Wendy McElroy writes "An aspect of the free market -- the real free market, sans government, not the wretched State capitalism of today -- that receives scant attention from libertarians is the vital role played by activist consumers and consumer advocacy groups. They are part of the feedback mechanism that makes the marketplace function well. Just as unions ((again sans government) act as a brake on bad labor practices ..." Stephan Kinsella says that corporations are valid entities, and that the problem is really the legal structure, i.e. the state.
In writing this I do not want to debate either one of them, but instead wonder, if without the state, there would be corporations, labor unions and consumer advocacy groups? I strongly suspect not. At least not in the form we recognize today. The corporation is a form of doing business that is chosen today because of the legal system that exists. Limited liability is just one feature. There is a whole legal structure that makes this kind of setup desirable. Would it be if there was no state? Or would people in a free society devise more efficient ways of organizing labor and capital?
Labor unions grew in response to abuses by the managers of corporations in a restricted labor market. If the labor market were not restricted, if there were more jobs than people to fill them, as I believe would be the case in a free economy, then the need for labor unions would vanish, even if the corporate system remained unchanged.
I also believe that consumer advocacy, as we understand it today, would be obsolete. With a wide range of goods and services, sold by a huge number of providers, people would simply not do business with providers that did not satisfy them. Add to that a legal system that provided quick relief for damages (when the parties could not settle between themselves) and you have a very different world than the one we live in today. Once again, I think that the need for this type of service would not exist. The one aspect of consumer advocacy that I see continuing is independent product testing, but that is done by many groups, not just those interested in consumer protection.
While I really do not buy Kinsella's argument regarding the legitimacy of the corporate structure, at least corporations exist for a positive purpose. To organize labor and capital to be able create value (as a general rule). So I see that function existing in a free society, much more than I see the function of labor unions and consumer advocacy. They are, by their nature, adversarial organizations. They assume that there is another side and that there will be a fight. I strongly believe that in a free society there will be far fewer adversarial relationships, especially between labor and capital or between vendors and their customers. Given this, I see much less need for these functions, as well as lawyers.