Lawyers and Firms and Corporate Entities, Oh My! | The Laws of Capitalism Episode 3

Corporations—a superior innovation for organization, or simply another way to create wealth?

Katharina Pistor examines how the law has accompanied the evolution of private business enterprises, from their early roots as simple partnership agreements of temporary duration, to colonial joint-stock companies in the 1600's with state charters granting them the legal status of corporations (or legal persons), and the eventual introduction of general incorporation statutes in the 1800's simplifying the creation of corporations. By the 1900's the law enabled the corporation to become the dominant form of business organization under capitalism.

Prof. Pistor takes up the case study of Lehman Brothers, and explains how its organization as a holding company allowed shareholders to profit, while leaving debt-strapped subsidiaries to flounder. Lehman harnessed the corporate structure created by law to build a house of cards.

[rayremnant.u]

The best way to critic capitalism is just to explain how it works.

[iamheasyouareheas]

Thank you for bringing us inspiration every week. This is easily one of the most important channels on the internet.

[aritragupta]

"It's social resource, not just a private resource". This insight is completely ignored about modern corporations. They are govt. created entities through laws and statutes. Corporate entities/individuals do not exist in nature. Which means the argument that the govt should not intervene in the market as that might undermine the free market is nonsense. The very presence of Corporations means the govt has already intervened. Modern corporations reap the benefits of govt granted privileges, but vehemently resists govt interventions to safeguard the economic interests of workers. If a corporation resists interventions to secure workers rights, the govt should take away the charter/privileges given to create the corporation. That won't be an intervention. That would be akin to undoing a previous intervention that created the corporation in the first place. Maybe the govt should incorporate the workers and the society at large into the corporate charter, as a stakeholder.

[timothykangethe]

Having read The Mystery of Capital by Hernando de Soto, The code of Capital definitely ramps up the conversation about Capital SPV, Opportunity cost and consequent financial malfeasance. 🎯
Quite a compelling argument on matters of vicious Capitalism

[gregorystevens]

Oh how the course of my career might have been changed had I been instructed by Professor Pistor as a 1L. Her perspective is essential. One of the best gifts I feel comfortable sending to friends and acquaintences is The Code of Capital.

[dfwherbie]

Just bought her book, “Code of Capital, ” because of this. I’ll get to it once I’m done with Anwar Shaikh’s book.

[ug_access]

Like how is this vital information just free! Thanks a lot!

[josedavidgarcesceballos]

I cannot imagine how hard it was to talk about all of this without saying "tax heaven". Cheers.

[misslabellekitty]

When I arrived at 18:19 I couldn't help but scream FTX.... oh my goodness it's like... almost recycling tricks.

[dordagiovex]

i knew it!:Alien monsters are among us! They want to devour as much and possible and their only goal is to grow and become even bigger and more ravenous.. they are made of paper rules and enslaved humans! And are immortal

[ZangariRC]

a UBI is the only humane solution, it must become a prerequisite of capitalism.

[oriocoookie]

you don't need to set up a corporation to have limited liability ... jesus

[clickx]

The history of corporations is enthralling to say the least. Just one question for Professor Pistor, how is the US FED a government entity if it is OWNED by a collective of banks? Can you elaborate on this?