Pierce the veil and go after the family.
(Under capitalism) many costs of having PtLds are externalized.
this is a big differences... I think tomp is explaining this difference somewhere in this thread.
I'd wager that at a societal level we roughly break even +/- a little bit in either direction. For every mega-corp abusing their legal status there's a few thousand small and medium businesses that do not have to worry (as much) about being sued into oblivion by some ambulance chaser over something that is not the result of malice. (I'm speaking about various private liability limiting corporate structures in general here.)
russia didn't have the economic basis to get rid of basic material scarcity in 1917, and also was constantly under attack by capitalism, and so it devolved into an undemocratic mess until it reverted (now everything is even worse there).
The important thing to recognize is that the ruling class - whoever owns property and is able to use that to exploit workers - will control the government and make laws that benefit them.
The possibility to bankrupt a company without losing more than you put into the venture is in my eyes a feature of capitalism, not a bug.
There probably needs to be some exceptional way in law to pierce the shell of limited liability and go after officers, perhaps even claw back from investors and shareholders.
(In practice, however, managers are only rarely put in jail, both because it's notoriously difficult to prove white-collar crime (except in few cases, like insider trading, which are the pursued with extra vigor), and because CEOs are generally rich and well connected... but the problem there is corruption, not some inherent feature/bug of the idea of limited liability company.)
We take money earned from theft and drug dealing, we take the stolen car from the person who innocently bought it. There's an offence of receiving stolen property. We don't take the millions from the execs who made millions pushing pharmaceuticals illegally, or the nuclear plant CEO and shareholder that has now, by dint of closure, given the job of decommissioning to the state - i.e. all of us. Once in a blue moon there's a criminal prosecution, but they just about always manage to stay wealthy.
We need to rethink the limits of limited liability as it's become a convenient shield to hide all sorts of unethical, shitty and outright illegal behaviour behind.
> Limited liability only protects the capital of the shareholders,
No, it also protects shareholders from crimes the PtLd commits in order to "serve them". This is a main problem with PtLds imho.
1) the fine needs to be fair to the society (often we see these "slap on the wrist" fines for big corps, that's just disgusting and shows how much our democracies are disfunctional)
2) i suggest this because i want the shareholders to be pushing their companies to ethical behavior.
3) it is very important that companies are also held liable for unethical behavior in other countries, and/or even for unethical behavior of subsidiaries (the foxcons and the likes).
4) When the fine is larger than the company's worth, collect it from the shareholders.
No, the correct solution already exists - the criminal justice system going after criminals that did crime - it just doesn't work very well (especially when criminals are rich - e.g. Epstein - no need for "limited liability company").
> Then noone would invest.
i disagree, you just only invest in ethically sound endeavours. and thats exactly what im trying to achieve by my suggestions. starve bad-business from investment and/or people willing to take ownership. and make investors also do dilligence on the ethical side, instead of only an assessment of books+team+product+market.
"Sorry Grandpa, I know you thought that company was on the up and up, but we're gonna have to take your retirement."
This is why I think the argument that a corporation only has a duty to it's stockholders is rank bullshit.
Limited liability is directly as and exactly an externalization of costs; that's all that it is.
It's one that evolved hand in hand with capitalism, sure, but if it exists in a non-capitalist system it has the same effect.
The system is bought by folks like these. If you think the system will punish them, then I suggest taking a look at precedence for folks like them. It's not in the favor of the general public.