The Legal Fiction That Made Risk Disappear

Описание: The limited liability corporation wasn't invented to make business more efficient. It wasn't created to encourage entrepreneurship or innovation. It was designed to solve a specific problem for wealthy investors: how to profit from risky ventures without bearing the full consequences when they failed. Before limited liability, business owners were personally responsible for every debt their companies incurred. If the business failed, creditors could seize their homes, their land, their personal assets.
This system worked when businesses were small and local. It became a problem when industrial ventures required massive capital from multiple investors who couldn't personally monitor every decision. The solution was elegant and radical: create a legal fiction that separated the corporation from its owners, allowing profits to flow upward while containing losses within artificial boundaries.
We examine how this legal innovation transformed capitalism from a system where owners bore risk into one where risk gets distributed to workers, creditors, and the public while ownership retains control and captures returns. How limited liability enabled industrial expansion while protecting capital from its consequences. And how what looks like progress in business organization is actually the institutionalization of privatized gains and socialized losses.
No business advice. No investment recommendations. Just the archaeology of how law was rewritten to serve capital accumulation over accountability.
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