----- Original Message ----- From: Wei Dai <[EMAIL PROTECTED]> > > One factor that keeps large corporations honest is the threats of hostile > takeovers and bankruptcy. Unfortunately neither of these seem likely to > apply to a large nation-as-corporation. Imagine creditors trying to force > everyone else to leave the U.S. after a bankruptcy because they now own > all of the shares.
What if a foreign power began buying up large numbers of shares and assigning them to its foreign agents? How many shares would Al Qua'ida buy? Other questions/observations I have: will shareholders receive dividends? Would immigration's effect on dividend size affect shareholders' demand for one immigration policy or another? If the government refused to issue more shares, but simply bought one back on the open market to issue to each new child and charge the parents's for the cost, this would be an interesting way to stabilize population. Would it make more sense to organize a nation like a not-for-profit corporation? Since the modern state is often regarded as already being organized like a corporation, I assume this thread is about organizing the literal nation itself as a corporation. Does this not mean an internal labor market in which the managers would be responsible for training, job assignments, and promotions (and wages and salaries), so that involuntary unemployment and welfare schemes would be non-existent? Would social security and medicare be run like a pension system? But what would they be invested in? With the nation (not just the state) as corporation, there presumably would not be any use for a stock market, so pensions would have to be funded entirely out of corporate (national) profits. If the whole apparatus of state were so funded, there really would be no need for taxes per se. (Perhaps this thread should be "nation as conglomerate.") Would corporate divisions or subsidiairies compete against each other or receive protected territories? Could the corporation hire employees who were not shareholders? Could one become a shareholder without moving here? What if most of our shareholders eventually lived overseas, while our residents were mostly employees? If only shareholders may be employees, and foreigners may not own shares, does that mean no overseas employees permitted unless they are shareholders stationed abroad? The nation could not be a multinational corporation? Would a social stigma to selling one's share evolve? In one survey, 25% of US respondents said they would change their religion for 2 million dollars, but only 16% would give up their US citizenship for the same sum. Go figure. How would we preserve an independent judiciary (essentially an arbitration system)--although that is a challenge under any system? The US judiciary already seems to be increasingly politicized. Would the only restraint on our CEO be contractual agreements and decisions by the Board of Directors? If so, we would not need a legislature anymore. New laws-regulations could be drafted by legal experts as the CEO directed. John Hull wrote: > 1. The program will prevent poor from coming to the > States. I think that's wrong, but I respect your view > if you feel otherwise. So you think its wrong to demand that poor people respect private property rights (since the corporate-nation would be the private property of the shareholders). But if you want to forcibly confiscate a share or two from Berkshire-Hathaway and donate it to me (since I can't afford to buy them), I won't complain very loudly :) Seriously though, if no limitations are placed on immigration, the effects would likely be unpleasant for many of the people who already live here and do, in fact, think of themselves sort of as shareholders (citizens) of the nation. (In olden times, the kingdom was viewed as a sole proprietorship owned by the king and national identity was weak or non-existent. Soldiers were mercenairies beholden only to their employer, not to "the people." Multicultural states were much more stable under sole proprietorship-monarchies than under conditions of republican nationalism.) Do you mean that you want to benefit a select few of the foreign poor at the cost of depressing wages and opportuny for the native poor of your own country and raising the net cost of public services (according to labor economists), or do you mean that you want mutually open borders as a matter of principle? In either case, what effect will this have on the native lower classes' sense of belongingness, national loyalty, willingness to make sacrifices and avoid free-riding, etc.? Does the logic here not ultimately lead to an every-man-for-himself mentality that ultimately shifts loyalty from the nation-state to the family with whatever repercussions that may have for political stability? Now, I will readily agree that the concept of transferable national shares may well have the effect of eroding social capital, but so does your view that foreign born poor have some right (implied by wrong-to-prevent-them-from-moving-here) to move here. I would also like to point out the moral hazard of receiving enough poor from sending countries to reduce pressure for political and economic reform within those countries, while doing nothing for the vast hordes of poor who must remain there. One problem with open borders (in addition to differing political cultures among the immigrants, national security risks, the evolution of Quebec-style or Yugoslavia/Kosovo-style multicultural schisms, ethno-tribal rivalries, differential ethnic crime rates, and unlimited population growth) is that the immigrants will not stop coming until the standard of living or economic opportunities in the receiving nation are no better than in the poorest, most mismanaged and tyrannized nation in the rest of the world. > > 2. The incentive structure may give unhealthy goals > too much weight. I can't think of anything specific, > but it sounds like we could be setting ourselves up > for a Ken Lay presidency. I'm not sure that would be > a good idea. Ken Lay, Bill Clinton (Hillary in 2008), what's the difference? Lay might even be an improvement. And then there was the notorious Grant administration, or the democratically elected (twice!) Milosevitch administration in Yugoslavia. Lincoln's administration led to a civil war (any of the other three choices in the 1860 election would have avoided secession), and the FDR and LBJ administrations were policy disasters from which we may never recover. What makes you think a Board of Directors would necessarily make poorer choices? One problem with universal suffrage is that too many voters are actual or wannabe free-riders. Another problem, of course, is voter ignorance and even voter stupidity. And then there is voter apathy, which is entirely rational. One vote really doesn't make a difference. If it made a difference in one election in 100, it still would make no difference. presumably > it would be found efficient to re-allow indentured servitude to pay off > one's share, right? Interesting question. Technically, indentured servitude is not really involutary servitude. Under current interpretations of the 13th, 14th, or whichever amendment it was that confiscated US slaves without compensation, is indentured servitude permitted by the courts? Misha Gambarian wrote: >They can just lose their voting rights, but still have right to work and live in USA. In this case I expect price of share to be very small, probably less than $10,000 - and in this case Gates can buy 6,000,000 votes and more or less make USA presidents > It would probably be safer to allow one vote per shareholder, not one vote per share. From: john hull-- for example, > the CEO could pursue int'l policies that would prevent > India from having a strong high-tech industry as a > means to get educated Indians to move to the States. > It seems to me that such a scenario degrading into > some of the lowest depths of mercantile excesses is > too likely to be a safe choice. But all the incentives for that scenario already exist. Robin Hanson wrote: One, assuming that > a CEO maximized share value of a nation, what would they do wrong or > right. Do you mean what would they do to decrease or increase shareholder value, or what would they do wrong or right morally, which seems to be a question that also crops up a lot in this thread? >And two, what institutions could get them to maximize share > value. For a start, we could tie fluctuations in the pay of government employees (elected and unelected) to fluctuations in the GDP, perhaps using a five year moving average. Does this whole discussion of nation-as-corporation remind anyone besides me of the USSR? Was the Soviet Union's collapse fundamentally a matter of bad management rather than any dysfunctionality inherent in the corporate model? I think even competition would be possible by pitting one division against another in the same industry, with promotions going to the manager of the best performing division or profit center. The biggest shortcoming to a fully corporate model seems to be the question of how to spur innovation. The "mechanics" of innovation have been tackled by some business gurus, but I don't know how effective their recommendations are. Free-riding might be dealt with by worker peer groups and by closely tying worker pay to the profitability of the profit center. ~Alypius Skinner
