Tuesday, December 11, 2012

Uncle Eric and Limited Liability

Uncle Eric Talks About Personal, Career, and Financial Security, by Richard J. Maybury

That is just an awful title for a book.  For one thing, you can't remember it.  At least I can't.  Maybe it could be shortened to Uncle Eric Talks.

However, it's got some amazing stuff in it.  The last chapter we are reading before the Christmas break is "Automatic Evil."  Anyone who's read Charlotte Mason's books, particularly Ourselves, will recognize where he's going right away.  To paraphrase: don't let bad ideas into your head in the first place, because they take root, reason themselves into seeming reasonable, and then lead to bad moral choices.  The Bible recognizes this too:  The heart is deceitful above all things, and desperately wicked: who can know it? (Jeremiah 17:9).

And then...bang, Uncle Eric takes that idea and jumps with it, as nobody else would do, into a pool of business theory.  "When you see good people being harmed, question the underlying model.  One model that is, in my opinion, extremely corrupt but very common and widely accepted is the limited liability corporation."

His objection is that limited liability keeps business owners from taking full responsibility for their products or their actions.  If you can only be punished to a small extent (instead of having to be fully liable), you won't try as hard to create quality products.  It also pulls investment money away from joint stock companies, partnerships, and sole proprieterships; and it can turn the stock market into "gambling casinos."  But "you are stuck in a world built on this model, so your best-laid plans will often go wrong.  Get used to it.  We cannot extract honesty and safety from something that is, in my opinion, inherently corrupt and deceptive."

This is pretty heavy-duty stuff to lay on a sixth grader.  I told Dollygirl I don't expect that she'll have to worry anytime soon about investing in a limited-liability corporation.  But we also made some larger connections with the whole idea of people taking responsibility for their work, whether that's in the work world, in school, or somewhere else.  If you're given the choice, would you rather do a project yourself (or with a friend) and get full credit for it, good or bad; or be a member of a larger team and not take as much heat if it doesn't work out?

As Steve Brown says: "You think about that."

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