The Company: A Short History of a Revolutionary Idea by John Micklethwait and Adrian Wooldridge
The limited liability company has been one of the most important innovations of recent history. It has been around for a few centuries in some form, but has only really started to become prominent in the last two centuries. Limited liability is a key difference. Previously, individual business owners were personally liable for company debts. Partners shared the responsibility. With the company, stock-holders liability was restricted to the money they invested. This enabled greater investment from people of different income levels. It also lead to some initial bubbles (such as the south sea bubble) that lead to a pause in company formation.
Initially companies could only be formed by getting a specific charter from the government. Some of these companies were great exploration operations, complete with administration and enforcement arms. Later anybody could choose to set up a company as they desired. Companies proliferated. They were able to take on rights of humans. However, they could also outlive humans.
Everything has not been smooth sailing. There have been periods of excess with companies. This usually involves people extracting value from companies at the expense of others. This will often lead to periods of regulation. The company structure and its relationship to society to continues to evolve. This book provides a short overview of companies and their importance in our society.
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