Going back to school is an interesting experience. Of course, most of us do it to expand or update our job skills. Hell, in this country, education is presented almost primarily in terms of getting “job skills”. One of the great things about it, if you pay attention, is that you may learn tidbits that broaden your understanding of our world. In fact, one of the reasons that the political discourse is so meager in this country is that so few Americans have broad educations, or treat a broad education as a good in-and-of itself.
So this week, a couple of interesting little facts came into view, thanks to a Corporate Practice paralegal class. Two of the most popular ways of organizing business enterprises over the last couple decades are the Limited Liability Partnership (LLP – created first in Texas in 1991 to protect professionals from lawsuits) and the Limited Liability Company (LLC – created first in Wyoming in 1977 to provide the liability protections of corporate structures without the “double taxation” that the investor class loves to whine about). The important words, of course, are “limited liability”. So what does that mean?
Limited liability is a way to protect a person’s individual assets from attack in court due to some damage done by a business that a person invests in. Liability is limited to one’s investment in the enterprise, in much the same way that a shareholder is on the hook only for their investment in shares in the company. LLP’s and LLC’s protect a person’s (or any other legal entity’s) other assets, income and belongings from lawsuits brought by people who may have been harmed by the actions of the LLC or a party within the LLP. Those who argue for these structures argue that investors wouldn’t help grow new businesses without such protections.
These are old arguments, the same ones that were made in the past over the establishment of corporations and business trusts. One of the most troubling things about corporations is that they have so many of the advantages of being legal persons, yet few of the obligations that actual flesh-and-blood people have in their daily activities. In fact, this expansion of “limited liability” for investors has dovetailed a political expansion of the personal liabilities for the vast majority of average people. The average worker can’t protect himself from credit liabilities any more, thanks to the Bankruptcy Act, let alone from debts due to job loss or hospital bills. While investors flock to new legal armor to shield themselves from lawsuits, more and more people at the lower end of the economic spectrum find themselves more and more exposed. Years of workers and consumers and citizens demanding that corporations be exposed to civil litigation when they cause damage are now being undone by these new legal entities. Basically, if you already have, there are more ways to make sure you KEEP. If you don’t, if you’re hanging on, well …
After all, we all know in Twenty-First Century America that virtue is reflected in what you have. If you are bobbing in the economic seas, trying desperately to keep your and your family’s head above water, then you’re obviously not doing something right. You most likely deserve your fate, while the vituous investor needs to be protected from harm, so that he can spread his “virtue” far and wide, in new business ventures.
This leads to a problem in this culture of cheating and lying. In a civil culture like ours, a culture built out of multiple religions, multiple ethnicities, multiple cultures, there is only the civil sphere that we can rely upon for some shared moral structure. Morality, one can easily argue, rests upon a set of rules and a set of consequences when one fails to follow those rules. Yet what is there to say of an investor class that is increasingly walled off from those consequences? Add to that the natural immunity that comes from wealth, in a court system that is weighted toward those who can afford the best lawyers, and a culture of impunity spreads and results in greater and greater inequities.
Those who HAVE expect police protection, while the poor increasingly look at the police as a distant force at best, or an occupying force. It is the poor kid who will pay for the dime bag with jail time, while the wealthy kid, child of an investor, who will get the second chance. This is an old story, yet these new forms of organization reflect a new resurgence of an expectation of privilege on the part of those who have the most.
It isn’t a coincidence that these new legal strategies have risen out of the political cultures of Texas and Wyoming, the political homes of the two men who now govern with an overweening sense of impunity and beligerance. What matters to them is TAKING, while the risk of LOSING is minimized. Deference from the police, from the government, from the electorate, is EXPECTED by this new investor class. A shield from consequence breeds a sense of impunity, an impunity that is more the place of a royal class, the kind of people we once fought a Revolution to escape. THEY can demand that the police come to interview THEM at a time of their choosing, while the rest of us are fair game for sneak-and-peek searches, wiretapping, bag searches and increasing encroachments of both government and corporate surveilance.
It is interesting what you learn, as you go about your education. It’s interesting the various things that offer food-for-thought, in one’s pursuit of expanding job skills and new opportunities. This question of liability is one deserving of debate, of legal challenge and perhaps fresh legislation to return some balance to the current social climate in this country.
Morality GROWS from liability, whether you’re facing eternal damnation or civil tort. This growing trend to protect those with the most from liability is dangerous, while more and more workers and poor have less and less recourse.