The rise of multinational corporations

The corporations are legal entities which got many of the same rights of normal citizenships. 150 year later, corporation were insignificant entities that trough years have become more and more relevant in our daily world an nowadays is the dominant institution of the present. The documentary of Michael Moore called “the corporation” analyzes the nature, evolution, impact and the possible future of the modern business corporation.

Today, there are several terms that are related to the form of operation of the corporations such Capitalism, Legal institution, Externalities and Limited liability. I will explain them based on the topics of the corporations.

1.    Capitalism: is a social system based on the principle of individual rights. The term capitalism is used here in the broader philosophical political sense, and not in the narrower economic sense.

2.    Legal institution: refers to a entity that got rights and trusts under the legal policies of a country, the term trust, as the documentary shows lead to an antitrust era. Antitrust are those set of laws which alleged protection of competition in order to avoid monopolies.

3.    Externalities: refers to facts outside the company that affects the normal operations of the corporations, I mean, incidents that change the course of actions. In the documentary Barry Commoner said: “‘Our economic system treats environmental degradation as an externality—a cost that does not enter into the conventional arithmetic that determines how we use our resources’. Meaning that corporations doesn`t take into account the costs to external factor inside their operational costs.

4.     Limited liability: liability is a term that means the legal responsibility and debts a company gets during the course of operations. Limited liability is that corporations only respond for certain amount of debts that arise for the operations in order to protect the shareholders.

One of the criticisms in the movie is “without externalities, no manufacturing industry is sustainable”. Do you agree? What could be done in this phenomenon?

I`m very agree with this statement, because according to the sustainable development model supported by the United Nations, we should think in exploiting our resources in order to fulfill the current needs of the society while preserving the environment to meet the future need for generations to come. This is very important to achieve because if companies spend all the resources nowadays, in the future would be a scarcity and companies are willing to finish their operations.

In this phenomenon what we should do is to teach all the new generations to protect and preserve the scarce resources there are in the world in order to guarantee enough raw materials and maintain the environment.

References:

• "YouTube - the Corporation Trailer." YouTube - Broadcast Yourself. Web. February 26/2011 http://www.youtube.com/results?search_query=the corporation trailer&aq=f.
• capitalism. (s.f.). Recuperado el 26 de 02 de 2011, de capitalism.org: http://www.capitalism.org/