The second volume of the American Affairs Journal has come out and it is even better than the first volume. Whereas the first volume seemed promising, the second volume is simply excellent. Of special interest is the paper titled The Corporate Contradictions of Neoliberalism by David Ciepley. This paper is especially interesting if read in conjunction with a further more substantial paper by Ciepley titled Beyond Public and Private: Toward a Political Theory of the Corporation. It is well within the framework of absolutism.
The papers in question, whilst still holding to the undefendable concept of the sovereignty of the people, take aim at the neoliberal conception of the corporation as being the creation of shareholders. Ciepley makes the point which is evident to anyone reading the liberal oeuvre carefully that liberals are really agrarian primitivists totally at odds with advanced industrial civilization. What is remarkable about them though is that despite holding agrarian primitivism in all areas, they then are able to turn around and claim credit for developments which they opposed based on classical liberalism. Just think of all those libertarians and classical liberals lauding Hong Kong, Singapore and South Korea, to name only a few examples, as the exemplars of classical liberalism and (this is where it gets hilarious) capitalism. Ciepley makes it evidently clear that the corporation is not liberal, is opposed to liberalism, and has been subject to disastrous liberalisation which has rendered them deranged institutions that have begun simply cannibalizing society.
The papers make it clear that the corporation is in effect a delegate of the sovereign. Furthermore, logically it is obvious that a company cannot be the result of shareholders as shareholders are made by the board, not the other way around. Neoliberals including Milton Freedman turned this on its head by claiming the shareholders are the owners and the board are their employees. This is nonsense of the highest order. Worse, what he was doing was bringing Lockean state of nature idiocy into the world of the corporation. This article from Forbes is much more scathing of the concept than Ciepley, and rightly so. Friedman violates the very concept of the corporation as an entity and makes it a sort of pooling of individual partners in the form of state of nature shareholders. Pure gibberish from (and I can’t believe this now) one of the most influential economists of the 20th century- he simply did not know how a company works. As Ciepley takes pain to note, this violates the concept of the corporation from every conceivable angle. Not only does it negate capital shielding that allows the corporation to own the property and not be subject to shareholders withdrawing funds (and property) in the way a partner may in a partnership, but it also negates the limited liability of the corporate structure. If the property of the company was indeed the shareholders’, then there is no limited liability. Worse than this, by removing the corporation as the legal owner of the property (the very function of its status as a company) it requires an individual contractualism in which the corporation becomes a kind of metaphysical fraud hiding the true nature of the situation as a giant contractual web of individuals. This is reminiscent of Hayek’s/ Mise’s methodological individualism. The corporation in this bizarre Lockean retconning is effectively a giant partnership of individuals (the corporate layer is fraud) like a giant Leviathon, or Lockean state, in a kind of social contract thingy. Ciepley amusingly considers this seriously and is dismissive on the basis that this would require all individual shareholders to engage in individual contracts with all that deal with the corporation (employees, customers, debtors, lenders,) and other shareholders, an absurd state of affairs…is anyone getting déjà vu from liberal political theory and the complaints of Filmer here?
The results of this absurdity are noted by Ciepley in the collapse of the American corporation from being a capitalist entity in the sense of accumulating capital and investing in expansion and development of new products, to one which doesn’t. Corporate boards were encouraged to become shareholders to align the principal-agent problem based on the error- astonishing error- of shareholders being the owner of the company’s property. The pay of CEOs then went from being wages and no shares in 1984, to being 66% share options in 2001. The results are simply astounding. In 1950 60% of Corporation profits in the US were retained for expansion and R&D. In 2003 this was just 3% (in China it is apparently 50%.) The Liberals in effect created a nominalist dream world in which the corporation was just metaphysics to the concrete liberal individual who had to be tied into the role of being subject to consequences by being made a shareholder; an absurdity. Liberal capitalism is a contradiction in terms, the essence of liberalism is anarcho anti-civilisationalism. The idea of society as a network of contractual individuals is literally opposed to the legal construct of the corporation which gains its legal personhood from the sovereign.
Liberalism, liberal “capitalists” and classical liberals fundamentally theoretically oppose the concept of an agglomeration of capital having a separate existence in law from the individuals that comprise it. They are parasitic primitivists and it is only through an absolutist lense that this can be seen in stark clarity. As Ciepley quotes Smith (anti-corporation) as making clear:
“The directors of such companies … being the managers rather of other people’s money … it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own…. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. (Smith
 1976, II, 264–65)”