4 ms·

Do you understand the concept of limited liability?

by woah 8y ago

perfmode 8y ago
I believe this is precisely the concept under critique.
throwaway5752 8y ago
They clearly don't, and obviously don't understand why it exists. Nothing interesting would be possible without it. Nobody on Earth would be a C-level executive if they had criminal liability for all their employees. I sometimes think that people that want to end it have never been in charge of anything nontrivial and have no idea how terrible the consequences of ending it would be.
- perfmode 8y ago
  How do you propose we address the problems we face?
  - throwaway5752 8y ago
    Per my earlier comment (https://news.ycombinator.com/item?id=18657024 https://news.ycombinator.com/item?id=18657024) regulating and enforcing regulations. This already exists, and when not deregulated or captured, works well. There is no magic system that removes the human element to this, and the cost here is a vigilant population that holds elected officials responsible and doesn't allow deregulation or regulatory capture. There is no possible solution to this that works absent a population that doesn't consider it important. This is exemplified in jurisdictions where police turn a blind eye because so-and-so is the son of so-and-so and it's tolerated. Criminal liability (vs limited liability and corporate regulation) for executives is just as weak and has large unintended consequences.
- aphextron 8y ago
  >They clearly don't, and obviously don't understand why it exists. Nothing interesting would be possible without it. Nobody on Earth would be a C-level executive if they had criminal liability for all their employees. I sometimes think that people that want to end it have never been in charge of anything nontrivial and have no idea how terrible the consequences of ending it would be. Well perhaps those things should be illegal or made untenable. If you are publicizing risks in such a way that you are privately profiting from the public endangerment, you really don't have any moral or legal right to that money. Yet here we are again in a situation where people are killed, an executive says "we're sorry", and they continue pocketing the money.
aphextron 8y ago
>Do you understand the concept of limited liability? I sure do. But I didn't when I was younger, growing up as a member of the lower class never exposed to business. That's why I find it so appalling. The concept of being able to run a business into the ground, maxing out debt, ignoring all reality while paying yourself a paycheck, then just walking away from it in bankruptcy and doing it again is just mind blowing to the blue collar, working class mentality. There's a whole class of people in our society who may or may not provide any benefit, but nevertheless get by making vast sums of money and working in prestigious high paying jobs who have no concept whatsoever of what it means to work for a living is like. The whole system is completely rigged against anyone who doesn't meet that threshold, and I'm increasingly convinced that this is the entire basis of capitalism.
- marcoperaza 8y ago
  Limited liability is as important to the little guy as anyone else. If you want to open your own store, start your own carpentry business, or run your own taxi, then you should form some kind of business entity with limited liability, such as an LLC. That way, if it turns out that a product you sold is defective and hurts someone, if a staircase you built collapses on someone, or if you get into a car accident, you're only personally on the hook for whatever you invested into the business, not everything you're worth.
  - brokenmachine 8y ago
    I'm just a dumb worker, but I would like business owners to be forced to do their absolute best to avoid making dangerous collapsing staircases. I don't know how it would work, I guess they'd have to pay for more insurance. But it seems that the way it is now, everyone has to pay for their ability to move fast and break things. Just throwing ideas around, my economics knowledge is rudimentary at best.
    - marcoperaza 8y ago
      We all benefit from innovation and risk-taking. The advances and comforts of modern society would be impossible without the risk imposed by factories, machinery, and so forth. If starting or joining a business venture meant putting everything you're worth on the line in the case that one employee is negligent, then no sane person would do it. When limited liability is abused, such as when a corporations are undercapitalized[1], then courts can "pierce the corporate veil" and hold its owners personally liable for judgments against the company. [1] Undercapitalization is when not enough assets are kept in the business to pay for its debts or reasonably expected liabilities.

Do you understand the concept of limited liability?

by woah 8y ago

Do you understand the concept of limited liability?

perfmode 8y ago

I believe this is precisely the concept under critique.

throwaway5752 8y ago

They clearly don't, and obviously don't understand why it exists. Nothing interesting would be possible without it. Nobody on Earth would be a C-level executive if they had criminal liability for all their employees. I sometimes think that people that want to end it have never been in charge of anything nontrivial and have no idea how terrible the consequences of ending it would be.

perfmode 8y ago
How do you propose we address the problems we face?
- throwaway5752 8y ago
  Per my earlier comment (https://news.ycombinator.com/item?id=18657024 https://news.ycombinator.com/item?id=18657024) regulating and enforcing regulations. This already exists, and when not deregulated or captured, works well. There is no magic system that removes the human element to this, and the cost here is a vigilant population that holds elected officials responsible and doesn't allow deregulation or regulatory capture. There is no possible solution to this that works absent a population that doesn't consider it important. This is exemplified in jurisdictions where police turn a blind eye because so-and-so is the son of so-and-so and it's tolerated. Criminal liability (vs limited liability and corporate regulation) for executives is just as weak and has large unintended consequences.
aphextron 8y ago
>They clearly don't, and obviously don't understand why it exists. Nothing interesting would be possible without it. Nobody on Earth would be a C-level executive if they had criminal liability for all their employees. I sometimes think that people that want to end it have never been in charge of anything nontrivial and have no idea how terrible the consequences of ending it would be. Well perhaps those things should be illegal or made untenable. If you are publicizing risks in such a way that you are privately profiting from the public endangerment, you really don't have any moral or legal right to that money. Yet here we are again in a situation where people are killed, an executive says "we're sorry", and they continue pocketing the money.

aphextron 8y ago

>Do you understand the concept of limited liability? I sure do. But I didn't when I was younger, growing up as a member of the lower class never exposed to business. That's why I find it so appalling. The concept of being able to run a business into the ground, maxing out debt, ignoring all reality while paying yourself a paycheck, then just walking away from it in bankruptcy and doing it again is just mind blowing to the blue collar, working class mentality. There's a whole class of people in our society who may or may not provide any benefit, but nevertheless get by making vast sums of money and working in prestigious high paying jobs who have no concept whatsoever of what it means to work for a living is like. The whole system is completely rigged against anyone who doesn't meet that threshold, and I'm increasingly convinced that this is the entire basis of capitalism.

marcoperaza 8y ago
Limited liability is as important to the little guy as anyone else. If you want to open your own store, start your own carpentry business, or run your own taxi, then you should form some kind of business entity with limited liability, such as an LLC. That way, if it turns out that a product you sold is defective and hurts someone, if a staircase you built collapses on someone, or if you get into a car accident, you're only personally on the hook for whatever you invested into the business, not everything you're worth.
- brokenmachine 8y ago
  I'm just a dumb worker, but I would like business owners to be forced to do their absolute best to avoid making dangerous collapsing staircases. I don't know how it would work, I guess they'd have to pay for more insurance. But it seems that the way it is now, everyone has to pay for their ability to move fast and break things. Just throwing ideas around, my economics knowledge is rudimentary at best.
  - marcoperaza 8y ago
    We all benefit from innovation and risk-taking. The advances and comforts of modern society would be impossible without the risk imposed by factories, machinery, and so forth. If starting or joining a business venture meant putting everything you're worth on the line in the case that one employee is negligent, then no sane person would do it. When limited liability is abused, such as when a corporations are undercapitalized[1], then courts can "pierce the corporate veil" and hold its owners personally liable for judgments against the company. [1] Undercapitalization is when not enough assets are kept in the business to pay for its debts or reasonably expected liabilities.