The Harm Principle and Corporations

Abstract

In this paper, I defend what may seem a surprising view: that John Stuart Mill’s famous harm principle would, if taken to be what justifies government action, disallow the existence of corporations. My claim is not that harmful activities of currently existing corporations warrants their losing corporate status according to the harm principle. The claim, rather, is that taken strictly, the harm principle and the legal possibility of incorporation are mutually exclusive. This view may be surprising—and I do not at all mean to attribute it to Mill—but if I am right, it should be obvious. It should also encourage us to think more about the nature of the markets within which business occurs. In the first section, I layout the view that follows from accepting the harm principle. In the second section, I explain the basic nature of legal incorporation. In the third section, I lay out the brief, but I think decisive, argument that the endorsement of the harm principle (as understood in the first section) is necessarily opposed to legal incorporation. I consider objections in the final section.