Deregulation and Corporations

I'm new here and this is my first post.  I was directed here by Ron Paul's newest book (like others I'm sure) and I am very interested in learning as much as I can here.

My question is this: if corporations were deregulated, what would keep them from assuming more control than they already do?  How do we liberate the government from corporations' influence if we give them unchecked power?

Kalo:

How do we liberate the government from corporations' influence if we give them unchecked power?

Unchecked power to do what?  If there's no government for them to buy, their power is limited to what they can do in the free-market.  I suppose there's a very real threat that they'll sell us valuable goods and services at fantastically low prices, is that what you mean?

 Nice to see another Paulite, Kalo! I originally came to this site in late 2007 via Ron Paul as well. :)

If corporations were deregulated you'd see more competition between different corporations occur. Regulation always limits competition by blocking out smaller businesses from participating on a plain level field with larger businesses. Deregulation would not mean that corporations would take over government. As long as a government would fight corruption there would be no problem of corporations overcoming government.

Corprate regulation (and business regulation in general) doesn't restrict their [corperations'] power in the market, it expands it. Small businesses who can't overcome regulation restrictions due to their lack of accumulated capital and compete with corporations.

http://fskrealityguide.blogspot.com/2007/11/how-state-destroys-small-businesses.html

fsk explains it in more detail.

I am a Pauler/Paulite too!  

It Corporations/Firms were deregulated, they will have to compete in the Free Market, meaning they cannot use government to create specialized monopolizes, regulations, laws, quotas, to benefit themselves.  The system we have now, corporations utilize government, particularly government officials to gain an advantage over their competitors or to force consumers to purchase or use their services.  Deregulating the market would free the market for open competition.

BTW, welcome to Mises.org boards.

Wow, I wonder what these boards were like before the Paulertariat came.

What people don't realize is that corporations frequently lobby government for regulation in order to stiffle competition. For instance, it is widely believed that Upton Sinclair's book "The Jungle" forced government to enact regulation against meat processing companies. However, most don't know that those very companies were lobbying congress to enact regulation long before the book was published.

Thanks everyone, this is some interesting information.

Kalo, if you'd like some more specific answers, please ask for specific regulations. I'm sure, for instance, folks here will go on and on of how the state fails to protect people's bodies and properties from polluters, instead passing pollution permits for well connected individuals and then regulating the size of the chimneys and all that kind of stuff, so the price structure won't internalize environmental damage.

By the way, in case you're interested in learning some economics, there's plenty of material around here; this is afterall a economics school ;). I personally started myself with Economics for Real People and I recommend it because it guides you through a bunch of terminology and concepts, but Economics In One Lesson might be more fun, it focuses instead in exploring a lot of misconceptions on economics.You should find them available as a PDF under Literature, and you can also order them in paper for cheap through the Mises store (and these are also on amazon as well). Ron Paul sure fished a lot of us, uh? ;)

Kalo:

My question is this: if corporations were deregulated, what would keep them from assuming more control than they already do?  How do we liberate the government from corporations' influence if we give them unchecked power?

Most regualtions of corporations actually favor large corporations over small businesses.

For example, the ban on raw milk is a tax on small farmers, who can't afford their own pasteurization plant.

The Federal Reserve credit monopoly means that large corporations can raise capital more cheaply than small businesses or individuals.

Sarbanes-Oxley is essentially a tax on small corporations.

FDA regulation of the drug industry means that only a large pharmaceutical company can bring a new drug to the market, because of the huge cost of getting a drug approved.

Corporations are themselves a legal fiction.  Corporations separate ownership, power, and responsibility.  It is government itself that protects management from misconduct.  Tort reform limits punitive damages (see recent Supreme Court Exxon Valdex ruling).  Limited liability incorporation protects management and shareholders in the event of bankruptcy.  It's usually impossible to directly sue management for misconduct committed on the job; they're usually covered by corporate insurance policies anyway.

In a free market, a group of people can get together and pretend they're a corporation.  They wouldn't get any special legal perks.

I wrote more details in How the State Destroys Small Businesses.

This is a common misconception.  "Government is needed to prevent monopolies."  Usually, government is the *CAUSE* of monopolies.