Couldn’t a libertarian court view an investment in a corporation as something not necessarily akin to ownership (which I agree would necessitate liability on the part of the investor, at least WRT tort liability), but rather more like a conditional loan?

In other words, I would loan Corporation X $100 on the condition that they repay me a certain amount each quarter, based on their quarterly profits. You can call that “dividends” or “interest”, but one seems to imply agency while the other does not.

Thoughts anyone?

Those who VOTE, on the other hand, give their imprimatur to the system, and so are culpable for any damage that the system produces regardless of which side they vote for (because voting is a revelation of a preference for rule by whoever controls the largest gang). Between them they’re responsible for every last red cent and every last drop of blood shed and every last piece of flesh torn off someone else’s child.

That might be viewed as tangential to the issue limited liability – except that it’s not.

Cheers

GT
GT’s Market Rant

That first sentence of mine was sloppy. That said, it was clarified by subsequent paragraphs.

As to whether a court or tribunal would grant an investor relief from having to make creditors whole simply because he was dumb enough to appoint a bad agent… sorry, I can’t see it (unless the limited liability was known by the plaintiff in advance, in which case the plaintiff can go jump… the law of contract is paramount, in my view). Any anarchist court that was prepared to extend limited liability ex post facto, would be exculpating the agent for stupid decisions… we have enough of that now.

The agency co-ordination issue is a very very very bad justification for limited liability: it rewards the abrogation of responsibility. It’s the sort of thinking that would pardon American voters for the actions of their government. I wouldn’t: if you subscribe to a thing, you are on the hook for your share of the whole of any wrong it causes, not just the value of your shareholding.

Limited liability skews investment decisions, because investors are indemnified from the bulk of leverage-related losses.

Cheers

GT
GT’s Market Rant

I don’t see why it couldn’t. An anarchist court could easily recognize that an investor who forgoes control should not suffer unlimited liability.

i have noticed the same. of course this is a consistent thread w/many ancaps who mistakenly think that the organization of firms under a freed market would remain unchanged. i have also noticed in these responses that walmart’s defenders talk of the generic “road” and not highways and there is an important distinction between the two.

I find it hard to see how limited liability companies would come to dominate a genuinely free market as they dominate our current market structure.

Sure, there would always be no end of people wanting to participate as ‘equityholders’ if they knew that they had no downside apart from their contributed capital, but leveraged exposure to gains (since the corporation can leverage up by accruing debt in its own name, and equityholders are not on the hook for the debt).

However nobody in their right mind would extend credit to a Ltd in preference to a corporation without limited liability. I guess the counter to that is that firms are obviously willing to do so in the current environment.

Cheers
GT
GT’s Market Rant