SOURCE: Bloomberg Echoes
Robert E. Wright is the Nef Family Chair of Political Economy at Augustana College in South Dakota and the author of “Corporation Nation,” which will be published in December by the University of Pennsylvania Press.The uproar over allegations of politically motivated investigations by the Internal Revenue Service shouldn’t be surprising given Americans’ long love affair with nonprofits and their strong disdain of partisanship, especially within bureaucracies.After independence, and especially after ratification of the Constitution, Americans began forming businesses, charities and other associations at unprecedented rates. Unshackled from British law and the threat of monarchical tyranny, they sought to invest in long-term stability, and in each other, in ways that required the establishment of large and lasting organizations.To create these institutions, early Americans adapted corporate laws from Britain. At first, incorporation required both for-profit and nonprofit organizations to obtain a charter from state governments. Charters were special laws passed by state legislatures and signed by governors under the rules of state constitutions.
by Robert E. Wright
Denarius of Sabina Augusta, Roman Republic era. Credit: Dartmouth College.Today, legislators facing budget deficits must decide the degree to which to cut spending, increase taxes, or borrow. All three can have negative effects on the economy and legislators’ individual prospects for re-election. Gridlock has resulted on more than one occasion.Until a few centuries ago, governments regularly resorted to additional fiscal techniques. One was to pillage other countries. That does not work well anymore because most wealth today takes the form of flighty human capital, not easily appropriated physical stuff. Moreover, wars have grown too expensive and too destructive to make them paying propositions.
by Robert E. Wright
Credit: Flickr/Inheritance magazine.
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