Ok, let's see if I can keep up with responses - to be honest I didn't expect this question to take off like it has but the result is, IMHO, excellent!

First, I need to go back and qualify what viewpoint my questions/comments are coming from. I do not belive it is possible to have a free society under our current form of government in any way, shape, or form - that statement has nothing to do with our Constitution. Our current government and Constitution are two separate beings at this point in time. My original question was posed with the assumption of a new and independent entity/society entirely separate from our current one.
On the issue of incorporation, having the state be involved in granting charter is against the concept of a "free" market.
Jason -
"No, that's not really true. The government regulated them because the government likes regulation, and politicians like to demagogue against "evil corporations." Of course there have been abuses, but these can be handled by the tort system if they are truly cases of violations of rights."
Not our current tort system - unless you plan on giving tort law a whole new identity and purpose. You cannot "fine" a multi-national, multi-billion dollar corporation into compliance - unless you plan on allowing insane levels of monetary compensation to be handed out. Lawsuits against these large corporations are a way of doing business. They pay their fine, pass the cost onto consumers or stock holders, and keep on going without batting an eye. That's business under limited liability.
"The market system is the only effective way to discipline corporations."
If it were only that easy.
"When corporations pursue their business honestly, as most of them do, they generate huge benefits for the economy."
Do they benefit the economy - or themselves? When corporations such as Nike spend $5 on labor and material in a third world country and then sell their product for $100 in a first world country - who benefits? Certainly not the first world country.. Nike is the ultimate beneficiary with the third world country coming in way down the line a very meager second.
Your concept of a free market regulating everything necessitates a closed economy - reality says otherwise.
"What's your alternative: socialism?"
First, I have not been sarcastic with you - I expect the same measure of respect in return.
I must say though - dumping the responsibility of corporate regulation on the tort system (as they both currently function) would be a very close cousin to socialism - only a different branch of the government would be taking from the rich and giving to the poor.
"Err, a better question is, How could banning a stock market be compatible with a free society? The stock market is a wonderful example of free trade in action."
Is it really free trade in action? Here is a question for you: The market has lost a few TRILLION dollars over this past year - where has the money gone? Money, once created, does not just disappear - it has to go somewhere. What's happened to it?
Was the stock market designed to build capital - or strip it?
JD