Libertarians & Corporations

by Jim Russell
Number 113 – 2nd Quarter 2002

In the thirty-five years or so that I have thought of myself as a libertarian, the ranks of Americans who call themselves libertarian have grown. Paradoxically, individual liberty itself seems to be steadily losing ground to the growing impositions of a growing Leviathan State. I think I know why.

Most well-known libertrians in these United States are in one way or another affiliated with corporations, in many cases tax-exempt corporations in promulgating libertarian principles. Furthermore, in defending free enterprise and markets from statist encroachment, libertarians often find themselves defending and allied with business corporations. As a result of these relationships and their concommitant allegiance to corporations, these libertarians compromise the objective, which is freedom. Liberty in America is on the wane because its friends have been captivated by the enemy’s treacherous child.

Corporations are pure-bred progeny of Leviathan. You can’t have one without the other. No libertarian principle can pretend to excuse their existence. Nothing from the lexicon of liberty can be said in defense of the corporate concept. Nevertheless, libertarians across the land are locked in conjugal bliss with these jackanapes. To paraphrase the wisdom of a man called Jesus, “Nothing can come from corn but corn, nothing from nettles but nettles.” Freedom cannot spring from the groin of Leviathan or its scion, nor from libertarians wed to corporations.

One absolutely inescapable prerequisite of a libertarian society is people who are willing to accept responsibility for themselves and their actions. The fundamental raison d’etre of incorporation is to avoid responsibility. A corporation shields its owners (stockholders) from responsibility (vis., liability) for the corporation’s actions by means of a legal fiction imposed and enforced by Leviathan. It is so contrary to libertarian purpose and principles as to assure that no libertarian society can emerge from a corporate culture.

Among Leviathan’s most efficacious, landmark achievements on the road to serfdom, few can compare with the Sixteenth Amendment and the income tax for top honors. Slavery and war are worthy contenders, but their pernicious affects upon liberty are not as subtle and cunning. It is inconceivable that libertarians would cultivate seeds of war or slavery, yet many diligently sow and grow Internal Revenue Code section 501(c)3 corporations. In return for a tax exemption and a shield from liability, they strengthen Leviathan’s stranglehold on freedom by legitimizing one of its tentacles.

FEE, Cato, FREE, Reason; look carefully at any libertarian think tank and what you will see is a tax-exempt, state-licensed, government-franchised corporation. Grove City College, Bob Jones University, Hillsdale College, and other noble, “independent,” educational institutions that bravely refuse government grants and loans on one hand, on the other hand operate government chartered, IRS-approved, tax-exempt corporate entities to receive private donations. By seeking and accepting privileges and immunities conferred by Leviathan upon corporations, these fine institutions confer legitimacy upon the State, enabling it to impose taxes, wage wars, conscript (i.e., enslave) soldiers, execute “traitors,” and suffocate liberty.

What’s to be done? Back in the 1950s when the Army Corp of Engineers and the Bureau of Reclamation set out to build Marble Canyon Dam in the Grand Canyon, a small environmental group took a stand against the project, and, in the eyes of most Western politicians and bureaucrats, a stand against progress. The statists summonsed the IRS which threatened to revoke the group’s tax exempt status if it continued to “lobby” against the dam. The group responded, “to hell with that!”, and defended the Grand Canyon anyway. The group – the Sierra Club – never stood taller nor grew faster than when it surrendered its tax-exempt status in order to battle Marble Canyon Dam – and won!

The Sierra Club is anything but libertarian, and I assume that it has subsequently reclaimed its 501(c)3 license. But for one brief shining moment it demonstrated the power of putting principles before pragmatism. To incorporated libertarian organizations I would say, go ye therefore and do likewise.

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