This is such a big topic that I may devote some other space here in the blog – or you can read the book, The Surprising Design of Market Economies! But here goes. And this is the third in the ongoing series, One a Day: Nine Reasons the Free Market is a False Concept.

Question: what does Apple corporation and the City of London have in common? Or Time-Warner and New York City? Answer: they are all corporations, created by government. Among their differences is that the City of London and the City of New York are centuries old, while Apple and Time Warner are of more recent vintage.

To state an obvious but still lesser known fact: Corporations are created by government. Whatever rights and powers corporations have is because their parent, a government, gave it to them, through their charters.

For many centuries governments only created corporations to establish public bodies, such as cities, universities and monasteries. Then government began creating corporations like The Virginia Company or the East India Company, for exploration and profit, but still in what was thought was public service. Each corporation required a separate vote by a legislature. The ability to create private corporations by right, without a vote of a legislature, was a big change that occurred in the mid and late 19^th century. But government still holds the reigns, through the charters that corporations receive.

To those who believe they admire private business and look down upon government, I hope to show that this position does not make logical sense. The businesses they admire are often corporations, which means that a government somewhere created them. It’s certainly very difficult to imagine contemporary capitalism without them.

What I would like, and talk about in my book, is to have a more public conversation about what kind of corporations we have, what their rights and privileges should be, and what their purpose should be. I hope my book The Surprising Design of Market Economies is a first word in this conversation.