The thing is, Krugman is still pointing out one of the major criticisms against corporations. Their top executives make bad decisions and put their own goals ahead of the company's based on the fact that they're playing with other peoples' money. How many of these types would be willing to do this with their own money?

If left to their own devices (read: without bailouts, artificially cheap credit or legal favoritism), corporations would function like any other agents of the free market, subjected to profit and loss.

Corporations are not hive minds in the same sense that any other organization is not. A mind is an attribute of the individual; a corporation is nothing but an organizational framework.

What other agents of the free market? Corporations are the free market.

And I think most group psychologists would dispute the idea that groups don't take on hive-mind-like qualities.

Individual households, small business, and the government are all actors in the free market that are within the same ballpark as corporations. And any of these is quite capable of forming hiveminds too - as do individual government departments, charitable organizations, political parties, labor unions, professional associations, and internet discussion forums.

I would say corporations are a creature of the tax system, at least in part. When individuals trade, every transaction is taxed. When people in a corporation trade, its not taxed until the results are traded with some other entity. There is some incentive to get under an organizational umbrella.

There are other agents in the free market other than corporations. Anyone that is working for one is actually agent in the free market. They trade their labor with the corporation and the cash they get with hundreds of other agents.

In some alternate universe, maybe. But that's not how it works where I live.

Krugman has a long history of linking economics and science fiction:

http://krugman.blogs.nytimes.com/2008/05/04/economic-science...

Psychohistory never made sense either.

The key feature of a corporation besides limited liability is the nearly unmanageable principal-agent relationship between shareholders and managers. It's kind of amazing to me that a structure where shareholders lose to managers so consistently is the structure of choice.

Most corporations should be distinguished from banks, since the banks actually managed to acquire a put option for the bank itself, doubling the leverage of management. The really striking thing is witnessing the monetization of that put although it really shouldn't be too surprising, since virtually the same thing happened in the 80's with the S&L industry.

All the hive mind/group think stuff can and does happen in any organization where leaders need to persuade followers. Not as "new" as you might think.

Heh, 'bout time someone pointed out the other key feature of a (public) corporation. Plus I like the idea of banks having a 'put option' on themselves. Glad to see at least some people manage a level-headed assessment of the economic situation now -- e.g. as opposed to others who in light of corporations' success in the arena immediately start a religion around worshipping the idea of a corporation, Y combinator included.

Its not amazing that those creating an enterprise would use the structure most advantageous to them. Or that investors would pick investments run by people capable of seeking advantage.

Submitted two days ago, and gained no comments and no upvotes: http://news.ycombinator.com/item?id=1993348

Timing of submissions and luck are critical in getting noticed. I find that frustrating.

Inventing new words, like "kleptocracy" to bitch about The Man is for d-bags, UNLESS you're Paul Erdös. Erdös Krugman is not. I rest my case.

Can we please nix this print version linking?