I’d like to take as an example of unexamined assumptions, the received opinion about what Adam Smith wrote in His The Wealth of Nations. Adam Smith, taken as the godfather of modern capitalism and markets, wrote things in quite a different spirit. I apologize for the following extensive quotes but I think they are necessary to break through our constraining habits of contemporary shared ideology. Dealing with the future will require many of us to question our inherited assumptions.. Just skim them till you get the spirit – but they are worth careful study.

These quotes are all from searching for “corporation” in the etext of The Wealth of Nations at http://etext.virginia.edu/toc/modeng/public/SmiWeal.html

The exclusive privileges of corporations, statutes of apprenticeship, and all those laws which restrain, in particular employments, the competition to a smaller number than might otherwise go into them, have the same tendency, though in a less degree. They are a sort of enlarged monopolies, and may frequently, for ages together, and in whole classes of employments, keep up the market price of particular commodities above the natural price, and maintain both the wages of the labour and the profits of the stock employed about them somewhat above their natural rate.

Such enhancements of the market price may last as long as the regulations of police which give occasion to them.

 It is to prevent this reduction of price, and consequently of wages and profit, by restraining that free competition which would most certainly occasion it, that all corporations, and the greater part of corporation laws, have been established. In order to erect a corporation, no other authority in ancient times was requisite in many parts of Europe, but that of the town corporate in which it was established. In England, indeed, a charter from the king was likewise necessary. But this prerogative of the crown seems to have been reserved rather for extorting money from the subject than for the defense of the common liberty against such oppressive monopolies. Upon paying a fine to the king, the charter seems generally to have been readily granted; and when any particular class of artificers or traders thought proper to act as a corporation without a charter, such adulterine guilds, as they were called, were not always disfranchised upon that account, but obliged to fine annually to the king for permission to exercise their usurped privileges. The immediate inspection of all corporations, and of the bye-laws which they might think proper to enact for their own government, belonged to the town corporate in which they were established; and whatever discipline was exercised over them proceeded commonly, not from the king, but from the greater incorporation of which those subordinate ones were only parts or members.

I am continuing the quotes from Wealth Of Nations, published in 1776:

In China and Indostan accordingly both the rank and the wages of country labourers are said to be superior to those of the greater part of artificers and manufacturers. They would probably be so everywhere, if corporation laws and the corporation spirit did not prevent it.

Corporation laws enable the inhabitants of towns to raise their prices, without fearing to be undersold by the free competition of their own countrymen.

An incorporation …. makes the act of the majority binding upon the whole. In a free trade an effectual combination cannot be established but by the unanimous consent of every single trader, and it cannot last longer than every single trader continues of the same mind. The majority of a corporation can enact a bye-law with proper penalties, which will limit the competition more effectually and more durably than any voluntary combination whatever.

Corporation laws, however, give less obstruction to the free circulation of stock from one place to another than to that of labour. It is everywhere much easier for a wealthy merchant to obtain the privilege of trading in a town corporate, than for a poor artificer to obtain that of working in it.

The obstruction which corporation laws give to the free circulation of labour is common, I believe, to every part of Europe. That which is given to it by the Poor Laws is, so far as I know, peculiar to England. It consists in the difficulty which a poor man finds in obtaining a settlement, or even in being allowed to exercise his industry in any parish but that to which he belongs. It is the labour of artificers and manufacturers only of which the free circulation is obstructed by corporation laws. The difficulty of obtaining settlements obstructs even that of common labour.

…that exclusive corporation spirit which prevails in them, naturally endeavour to obtain against all their countrymen the same exclusive privilege which they generally possess against the inhabitants of their respective towns

As it is the interest of the freemen of a corporation to hinder the rest of the inhabitants from employing any workmen but themselves, so it is the interest of the merchants and manufacturers of every country to secure to themselves the monopoly of the home market.

…but were at best but a sort of corporation, which , though it had the power of enacting bye-laws for its own government, was at all times subject to the correction, jurisdiction, and legislative authority of the mother city.

OK, end of quotes, and worth thinking about.

Sermon: the corporation was a creation of the state for social purposes. It always tends to its own profit and control. Markets and corporations are very different principles. Markets are free and spontaneous. Corporations are organized for control of markets. But, “though it had the power of enacting bye-laws for its own government, was at all times subject to the correction, jurisdiction, and legislative authority of the mother city." That is, the chartering political entity, sovereign, retained control of the contents and provisions of the charter

I find this immensely interesting. Perhaps the most important fault line, using the doctrine of “person”, in our current situation, is that corporations, chartered, as they all are, by the state, become autonomous in action and legal status. It may be a fatal cancerous shift in The US Constitution’s DNA and later legal interpretation. Corporations were not part of the original deal. Capitalism, corporations, money and markets do not together make a unitary structure, but a jerry rigged culture of control. Teasing these apart and separating their healthy from their destructive actions may be part of the way forward.

 Adam Smith quotes on Corporations