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End limited liability - Open Knowledge — LiveJournal

Jun. 2nd, 2006

12:25 pm - End limited liability

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An issue that leftists and libertarians can agree on:


One of the persistent threads running through environmentalism is the notion of "Corporate Responsibility." I've been thinking through some of the issues involving how corporations are formed and how the nature of the corporation affects how the economy assesses and handles risk and I'd like to present an idea for comment and examination.

The seed of the idea is that the limited liability corporation is a government subsidy to risky investments and as such may be partly what drives the reckless attitude of corporations towards the environment. Read on for more details.


More at the WorldChanging site.

Via ernunnos.

Comments:

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From:selfishgene
Date:June 2nd, 2006 05:15 pm (UTC)
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I don't get anarchist opposition to limited liability. Suppose I operate a business which incurs some tort. The entire value of the business is not sufficient to pay restitution. The shareholder (me) is liable (assuming limited liability is forbidden). I can simply disappear with any assets I still have. To prevent this, requires government issued (unique) identity. It requires banks that respond to subpoenas. It requires a method of tracking people leaving a location (such as a passport).
The anarchists by forbidding limited liability, now have to recreate the state to make that prohibition actually work!
Limited liability partially restores a human ability to simply vanish when ones debts pile up. This ability is restricted by government registration of businesses and persons as well as border controls.
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From:ernunnos
Date:June 2nd, 2006 05:29 pm (UTC)
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Yeah, anarchism is self-refuting.
Limited liability partially restores a human ability to simply vanish when ones debts pile up.
I suppose that's a good thing if you're the kind of person who enjoys living off the labor of others. But I see no compelling reason to organize society around the desires of the predator class.
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From:bigleeh
Date:June 2nd, 2006 07:24 pm (UTC)
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I must admit I see predation as being the other way around on this. I see most corporations as a bunch of guys trying to make a buck in a world where profit is hard to come by and at any minute a horde of fast-talking yahoos in italian shoes can swoop down take away everything you own. When a corporation goes to borrow money the lender knows that the debt is guaranteed only by the resources of the company, not the resources of the stockholders, and since the lender is not coerced to lend the money the risks involved in dealing with a limited liability entity are factored into the deal...

No, wait...

I've changed my mind.

Limited liability IS bad.

And, come to think of it. We should outlaw water-tight bulkheads in ships, too. If a ship springs a leak it should just sink. I mean, a shark's gotta eat, right?
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From:ernunnos
Date:June 2nd, 2006 08:03 pm (UTC)
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Whenever I see someone crying, "Well, you should have known better than to do business with me!" I see someone who can be safely shot in the face with no loss to the world.
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From:bigleeh
Date:June 2nd, 2006 08:59 pm (UTC)
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Note to self: If I ever do business with ernunnos pay cash in advance. Or better yet, take my business somewhere else.
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From:ernunnos
Date:June 2nd, 2006 09:20 pm (UTC)
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Precisely!

If you feel you may have occasion to utter those words, then those are the same two options I'd prefer you to take as well. I love how a well-crafted policy automatically brings about a perfect meeting of the minds.

It really is a form of social and economic technology.

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From:pentomino
Date:June 2nd, 2006 07:28 pm (UTC)
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Leftists and libertarians. Two groups that have no power in the federal government.
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From:blueadept
Date:June 3rd, 2006 05:23 pm (UTC)
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Limited liability does not let wrongdoing officers and employees off the hook; only shareholders. If Joe Blow owns a share of a giant company where an exec makes the decision to dump a bunch of toxic waste in an ocean, should Mr. Blow share a jail cell with the exec and the employees who carried out the action?
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From:crasch
Date:June 3rd, 2006 07:04 pm (UTC)
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The shareholders receive profits based on the behavior of the corporate employees (which may include cost savings due to dumping toxic waste into the ociean). It seems only fair to me that they bear the liability for those actions as well.
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From:(Anonymous)
Date:June 5th, 2006 09:10 am (UTC)

limited liability

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Come over from the far right, we are not going change anything regarding subsidizing those risky investments.
The environment is in no danger, stop with the dramatics.
-Biff Romoray
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From:(Anonymous)
Date:January 27th, 2007 11:30 pm (UTC)

Thanks a lot for this great resource!

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Thanks a lot for this place, where people can leave their ideas and opinions, it's great!With the best regards!
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