I am prompted by recent events to follow up on thoughts I emailed to Sheldon Richman a few months back:
I feel strongly that If we want to fix the country (and if libertarians don't want to be dismissed as irrelevant/patsies for rent-seekers) we need to find ways to restore shareholder ownership of downside risk. This is the only way to back away from the destruction of communities and our natural and government commons by faceless elites through corporations - and the battle for control over Government micromanagement that so often is captured by corporations and serves as barriers to entry.
Insurers would step in to help shareholders and act as a check on management.
The states that create corporations retain power under the 14th Amendment to discriminate in favor of local, unlimited liability forms of corporation or corporations in which shares are not fully-paid up. There is nothing like a substantial risk tail to focus shareholders on managing management.
Allow me to summarize thoughts that I have posted extensively elsewhere. The state has institutionalized moral hazard and exacerbated principal-agent problems via the grant of limited liability to corporate shareholders. This grant is at the core of why investors chose to us the corporate form (as opposed to traditional partnerships and older versions of corporations where shareholders retained substantial risk), and is something that cannot be obtained merely by voluntary transactions - as it involves future potential involuntary victims of acts by the new corporate legal entity (lenders and other parties can of course agree in advance to liability caps and recourse limits).
This state intervention has set in motion and greatly fuelled the growth of government and battles with citizen groups over the wheel of government -- battles in which insider elites, generally acting through long-lived and deep pocketed corporations that are armed with greater knowledge and cloaked with anonymity, have the overwhelming advantage. I earlier summarized these dynamics here: The Cliff Notes version of my stilted enviro-fascist view of corporations and government
As I have noted elsewhere: I am NOT arguing FOR a general rule that shareholders SHOULD be liable for corporate torts. Rather, I：
Any suggestion that one must “provide a theory of liability that coherently distinguishes shareholders from any other patron of the company” BEFORE one can examine any justifications FOR the state grant of limited liability or the consequences of such intervention would be both sadly non-libertarian and dangerously blind and shallow.
Can I interest any other libertarians in pursuing this avenue of rolling back the state?