Home > Uncategorized > It’s a rachet, and racket: State-made limited liability corporations are the health of the massive Regulatory State

It’s a rachet, and racket: State-made limited liability corporations are the health of the massive Regulatory State

[from a Facebook post]

State-made limited liability corporations are the health of the massive Regulatory State, which is likewise the health of the crony corporations. It’s a rachet, and racket.

Are you a Bootlegger, or a Baptist?

In free, voluntary markets, there is no Get-Out-of-Personal-Liability-for-Harms-Caused-to-Others-Free Card.

Limited liability for shareholders is a state-granted favor that is demonstrably at the bottom of the dynamic of people forever running to a gamed “democratic” government, to make government make its creations behave more nicely (with the regulations then serving to protect the big, to limit competition, and to fuel corruption and further government capture). As soon as governments began creating corporate monopolies and/or limited liability cos, then judges followed suit by rejecting strict common-law protections of private property in favor of a pollution-/corporation-favoring “balance” of equities that Block and Rothbard noted.

In a private law society, one finds ALWAYS individuals and associations of individuals who may negotiate liability caps with voluntary counterparties, but remain potentially personally liable up to the remainder of their personal assets for harms that their activities (and those of their agents) caused to others.

While the persons who actually directly caused harms would of course be liable, their principals would try to limit their own potential exposure by either closely managing their agents or making sure that others were independent contractors.

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