> 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