Why did Adam Smith object to the corporate form of firm organization? Is the problem he identified relevant at all today, for the U.S. and the rest of the world?
To quote Smith, "The policy of Europe occasions a very important inequality . . . by restraining the competition in some employments to a smaller number than might otherwise be disposed to enter into them. The exclusive privileges of corporations are the principal means it makes use of for this purpose."
AND
“[An] increase of competition would reduce the profits of the masters as well as the wages of the workmen. The trades, the crafts, the mysteries, would all be losers. But the public would be a gainer, the work of all artificers coming in this way much cheaper to market.”
Corporations inhibit competition and disadvantage consumers. Obviously, the situation is the same today as it was in Smith’s time.
November 29th, 2009 at 6:40 pm
To quote Smith, "The policy of Europe occasions a very important inequality . . . by restraining the competition in some employments to a smaller number than might otherwise be disposed to enter into them. The exclusive privileges of corporations are the principal means it makes use of for this purpose."
AND
“[An] increase of competition would reduce the profits of the masters as well as the wages of the workmen. The trades, the crafts, the mysteries, would all be losers. But the public would be a gainer, the work of all artificers coming in this way much cheaper to market.”
Corporations inhibit competition and disadvantage consumers. Obviously, the situation is the same today as it was in Smith’s time.
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