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Does the limited-liability of corporations allow them to harm people with impunity?

I have heard libertarians argue that the limited-liability status of corporations allows them to violate rights and not pay the full cost of doing so. I've heard an argument like this: suppose ten billionaires, each with a net worth of $1 billion, co-found a corporation. Each billionaire puts $100,000 into the company, and it doesn't yet have any debts, giving the corporation a net book value of $1 million. This corporation ends up accidentally leaking toxic chemicals into a city, causing $100 million worth of damage. Yet if the victims sue the corporation for damages, they can receive no more than the $1 million value of the corporation, and they can't go after the billionaire shareholders' personal assets. Therefore, limited liability is evil. But can't plaintiffs sue a corporation and in addition sue its principal stockholders personally? Are anti-corporation libertarians right that limited liability is a violation of rights that should be abolished?

legendre007, 17.10.2013, 00:21
Idea status: under consideration


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