Quote:
Originally Posted by Namekuseijin
. Companies like Disney seem to never die at all! Someone should kill them, bleed them until bankrupt.
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That's the idea. Precursors to corporations go back to the ancient world, and the first corporations emerged during the middle ages. Basically, a corporation is a legal entity that has privileges that are distinct from its members, one of which is that it survives beyond the lives of its founding members.
The first corporations in the United States where formed by state and local governments to do specific public services, such as maintaining dikes, roads, bridges, and levies. In this way public services could be performed without taxation. After the Erie Canal was constructed, state and local governments went on a canal building frenzy. This speculative fever resulted in a financial crisis in 1837, resulting most of the newly constructed canals going bust.
Public opinion towards government and government projects turned sour, and Andrew Jackson capitalized on that discontent by running a populist campaign against public corporations, arguing that they were the tools of oligarchs for seizing power. By 1847, 40 out of 44 states had passed general incorporation laws which replaced legislative charters, so that any group that satisfied minimal capital requirements could incorporate.
The most important privilege that a corporation has is limited liability. This just means that the owners of the corporation are not liable for any debts or costs imposed by the corporation. That means that if a corporation can't pay its debt, creditors can't seize the assets the shareholders. If a corporation kills a bunch of people, the shareholders cannot be held liable. The privileges of a corporation, such as unlimited life and limited liability, enable them to amass massive amounts of capital and to take huge risks, which allows for things like the construction of railroads and telegraphs.