The trouble with limited liability... it isn't a 'free market' concept.

[RobinFinderson]

There is nothing preventing each of the parties from taking on a corporate form to limit their liabilities. The problems occur when government steps in and says Party A's debts are guaranteed and Party B's debts are not, or something similar. If both are afforded the same protections and incentives under the law, then there is no lawmaker-induced market advantage.

My primary issue with limited liability is not the advantages that it might confer to one party over another, though I mentioned it, and I consider it to be a valid secondary concern (perhaps one that could be resolved by inventing a single, scalable organizational structure for all businesses, something that confers the same basic privileges to all, but requires different levels of accounting based on thresholds of public ownership and scale... I don't know, I'm just taking a stab in the dark here). My issue is with how it skews the assessment of risk and reward, leaving the public to pay for damages exceeding the limits of liability. Limited liability allows entities to reap the rewards of risk, but leaves the public holding the bag when things go south.

[creekster]

My primary issue with limited liability is not the advantages that it might confer to one party over another, though I mentioned it, and I consider it to be a valid secondary concern (perhaps one that could be resolved by inventing a single, scalable organizational structure for all businesses, something that confers the same basic privileges to all, but requires different levels of accounting based on thresholds of public ownership and scale... I don't know, I'm just taking a stab in the dark here). My issue is with how it skews the assessment of risk and reward, leaving the public to pay for damages exceeding the limits of liability. Limited liability allows entities to reap the rewards of risk, but leaves the public holding the bag when things go south.

To be clear, you are talking about liabilities for damages caused by personal injury or property damage to third parties, as opposed to economic losses?

[Jacob]

Perhaps the title of this thread should be changed to:
Limited liability, while well-established principle in market economies, has created some negative consequences to the public and customers of corporations. Such negative consequences may or may not be outweighed by the positive consequences of the creation of the corporate form.

Then Robin could argue that the negatives outweigh the positives to society and everyone else could argue why that isn't the case.

Plus we would all finally understand what he is talking about.

[RobinFinderson]

To be clear, you are talking about liabilities for damages caused by personal injury or property damage to third parties, as opposed to economic losses?

Since property damage is a kind of economic loss, I don't understand your question.

[RobinFinderson]

Perhaps the title of this thread should be changed to:
Limited liability, while well-established principle in market economies, has created some negative consequences to the public and customers of corporations. Such negative consequences may or may not be outweighed by the positive consequences of the creation of the corporate form.

Then Robin could argue that the negatives outweigh the positives to society and everyone else could argue why that isn't the case.

Plus we would all finally understand what he is talking about.

There are lots of 'well-established principles in market economies' that are also deemed to be 'anti-capitalist' and 'anti-free market.' I'm often amused by how some conservatives pick and choose among these 'well-established principles' when they make their case. When you point out that government involvement in markets has basically existed as business consideration for centuries, you will typically hear, "But that isn't really capitalism and the free market,' thus rendering both the capitalist and free market concepts as unattainable ideals. So regulation is bad, and limited liability is good, even though they are both 'well-established principles in market economies.' The primary primary consistency seems to be a 'pro-corporate' agenda, rather than any ideological consistency about 'free markets' and 'capitalism.'

[Pelado]

My primary issue with limited liability is not the advantages that it might confer to one party over another, though I mentioned it, and I consider it to be a valid secondary concern (perhaps one that could be resolved by inventing a single, scalable organizational structure for all businesses, something that confers the same basic privileges to all, but requires different levels of accounting based on thresholds of public ownership and scale... I don't know, I'm just taking a stab in the dark here). My issue is with how it skews the assessment of risk and reward, leaving the public to pay for damages exceeding the limits of liability. Limited liability allows entities to reap the rewards of risk, but leaves the public holding the bag when things go south.

How are you defining "the public?" In which cases would you argue that the public has been left to pay for damages?

[creekster]

Since property damage is a kind of economic loss, I don't understand your question.

Well confusion seems to be a guiding principle of this thread so welcome aboard.

Economic loss may result from property damage, but property damage is not economic loss. Falling value of stocks, or falling value of property is an economic loss. Having your car smashed so that it loses value is property damage that results in an economic loss. The economic component measures the value of the damage, but the damage is to tangible property.

I am trying to understand what the hell you are talking about, is all., Do you mean losses like the greater risks of pooled capital allow fro greater losses that the public sometimes ends up shouldering? Or do you mean that a liability based on personal ionjury or property damage sometimes exceeds the ability of a corporation to pay?

Meh, you guys are all above me anyway. Nevermind.

[Pelado]

Well confusion seems to be a guiding principle of this thread so welcome aboard.

Economic loss may result from property damage, but property damage is not economic loss. Falling value of stocks, or falling value of property is an economic loss. Having your car smashed so that it loses value is property damage that results in an economic loss. The economic component measures the value of the damage, but the damage is to tangible property.

I am trying to understand what the hell you are talking about, is all., Do you mean losses like the greater risks of pooled capital allow fro greater losses that the public sometimes ends up shouldering? Or do you mean that a liability based on personal ionjury or property damage sometimes exceeds the ability of a corporation to pay?

Meh, you guys are all above me anyway. Nevermind.

Don't feel too bad. You are a monkey, after all.

[creekster]

Don't feel too bad. You are a monkey, after all.

It's an ape.

[Pelado]

It's an ape.

Says the monkey.

[Moliere]

I don't think RF hates the concept of limited liability. I think he just doesn't like the fact that Republicans talk about loving a "free market" but then they also think regulation or limitations on it are a good idea as well. Of course it helps his argument when he paints all Republicans as free market loving, Ayn Rand worshipping monkeys apes.

[Green Monstah]

I think you'd be hard-pressed to find an intelligent Republican who thinks that the markets should be 100% unfettered.

[Jacob]

There are lots of 'well-established principles in market economies' that are also deemed to be 'anti-capitalist' and 'anti-free market.' I'm often amused by how some conservatives pick and choose among these 'well-established principles' when they make their case. When you point out that government involvement in markets has basically existed as business consideration for centuries, you will typically hear, "But that isn't really capitalism and the free market,' thus rendering both the capitalist and free market concepts as unattainable ideals. So regulation is bad, and limited liability is good, even though they are both 'well-established principles in market economies.' The primary primary consistency seems to be a 'pro-corporate' agenda, rather than any ideological consistency about 'free markets' and 'capitalism.'

I have no idea what your point is. You are creating interesting straw men though.

[Viking]

The invention of limited liability has definitely greased the wheels of economic development, and is a defining characteristic of corporations, but it isn't a 'free market' concept. In fact it is just the opposite. 'Limited liability' is just another way of saying 'limited accountibility,' and that means that people can take bigger risks with smaller consequences for failure. It significantly changes human behavior.

Shut up, Donny. You're out of your element.

[Viking]

The invention of limited liability has definitely greased the wheels of economic development, and is a defining characteristic of corporations, but it isn't a 'free market' concept. In fact it is just the opposite. 'Limited liability' is just another way of saying 'limited accountibility,' and that means that people can take bigger risks with smaller consequences for failure. It significantly changes human behavior.

Shut up, Donny. You're out of your element.