Can capitalism be defended from the libertarian right?
The hostility of libertarians to the modern state is well known. Less well known are the objections that many libertarians have to modern capitalism.
The modern capitalist economy rests largely on two major government-created privileges bestowed on private firms and individuals: limited liability and intellectual property rights, like patents and copyrights. Limited liability, a legal privilege bestowed by the government, means that the owners of a government-chartered corporation are liable to creditors or plaintiffs in lawsuits only up to the amount that they have invested in the enterprise. In contrast, sole proprietors and partners in general partnerships traditionally have unlimited liability for all of the debts of the enterprise. By ensuring that investors in corporations do not risk personal ruin, governments in the 19th and 20th century enabled the rise of large, efficient industrial corporations that can access huge pools of private capital by means of flourishing stock markets.
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