Limited Liability

The worst example of collusion between government and business is the limited liability laws. These laws are now normal throughout the world.

Company owners are free to make unlimited profits. The limited liability laws, limit their losses to the value of their initial investment, if the company fails. The aim is to encourage business growth for the benefit of the economy.

When governments pass limited liability laws, they are doing something they do not have the power to do. Liability can only be removed when someone pays the price. Jesus was able to wipe out our liability for sin, because he paid the penalty on the cross. Governments think that they can wipe out liability by simply decreeing that it will be limited. They do not have that power, because they are unwilling to pay the price.

Governments cannot limit or eliminate liability for business losses. All they can do is shift the liability to others who are not responsible. When a limited liability company goes broke, the owners walk away with limited losses. The rest of the cost is shifted to the creditors of the failed company. The businesses that have supplyed goods and services to the failed company have to bear the cost, even though they have acted in good faith. The government lets the people who were responsible for the business failure go free, but forces those were not responsible to carry the cost.

Governments cannot limit liability. All they can do is shift liability from those who were responsible to those who have acted in good faith. That is not justice.

When the government punishes those who do good and rewards those who makes mistakes, we have tyranny.