The trade of a joint stock company is always managed by a court of directors. This court, indeed, is frequently subject, in many respects, to the control of a general court of proprietors. But the greater part of those proprietors seldom pretend to understand any thing of the business of the company; . . . give themselves no trouble about it, but receive contentedly such half year or yearly dividend, as the directors think proper to make to them. This total exemption from trouble and from risk, . . encourages many people to become adventurers . . . who would, upon no account, hazard their fortunes in any private company.
The directors of such companies, however, being the managers rather of other peopleʹs money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. . . Negligence and profusion therefore, must always prevail, more or less, in the management of the affairs of such a company.
Thursday, July 23, 2009
Adam Smith explains government run health care
From The Wealth of nations, 1776