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I agree. We have this notion of creating corporations so that shareholders are not liable for anything. Maybe shareholders should be liable when they break laws

I agree. We have this notion of creating corporations so that shareholders are not liable for anything. Maybe shareholders should be liable when they break laws and kill people.

rayiner 8y ago
The corporation can be charged as an entity itself, independent of any shareholder or executive: https://en.wikipedia.org/wiki/List_of_companies_convicted_of_felony_offenses_in_the_United_States https://en.wikipedia.org/wiki/List_of_companies_convicted_of...
- mcculley 8y ago
  I understand that. In those cases, the only negative impact to shareholders is potentially losing money. Maybe shareholders should have more responsibility.
  - SolarNet 8y ago
    This destroys capitalism, you can't move the criminal risk to the shareholders. Increased monetary risk, sure: like corporations convicted of crimes have to give money in restitution before making shareholders whole; or even go the next step and make major shareholders liable for covering that restitution (if it exceeds assets on hand) in addition to eating the loss of stock. But for capitalism to function, investing must only lead to monetary penalties (but we could certainly make them stronger). If you have to, move it to executives, it could actually justify the insane salaries and bonuses.
    - mcculley 8y ago
      I am not convinced that investors having more skin in the game would destroy capitalism. Maybe it would destroy our local interpretation of capitalism. Maybe that is a good thing.
    - zipwitch 8y ago
      An objective debate over the future of capitalism is something our society needs.
    - Symmetry 8y ago
      No, this is the system we used to have in the robber baron era and it functioned. It just leads to the concentration of control of large enterprises in the hands of individuals and small groups.
  - mcculley 8y ago
    I'm amused by the downvotes for a controversial question. Check out http://paulgraham.com/say.html http://paulgraham.com/say.html
    - ericd 8y ago
      It's not that it's controversial, it's just that it's not a workable idea, or at least you haven't proposed any way to make it workable. That article, if I recall correctly, is about cultural taboos. I don't think this is one of those. Stepping up the level of fines and corporate penalties to be greater than the expected gains from bad behavior is a much more workable solution. Companies were much more careful to not act too monopolistically when the government was in full trust busting mode.
      - mcculley 8y ago
        You don't think it is a cultural taboo here on HN to question the wisdom of unfettered libertarian, free market entrepreneurship? Yes, the fines should probably be increased and enforced. But if I, as an investor, decide to put $10 into Uber, I only risk my $10 if Uber kills more people and breaks more laws. It seems to me I should have more responsibility than that for encouraging such behavior.
  - gnode 8y ago
    Should the pensioners whose pensions are invested in index funds be sent to jail for Uber's actions? Where would this culpability end?
    - mcculley 8y ago
      I don't know. I have wondered that as well. We currently have a system where the most wealthy benefit and have no skin in the game. That seems wrong to me. I welcome any solution that makes people think about the entities they support.
- isostatic 8y ago
  Great, so do those shareholders all get criminal records?
  - mcculley 8y ago
    Maybe they should. The executives of Uber have the tacit approval of the investors.
skocznymroczny 8y ago
Corporation, n. An ingenious device for obtaining individual profit without individual responsibility.
- Spivak 8y ago
  Until it isn't. If you can show that willful negligence on the part of specific individuals then a suit against them directly can go through.
Spivak 8y ago
Limited liability. If you can show that specific shareholders were willfully negligent then you can go after them directly.
- mcculley 8y ago
  That is not how it appears to function in practice. The investors of Uber are well aware that Uber is breaking laws. They are making a perfectly rational decision that it will pay off.
  - mmt 8y ago
    > investors of Uber are well aware That's an extraordinarily huge presumption to make about someone, especially, in practice, an "investor" isn't even a natural person. Moreover, the "person" who owns the shares may not be the one who made the purchase decision, such as with venture capital, hedge funds, and mutual funds [1]. Even an individual, natural person may buy a particular stock based purely on financials, or even just price (such as day traders). No awareness of business practices is necessary. Then there's short-selling. Who owns those shares, at which point in time? Most of these questions (ownership, not purchase decision responsibility) do need to have an answer for the purpose of corporate voting, but only occasionally and not to determine criminal liability for an arbitrary point in time. The latter would be remarkably impractical, if not unfair. [1] Assuming one pierces that "veil" of ownership
    - mcculley 8y ago
      At the bottom of those chains of ownership are individual humans. Our systems of law and commerce should serve people, not the other way around. My understanding is that Uber is privately held, mostly by venture capitalists who expect it to increase in value once it monopolizes the market. We are not talking about a publicly held, well-governed organization.
YouAreGreat 8y ago
> shareholders should be liable when they break laws and kill people Shareholders shouldn't (unless there's clear mens rea, such as when they set up the corporation in order to break laws) but officers of the corporation should, and probably already are.

I agree. We have this notion of creating corporations so that shareholders are not liable for anything. Maybe shareholders should be liable when they break laws and kill people.

rayiner 8y ago

The corporation can be charged as an entity itself, independent of any shareholder or executive: https://en.wikipedia.org/wiki/List_of_companies_convicted_of_felony_offenses_in_the_United_States https://en.wikipedia.org/wiki/List_of_companies_convicted_of...

mcculley 8y ago
I understand that. In those cases, the only negative impact to shareholders is potentially losing money. Maybe shareholders should have more responsibility.
- SolarNet 8y ago
  This destroys capitalism, you can't move the criminal risk to the shareholders. Increased monetary risk, sure: like corporations convicted of crimes have to give money in restitution before making shareholders whole; or even go the next step and make major shareholders liable for covering that restitution (if it exceeds assets on hand) in addition to eating the loss of stock. But for capitalism to function, investing must only lead to monetary penalties (but we could certainly make them stronger). If you have to, move it to executives, it could actually justify the insane salaries and bonuses.
  - mcculley 8y ago
    I am not convinced that investors having more skin in the game would destroy capitalism. Maybe it would destroy our local interpretation of capitalism. Maybe that is a good thing.
  - zipwitch 8y ago
    An objective debate over the future of capitalism is something our society needs.
  - Symmetry 8y ago
    No, this is the system we used to have in the robber baron era and it functioned. It just leads to the concentration of control of large enterprises in the hands of individuals and small groups.
- mcculley 8y ago
  I'm amused by the downvotes for a controversial question. Check out http://paulgraham.com/say.html http://paulgraham.com/say.html
  - ericd 8y ago
    It's not that it's controversial, it's just that it's not a workable idea, or at least you haven't proposed any way to make it workable. That article, if I recall correctly, is about cultural taboos. I don't think this is one of those. Stepping up the level of fines and corporate penalties to be greater than the expected gains from bad behavior is a much more workable solution. Companies were much more careful to not act too monopolistically when the government was in full trust busting mode.
    - mcculley 8y ago
      You don't think it is a cultural taboo here on HN to question the wisdom of unfettered libertarian, free market entrepreneurship? Yes, the fines should probably be increased and enforced. But if I, as an investor, decide to put $10 into Uber, I only risk my $10 if Uber kills more people and breaks more laws. It seems to me I should have more responsibility than that for encouraging such behavior.
- gnode 8y ago
  Should the pensioners whose pensions are invested in index funds be sent to jail for Uber's actions? Where would this culpability end?
  - mcculley 8y ago
    I don't know. I have wondered that as well. We currently have a system where the most wealthy benefit and have no skin in the game. That seems wrong to me. I welcome any solution that makes people think about the entities they support.
isostatic 8y ago
Great, so do those shareholders all get criminal records?
- mcculley 8y ago
  Maybe they should. The executives of Uber have the tacit approval of the investors.

skocznymroczny 8y ago

Corporation, n. An ingenious device for obtaining individual profit without individual responsibility.

Spivak 8y ago
Until it isn't. If you can show that willful negligence on the part of specific individuals then a suit against them directly can go through.

Spivak 8y ago

Limited liability. If you can show that specific shareholders were willfully negligent then you can go after them directly.

mcculley 8y ago
That is not how it appears to function in practice. The investors of Uber are well aware that Uber is breaking laws. They are making a perfectly rational decision that it will pay off.
- mmt 8y ago
  > investors of Uber are well aware That's an extraordinarily huge presumption to make about someone, especially, in practice, an "investor" isn't even a natural person. Moreover, the "person" who owns the shares may not be the one who made the purchase decision, such as with venture capital, hedge funds, and mutual funds [1]. Even an individual, natural person may buy a particular stock based purely on financials, or even just price (such as day traders). No awareness of business practices is necessary. Then there's short-selling. Who owns those shares, at which point in time? Most of these questions (ownership, not purchase decision responsibility) do need to have an answer for the purpose of corporate voting, but only occasionally and not to determine criminal liability for an arbitrary point in time. The latter would be remarkably impractical, if not unfair. [1] Assuming one pierces that "veil" of ownership
  - mcculley 8y ago
    At the bottom of those chains of ownership are individual humans. Our systems of law and commerce should serve people, not the other way around. My understanding is that Uber is privately held, mostly by venture capitalists who expect it to increase in value once it monopolizes the market. We are not talking about a publicly held, well-governed organization.

YouAreGreat 8y ago

> shareholders should be liable when they break laws and kill people Shareholders shouldn't (unless there's clear mens rea, such as when they set up the corporation in order to break laws) but officers of the corporation should, and probably already are.