Yaron Answers: Bankruptcy Laws

Yaron Brook answers a question from Jason: “Would bankruptcy laws exist in a laissez-faire capitalist society?” www.laissezfaireblog.com.

http://www.florida-bankruptcy-laws.net – If you are considering declaring bankruptcy, you want to watch this video first. Learn the pros and cons of filing f…

14 thoughts on “Yaron Answers: Bankruptcy Laws

  1. Corporations are operated by people. They are vehicles. I say that business transactions between people are moral and business transactions with cars, buses and tanks is moral corruption.

  2. Corporations are individuals relating to each other in a certain way. Corporations are not a transcendent God.

  3. It is also the duty of BOTH parties to a contract to exercise “due diligence.” If engage in a contract w/an entity I should have known was unable to meet their obligation, well shame on me. People become irresponsible and dumbed-down when government stands at the ready to rescue everyone for their own folly [at taxpayer’s expense…of course!]

  4. Fulfilling the obligations of a contract has nothing to do with respecting the terms of that contract.

  5. Bankruptcy creates a dispute. Who gets the assets? And the court system handles disputes. A similar dispute would arise when your rich Aunt Sally dies–the court examines the will and decides who gets what. This prevents the loudest, or most intimidating, recipient from pressuring the others in order to get more than he deserves.

  6. I don’t even think corporations would exist in a free market. They’re a form of government preference. The free-market way to organize a business would be through contracts only. As for bankruptcy, it is anti-market and anti-contract to have a system where you can discharge your debts simply by not having enough money to repay them. In a free market, the contract would remain in force. In practice, many people would compromise. But legally they shouldn’t have to.

  7. I can understand situations where you knowingly sign a contract that you cannot maintain, or where you lie in order to get a contract, as being initiations of force. But is force initiated if you are simply incapable of fulfilling the contract, through no fault of your own?

  8. You mean a collective societal concept.

    Individuals not working for themselves but toward a “common good”

  9. Looking at this objectively, would it not be immoral to do business with corporations instead of individuals.

  10. If John Thomas has his name over the door, then John Thomas is responsible for the financial position of his business and personal honor.
    John Thomas is accountable for and can speak for, his actions.

    If John Thomas Corporation is bankrupt. Who is responsible? No ONE man but a mere fiction of one (a concept)

    John Thomas works for John Thomas (self-orientated actual)
    The John Thomas Corporation works as a co-operation for a corporation (a self-less concept ).

  11. Dr Brooks, None of that explains what it is about Government that makes it suited to handle bankruptcies. You do mention the argument that it sets standards, but standards can be set by convention, not necessarily needing the monopoly user of retaliatory force. The Gov’t presents itself because I, as the bankrupt individual, have initiated force by not respecting my contracts. I have rendered a disvalue, which must be objectively prioritized among and over many hurt parties.

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