> This is one theory of the corporation. There are  
> others. It is incomplete  
> because it does not define the boundaries of the  
> corporation, i.e., which  
> contracts are internal and which are external.   
  
  
Actually, the Coase-Williamson approach has no trouble  
with defining such boundaries, its just in the nature  
of different contracts.  
  
  
> It  
> does not include the  
> phenomenon of the corporation entering into  
> contracts with other economic  
> entities as if it were an individual. My question  
> was about a collective acting  
> as an individual. A legal fiction perhaps? But one  
> that presents real  
> theoretical difficulties for individualism.  
  
The corporate veil is just a legal device for  
assigning responsibly. It would make no sense to hold  
a small shareholder in Union Carbide responsible for  
Bopal. There are execs who should have been nailed for  
that, but not stockholders who trusted them to make  
the right decision. This is just an example of  
extended division of labor. The fact that we call the  
corp an individual does not create for it a will of  
its own. Does a large sole proprietorship acquire a  
will of its own by going public? Sam is right about  
Olson.  
  
  
"A corporation can have a collective intention which  
is entirely   
different from the individual intentions of its  
components in   
carrying out that intention and is not a mere  
summation."  
  
AN unitended consequence of the pusuit of individual  
interests among many? I think Hayek has this covered  
when he wrote about dispersed kowledge, uncertainty,  
and learning- competition as a discovery procedure and  
all that stuff. Hayek's theory does cover this stuff.  
You might not like the way he covers it, but the idea  
that individualism can say nothing about such things  
is simply false.  
  
Doug MacKenzie