Please educate me.Uh. . . You may want to grab a few 101-type books on modern conglomerates. You're entirely off on almost every point here.
Please educate me.Uh. . . You may want to grab a few 101-type books on modern conglomerates. You're entirely off on almost every point here.
There is nothing wrong with a corporation, or any group of individuals acting together, influencing the political process in a representational democracy. Thats the point.
Yes, big companies start small. It's when they get big enough to distort the markets around them that they become a problem. Adam Smith hated corporations, because the corporations of his day were all government-backed wealth-extraction monopolies. His Wealth of Nations was written specifically to promote small "mom-and-pop"-style commerce; his central argument was that in order for markets to be efficient and generate wealth, they need to be local, with small players responding to local supply and demand.No. Little companies turn into large ones because people choose to shop there. We didn't just start with a multi-billion dollar Wal-Mart. Sam Walton started with a single store (a mom and pop, believe it) in a town with 3,000 people. Just looking around here, if people hate Wal-Mart (which is packed almost all day) they have lots of other options.
Yes, as you said, some companies, yes, some companies no. It depends on who's running them. The concept of moral hazard comes into play because people who are insulated from the consequences of risks tend to take more risks than people who are not insulated from those consequences, c.f. the recent financial meltdown. Yes, some companies are run by people who take a long view, others are not. It's the ones like Wal-Mart that focus on extracting wealth rather than creating it that cause the problems.Short term focus? Like IBM who has been around for 100 years. Clearly playing fast and loose with their future. Some companies, absolutely. All companies, no.
For several of the companies I worked for in the past, this was not the case. Sure, on paper there were "alternatives," but interestingly enough, the alternative plans also held stock in the company. So it was really a choice between a company-run program that bought the company's stock or a 3rd-party program that also held the company's stock. The plan administrators could not offer me (or rather did not offer me) options that did not involve company stock, so that's why I chose not to participate in those programs.Sounds a little shady to me. You should call your 401k administrator and negotiate another option. If it is truly a lack of options then you'll have no trouble getting support for more options. In almost all cases where a company requires you to buy their stock there is a holding period, after which you can make a change.
I was stating that we were not in disagreement on that point..Its a legal fact, you don't have to agree or disagree.
The recent case of Citizens United vs. the Federal Election Commission is a good example of corporations fighting to protect their "personhood" and the rights that go along with it.Thats the legal fiction.
Santa Clara County vs. Southern Pacific Railroad, 1886. The justices in the case specifically did not address 14th Amendment matters regarding corporations, however, the court reporter, J. C. Bancroft Davis, the former president of the Newburgh and New York Railway Co., inserted a pre-trial comment by one of the justices - i.e. a comment that was not an official part of the case - to the effect that corporations were entitled to 14th Amendment protections. It can be argued that Mr. Bancroft Davis was not impartial and had a vested interest in that outcome. More importantly, the inclusion of that comment opened the door to claims by corporations that they are entitled to the same rights as natural persons.Which case would this be?
To a degree. When the company goes bankrupt, the shareholders cannot be held liable for the debts of the company - that's the main attraction of the corporate form - but the trade-off is that the corporation's creditors have prior claim to the assets of the company, which are treated as separate from the assets of the shareholders. So in reality, the shareholders don't hold the assets of the company until dissolution, and then they only get what's leftover after the creditors are done, which is often nothing.As far as rights go, that depends entirely on 1) the by-laws and charter, and 2) the laws of the state of incorporation. If you don't want to be involved in a corporation such as you describe, then don't buy their stock. There are many companies that have extensive protections for stock holders. On top of all this, shareholders have voting rights, which allows them to change just about anything.
Again, when companies get large enough to distort markets, smaller competitors disappear; when all of the "choices" are market-distorting chains, the choice you make doesn't have a lot of impact because the price you pay is not set by the supplier's needs, but by the growth targets of the chain.This is more proganda than fact. There are many choices. Just because the chains are the most visable doesn't mean its the only choice. Further, there are MANY choices within a given market for a given good. If you don't like one company you can go to another.
Except for food, clothing, and other necessities. Unless you're suggesting that we all go back to supplying our own.If that doesn't work you can do without.
Again, when all of the choices are large, market-distorting companies, the "choice" is limited.Simply saying "I want it" doesn't entitle you to endless choices from companies that you find ethical. If you don't like car companies, ride a bike. Don't like bike companies, walk; ect ect ect.
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I disagree strongly, where you put your money makes all the difference.
There's nothing wrong with a group of individuals working together, but a corporation is a separate legal entity, and the needs of the corporation are not the same as those of natural persons. The point of a representational democracy is to address the needs of natural persons; it does this in part by extending privileges to certain business arrangements that address those needs and - ideally - by removing privileges from businesses that do not.There is nothing wrong with a corporation, or any group of individuals acting together, influencing the political process in a representational democracy. Thats the point.
To its creditors first (by law); what's left is then divided among the shareholders.So, if the business closes tomorrow, where does that money go? Does it evaporate?
To its creditors first (by law); what's left is then divided among the shareholders.
No, Adam Smith said the market will effectuate the most efficient form of commerce. He didn't say that one specific form of commerce (mom'n'pop, what a buzzword) was best.Yes, big companies start small. It's when they get big enough to distort the markets around them that they become a problem. Adam Smith hated corporations, because the corporations of his day were all government-backed wealth-extraction monopolies. His Wealth of Nations was written specifically to promote small "mom-and-pop"-style commerce; his central argument was that in order for markets to be efficient and generate wealth, they need to be local, with small players responding to local supply and demand.
That isn't market distortion, its actors in a market. They aren't distorting the market they are just acting in the market.Wal-Mart is packed because it can sell everyday items that people need (like toothpaste) at a loss and make up the difference on its store brands which are mostly profit due to the fact that Wal-Mart has the ability to make demands on what its suppliers can charge it (market distortion); if a supplier doesn't deliver the goods for what Wal-Mart says, Wal-Mart threatens to go elsewhere. Smaller competitors don't have that option.
Supply side economics has been disproven so many times. The consumer determines what they are willing, or able, to pay for a product. Not the supplier. If it were true that supply side economics works why not charge millions of dollars for any given product, then drive the economy that way? Because no one could or would buy it, and then the producer couldn't make its payrole, then it would go out of business.When a supplier is faced with the loss of a major market, they cut whatever corners they have to cut in order to meet Wal-Mart's demands, even if it means that they have to cut their own workers' wages and benefits in order to meet those target prices. In a normal, non-distorted market, Wal-Mart would still seek the lowest cost, but those costs would be determined by the needs of the suppliers, not the needs of the purchaser.
Is he not responding to me?^ My, don't we have an inflated opinion of ourselves.
I'm guessing by the way he posts immediately after me every time I post Vinyl boy doesn't know he's ignored and is reading my posts.
You're a troll, friend, and I don't want any part of your nonsense. Extend the courtesy to all the other people on the board and put me on ignore, you're just wasting space.
No, Adam Smith said the market will effectuate the most efficient form of commerce. He didn't say that one specific form of commerce (mom'n'pop, what a buzzword) was best.
Many of the "market distorting" organizations are the most effecient mechanisms for delivering goods to a given market. If they aren't then they get removed by someone with a more efficient model. The fallacy that one a large organzation gets established it can't be removed has been proven a fallacy many times over. For instance, the Sears, JC Penney, Montgomery Wards, WalMart succession proves that one very large organization will give way to smaller more efficent organizations over and over.
That isn't market distortion, its actors in a market. They aren't distorting the market they are just acting in the market.
So, WalMart is literally using its enormous purchasing power to leverage down the profit of other large corporations (like what they did with Rubbermade), this savings is then passed on to the consumer as selling products at a "loss." They then make up that loss by selling similar products at lower prices. I know that what you said is amazingly contradictory, but in the end the consumer is the winner.
Supply side economics has been disproven so many times. The consumer determines what they are willing, or able, to pay for a product. Not the supplier. If it were true that supply side economics works why not charge millions of dollars for any given product, then drive the economy that way? Because no one could or would buy it, and then the producer couldn't make its payrole, then it would go out of business.
WalMart is driving efficiency. In many many many cases the innovation that happens in given products (say production lines, or new methods of construction) has been driven by this exact force. People are continuously driving to increase what they can offer for a lesser price. WalMart has, along with cost requirements, quality requirements. I personally have seen identical products sold at WalMart and Wholefoods where one is double the price. Identical quality, double price.
They move anyway. In fact, what has happened in recent years is unprecedented tax cuts for corporations, coupled with exorbitant relocation of the workforce over seas. They have the best of all worlds. Being incorporated in the US means they can market their mostly foreign made goods in the US without paying tariffs. Making their goods overseas means they can avoid paying American wages. Having a billion loopholes means they can avoid paying US taxes.
I mean, really, when you think about it, it's better if they move so we can at least charge them tariffs!
That isn't even the least bit true. There are so many reasons why.Because Wal-Mart has gotten so large and is distorting the market, smaller companies cannot compete with it. That's why it sells things at a loss - to undercut its competitors. When the smaller companies go out of business, all you're left with are the large companies which are all distorting the markets around them. So prices are not determined by costs (like they're supposed to be in capitalism), costs are determined by whatever price Wal-Mart wants to charge.
Its the job of the board of directors to ensure that whomever is runing a company is doing so for the benefit of the owners. We are very ill placed to determine if a company is acting in its short or long term interest. Further, CEO's do not simply have moral hazard by virtue of being a CEO. Many have millions of dollars on the line (in terms of bonuses, stocks, or future contracts). This is one reason that CEO's get paid as much as they do, to keep them in the game. To ensure they are as invested in the future of the company as the shareholders are.moral hazard...... Wal-Mart that focus on extracting wealth rather than creating it that cause the problems.
Citizens United was a 501(c)(3) non-profit.The recent case of Citizens United vs. the Federal Election Commission is a good example of corporations fighting to protect their "personhood" and the rights that go along with it.
This wasn't the case which established Corporate personhood once and for all. It was the same exact court which said, "It is contended by counsel as the basis of his argument, and we admit the soundness of his position, that corporations are persons within the meaning of the clause in question. {..}corporations can invoke the benefits of provisions of the constitution and laws which guaranty to persons the enjoyment of property, or afford to them the means for its protection, or prohibit legislation injuriously affecting it." -MINNEAPOLIS & ST. L. R. CO. v. BECKWITH 1889Santa Clara County vs. Southern Pacific Railroad, 1886.
That depends entirely on the corporation, how much debt it carries, and how many stock holders there are. Imagine for a second if it were the other way: creditors wait in line after stock holders to get whats left. What would be left? Nothing, shareholders own the entire company. Not only that, credit would be impossible to come by, all one would have to do is dissolve their company and cash in their shares.corporation's creditors have prior claim to the assets of the company, which are treated as separate from the assets of the shareholders. So in reality, the shareholders don't hold the assets of the company until dissolution, and then they only get what's leftover after the creditors are done, which is often nothing.
This simply is not true. Its that easy. The bylaws and charter establish the purpose of the business and how it is to be run. There are several famous instances of corporations having their charter or bylaws amended (or attempted to amend) to change the actions of the corporate managers. Nothing can change the fiduciary duty, that is established by law not by the charter or bylaws. That is a function of agency law, not of corporate governance.The shareholders also cannot change the corporate bylaws in ways that contradict federal and state laws; for example, they can't create bylaws that contradict the fiduciary duty of the corporate managers to maximize profits even if they themselves would prefer a system where growth is determined by demand, not by the quarterly growth targets of Wall Street. They also can't change the bylaws to hold their corporate managers responsible for negative environmental or social outcomes; managers are protected by law except in cases of deliberate criminal activity. So there's only so far that shareholder activism can go.
Its worth noting again, because you constantly misuse the term, companies are not distorting markets by acting in them. Generally, market distortions come from the government; price floors, ceilings, or subsidies. Companies are not simply distorting a market by offering products are lower prices than those same products can be offered by another entity.Again, when companies get large enough to distort markets, smaller competitors disappear; when all of the "choices" are market-distorting chains, the choice you make doesn't have a lot of impact because the price you pay is not set by the supplier's needs, but by the growth targets of the chain.
This isn't how you determine revenue anywhere on this planet.The basic idea is that you divide the available disposable income in a market by the amount of retail square footage in that market to give you the available money per square foot.
You'll have to show me something like the bylaws of WalMart where it says this. It sounds more like anti-corporate nonsense.One of the strategies of Wal-Mart et al. is to open a large store in a market that doesn't need more retail space in order to shrink the available money per square foot and then simply operate at a loss until the smaller stores cave in; when the available money per square foot recovers, Wal-Mart benefits.
This is not even remotely the case. I counted that there were 47 seperate stores withing 2 miles from my house which I could by clothing from. 47! Thats hardly "no choices." Further, anyone with access to a library can buy off the internet. There are literally thousands of sites selling everything you can imagine. "Limited choice" is more about stirring up people to act against large companies.Except for food, clothing, and other necessities. Unless you're suggesting that we all go back to supplying our own.
Again, when all of the choices are large, market-distorting companies, the "choice" is limited.
The needs of corporations are often identical to those of real persons. Whether that be the persons who run the company, or work for it, or buy from it. Further, corporations don't get to vote, so its difficult to say that they are in control of elections; I am aware of the mindless babble about Citizens United. It cannot be the role or business of government to make or break fortunes based on political expediency. People can very well eliminate companies that do not do as they wish. WalMart could go bankrupt overnight if people decided not to shop there. The government is redundant, unnecessary, and ofter harmful to the ordered conduct of society.There's nothing wrong with a group of individuals working together, but a corporation is a separate legal entity, and the needs of the corporation are not the same as those of natural persons. The point of a representational democracy is to address the needs of natural persons; it does this in part by extending privileges to certain business arrangements that address those needs and - ideally - by removing privileges from businesses that do not.
Haliburtons headquarters are still in Houston, and they are still incorporated in the United States.How about this: move your company overseas and you lose ALL government contracts!! I personally think when Halliburton moved it's world headquarters to Dubai --- they ceased to be an American Company!
You sir are a troll. I'm amazed at how much trolling is allowed here.Smug parroting of partisan party line anecdotes and talking points. I guess it's sort of a "good thing" that you're so impressed with yourself. It balances out the fact that NO ONE ELSE IS.
Seriously. We're all intelligent and educated here. That manure doesn't have any voodoo qualities here. The emperor has no clothes.
Move along.
You sir are a troll. I'm amazed at how much trolling is allowed here.
You join Crutzbone, Vinyl boy, Midlifebear, and Arkfarmbear on my ignore list.
No, he advocated a system where each player was local and could respond quickly to changes in local supply and demand. It was through this system of local business owners accountable to local clients and responding to local changes in supply and demand that efficiency was achieved.No, Adam Smith said the market will effectuate the most efficient form of commerce. He didn't say that one specific form of commerce (mom'n'pop, what a buzzword) was best.
There are efficiencies of scale which reduce the immediate cost of doing business, but these are offset by growing externalities. For example, agribusinesses have consolidated their control over the food system to the point where they control pretty much everything from seed to store. This has the effect of reducing their immediate costs, but it creates externalities which reduce efficiency - not the least of which is the need to ship a head of lettuce 1,500+ miles from where it was grown to where it's ultimately needed. But even ignoring for the moment the environmental costs of monocultures and long-distance shipping, as well as the increased tax burden of agricultural subsidies which keep our food artificially cheap, which is more efficient at getting goods to market: Buying that head of lettuce from your neighbor down the road (who knows how much lettuce to grow based on local demand), or having that lettuce shipped across the country by a multi-national (that grows more lettuce than it needs to because of subsidies)? And which is more conducive to a strong local economy: Buying lettuce from your neighbor (who contributes most of his income to the local economy), or buying it from a multi-national (that consolidates its income in one central location and then often as not quickly transfers it to a tax haven)?Many of the "market distorting" organizations are the most effecient mechanisms for delivering goods to a given market. If they aren't then they get removed by someone with a more efficient model.
The problem, as I mentioned, is not that Wal-Mart uses its purchasing power to get discounts which are passed on to consumers (that's how it's supposed to work), it's that Wal-Mart uses its purchasing power to set arbitrary price points which have no bearing on the actual costs of production; this in turn forces its suppliers to take drastic measures in order to meet those arbitrary goals, usually in the form of cutting back wages and benefits which, in turn, reduces the available disposable income in the communities where those suppliers operate.So, WalMart is literally using its enormous purchasing power to leverage down the profit of other large corporations (like what they did with Rubbermade), this savings is then passed on to the consumer as selling products at a "loss." They then make up that loss by selling similar products at lower prices. I know that what you said is amazingly contradictory, but in the end the consumer is the winner.
Yes, supply side economics doesn't work at all, but I wasn't talking supply-side economics. I was addressing the reality that a supplier needs to be able to charge enough money for its product so that it can pay its production costs plus a reasonable markup to cover its overhead. The decisions as to which goods a supplier makes are determined both by which goods consumers want and which goods the supplier can make profitably at the price consumers are willing to pay - both of which are demand-side factors (what people want, and what they're willing to pay).Supply side economics has been disproven so many times. The consumer determines what they are willing, or able, to pay for a product. Not the supplier. If it were true that supply side economics works why not charge millions of dollars for any given product, then drive the economy that way? Because no one could or would buy it, and then the producer couldn't make its payrole, then it would go out of business.
And that's a good thing. As efficiency increases, prices can decrease.People are continuously driving to increase what they can offer for a lesser price.
The problem is, again, that Wal-Mart's price requirements are not connected to the actual costs of production, they are simply "We want to undersell our competition, and if you don't comply with us, we will cut you loose and find someone else that will." So yes, you'll find identical goods at different price points in different stores; Wholefoods probably is overpriced because of its demographics (yuppies), but Wal-Mart is certainly underpriced because of its demographics (blue collar). The actual "free market" price of the goods in question is most likely somewhere in the middle, i.e. the price that represents the reasonable cost of producing the goods plus a reasonable markup by the producer, distributor, and reseller. Of course, one could also argue that since people are willing to pay the higher price at Wholefoods, then that is the actual demand-driven price, but again, that higher price is only supported because of Wholefoods' "image."WalMart has, along with cost requirements, quality requirements. I personally have seen identical products sold at WalMart and Wholefoods where one is double the price. Identical quality, double price.
Smith only liked this because of the unresponsiveness of the East India Company. His causes for disliking the global market have been more than elimiated.No, he advocated a system where each player was local and could respond quickly to changes in local supply and demand. It was through this system of local business owners accountable to local clients and responding to local changes in supply and demand that efficiency was achieved.
But you end up paying to cheapen your own food. This is akin to handing yourself a dollar you already had (except government overhead).But even ignoring for the moment the environmental costs of monocultures and long-distance shipping, as well as the increased tax burden of agricultural subsidies which keep our food artificially cheap
Some places are great for local agriculture, others are not. It is much more efficient to have it centerally grown then shipped. Economys of scale and specialization have been proving this for 100 years now.which is more efficient at getting goods to market: Buying that head of lettuce from your neighbor down the road (who knows how much lettuce to grow based on local demand), or having that lettuce shipped across the country by a multi-national (that grows more lettuce than it needs to because of subsidies)? And which is more conducive to a strong local economy: Buying lettuce from your neighbor (who contributes most of his income to the local economy), or buying it from a multi-national (that consolidates its income in one central location and then often as not quickly transfers it to a tax haven)?
You watched the Story of Stuff, didn't you?In both cases, you might pay a little more for the lettuce (or a lot more, if we're eliminating the subsidies), but the local supplier can better meet your needs with fewer externalities.
It can't be both ways. I shop there and I'll tell you, they pass the saving on to the consumer. In many cases their regular price is lower than the 'other' stores sale price.The problem, as I mentioned, is not that Wal-Mart uses its purchasing power to get discounts which are passed on to consumers (that's how it's supposed to work), it's that Wal-Mart uses its purchasing power to set arbitrary price points which have no bearing on the actual costs of production; this in turn forces its suppliers to take drastic measures in order to meet those arbitrary goals, usually in the form of cutting back wages and benefits which, in turn, reduces the available disposable income in the communities where those suppliers operate.
Maybe you don't know this, but getting a good on the shelf at WalMart, for many, is akin to winning the lotto. Your sales go through the roof. Not only that, many of Walmarts producers are posting profits. If what you say is true, Walmart is destroying them. This isn't happening in society. In fact, I keep using Rubbermade because they originally didn't want to take Walmarts deal. So, Walmart pulled their product. They lost so much money they came back to the table, but the deal Walmart previously offered was gone because their new supplier was that much more willing to negotiate.The consumer benefits from this only if you take the short-term view; in the long-term view, shrinking disposable incomes create local recessions which ultimately do not benefit the consumers in those communities. So you can either have cheap goods now with a shrinking local economy to follow, or somewhat less cheap goods now, but a stable local economy to follow. Which outcome is more desirable?
You are still saying two seperate and contradictory things. 1) The producers are losing money and unable to comply with Walmarts demands, 2)The producers are deathly afraid of Walmart dropping them as they would no longer be able to sell their goods which they are posting a loss on. These two things are contradictory and irreconcilable.The problem is, again, that Wal-Mart's price requirements are not connected to the actual costs of production, they are simply "We want to undersell our competition, and if you don't comply with us, we will cut you loose and find someone else that will."
Wouldn't that raise the standard of living? If it is underpriced then some one somewhere is losing their profit. You can't sell at a loss for eternity. Further, many of the companies that have products on Walmarts shelves are/have posted profits.but Wal-Mart is certainly underpriced because of its demographics (blue collar).
The more disposable income in an area - either due to higher population or higher wages - allows for more competition. The bigger the market, the more competition it can support, which is why NYC can support 20,000+ restaurants. In smaller markets, chains quickly dominate the landscape. I mentioned that before and will address it again below.1) Its a fact that smaller companies compete with WalMart every single day. At my WalMart they sell A LOT of pizza. Hot, fresh ready to bake, frozen, and all the makings for it. There is a Dominoes in the parking lot of WalMart. I don't use that Dominoes because at peak times you wait an hour for your pizza. I, instead, go to the smaller company 2 blocks away; smaller than either Dominoes or WalMart by a sight. There is a Home Depot across the street that stays packed all day; they are clearly competing with the larger WalMart. In fact, WalMart got rid of most of its home improvement section, including almost all of their paint, because the competition is so steep.
WalMart doesn't adjust prices up, it adjusts them down in order to undersell its competitors. So it is adjusting prices with an eye to what it can get from consumers, and after it does so, it forces its suppliers to meet those price points which are not correlated to actual production costs. And no, WalMart would not be able to set arbitrarily high prices that the market couldn't bear, but it can set arbitrarily low prices to the extent that those low prices don't force its suppliers out of business.2) Price are not, and cannot be a result of WalMart setting them. This is a limit on every single good in society for what people are willing to pay. WalMart can't simply say, "its $50 for a gallon of milk." Further, if WalMart doesn't price its goods with consideration of what they are going to get from the consumer they run the risk of opening the door to more competition.
Yes, boards of directors et al. are responsible for benefiting shareholders and CEO's invested in their companies. How do you explain the recent financial meltdown if not a bunch of people who were taking risks because they thought they would be insulated against the consequences of those risks?Its the job of the board of directors to ensure that whomever is runing a company is doing so for the benefit of the owners. We are very ill placed to determine if a company is acting in its short or long term interest. Further, CEO's do not simply have moral hazard by virtue of being a CEO. Many have millions of dollars on the line (in terms of bonuses, stocks, or future contracts). This is one reason that CEO's get paid as much as they do, to keep them in the game. To ensure they are as invested in the future of the company as the shareholders are.
And still a corporate "person."Citizens United was a 501(c)(3) non-profit.
That's derived from the exact pretrial quote that was used in Santa Clara, so again Santa Clara laid the groundwork for claims of corporate personhood and it was included in the transcripts improperly. That the same court later addressed the issue which it avoided in Santa Clara and came to the same conclusion is not at all surprising. However, Santa Clara served as precedent for Beckwith because the justices were "officially" on record as saying "we believe the 14th Amendment applies to corporations," which the counselor in question referenced as the basis of his argument.This wasn't the case which established Corporate personhood once and for all. It was the same exact court which said, "It is contended by counsel as the basis of his argument, and we admit the soundness of his position, that corporations are persons within the meaning of the clause in question. {..}corporations can invoke the benefits of provisions of the constitution and laws which guaranty to persons the enjoyment of property, or afford to them the means for its protection, or prohibit legislation injuriously affecting it." -MINNEAPOLIS & ST. L. R. CO. v. BECKWITH 1889
It was a misunderstanding - and I'm being generous - that a pretrial statement was included in the final ruling, and that improper inclusion has set precedent, which as I pointed out above, was referenced to hold the justices to their "official" position.If there was some misunderstanding the court had ample time to change its mind. It also could have qualfied it's ruling. It did none of this. There is no "misinterpretation."
Most corporations don't go out of business voluntarily; they generally go out of business when they are forced to, which means that the shareholders are the ones who get screwed when that happens, not the creditors.That depends entirely on the corporation, how much debt it carries, and how many stock holders there are. Imagine for a second if it were the other way: creditors wait in line after stock holders to get whats left. What would be left? Nothing, shareholders own the entire company. Not only that, credit would be impossible to come by, all one would have to do is dissolve their company and cash in their shares.
As I said, they can't change their bylaws to conflict with state or federal laws, and that limits the ability of shareholders to change the actions of corporate managers, since some of the provisions that insulate managers from the consequences of their actions are determined at state or federal level.This simply is not true. Its that easy. The bylaws and charter establish the purpose of the business and how it is to be run. There are several famous instances of corporations having their charter or bylaws amended (or attempted to amend) to change the actions of the corporate managers. Nothing can change the fiduciary duty, that is established by law not by the charter or bylaws. That is a function of agency law, not of corporate governance.
Not misusing the term at all. WalMart setting an artificially low price (one that is not determined by actual production costs) is the same as a price ceiling determined by the government. WalMart is saying "you cannot charge us more than $X, and it's your problem if you can't make a profit that way." Market distortion.Its worth noting again, because you constantly misuse the term, companies are not distorting markets by acting in them. Generally, market distortions come from the government; price floors, ceilings, or subsidies. Companies are not simply distorting a market by offering products are lower prices than those same products can be offered by another entity.
No, you misunderstand. I never said that the supplier gets to name its own price: The price a supplier charges is determined by whatever it costs the supplier to make the product, plus a markup to cover its overhead; if the supplier sets an arbitrarily high price, nobody is going to pay it, and the supplier will go out of business. At the same time, if the reasonable price is still too high for the market, then the supplier needs to reconsider whether or not it should continue to make the item that no one wants at a profitable price.The price must not, and cannot be set by the supplier. If that were the case then the supplier could name any absurd price and the consumer would pay it, this doesn't happen. Of course, a distortion could make it happen, say if a union bought off the government to impose a monopoly in their favor. Then the supplier names its price and the consumer has to pay it.
Revenue? I didn't say anything about revenue. What I said was that there is an economic measure which shows the maximum possible earnings per square foot in a level playing field market, and that when this drops below a certain level, smaller stores suffer more than larger stores.This isn't how you determine revenue anywhere on this planet.
It's not in the bylaws because that would be illegal; it is, however, an established strategy that was and is employed by several companies (large, nationally known chains) which I have worked for in the past.You'll have to show me something like the bylaws of WalMart where it says this. It sounds more like anti-corporate nonsense.
See above regarding higher levels of disposable income in a community supporting more competition. Large, wealthy communities support more competition than small, poor communities; this can be measured by the economic calculation I referenced above - available disposable income per square foot (level playing field assumed). And as for internet stores, it's also dominated by large corporations which get far more hits than small companies.This is not even remotely the case. I counted that there were 47 seperate stores withing 2 miles from my house which I could by clothing from. 47! Thats hardly "no choices." Further, anyone with access to a library can buy off the internet. There are literally thousands of sites selling everything you can imagine. "Limited choice" is more about stirring up people to act against large companies.
The needs of corporations are determined by the bottom line; real people need wages, corporations need to reduce wages as expenses; real people need clean air, polluting corporations need to ignore that as an externality; real people need safe, nutritious food, corporations need to reduce production costs by relying on artificial fertilizers, pesticides, and herbicides; etc. So no, the needs of corporations - maximize profits - are not the same as the needs of real people, even though real people run and work for those corporations.The needs of corporations are often identical to those of real persons. Whether that be the persons who run the company, or work for it, or buy from it.
Under the present system of election campaigns, the candidate with the most dollars has the advantage. When those dollars come from individual people, that's fine; when those dollars are awarded to candidates based on the votes of a small number of corporate directors, then it becomes a problem because those people have an inordinately large influence.Further, corporations don't get to vote, so its difficult to say that they are in control of elections; I am aware of the mindless babble about Citizens United.
So creating a system of property laws that allow you to determine who owns what is harmful? Creating a system that can resolve conflicting ownership claims peacefully is harmful? Creating contract laws that provide legal recourse in the event of fraudlent transactions is harmful? Providing a stable currency is harmful? Providing police and fire departments is harmful? National defense?The government is redundant, unnecessary, and ofter harmful to the ordered conduct of society.
Hmm, I seem to recall something about "life, liberty, and the pursuit of happiness" too. And you can't enjoy those benefits if your basic needs aren't met, so by promising to deliver "life, liberty, and the pursuit of happiness," at the very minimum the government is promising to create the conditions which will allow all persons to achieve those states.On top of all this, it is not the purpose of a representational democracy to address the needs of its citizens. The purpose is for the government to carry out the desires of the people; these are entirely seperate things.
He didn't dislike the global market - he disliked large corporations that exercised monopolistic powers. Those haven't been eliminated.Smith only liked this because of the unresponsiveness of the East India Company. His causes for disliking the global market have been more than elimiated.
The environmental costs of pollution are not factored into the cost of lettuce. The environmental costs of monoculture agriculture with its dependence on synthetic fertilizers, pesticides, and herbicides are not factored into the cost of lettuce (the price of the fertilizers is, but not the long term impact of soil depletion). So there are externalities that are not included in the price you pay for the item on the shelf, but which you ultimately pay for in the long-term one way or another.These are, by definition, no externalities. These costs are in the price of a head of letuce.
And that's where Smith's version of global trade comes in: Local merchants buy up surplus goods where they are common and thus cheap and sell them to local merchants in places where they are not common and therefore expensive. They hire local shippers (in the old days, actual ships) to carry the goods from point A to point B. The difference is that all of the players are local, and thus responsive to changes in local supply in demand.Further, you can't turn every city into a farm. Not only would that retard the standard of living for an untold number of people, but not every community can provide itself with the needed goods.
But that dollar stays in the local economy, where it continues to circulate, instead of leaving the local economy where it might not return any time soon.But you end up paying to cheapen your own food. This is akin to handing yourself a dollar you already had (except government overhead).
Only if you ignore the externalities mentioned above. When you factor them in, it's "cheaper" to buy local.Some places are great for local agriculture, others are not. It is much more efficient to have it centerally grown then shipped. Economys of scale and specialization have been proving this for 100 years now.
It hurts local people if there is a trade deficit between the two localities. If your local population is importing more than it exports, more money is leaving the local economy than is coming back to it, and this creates a local recession. In the short term this could work, but in the long term it's unsustainable.Every farm is local somewhere. Its a myth that buying out of county/state/city/country goods will hurt the people in that arbitrary jurisdiction. This is roundly proven by the last 35 years of international trade; which coincides with the largest improvement in standard of living ever seen.
That's a whole other can of worms. But again, Smith's model of international trade - local agents with long-distance contacts - can still provide countries with export revenue without the need for large corporations to mediate the exchange. And since the money earned by local agents tends to stay in the local economy, they can build up capital faster than if they outsource to multinationals.Further, only buying local would deprive much of the the Third World of their only source of income: international trade. Many of those societies have no ability to create the capital intensive industry required to modernize without trade with a First World nation. Whether that is caused by lack of capital or expertise. If they have no trade they have no income, meaning they simply do without capital goods.
Nope.You watched the Story of Stuff, didn't you?
If the corporation does not include the costs of ameliorating any negative environmental impacts of its actions on its books, it's an externality.Environmental cost isn't an externality.
Again, Adam Smith did not advocate every community creating its own products - he did talk about comparative advantage and all - but he did state that local vendors were the best conduits for trade since they could respond quickly to changes in local supply and demand.And, the massive efficiency loss by having every community create all its own products would be overwhelming.
The biggest complaint by WalMart suppliers is that WalMart's prices cut their profit margins to a sliver, even after they cut back as much as possible on wages and benefits and other controllable expenses. WalMart isn't cutting back so far as to kill their suppliers, but they do cut back far enough that their suppliers are vulnerable to shifts in the market.The prices HAVE to have a bearing on the cost of production. If, say, Rubermade can't cover their costs of production with what Walmart is paying them, they go out of business.
Of course getting picked up by WalMart is good in the sense that they're a major outlet, but again, one of the major complaints from WalMart's suppliers is razor-thin profit margins, margins which could possibly be higher if they weren't being held to an artificially low price point.Maybe you don't know this, but getting a good on the shelf at WalMart, for many, is akin to winning the lotto. Your sales go through the roof. Not only that, many of Walmarts producers are posting profits.
They lost money because they lost a major outlet for their goods, and now they are making less money per unit than they could be if they weren't competing against a supplier which is meeting WalMart's artificially low price point - possibly at the expense of its own profit margin.They lost so much money they came back to the table, but the deal Walmart previously offered was gone because their new supplier was that much more willing to negotiate.
WalMart is a large outlet. By not caving into WalMart's demands, they are losing market share, so they have to choose between lower profits per unit or lower market share, an unpleasant choice caused by WalMart saying "we're only charging $X - deal with it."Walmart is imposing nothing. If a producer doesn't want Walmart to sell their goods then they can go to Target, Kmart, BestBuy, Kohls, ect ect ect ect.
I said that the producers are being forced to scale back and cut corners in order to meet WalMart's artificially low price points; if they don't, WalMart will drop them. But if they do meet the artificially low price points, they are making less money per unit than the free market would normally support. And in some cases, as mentioned above, the profit margins are so slim that the suppliers become vulnerable to minor market instabilities.You are still saying two seperate and contradictory things. 1) The producers are losing money and unable to comply with Walmarts demands, 2)The producers are deathly afraid of Walmart dropping them as they would no longer be able to sell their goods which they are posting a loss on. These two things are contradictory and irreconcilable.
Exactly. Many companies turn to cheaper foreign parts to help meet WalMart's price targets (I'm thinking specifically of the heating elements in toasters, since that's the example that I can recall off the top of my head); that means that an American company that makes the same parts but charges more (due to paying better wages) is now losing sales. So the supplier makes WalMart's target and earns a profit - often slim - but another company loses business as the result of WalMart's decision. And the people who depend on that company for their wages suffer. And the communities that depend on the disposable income of those people suffer. And the businesses in those communities suffer. And the people who depend on those businesses for wages suffer. And so on. So ultimately someone loses money so that someone else can buy cheap stuff at WalMart.If it is underpriced then some one somewhere is losing their profit. You can't sell at a loss for eternity.
See above.Further, many of the companies that have products on Walmarts shelves are/have posted profits.