(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.)
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).
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.
