Even Adam Smith did not believe in the "invisible hand" of the marketplace, unhindered by regulation.Our founding fathers did not subscribe to Adam Smith's 'invisible hand'. They believed in very heavy regulations and restrictions on corporations. They were men who held ethics as the most important attribute. They viewed being paid by the American people for their services as a privilege not a right. And they had no problem closing down any corporation that swindled the people, and holding owners and stockholder personally liable for any harm to the people they caused.
Early laws regulating corporations in America
*Corporations were required to have a clear purpose, to be fulfilled but not exceeded.
*Corporations’ licenses to do business were revocable by the state legislature if they exceeded or did not fulfill their chartered purpose(s).
*The state legislature could revoke a corporation’s charter if it misbehaved.
*The act of incorporation did not relieve corporate management or stockholders/owners of responsibility or liability for corporate acts.
*As a matter of course, corporation officers, directors, or agents couldn’t break the law and avoid punishment by claiming they were “just doing their job” when committing crimes but instead could be held criminally liable for violating the law.
*Directors of the corporation were required to come from among stockholders.
*Corporations had to have their headquarters and meetings in the state where their principal place of business was located.
*Corporation charters were granted for a specific period of time, such as twenty or thirty years (instead of being granted “in perpetuity,” as is now the practice).
*Corporations were prohibited from owning stock in other corporations, to prevent them from extending their power inappropriately.
*Corporations’ real estate holdings were limited to what was necessary to carry out their specific purpose(s).
*Corporations were prohibited from making any political contributions, direct or indirect.
*Corporations were prohibited from making charitable or civic donations outside of their specific purposes.
*State legislatures could set the rates that some monopoly corporations could charge for their products or services.
*All corporation records and documents were open to the legislature or the state attorney general.
The Early Role of Corporations in America
The Legacy of the Founding Parents
That form of folly required the "more perfect" idiocy of the corporate cultists of our own supremely brainwashed society.
They are incapable of understanding that the "invisible hand of the marketplace," devoid of appropriate regulation, leads inevitably to the "invisible mind of the marketplace," and to the imbecility and disaster which followed the Neo-Con swindlers dismantling economic regulation.
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Adam Smith, however, did not advocate regulation of the type that is social engineering. He strongly spoke against it. The regulation he favored was the necessary enforcement of anti-trust regulations to prevent intentional economic violence. He supported a role in government to enforce contracts and patent protections.
In Wealth of Nations he didn't dwell a great deal on the welfare state as such was unthinkable in his time. But of charity he did say (paraphrased): "Charity, while a virtuous act, cannot alone provide the essentials for living. Self-interest is the mechanism that can remedy this shortcoming." Said Smith: “It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest."
The Founders intended people to be free to pursue whatever their hearts led them to pursue short of trampling on the rights of others. And if their hearts led to to pursue acquisition of great fortunes, that was good and fine. Because nobody can do that without creating opportunities for others along the way. And also the wealthy have the means and the leisure to do good public service and works that are not a prerogrative for those of more limited means.
If TR Roosevelt had spent more time studying such concepts and less time building a personal fiefdom, we would be much much better off now than we are.
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