“You might think that I’m all ears, too, but I expect you’ll sniff out the truth in due course.”
But it is liability limitation that made predation normal – or at least common, to be expected – in trade. We want to do business with the butcher, the baker and the candlestick maker, but instead we wake up with fleas from Bezos, Dorsey and Zuckerberg – the law firm of all the people who didn’t read the Terms of Service.
This is me, nearly sixteen years ago:
“The essential defining characteristic of a corporation, as against other ways of organizing a business enterprise, is liability limitation, a conspiracy between the proprietors and the state to defraud tort claimants of all they might otherwise obtain in redress for their injuries. It’s pure Hamiltonian Social Engineering, Mercantilism at its worst. The idea is to encourage investment by limiting the risk. But by limiting responsibility, investment is distorted away from the individual integrity that is the sine qua non of enlightened self-interest. The limited liability corporation is the rope by which Capitalism hung itself.”
Some people are much better at particular jobs, which is how task specialization brought us the butcher, the baker and the candlestick maker. Some people are better at organizing and managing things, too, and this, also, is a talent to be exploited in the marketplace – within limits.
Liability limitation rewards investors for hiring ruthless managers. The butcher marks up cost-plus not because everyone else does it that way, too, but because friends don’t gouge friends. The baker gives you a baker’s dozen doughnuts because you take care of the people who take care of you. The candlestick maker employs your kid part-time – not because he’s worth it, but because someday soon he Read more
