Corporations vs Businesses: Explaining the Difference to a Simpleton

[Altimadark]

It occurs to me that I don't really understand what distinguishes a "corporation" from a "business," outside of the fact that the former is a legal fiction created by government, nor do I fully understand the problems this legal fiction creates. Would anybody be willing to offer an explanation in terms my slow, easily-distracted brain can understand, be it in their own words or via link to someone else's?

[Ibrahim90]

It occurs to me that I don't really understand what distinguishes a "corporation" from a "business," outside of the fact that the former is a legal fiction created by government, nor do I fully understand the problems this legal fiction creates. Would anybody be willing to offer an explanation in terms my slow, easily-distracted brain can understand, be it in their own words or via link to someone else's?

the Corporation: yes, it is a legal fiction created by Government, given to a person or persons in a given business. the problem is pretty straightforward: you're in effect creating a legal entity that has extra privileges and immunities that otherwise wouldn't have been there for the individuals running a business if there were no legal incorporation process (reference the BP spill as an example).

the Video by Jacob Spinney responding to that idiot CultofDusty explains it more eloquently (this can be found elsewhere on the forum, since I'm feeling lazy).

[MrBogosity]

The biggest difference is what economists call "moral hazard." As an individual or private group running a business, you take the risk, which means you personally pay for any failures. (This isn't the same as Limited Liability; you can have that without being a corporation. It's in your contract that everyone who does business with you agrees to go only after business assets, not personal, if there's a dispute.)

Corporations get sweetheart deals with the government, but it's very skewed. A small Mom-n-Pop shop is a corporation, but they get relatively few benefits compared to larger corporations. The larger the corporation, the more benefits they get from government at all levels to "create jobs" or "serve the community." Get big enough, and you're "too big to fail" and you're protected from the consequences of your risky decisions--which, of course, just leads you to make even riskier decisions without any contingency plan for failure (because government IS your contingency plan, you see).

So even though small corporations do get benefits like protected business loans, the big corporations get WAY more benefits and you end up with the corporatist system we have today, where big corporations can run roughshod over smaller businesses, which gets people riled up and demanding government do something about them, whereupon government passes more regulations and the big corporations get an even bigger advantage.

[Travis Retriever]

The biggest difference is what economists call "moral hazard." As an individual or private group running a business, you take the risk, which means you personally pay for any failures. (This isn't the same as Limited Liability; you can have that without being a corporation. It's in your contract that everyone who does business with you agrees to go only after business assets, not personal, if there's a dispute.)

Corporations get sweetheart deals with the government, but it's very skewed. A small Mom-n-Pop shop is a corporation, but they get relatively few benefits compared to larger corporations. The larger the corporation, the more benefits they get from government at all levels to "create jobs" or "serve the community." Get big enough, and you're "too big to fail" and you're protected from the consequences of your risky decisions--which, of course, just leads you to make even riskier decisions without any contingency plan for failure (because government IS your contingency plan, you see).

So even though small corporations do get benefits like protected business loans, the big corporations get WAY more benefits and you end up with the corporatist system we have today, where big corporations can run roughshod over smaller businesses, which gets people riled up and demanding government do something about them, whereupon government passes more regulations and the big corporations get an even bigger advantage.

Facts that make it all the more infuriating when some pseudo-intellectual statist talks about how, "If Blackwater, BP and others could find customers in an anarcho capitalism, they would still be a thing." And even trying to quote Rothbard on the matter...

[evensgrey]

Facts that make it all the more infuriating when some pseudo-intellectual statist talks about how, "If Blackwater, BP and others could find customers in an anarcho capitalism, they would still be a thing." And even trying to quote Rothbard on the matter...

Sure, they'd still be things, but they wouldn't be able to protect their owners and officers from being liable for misdeeds they carry out in the name of the business.  That protection is pretty much the whole point of a corporation.

[Travis Retriever]

@Shane:  It also occurs to me that the liberals who whine about "Waah! Look! See? In capitalism the big business swallow up the little business!" Is yet another case of blaming the free market for the failings of government.  Well, based on your post and stuff. I mean it does make sense, as a bigger corporation has more money to lobby Congress and bring in more tax revenue (govco getting a bigger cut of the profits than the oil companies, anybody?)

[Travis Retriever]

The biggest difference is what economists call "moral hazard." As an individual or private group running a business, you take the risk, which means you personally pay for any failures. (This isn't the same as Limited Liability; you can have that without being a corporation. It's in your contract that everyone who does business with you agrees to go only after business assets, not personal, if there's a dispute.)

Corporations get sweetheart deals with the government, but it's very skewed. A small Mom-n-Pop shop is a corporation, but they get relatively few benefits compared to larger corporations. The larger the corporation, the more benefits they get from government at all levels to "create jobs" or "serve the community." Get big enough, and you're "too big to fail" and you're protected from the consequences of your risky decisions--which, of course, just leads you to make even riskier decisions without any contingency plan for failure (because government IS your contingency plan, you see).

So even though small corporations do get benefits like protected business loans, the big corporations get WAY more benefits and you end up with the corporatist system we have today, where big corporations can run roughshod over smaller businesses, which gets people riled up and demanding government do something about them, whereupon government passes more regulations and the big corporations get an even bigger advantage.

So like Christopher Cantwell said, in the absence of the state, corporations, by definition, cannot exist.  I really don't get the statists who act like govco is the anti-corporation...and really, even if that weren't the case, who lets them get away with it?  That is, who claims a monopoly on the courts and police? (Hint: Long word, begins with a 'g')

And yeah, what you say makes sense, as the bigger a corporation, the more revenue it brings in to tax, giving govco a financial incentive to protect them.  And of course, the bribes...I mean campaign contributions they're known for throwing at governments and politicians, etc.