The Self-Regulated Propriety of the Risk
Propriety is ownership. Instead of liability being naturally limited, it is naturally direct, fully assumed in priority, regulated by the propriety of the risk.
If risk is consolidated–aggregated to control for it, existing “the big risk” by limiting the liability of the corporate body–who owns it? Is this not “the tragedy of the commons!”
If everybody owns it then nobody owns it, right?
Aggregating the risk makes it so its ownership occurs by assignment. Capitalists make this happen by default.
When financial default occurs, and your bank account is not big enough to survive the risk, you are subjected to the risk by assignment.
Capitalism, since it is said to be sub-optimal without limited liability, works hard to consolidate risk for assignment. The more the liability is limited, the more risk surplussed for assignment.
Capitalists say the assignment really has no purpose. In nature, for example, when things naturally occur without human direction it is, nevertheless, described in terms of utility. When “A” occurs and “B” happens, a particular result is observed, providing some utility or final purpose–an effect–arbitrated by nothing in particular. It just happens, naturally selected, being randomly accidental.
Random and accidental as things may be, values tend to be assigned to a purpose, not because they really have purpose, but since time exists measure and resists nothing, anything is possible; and, by the same argument, since anything is possible, everything tends to have purpose despite how accidental things may randomly be.
Having purpose suggests propriety. If it is naturally occurring, who is to say it is improper? So, if the “big risk” occurs, no one is to blame. The liability is naturally limited, effectively annihilated by the accidentals. If the last recession did not get you, then maybe the next one will. With the risk existing in the aggregate, consolidated with purpose but existing without any particular attribution, whatever value you may assign to it, being improper, for example, is arbitrary if not delusional because nobody really owns it. Tragically, it is the value of a common existence, and without the corporate identity there would be no objective, common purpose (no propriety) at all.
(According to capitalists, if everybody owns it then nobody owns it. The result is tragic because who cares about things you don’t own. Of course, this fully assumes that nobody owns the aggregated risk till it is assigned by default, but the default condition is a free market where everybody owns a self-determined part of the risk in the aggregate. It’s the law of large numbers, a force to be reckoned with, and closing your eyes doesn’t really make the world go away.)
The corporate identity frees the market to form capital investment because it annihilates the probable risk, economists tell us. Without the limited liability of positive law (reflecting the objective measure of the natural law), there is no incentive to invest. Rich people hoard wealth with no incentive to turn it into capital because it is too risky, which is essentially Ayn Rand’s argument.
If the rich are taxed to redistribute the wealth, Rand says, the rich will naturally hide it. Foolishly, then, the measure to gain utility is dysfunctional (existing the risk to be avoided) because, Objectivists say, it does not have the propriety (the objective, descriptive-random-utility) of a natural existence.
Considering the probable outcome (the effect) of Objectivist public policy (evidenced by the Great Recession), would “We” not be better off existing the risk to be avoided and randomly select the propriety of risk strictly by the numbers?
(Make a list of Objectivist values and public policy leading to the Great Recession. Check it against the conservative-policy platform now being offered going into the mid-term elections. You don’t have to check it twice to see what the probable effect would be.)
Instead of freeing the market to accommodate the capital, maybe we should be freeing the market of capitalism!
Empirically valued, strictly constructed, existing by the numbers, what is the propriety of the risk described as the utility of a self-regulated, random existence, like we see in nature?