Limited Liability – Limited Profit

Here is my favourite idea for fixing the bug described in Subdue the greedy giants!.

We just need to make clear by law that every private corporation will get nationalized when its investment to profit ration exceeds a certain threshold. IOW when we can say that the investors have made enough profit.

This nationalization won’t harm the corporation’s activity. We just change the recipient of the profit. It is just a new strategy of distributing the profit.

Nationalization is imposed by the state because –of course– the owners of an expanding business don’t want to give away their shares. It is a simple obligation, as obvious as a yearly tax declaration. Failing to do it in time simply leads to increasing fines and ultimately criminal prosecution of the responsible managers.

It is a form of expropriation. Of course the owners don’t like to get expropriated (unless they bought for speculation, which is an edge case). But they have no choice. Expropriation happens when some public interest becomes more important the private interest. The public interest of controlling the giant is more important the private interest of its owners. Of course the price to be given to the investors is to be determined by clear, legally regulated rules. There must be a balance between giving to the owners what they deserve and keeping the corporation’s activity alive.

Google, Amazon, Microsoft and Facebook are registered in the United States. But only the parts that actually exist in the US will go to the US. The Belgian headquarter remains private as long as the Belgian government doesn’t decide to nationalize it in turn.