the verdant forest that Stephen Bainbridge describes in the post that Tom K mentions in his comment on the main post on this subject. The world would be a lot poorer without limited liability corporations. And if you don’t like corruption, well there is a demonstrated connection between poverty and corruption.

    Furthermore, to conflate Hong Kong, even post-takeover, with the mainland is a fundamental error.

    I am a classical liberal in the Smith tradition-a libertarian in the modern lexicon (though you should read my post expressing my discomfort with some who claim that label). But the indiscriminate and ignorant attacks on limited liability and the corporate form that some anarcho-libertarians make are just fundamentally wrong. And I will call them out on it even though we agree on many things. On this issue they lapse into the same idiocy as the OWS morons.

    Insofar as the ponzi scheme, Fed, social welfare issues are concerned. I hear you. But those have virtually nothing to do with limited liability and the corporate form. These are the issues that should be the primary focus, and obsessing about limited liability is a distraction from that focus, not to mention idiotic.

    The ProfessorComment by The Professor — January 20, 2013 @ 10:53 pm

  6. Meanwhile, I’m sure you’ve chucked all your own advice and, at last, created an LLC to start your new green energy feeding trough. :)

    Comment by Howard Roark — January 21, 2013 @ 9:48 am

  7. @Howard. LOL. I want to be green, as in greenback :-P Meaning maybe I’m not that different from Al Gore.

    The ProfessorComment by The Professor — January 21, 2013 @ 2:09 pm

  8. @Howard. I think they should create new categories of corporation for green energy companies. Some ideas. LPC-limited profit company. ZPC-Zero profit company. NPC-Negative profit company. TSC-Taxpayer supported company.

    The ProfessorComment by The Professor — January 21, 2013 @ 2:22 pm

  9. Incidentally, prof, did you notice how much of what the One said in his inauguration speech was not once mentioned in the campaign?

    We need some sort of term of art to describe the relationship between what a politician says he’ll do and what’s really on his mind. This is different from vanilla lying, where he says something then doesn’t do it. It’s lying by omission, where a pol goes ahead and does something he didn’t previously discuss.

    One could perhaps take the stuff talked about in the SOTU and score it for everything mentioned only now, i.e. now that it’s too late to vote against it.

    An agenda of 5 points, of which only 1 has previously been mentioned, would score 80%, for example. Or maybe 20% – on the basis that worse should be lower.

    The bit of Obama’s that seems likeliest to screw the USA is the guff about climate change. This wasn’t mentioned in the campaign, one assumes, because of the dodgy science and the price tag. Now the election’s in the bag, it’s time to pay the piper.

    The stuff about gay rights wasn’t much mentioned either, was it – or was it? It’s not going to cost any money, but the immorality of saying nothing is instructive.

    Comment by Green as Grass — January 22, 2013 @ 4:01 am

  10. @Green-It will cost money through new spousal and survivor benefits.

    Comment by pahoben — January 22, 2013 @ 10:16 am

  11. As for Comment 8, don’t say that too loud. You’ll just give the entire younger generation even more aspiration to seek employment in such categories. It’s the progressive and moral way of the future, after all. Reminds me of my sister who insists on working for a non-profit, complains that she never makes enough money, and is perpetually unable to detect any cognitive dissonance.

    Comment by Howard Roark — January 22, 2013 @ 10:34 am

  12. ,Younger generation, hell. If I can’t get this new deal going its either temporary paper headgear, a NYC Hack’s license (” We go to 42 from 23rd street? Take Holland and Lincoln Tunnel, OK?” in my best Bengali accent) or one of these GREAT Ideas of the Perfesser’s.

    Comment by Sotos — January 22, 2013 @ 10:57 am

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