[mindcrime]

No, in a truly free market the corporations can just pass on the negative externalities of their actions without any consequences if the other actors don't understand the negatives.

I would argue that, in a truly free market, the "corporation" as such, would not exist at all. Consider that corporations are legal fictions created by the State and could not exist without the government granting their special "limited liability" status. That in and of itself is a market distortion.

[throw51319]

You're just talking about the semantic term itself? I mean there would be a group of people who start working together and growing organically... because of the gain in efficiency through individual specialization. So idk what you're saying. They would produce and sell things to others. No regulations mean that they could obfuscate the negative externalities to the best of their abilities if they wanted to go for straight profit.

[mindcrime]

It's not just semantics. A "corporation" is a very specific thing which operates in a certain way because of the way it is defined legally. Without the legal fiction of the "corporation" groups of people could (and would) still cooperate to form businesses, but now the individual owners would not be artificially shielded from legal liability for the outcomes of the businesses actions.

IOW, if you, me and 10 other people get together, start a business as a "partnership" and build a bridge that collapses and kills a bunch of people, each of us, as owners, can be held liable individually for the damage/deaths involved. If we form a corporation, references to "piercing the corporate veil" aside, none of us stand to lose anything more than the amount we invested in the corporation. "Corporations" where created specifically to enable businesses to have larger numbers of owners ("investors"), and part of that was achieved by placing that artificial limit on the liability of the individual owners[1]. The reason for this was nominally a Good Thing, because it allowed larger businesses that could take on risks that smaller businesses would not be able to handle. But one can certainly question if that trade-off was justified... and as I argued before, as a distortion of true "free market" principles, this construct would not exist in a world which strictly held to pure laissez-faire / free-market capitalist ideals.

That said, I will say that there is a semantic aspect to all of this... the term "corporation" has a particular legal meaning in modern times, but the word in the popular vernacular, it is used differently in different parts of the world, and the meaning has changed over time. So just to be clear, when I say "corporation" I specifically mean the modern shared-stock / limited-liability corporation which is a legal fiction created by the State, upon registration by the owners.

[1]: https://en.wikipedia.org/wiki/Corporation#Limited_liability

[throw51319]

Yeah good point. Thought provoking on the idea of what a "corporation" can become these days, especially from a multinational standpoint...