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Do you feel the same way about the limited liability offered to investors in corporations? After all, if they don't want financial risk, they should just not in

Do you feel the same way about the limited liability offered to investors in corporations? After all, if they don't want financial risk, they should just not invest in anonymous businesses that they don't have any control over. Which obviously I'm being oblique, but of course the government should do things that ensure corporations benefit society, because that's why government has regulations to encourage their formation, for the benefits they can bring.

_heimdall 3y ago
> Do you feel the same way about the limited liability offered to investors in corporations? I think you meant this a bit facetious, but yes I do feel similarly there. I don't expect investors to he held liable for internal decisions made by companies, but absolutely if an investor doesn't want the financial risk they shouldn't invest. I'd argue that we only have those liability protections to keep people investing, without that our monetary system crumbles. > of course the government should do things that ensure corporations benefit society That only seems necessary if society has become so large and outsourced that we can reasonably make impactful decisions as consumers. Consumers should be close enough to the companies that they invest in or work with to know generally what that company does. You obviously don't need to know all the details, but at least enough to know that you generally think they're on the up and up, and if not you just take your business elsewhere. The necessity of government involvement, in my opinion, means that a society and the lives of it's citizens has gotten much to complex, and is ultimately then much too fragile.
- maxerickson 3y ago
  So the regulation protecting the monetary system is good and the regulation restricting corporations is bad? Got it.
  - _heimdall 3y ago
    Both are bad in my opinion. We shouldn't have a need regulation to protect our money, that'd a sign that the money itself isn't sound and the system is too fragile.
  - zeroonetwothree 3y ago
    The first one is not a “regulation” in the normal meaning of the word because it doesn’t restrict the actions of private individuals, but rather the government (in this case the courts). Usually we call things that restrict the power of the government “rights” not “regulations”.
    - maxerickson 3y ago
      If a business harms me, those laws prevent me from seeking restoration from the investors.
- UncleEntity 3y ago
  > I don't expect investors to he held liable for internal decisions made by companies... But they are liable up to and including the total amount of their investment. Some may say that this is to enable people to pool their resources to accomplish goals that are beyond what the individuals can accomplish on their own without losing everything if their plans go awry, best laid plans of mice and men and all that...
  - _heimdall 3y ago
    > But they are liable up to and including the total amount of their investment. That's how it should be! I don't think I explained myself well there. I was thinking specifically of legal concerns. If a company breaks the law, I wouldn't expect investors to be held criminally liable unless they reasonably knew what was done. I would expect them to be financially liable if the company value falls and their investment loses value. How are investments supposed to work if the upside is unlimited but the downsides are mitigated by regulation? Investing is a risk, effectively gambling. You should expect that anything you put in can be lost.
    - maxerickson 3y ago
      The downside in your scenario is limited by regulation! It's hilarious that limited liability is an obvious assumption for how the world should work and then telling companies that they don't get to offer high interest unsecured loans that also have punitive fees is some kind of perilous overreach.
      - _heimdall 3y ago
        > It's hilarious that limited liability is an obvious assumption I must have gotten myself lost if my comments read as though I was arguing that limited liability is a good thing. I guess if you consider limiting investor liability to criminal activity they were aware of, that's some form of limited liability. But I don't agree that liability should be limited even when someone is, or can be, aware if the risks they sign up for. I'm not saying anyone should tell companies they can't offer high interest unsecured loans - I'm only saying that consumers don't have to take the loans.
nonethewiser 3y ago
Then why allow interest and late fees at all then?

_heimdall 3y ago

> Do you feel the same way about the limited liability offered to investors in corporations? I think you meant this a bit facetious, but yes I do feel similarly there. I don't expect investors to he held liable for internal decisions made by companies, but absolutely if an investor doesn't want the financial risk they shouldn't invest. I'd argue that we only have those liability protections to keep people investing, without that our monetary system crumbles. > of course the government should do things that ensure corporations benefit society That only seems necessary if society has become so large and outsourced that we can reasonably make impactful decisions as consumers. Consumers should be close enough to the companies that they invest in or work with to know generally what that company does. You obviously don't need to know all the details, but at least enough to know that you generally think they're on the up and up, and if not you just take your business elsewhere. The necessity of government involvement, in my opinion, means that a society and the lives of it's citizens has gotten much to complex, and is ultimately then much too fragile.

maxerickson 3y ago
So the regulation protecting the monetary system is good and the regulation restricting corporations is bad? Got it.
- _heimdall 3y ago
  Both are bad in my opinion. We shouldn't have a need regulation to protect our money, that'd a sign that the money itself isn't sound and the system is too fragile.
- zeroonetwothree 3y ago
  The first one is not a “regulation” in the normal meaning of the word because it doesn’t restrict the actions of private individuals, but rather the government (in this case the courts). Usually we call things that restrict the power of the government “rights” not “regulations”.
  - maxerickson 3y ago
    If a business harms me, those laws prevent me from seeking restoration from the investors.
UncleEntity 3y ago
> I don't expect investors to he held liable for internal decisions made by companies... But they are liable up to and including the total amount of their investment. Some may say that this is to enable people to pool their resources to accomplish goals that are beyond what the individuals can accomplish on their own without losing everything if their plans go awry, best laid plans of mice and men and all that...
- _heimdall 3y ago
  > But they are liable up to and including the total amount of their investment. That's how it should be! I don't think I explained myself well there. I was thinking specifically of legal concerns. If a company breaks the law, I wouldn't expect investors to be held criminally liable unless they reasonably knew what was done. I would expect them to be financially liable if the company value falls and their investment loses value. How are investments supposed to work if the upside is unlimited but the downsides are mitigated by regulation? Investing is a risk, effectively gambling. You should expect that anything you put in can be lost.
  - maxerickson 3y ago
    The downside in your scenario is limited by regulation! It's hilarious that limited liability is an obvious assumption for how the world should work and then telling companies that they don't get to offer high interest unsecured loans that also have punitive fees is some kind of perilous overreach.
    - _heimdall 3y ago
      > It's hilarious that limited liability is an obvious assumption I must have gotten myself lost if my comments read as though I was arguing that limited liability is a good thing. I guess if you consider limiting investor liability to criminal activity they were aware of, that's some form of limited liability. But I don't agree that liability should be limited even when someone is, or can be, aware if the risks they sign up for. I'm not saying anyone should tell companies they can't offer high interest unsecured loans - I'm only saying that consumers don't have to take the loans.

nonethewiser 3y ago

Then why allow interest and late fees at all then?