If you could underline a single event in world history that could be called "the birth of capitalism", it would be the invention of the LLC by the Dutch Republi

If you could underline a single event in world history that could be called "the birth of capitalism", it would be the invention of the LLC by the Dutch Republic. Historically there has been no shortage of creditors using the long arm of the law to guard against moral hazard. Capitalism took off because of limited liability and bankruptcy law. Feudalism is an economy stuck in a local minimum because there's not enough new blood being entrusted with capital. Mix up the capital distribution a bit more, and yes there will be more business failures. But that capital will also find its way into the hands of entrepreneurs who are more skilled than the creditors. It's VC investing writ large: lose a little on most, make a lot on a few.