> > Corporate death penalty
> Corporations are legal fictions.
Then they shouldn't have the same rights as real people. If they're just fictions, then it stands to reason that at least when they behave so egregiously that their fictional life has to be ended, their worth and value also turns out to be fictional.
> If you're wiping out shareholders and creditors, who do the assets go to? If you aren't wiping them out, what are you doing? Corporate death penalties are ultimately meaningless without an expropriation component.
Exactly. And since the whole point of a limited-liability stock company is that a single entrepreneur shan't be liable with all he owns, but each shareholder only with the value of his investment, then it is precisely that investment that will turn out to have no value: After creditors are paid off, any remaining value goes to the state, which is the entity that hitherto, through the contract and other laws it maintains, has upheld the fiction that this kitty of money is a separate thing capable of exerting a legal will and intent; for this particular kitty, that fiction has now come to an end.
As for "wiping out" shareholders (not creditors, as per the above)... Yes and no, and above all: So what? As mentioned, their investment is exactly what they are willing to risk; that's the whole idea. Three points on this:
1) They could just as well lose it all if the company goes bankrupt some other way, so pretending that this is some new and unique possible outcome is disingenuous.
2) If they're "wiped out" because they've put all their life savings into any one company, the poor bastards should have looked up "diversifying". Again, not unique to this.
3) Wow, great -- finally some incentive for shareholder activism, to try and rein in old / appoint better new boards and CXOs and curb some of the evil shit corporations do, eh?
> Better: massive fines and/or pulling critical licenses. Arthur Andersen and Enron were felled through these mechanisms. They are legal. They are proven. They are precedented and they work.
Bullpucky. Two corporations, out of the myriad that had deserved it, that's ridiculously ineffective.
> If you wantonly break the law, you should not be a going concern.
Exactly. Then the fiction should end.
> But "nationalization" and "corporate death penalty" are political hot potatoes. (I'm entirely sidestepping the argument as to whether that's reasonable.)
Maybe they're such hot potatoes precisely because people, like you here now, keep sidestepping the argument.
> If you want these companies shut down, or fearful of being shut down, credibly threatening to break them up, fine them into bankruptcy or suspend their licenses (e.g. for Intuit, their tax preparation license) is more effective.
Sure, that too... But it seems imbalanced to limit yourself to only that, as long as you still have the death penalty for real people.
(And, hey, if you're fine with "fin[ing] them into bankruptcy" -- what happened, all of a sudden, to those poor shareholders and creditors; is wiping them out suddenly OK now?)