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Mr. Charu on institutional power



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Charu datt wrote:

> Vamsi Musunuru wrote:
>
>  > >  > Simply put: I trust a corporation more in a free/competitive  > >
> market  >
>  > > because its
>  > >  > power is clearly checked rather than a monopolistic Government    >
>  >
>  > > whose power
>  > >  > remains unchecked.
>  > >
>  > > i trust neither, as both are frequently unchecked, sometimes the
>  > > power being exchanged in a collusion between the two.
>  > >
>  >
>  > Very good.  My trust, in the above, was a relative term.  I made no
>  > reference to an absolute quantity!!
>
> i don't think we disagree that power corrupts, we differ on the solution. if
> i understand what you're saying, your solution is, roughly speaking, to
> check the power of corporations/capital with equally big government power-
> with the government exercising power to foster competition by other
> corporate entities so that no one corporation gets dominant- this may be an
> oversimplification of what you have in mind so please feel free to correct
> me.

Thanks for the offer.  And so much for not trusting institutional power?  I
would not trust the government to check the power of corporations for this
itself would require a concentration of power with yet another institution.
What I have always maintained is that power must be with the people - the
consumers.  This is possible only a free-market system.  I have defined
free-market as a system where entry, exit, and trade can be exercised "freely"
and the consumers will determine the fate of these entities through their
right
to choose.  Under this prescription, the Government really has no role to play
nor is there any risk of giving it such powers.


> my solution would be to curb the power of both government as well as of
> corporations. i've written about this before here, corporations would be
> limited in the scope of their activities and existence- in fact this is the
> way the notion of a corporation was 150 years ago in the US- a corporation
> was a temporary device to bring together resources for a particular
> enterprise and would receive a charter to do so from the state in which it
> operated

Ah, but the problem is that those issuing the charter now have the power
regulate consumer choice.  Shouldn't this power belong to the people?!  Such
concentration of power, especially with an institution, would lead to abuse
eventually.  I rather distribute this power among the people.  No charter,
nothing.  You play in an open field and consumers (the people) will shoot
you at
will and sometimes for no reason at all because they have the right to do
so - I
like that much better!!

> for example if someone wanted to build a bridge, a group of people
> could get a charter sanctioned by the state [i know, i know, the term
> 'state' is proabaly raising your hackles! i'll get to that later] the
> charter permitted the group aka corporation to raise money, perhaps float a
> bond, buy property in its name and so on.

No can do Sam!!  The state should have no powers of issuing a charter.  A
Government can, however, lay the ground rules for a fair bond market or stock
market that protect investor confidence.  And this too must be mandated by the
people - hence, the Government has to be a democratic one.

> once the bridge was built, the
> charter was ended and the corporation and its assets dissolved.

The consumers must decide upon this.  It is not a privilege of an institution
(such as the Government) to decide upon the existence of another institution.

> corporations
> that deviated from their charter were likewise dissolved.

Deviate from what charter?  A charter issued by an untrustworthy institution?
In a fair bond/stock market a corporation will collapse under the weight of
its
own arrogance where investors/consumers decide upon its fate.

> the logic behind this is that the activities of a corporation affect
> the environment in which it operates, hence the owners of
> that environment, should have some control over the corporate
> entities that operate among them, and as the capital collective
> represented by a corporation will have power [money = power]

Environment issue is an interesting one.  But the fundamental flaw here is
that
environment has been arrogantly treated as a "free" product or a gift from the
Gods that should be preserved.  We all know there is no such thing.
Environment
is a quantifiable commodity.  Every economic activity has a bearing on the
environment and somehow we are "clever" enough to detach it from the overall
economic equation.  Environment has a price and unless it is tied to the
rest of
the economy we will continue to see abuses.

The only way to check the abuse of tree-huggers and corporations, alike, is to
make environment a measurable quantity in the economic equation.  In other
words, if we have a well-balanced system then all abuses, including that of
the
environment, will be checked.  As it turns out, environment has been left
out of
the economic equation and hence there is no "natural" way to check its abuses.

I will reply to the rest of your message later.

Sincerely,
Vamsi M.



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