Is this a blatant attack on foundations of laissez-faire capitalism, or is there a true reason to believe entrepreneurs should be held responsible for their business actions, and possibly forced to commit seppuku if they go bankrupt?
Let’s define what limited liability means, and why it is good for both the businesses and their customers. Although the implementation in various countries differs, business owners are usually held responsible for their actions only up to the amount they have invested. That means the creditors can’t come knocking on their door one morning, and claim their personal property. Their liability is limited. Likewise, unlimited liability means the entrepreneur can become a helpless toy in the hands of his creditors, and they can come knocking on his door one morning. Limited liability does not mean no liability. Corporations are regulated by laws, and are ultimately held accountable by their customers. Customers decide whether a firm has made a mistake, and how it should be punished. With zillions of attorneys who declare themselves ready to sue, customers have effective means to correct corporate wrongdoing. And they do use their power. The most unaccountable corporations tend to be those th
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