Polemics & Exchanges

On Fiduciary Duty

In his article in the March issue on property takings (“Does the Federal Government Protect Private Property?Views), Stephen B. Presser exhibits the fuzzy thinking that prevents our side from gaining traction.  He equates corporate property with personal property when, in fact, corporate property, like government property, is nearly the opposite of personal property and is certainly its enemy.  Large, limited-responsibility (so-called limited-liability) corporate stockholding reduces ownership to an abstract near-nullity.

Worse, it forbids the good use of such ownership.  “Fiduciary duty” means only the profit motive may be considered, even if holders of a stock majority would prefer to do better.  Offshoring, exploitative marketing, law-buying, and ruining of communities—all are required.  Witness Carl Karcher, who was forced out of the leadership of Carl’s Jr., the company he founded, because he tried to fight this.

Sarbanes-Oxley is nowhere near enough to level the playing field.  We need to make full-responsibility ownership (sole proprietorship and partnership) as attractive as corporate stockholding.  Then the families, clans, and communities so rightly extolled in the rest of the March issue will have a fair chance to influence the course of our country.

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