The Morally Hazardous Modern Corporate World – a Free Market Distinction Between Vicious and Vitiated Corporations
Vol. 5, No 2a, 2012
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Octavian-Dragomir Jora, Assistant Professor, Ph.D. Department of International Business and Economics Faculty of International Business and Economics The Bucharest University of Economic Studies |
THE MORALLY HAZARDOUS MODERN CORPORATE WORLD – A FREE MARKET DISTINCTION BETWEEN VICIOUS AND VITIATED CORPORATIONS
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Bucharest, Romania Address: 6, Piata Romana, 1st district, 010374, Romania +4.021.319.19.00 E-mail: octavian.jora@yahoo.com
Mihaela Iacob, Assistant, Ph.D. Department of Finance Faculty of Finance, Insurance Banking and Stock Exchange The Bucharest University of Economic Studies Bucharest, Romania Address: 6, Piata Romana, 1st district, 010374, Romania +4.021.319.19.00 E-mail: miuiacob@yahoo.com
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ABSTRACT. In the present paper, we identify the corporation in its ultimate, proprietary meaning (as an expression of an aggregate of resources owned by shareholders and used according to their allocating-entrepreneurial vision), homogenizing, in some way, the entrepreneurial-capitalistic-managerial “interests” from within itself and, this time, treating the “shareholders vs. managers” tension as irrelevant. We distinguish, within this simplified framework, situations where corporate actors (the “shareholding-managerial aggregate”) gain together social privileges, undue rights on third party resources or, on the contrary, are prejudiced, together, by third parties. Either way, the “key character” is the State, which institutionalizes aggression and incites to free riding. We consider, in this logic, by “vicious-corporation” that which succeeds (while tolerated / encouraged by the public authorities) in acquiring resources from the rest of the society, without the righteous owners’ prior consent. It does this either by “material” redistribution – explicit transfer of expropriated resources – or by “virtual” redistribution – implicit rents from dedicated regulations –, internalizing this behaviour (moral hazard) in its day to day routine. We symmetrically define by “vitiated-corporation” that which is expropriated (materially, virtually) by third parties (mainly the rival corporations) which take comfort from this habit, rather than simply serving consumers.
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Received: June, 2012 1st Revision: September, 2012 Accepted: December, 2012
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JEL Classification:B53, K20, L20, M20
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Keywords: business corporation, private property rights, free market, interventionism, financial regulations, antitrust regulations, moral hazard, praxeological ethics and economics |
