An Argument Comparison - Essay Example

Argument Comparison Lecturer This paper seeks to compare and contrast two articles, The Economist ‘The endangered public company’, May 12, 2012 and Diamond, S. (2012) ‘Occupy Santa Clara! Corporate personhood reconsidered’, Dissent Magazine as well as discuss the strengths and weaknesses of the arguments in the articles. From a close analysis of the two articles, it is evident that they address the existence and moral independence of the endangered public companies and corporations. The articles look at public companies as an independent entity and a public good. However, there are various differences in the arguments posed in the articles. Each article has its own approach to the growth and existence of a public company and corporation. This paper attempts to look into the arguments of the mentioned articles. According to the Economist (2012) ‘The endangered public company’, May 12, 2012, public companies have remained capitalism’s locomotives from their invention in the mid 19th Century. Public companies have had themselves installed in the heart of the largest economy in the world, United States. In fact during the year 1990, public companies appeared to spread across the whole world and shunt aside other older forms of organizations like state owned enterprises and partnerships. In this article, the argument is that public companies succeeded due to the things provided for them that achieved a durable triumph. The public companies provided professional management that had their productivity boosted, a limited liability which ensured the public was encouraged to invest, and a corporate personhood or separate legal entity that inferred that the public company could survive even if the founders were removed from the company itself. The Economist (2012) in the article asserts that the growth of the state owned enterprises in the emerging markets challenged the perception that public companies were, in the sea, the biggest fish. There was also emergence of private equity firms in the West. This according to the Economist proved that public company were not the best managed in the economy. The notion that the public companies were best equipped and could advance the geographical frontier of the capitalism was however challenged by the rise of the economies of Asia with their family owned legions of conglomerates. In The Economist (2012) ‘The endangered public company’, May 12, 2012, the argument is that public companies are literally in danger of becoming fading clubs in London since the membership in them is declining. This led to the drop of their numbers greatly in both Britain and America. In fact, the Economist argues that it is no longer glamour to go public. In fact, entrepreneurs in need of going public must wait considerably longer; this is because the successful entrepreneurs of technology have managed to conserve much of their control at personal level. Partnerships on the other hand offered to the partners’ unlimited liability although limited to their number. This indicates that the company here cannot expand even in the boom, but could be ruined if they failed. Today according to the Economist (2012) ‘The endangered public company’, May 12, 2012, partnerships can provide tradable shares and limited liability due to the legal reforms. While companies pay taxes on dividend and the corporate taxes, partnerships are only liable to a single lot of tax. This has led the policymakers to embrace public company alternatives too. The Economist suggests in his argument that it is the new powers of economy that has changed the corporate institutions further. Family businesses make approximately half of all the Asia Pacific region listed companies and two thirds of those listed in India. This means the big challenge to the state owned enterprises is the controlled family conglomerates resulting from the huge number making majority of the listed companies. However, the greatest merit of the state owned enterprises is directly political ties with the government which helps in their protection from stiff competition that they cannot accommodate. On the other hand, the Economist asserts that family firms enjoy the capacity of long term as its major advantage. However, lack of professionalism and feuds among the family members makes their major challenges. According to the Economist (2012) ‘The endangered public company’, May 12, 2012, public companies are worst when it comes to managing their problems. Growing short term forms is a challenge to public companies in addition to regulation which is worse than in the private companies. On the other hand, Diamond, S. (2012) “Occupy Santa Clara! Corporate personhood reconsidered”, Dissent Magazine has another version of public corporation. According to Diamond, it is a seriously needed reform to end the idea of recognizing corporations as a legal person. In his article, Diamond states that, “I believe corporations are people when Texas executes one of them” (Diamond, 2012). Texas in the author point of view executes many corporations every year. The notion in Texas and the country that corporations are legal persons even make the dissolution process less expensive and easier than it would be if the case was different. Diamond argues in his article that the personhood of the corporations enables business firms to get into contracts, to hire and fire employees, to sue and be sued, to engage in a free expression, and to own other corporations. It is a convenience to recognize corporations like a separate entity from its owners as this allows some to denigrate the critics of the corporation and defend the concept of the same. The nature of economic organizations in the modern world has been challenged by the continuing recognition of the corporations as separate legal entity and as persons. According to Diamond in his article, it is wise to consider the consequences and effects of recognizing corporations as persons to the society. It is evident from the article that this rationale has outlived its significance to the value of the social concerns. Diamond quotes Marx, in his article, that the corporate personality integument has been eliminated by the production of the modern capitalist. In the Diamond, S. (2012) “Occupy Santa Clara! Corporate personhood reconsidered”, Dissent Magazine, a generation of scholars has been discouraged from deeply exploring the connections that exist between the modern concept of recognition of corporations as a separate legal entity or person and its significance social history. There is a contention in the Supreme Court about the same idea of referring to corporations as persons. In the article, Hurwitz who contended the idea in court was certain that the Supreme Court was aware of the corporate power as well as the rising enterprises. Hence, he suggests that this awareness and suspicion is not convenient to the corporation’s theory as a different and natural person or legal entity away from its investors and shareholders. Diamond asserts in the article that the aggregate theory looked at the corporation as something that obtained not so much protection from the Fourteenth Amendment not because in itself it was a person, but because it was made up by its shareholders who are the natural persons. Corporations according to Diamond are put in the control of capitalist entrepreneurs who are freely associated and not under the watch of the state. Diamond argues in his article that in spite of the attempts by theorists in economics and the law of conservative to demolish the existence of the corporations to allow individuals to engage in contracts freely, the conservatives who are in actual political power have continually acted as if corporations deserve full legal protection as a real entity. Diamond however says that corporations are not similar in a bit, and that the view of corporations as separate legal entity and as persons currently fails in distinguishing them. In summary, from the arguments posted by the authors in their respective articles as illustrated above, it is obvious that the two authors share an argument that corporations and public companies are separate legal entity. However, there are distinguishing arguments in the articles. While the Economists emphasizes on the advantages of public companies as that which provides unlimited liability, Diamond argues that the recognition of corporations as persons need a reform to abolish it. The Economist has also argued on other forms of business such as partnerships, state owned enterprises and family owned firms which are increasingly coming up to replace public companies, Diamond is keen on the disadvantages of recognizing corporations as a separate legal entity. References Diamond, S. (2012) “Occupy Santa Clara! Corporate personhood reconsidered”, Dissent Magazine: http://www.dissentmagazine.org/online_articles/occupy-santa-clara-corporate-personhood-reconsidered The Economist (2012) ‘The endangered public company’, 19 May 2012, accessible online: http://www.economist.com/node/21555552 Read More