Confessions of a recovering Libertarian: How I escaped a world of Ron Paul hero worship

[Rassah]

82. Early corporations, sure

Articles of incorporation are registered with the relevant government agency, SPECIFICALLY for the purpose of that government agency giving that corporation extra right, which have been expanding considerably over the last century.

Early corporations involved shareholders pooling their resources together with the expectation that if their venture fails, they only lose their contributions. That was the extent of the protection that early corporate charters grant them: you lose everything you invested if the venture fails. There were no corporate protections against liability should your venture screw something up. E.g. if you hired a ship to sail across the Atlantic to trade, and the ship runs aground and destroys a dock, it's technically the captain's fault, so although you lose your investment, the captain is liable. But if you pool resources together and go specifically destroying your competitor's docks, all the shareholders would be personally liable, not just for the resources they initially contributed, but for whatever it would cost to fix the damage they caused.

Modern corporations have corporate veils, limited liability, and even person-hood status. Shareholders are not responsible for ANYTHING the corporation does, and the only organization that prevents the harmed parties from suing shareholders is that "relevant government agency," which gave corporations all this power. You want proof that modern corporations are entities created by government? Just compare the rights and protections from liability that you can enjoy from a modern corporation, with the rights and protections you would get if you were simply a joint business owner (which is what you would have without a government agency to register with and protect you).

P.S. What does corporate structure and legal system have to do with economics?