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recall Adam Smith's critique of the "joint stock companies" of his day, particularly if management is granted a degree of independence; and his attitude toward the inherent corruption of private power, probably a "conspiracy against the public" when businessmen meet for lunch, in his acid view, let alone when they form collectivist legal entities and alliances among them, with extraordinary rights granted, backed, and enhanced by state power.
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the East India
Company demonstrated inherent flaws in the corporate form. The division between owners and managers in a joint-stock company, and the limited legal liability this division was based on guaranteed that stockholders would be apathetic about a company's activities as long as the company continued to be profitable. Just as problematic, the
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Bribery and corruption were inherent in this type of corporate model because the local managers sought to avoid close supervision by the Courts of
Governors, politicians, and Prime Ministers. In these circumstances, Smith did not consider joint-stock company governance to be honest. More importantly,
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Corporations, which previously had been considered artificial entities with no rights, were accorded all the rights of persons, and far more, since they are "immortal persons", and "persons" of extraordinary wealth and power. Furthermore, they were no longer bound to the specific purposes designated
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When the corporatization of the state capitalist societies took place a century ago, in part in reaction to massive market failures, conservatives – a breed that now scarcely exists– objected to this attack on the fundamental principles of classical liberalism. And rightly so. One may
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Chomsky contends that corporations transfer policy decisions out of the hands of the people and into corporate boardrooms, where public oversight is limited. The extensive financial resources of corporations and the extent to which they're employed to influence political campaigns in the United
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Furthermore, the context of the quote points to the complications inherent in chartered joint-stock companies. Each company had a Courts of
Governors and day-to-day duties were overseen by local managers. Governor supervision of day-to-day operations was minimal and was exacerbated by the poor
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The directors with of such companies, however, being the managers rather of other people's money than of their own, 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....
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Coca-Cola killed trade unionists in Latin
America. General Motors built vehicles known to catch fire. Tobacco companies suppressed cancer research. And Boeing knew that its planes were dangerous. Corporations don't care if they kill people — as long as it's
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noted that the corporate businesses which foreign visitors came to see and marvel at, as "showpiece of
American industrial achievement," were the very same ones that government attorneys scrutinized in their search for monopolistic wrongdoing.
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upon which the corporate form was based allowed for boards of directors to be so autonomous from and unconstrained by stockholder wishes that directors became negligent and ultimately self-interested in the management of the corporation.
258:"No other institution in American history—not even slavery—has ever been so consistently unpopular...with the American public. It was controversial from the outset, and it has remained controversial to this day."
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was one of the first to experience that paradox in a spectacular and personal way. By the last decade of the 19th century, Rockefeller found that he had become "the most hated man in the world."
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remains controversial for several reasons, most of which stem from the granting of corporations both limited liability on the part of its members and the status and rights of a
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was the joint-stock company. In the 18th century, the joint-stock company was a distinct entity created by the King of Great
Britain as
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machine (moving its operating costs to external organizations and people), in the same way that a shark is a killing machine.
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Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company.
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describes the modern corporate entity as 'an institutional psychopath' and a 'psychopathic creature.' In the documentary
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States has also been implicated as a way in which corporations undermine the democratic institutions in a society.
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corporate form because the separation of ownership and management could lead to inefficient management.
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and others have criticized the legal decisions that led to the creation of the modern corporation:
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by State charter, but could act as they choose, with few constraints.
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trading companies. These entities were sometimes awarded legal
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An
Inquiry into the Nature and Causes of the Wealth of Nations
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455:"The Corporation and John D. Rockefeller's Bewilderment."
360:"Corporations Would Literally Kill You to Turn a Profit"
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in designated regions of the world, such as the
British
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Around the middle of the 20th century, the economist
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The context for Adam Smith's term for "companies" in
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293:Big business#Criticism of big business
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358:Aschoff, Nicole (January 21, 2020).
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36:may be too short to adequately
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161:. Also in the film,
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