Abstract
The principle of limited liability is one of the defining characteristics of modern corporate capitalism. It is also, we argue in this article, a powerful structural source of moral hazard. Engaging in a double conceptual genealogy, we investigate how the concepts of moral hazard and limited liability have evolved and diffused over time. We highlight two parallel but unconnected paths of construction, diffusion, moral contestation, and eventual institutionalization. We bring to the fore clear elective affinities between both concepts and their respective evolution. Going one step further, we suggest that both concepts have come to be connected through time. In the context of contemporary capitalism, limited liability has to be understood, we argue, as a powerful structural source of moral hazard. In conclusion, we propose that this structural link between limited liability and moral hazard is an important explanatory factor of the systemic instability of contemporary capitalism and, as a consequence, of a pattern of recurrent crises that are regularly disrupting our economies and societies.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
Compound words can be closed, hyphenated or open.”Moral hazard” is an open compound word (like”ice cream”).
In the United States, this transfer happened later. During the 1913 panic, before the creation of the Federal Reserve Bank, the Bank of JP Morgan still famously played the role of LLR.
This is clearly contingent on the definition of “crisis,” although Broda and Levy-Yeyati seem to mean full-scale panic akin to the Great Depression. Furthermore, Broda and Levy Yeyati (2003) were writing before the more recent episode of financial turmoil.
The authors identify “direct moral hazard” as affecting the behavior of the direct recipients of insurance payments—the governments of the member states. This ought to be distinguished from “indirect moral hazard” effects on the lending behavior of their creditors, i.e., the “bail-out” of foreign banks, etc. (Dreher and Vaubel 2004).
Jacques Drèze (1961) had already applied economic tools to study moral hazard just two years earlier, yet Arrow’s article was clearly the more influential.
In situations of ignorantia (ignorance) or scientia (simple knowledge) the master’s liability was limited to the peculium. In the situation of Voluntas (the master consenting willingly to the dependent’s transactions), creditors could go after the master’s wealth beyond the value of the peculium (Abatino et al. 2009, p. 14).
The term comes from the latin word cumpanis that stood for “those that eat the same bread.”
Non-FIRE (finance, insurance and real estate) firms will in general have only a double layer of limited liability except in the rare situations when they might be bailed-out.
The full coverage welfare state used to play that function before neoliberal reforms of the health sector in many countries.
References
Abatino, B., Dari-Mattiacci, G., & Perotti, E. (2011). Early elements of the corporate form: depersonalization of business in ancient Rome. Oxford Journal of Legal Studies, 31(2), 365–389.
Ætna Insurance Company. (1867). Ætna guide to fire insurance for the representatives of the Ætna Insurance Co. Cincinnati: R. Clarke & Co. printers.
Alexander, J. (1982). Positivism, presuppositions, and current controversies. Theoretical logic in sociology, vol. 1. Berkeley: University of California Press.
Amsler, C. E., Bartlett, R. L., & Bolton, C. G. (1981). Thoughts of some British political economists on early limited liability and corporate legislation. History of Political Economy, 13(4), 774–793.
Arrow, K. J. (1963). Uncertainty and the welfare economics of medical care. The American Economic Review, 53(5), 941–973.
Arrow, K. J. (1968). The economics of moral hazard: further comment. The American Economic Review, 58(3), 537–539.
Aubert, J. J. (1994). Business managers in ancient Rome: A social and economic story of Institores, 200BC-AD250. Leiden: Brill.
Badian, E. (1972). Publicans and sinners. Oxford: Basil Blackwell.
Bagehot, W. (1873). Lombard street. London: Kegan Paul.
Baker, T. (1996). On the genealogy of moral hazard. Texas Law Review, 75, 237.
Baker, T. (2000). Insuring morality. Economy & Society, 29(4), 559–577.
Bartelson, J. (1995). A genealogy of sovereignty. Cambridge: Cambridge University Press.
Bentham, J. (1787). A defence of usury. Whitefish: Kessinger Publishing.
Bernanke, B. (2010). Causes of the recent financial and economic crisis. Testimony Before the Financial Crisis Inquiry Commission, September 2. http://www.federalreserve.gov/newsevents/testimony/bernanke20100902a.htm. Accessed 20 February 2011.
Brean, J. S., Kryzanowski, L., & Roberts, S. (2011). Canada and the United States: different roots, different routes to financial sector regulation. Business History, 52(2), 249–269.
Broda, C., & Levy Yeyati, E. (2003). Dollarization and the lender of last resort. In F. Sturzenegger (Ed.), Dollarization (pp. 101–130). Cambridge: MIT Press.
Bryer, R. A. (1997). The mercantile laws commission of 1854 and the political economy of limited liability. The Economic History Review, 50(1), 37–56.
Cajvaneanu, D. (2011). A genealogy of government. PhD dissertation – School of International Studies. Italy: University of Trento. Accessed on 20 September 2012.
Calomiris, C. W. (1990). Is deposit insurance necessary? A historical perspective. The Journal of Economic History, 50(02), 283–295.
Campbell, A. C. (1902). Insurance and crime. New York: GP Putnam's Sons.
Canguilhem, G. ([1966] 1978). On the Normal and the Pathological, translated by C. Fawcett. Dordrecht: Reidel.
Canning, J. (1996). A history of medieval political thought. New York: Routledge.
Carney, W. (2000). Limited liability. In B. Bouckaert & G. De Geest (Eds.), Encyclopedia of law and economics (Vol. III, pp. 651–691). Cheltenham: Edward Elgar.
Carrithers, M., Collins, S., & Lukes, S. (Eds.). (1985). The category of the person: Anthropology, philosophy, history. Cambridge: Cambridge University Press.
Carruthers, B. G. (1996). City of capital. Princeton: Princeton University Press.
Chang, H. (2000). The hazard of moral hazard: untangling the Asian crisis. World Development, 28, 775–788.
Chausovsky, J. (2007). State regulation of corporations in the late nineteenth century: a critique of the New Jersey Thesis. Studies in American Political Development, 21, 30–65.
Clark, G. (2002). Embracing fatality through life insurance in eighteenth-century England. In T. Baker & J. Simon (Eds.), Embracing risk: The changing culture of insurance and responsibility (pp. 80–94). Chicago: The University of Chicago Press.
Cohn, M. (2010). The political economy of corporate charters (working paper). Resource Document. Mercatus Center, George Mason University, 10–20 (April). http://mercatus.org/sites/default/files/publication/The%20Political%20Economy%20%20Corporate%20Charters.pdf. Accessed 15 May 2011.
Cordella, T., & Yeyati, E. L. (2003). Bank bailouts: moral hazard vs. value effect. Journal of Financial Intermediation, 12(4), 300–330.
Crotty, J. (2009). Structural causes of the global financial crisis: a critical assessment of the ‘new financial architecture’. Cambridge Journal of Economics, 33, 563.
Daston, L. J. (1987). The Domestication of risk: Mathematical probability and Insurance, 1650–1830. In L. Kruger, L. J. Daston, & M. Heidelberger (Eds.), Ideas in history, vol. 1 (pp. 237–260). Berkeley: University of California Press.
Dawson, W. H. (1912). Social insurance in Germany, 1883–1911. New York: Scribner.
DeFusco, R., Shoemaker, P., & Stara, N. (2011). Controlling the moral hazard created by limiting liability. Journal of Applied Business Research, 12, 9–19.
Dembe, A. E., & Boden, L. I. (2000). Moral hazard: a question of morality? New Solutions, 10(3), 257–280.
Djelic, M.-L. (2013). When limited liability was (still) an Issue: mobilization and politics of signification in 19th-century England. Organization Studies. doi:10.1177/0170840613479223.
Dow, S. C. (2012a). Different approaches to the financial crisis. Economic Thought, 1, 80–93.
Dow, S. C. (2012b). Economics and moral sentiments: The case of moral hazard. In V. Neves & J. C. Caldas (Eds.), Facts, values and objectivity (pp. 17–32). London: Routledge.
Dowd, K. (2009). Moral hazard and the financial crisis. Cato Journal, 29, 141–166.
Dreher, A., & Vaubel, R. (2004). Do IMF and IBRD cause moral hazard and political business cycles? Evidence from panel data. Open Economies Review, 15(1), 5–22.
Drèze, J. H. (1961). Fondements logiques de la probabilité subjective et de l’utilité. La décision, 73–87.
Ducat, A. C. (1862). The practice of fire underwriting 164–65 (4th ed.). Chicago: Church, Goodman and Cushing.
Duff, P. W. (1938). Personality in Roman private law. Cambridge: Cambridge University Press.
Duffie, D., & Gârleanu, N. (2001). Risk and valuation of collateralized debt obligations. Financial Analysts Journal, 57, 41–59.
Eichengreen, B. J. (1998). Globalizing capital: A history of the international monetary system. Princeton: Princeton University Press.
Ekelund, R. B., Tollison, R. D., Anderson, G. M., Hébert, R. F., & Davidson, A. B. (1996). Sacred trust: The medieval church as an economic firm. Oxford: Oxford University Press.
Farr, J. (2004). Social capital: a conceptual history. Political Theory, 32(1), 6–33.
Fetter, F. W. (1978). Development of British monetary orthodoxy, 1797–1875. Cambridge: Harvard University Press.
Fields, J., Klein, L., & Myskowski, E. (1998). Lloyd’s financial distress and contagion within the US property and liability insurance industry. Journal of Risk and Uncertainty, 16, 173–185.
Fischer, S. (1999). On the need for an international lender of last resort. The Journal of Economic Perspectives, 13(4), 85–104.
Földi, A. (1996). Remarks on the legal structure of enterprises in Roman law. Revue Internationale des Droits de l’Antiquité, 43, 179–211.
Foucault, M. (1972). An archaeology of knowledge, translated by A. Pantheon: M. Sheridan Smith. New York.
Foucault, M. (1984). Nietzsche, genealogy, history. In P. Rabinow (Ed.), The Foucault reader. New York: Pantheon Books.
Frazer, N., & Gordon, L. (1994). A genealogy of dependency: tracing a keyword of the US welfare state. Signs, 19(2), 309–335.
Freixas, X., Giannini, C., Hoggarth, G., & Soussa, F. (2000). Lender of last resort: what have we learned since Bagehot? Journal of Financial Services Research, 18(1), 63–84.
Funck-Brentano, F. (1922). National history of France: The middle ages. London: William Heinemann.
Gladwell, M. (2005). The moral-hazard myth. The New Yorker, 81, 44–49.
Goertz, G. (2005). Social science concepts: A user’s guide. Princeton: Princeton University Press.
Golembe, C. H. (1960). The deposit insurance legislation of 1933: an examination of its antecedents and its purposes. Political Science Quarterly, 75(2), 181–200.
Goodhart, C. (1999). Myths about the lender of last resort. International Finance, 2(3), 339–360.
Greenwood, R., & Empson, L. (2003). The professional partnership: relic or exemplary form of governance? Organization Studies, 24, 909–933.
Greif, A., Milgrom, P., & Weingast, B. R. (1994). Coordination, commitment, and enforcement: the case of the merchant guild. Journal of Political Economy, 102(4), 745–776.
Griswold, J. (1868). Hand-book of adjustment of loss or damage by fire: For the use of fire underwriters. New York: Insurance Monitor Office.
Guerra-Medici, M. T. (1982). In T. Orhnial (Ed.), Limited liability and the corporation (pp. 122–136). London: Croom Helm.
Guinanne, T. W. (2008). Using a New legal Form: the GmbH from its Introduction to World War I, (working paper). Resource Document. Yale University. http://yale.academia.edu/TimothyGuinnane/Papers/70703/Using_a_new_legal_form_the_GmbH_from_its_Introduction_to_World_War_I. Accessed 15 May, 2011.
Guinnane, T., Harris, R., Lamoreaux, N., & Rosenthal, J. L. (2007). Putting the corporation in its place. Enterprise and Society, 8(3), 687–729.
Hacking, I. (1990). Two kinds of 'New Historicism' for philosophers. New Literary History, 21, 343–364.
Hampsher-Monk, I., Timans, K., & van Vree, F. (1998). History of concepts: Comparative perspectives. Amsterdam: Amsterdam University Press.
Haynes, J. (1895). Risk as an economic factor. The Quarterly Journal of Economics, 9(4), 409–449.
Heimer, C. A. (1989). Reactive risk and rational action : Managing moral hazard in insurance contracts. Berkeley: University of California Press.
Hickson, C., & Turner, J. (2005). Corporation or limited liability company. In J. McCusker, S. Engerman, L. Fisher, D. Hancock, & K. Pomeranz (Eds.), Encyclopedia of world trade since 1450 (pp. 174–189). New York: Macmillan Reference.
Hillman, R. W. (1997). Symposium on the future of the unincorporated firm: limited liability in historical perspective. Washington & Lee Law Review, 54(2), 615–628.
Hodgson, G. (1986). Lloyd’s of London: A reputation at risk. Harmondsworth: Penguin.
Hölmstrom, B. (1979). Moral hazard and observability. The Bell Journal of Economics, 10(1), 74–91.
House of Commons (1856). Law of partnerships and joint-stock companies. House of Commons Debates, 140, 110–147.
Humphrey, T. M. & Keleher, R. E. (1984). The lender of last resort: A historical perspective. Richmond., Richmond, VA: Federal Reserve Bank of Richmond.
Hunt, B. C. (1936). The development of the business corporation in England, 1860–67. Cambridge: Harvard University Press.
James, J. (2007). Lloyd’s and the London insurance market: An overview. In J. D. Cummins & B. Venard (Eds.), Handbook of International insurance, Huebner international series on risk, insurance and economic security (pp. 903–924). New York: Springer.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
Johnson, J. J. (1995). Limited liability for lawyers: general partners need not apply. Business Law, 51(1), 85–154.
Johnson, P. (2010). Making the market: Victorian origins of corporate capitalism. Cambridge: Cambridge University Press.
Kahan, D. (2009). Shareholder liability for corporate torts: a historical perspective. Georgetown Law Journal, 97(4), 1085–1110.
Kane, E. J. (1989). The S&L insurance mess: How did it happen? Washington, DC: The Urban Insitute.
Koselleck, R. (2002). Practice of conceptual history – Timing history, spacing concepts. Stanford: Stanford University Press.
Kotlikoff, L. J. (2010). Jimmy Stewart is dead. Hoboken: John Wiley & Sons.
Krippner, G. (2005). The financialization of the American economy. Socio-Economic Review, 3(2), 173–208.
Kronman, A. T. (1983). Max Weber. Stanford: Stanford University Press.
Kvist, J., & Pedersen, L. (2007). Danish labour market activation policies. National Institute Economic Review, 202(1), 99–112.
Laeven, L., & Majnoni, G. (2003). Loan loss provisioning and economic slowdowns: too much, too late? Journal of Financial Intermediation, 12(2), 178–197.
Laffont, J., & Martimort, D. (2002). The theory of incentives: The principal-agent model. Princeton: Princeton University Press.
Leibold, A. W. (2004). Some hope for the future, after a failed national policy for thrifts. In J. R. Barth, S. Trimbath, & G. Yago (Eds.), The savings and loan crisis: Lessons from a regulatory failure, (vol. 5). Boston: Kluwer Academic Publishers.
Lennox, C. & Li, B. (2011). The consequences of protecting audit partners’ personal assets from the threat of liability. Journal of Accounting and Economics Conference, (forthcoming).
Lipton, P. (2007). History of company law in colonial Australia: economic development and legal evolution. Melbourne University Law Review, 31, 805–836.
Livermore, S. (1935). Unlimited liability in early American corporations. Journal of Political Economy, 43, 674–687.
Loftus, D. (2002). Capital and community: Limited liability and attempts to democratize the market in mid-19th century England (pp. 93–120). Autumn: Victorian Studies.
Lopez, R., & Raymond, I. (1955). Medieval trade in the Mediterranean world. New York: Columbia University Press.
Lounsbury, M., & Hirsch, P. (2010). Markets on trial: the economic sociology of the US financial crisis. Research in the Sociology of Organizations, vol. 30A. Bingley: Emerald Group Publishing.
Malmendier, U. (2009). Law and finance at the origin. Journal of Economic Literature, 47(4), 1076–1108.
Malmendier, U. (2010). Roman law and the law-and-finance debate. In I. Reichard & M. Schermaier (Eds.), Festschrift fuer Rolf Knuetel (pp. 214–246). Vienna: Firma Böhlau Verlag GmbH & Co.
McCahery, J. (2001). Comparative perspectives on the evolution of the unincorporated firm: an introduction. Journal of Corporation Law, 26(4), 803–817.
McCluskey, M. T. (2003). Efficiency and social citizenship: challenging the Neoliberal attack on the welfare state. Indiana Law Journal, 78, 783–876.
McCluskey, M. T. (2005). The politics of economics in welfare reform. In M. A. Fineman & T. Dougherty (Eds.), Feminism confronts homo economicus: Gender, law, and society (pp. 147–174). Ithaca: Cornell University Press.
McCulloch, J. R. (1856). Considerations on partnerships with limited liability. London: Longman, Brown, Green and Longmans.
Merton, R. C. (1978). On the cost of deposit insurance when there are surveillance costs. Journal of Business, 51(3), 439–452.
Micolier, G. (1932). Pécule et capacité patrimoniale. Lyon: Bosc et Riou.
Miller, A. R. (2003). The pretrial rush to judgment: are the“litigation explosion”,“liability crisis”, and efficiency clichés eroding our day in court and jury trial commitments? New York University Law Review, 78, 982–1132.
Mitchell, W. (1909). Early forms of partnership. Select essays in Anglo-American legal history, vol. III. Boston: Committee of the Association of American Law Schools.
Mitchell, D. (1992). A genealogy of the government of poverty. International Journal of Human Resource Management, 21(3), 215–251.
Mohan, R. (2009). Global financial crisis: Causes, impact, policy responses and lessons. Speech by the Deputy Governor of the Bank of India. Resource Document. London Business School, April 23rd. http://www.bis.org/review/r090506d.pdf. Accessed 25 February 2012.
Montgomerie, J. (2009). The pursuit of (past) happiness? Middle-class indebtedness and American financialisation. New Political Economy, 14(1), 1–24.
Moore, G. (1999). Solutions to the moral hazard problem arising from the lender-of-last-resort facility. Journal of Economic Surveys, 13(4), 443–476.
Moss, D. A. (2004). When all else fails: Government as the ultimate risk manager. Cambridge: Harvard University Press.
Mowbray, A. H., & Blanchard, R. H. (1955). Insurance, its theory and practice in the United States. New York: McGraw-Hill.
Murphy, S. A. (2010). Investing in life: Insurance in antebellum America. Baltimore: JHU Press.
Nietzsche, F. & Common, T. (2006 [1882]). The gay science. Mineola, NY: Dover Publications.
Nyman, J. A. (2003). The theory of demand for health insurance. Stanford: Stanford University Press.
Owen, M. R. (2004). OSHA’s failure to establish and enforce safety standards. Resource Document. Congressional Record – Extension of Remarks E1813. http://www.gpo.gov/fdsys/pkg/CREC-2004-10-06/pdf/CREC-2004-10-06-pt1-PgE1813-4.pdf. Accessed 4 May 2011.
Palonen, K. (2002). The history of concepts as a style of political theorizing: Quentin Skinner's and Reinhart Koselleck's subversion of normative political theory. European Journal of Political Theory, 1, 91–106.
UK Parliament (1855). Limited Liability Act, 18 & 19 Vic. c.133
UK Parliament (1856). Joint Stock Companies Act, 19 &20 Vic. c.47
Pauly, M. V. (1968). The economics of moral hazard: comment. The American Economic Review, 58(3), 531–537.
Peet, R. (2011). Inequality, crisis and austerity in finance capitalism. Cambridge Journal of Regions, Economy and Society, 4, 383–399.
Perrott, D. (1982). Changes in attitude to limited liability – the European experience. In T. Orhnial (Ed.), Limited liability and the corporation (pp. 81–121). London: Croom Helm.
Pratt, J., & Stice, J. D. (1994). The effects of client characteristics on auditor litigation risk, judgments, required audit evidence, and recommended audit fees. The Accounting Review, 69, 639–656.
Rénouard, Y. (2009[1968]). Les hommes d’affaire italiens du Moyen-Age. Paris: Editions Tallandier.
Reyes, F. & Vermeulen, E. P. M. (2011). Company law, lawyers and “legal” innovation: Common law versus civil law. Lex Research Topics in Corporate Law & Economics Working Paper, No. 2011–3.
Rochat, J. (2008). Naissance d’une forme juridique: La société anonyme industrielle en France, 1807–1848. PhD dissertation – Université Paris-X Nanterre, France. Accessed on 15 September 2012.
Rochet, J. C. (2009). Why are there so many banking crises?: The politics and policies of bank regulation. Princeton: Princeton University Press.
Rochet, J. C., & Vives, X. (2004). Coordination failures and the lender of last resort: was Bagehot right after all? Journal of the European Economic Association, 2(6), 1116–1147.
Rosenberg, N. (1994). Exploring the black box: Technology, economics and history. Cambridge: Cambridge University Press.
Royal Commission ML (1854). First Report of the Royal Commission on the Mercantile Laws and Amendments to the Law of Partnership. British Parliamentary Papers, XXVII.
Rubinow, I. M. (1913). Social insurance, with special reference to American conditions. New York: H. Holt.
Saint-Léon, M. (1907). Commandite in France. The Economic Journal, 17(66), 284–287.
Sapori, A. (1955). Merchants and companies in ancient Florence. (Translated by G. Elliot). Resource Document. Florence. http://www.archive.org/details/merchantscompani00sapo. Accessed on 11 May, 2011.
Saville, J. (1956). Sleeping partnership and limited liability, 1850–56. The Economic History Review, 8(3), 418–433.
Sered, S., & Fernandopulle, R. J. (2007). Uninsured in America. : Life and death in the land of opportunity. Berkeley: University of California Press.
Sewell, W. (1992). A theory of structure: duality, agency, and transformation. American Journal of Sociology, 91, 1–29.
Shannon, H. A. (1931). The coming of general limited liability. Economic History, 6, 267–291.
Shavell, S. (1979). On moral hazard and insurance. The Quarterly Journal of Economics, 93(4), 541–562.
Skinner, Q. (2002). Visions of politics (Vol. 1 – Regarding method). Cambridge: Cambridge University Press.
Sleet, C., & Smith, B. D. (2000). Deposit insurance and lender-of-last-resort functions. Journal of Money, Credit and Banking, 32(3), 518–575.
Smith, A. (1999[1776]). An inquiry into the nature and causes of the wealth of nations. In A. Skinner (Ed.), (Volume I [Books I to III] and Volume 2 [Books IV and V]). London: Penguin Books.
Somers, M. (1995a). What’s political or cultural about political culture and the public sphere? Toward an historical sociology of concept formation. Sociological Theory, 13(2), 113–144.
Somers, M. (1995b). Narrating and naturalizing civil society and citizenship theory: the place of political culture and the public sphere. Sociological Theory, 13(3), 229–274.
Spencer, H. (1878). State tampering with money and banks. In H. Spencer (Ed.), Essays: Moral, political and aesthetic (pp. 319–352). New York: D. Appleton & Company.
Starr, P. (1982). The social transformation of American medicine. New York: Basic Books.
Stern, G. H., & Feldman, R. J. (2004). Too big to fail: The hazards of bank bailouts. Washington, DC: The Brookings Institution.
Stiglitz, J. E. (1983). Risk, incentives and insurance: the pure theory of moral hazard. The Geneva Papers on Risk and Insurance-Issues and Practice, 8(1), 4–33.
Taylor, J. (2006). Creating capitalism: Joint-stock enterprise in British politics and culture. Woodbridge: Boydell Press.
The Corporation of Lloyd’s. (1871). Lloyd’s Act, 1871. London: The Corporation of Lloyd’s.
Thornton, H. (1802). An enquiry into the nature and effects of the paper credit of Great Britain (Printed for J. Hatchard). London: George Allen and Unwin.
Van Lent, L. (1999). The economics of an audit firm: the benefits of partnership governance. The British Accounting Review, 31, 225–254.
Vaubel, R. (1983). The moral hazard of IMF lending. The World Economy, 6(3), 291–304.
Weber, M. (2003[1891]). The history of commercial partnerships in the Middle Ages. Lanham, MD: Rowman & Littlefield.
Willan, T. S. (1953). The Muscovy merchants of 1555. Manchester: Manchester University Press.
Williston, S. (1888). History of the law of business corporations before 1800. Harvard Law Review, II: 114.
Winter, R. A. (1988). Liability crisis and the dynamics of competitive insurance markets. The Yale Journal on Regulation, 5, 455–480.
Woolgar, S. (1988). Knowledge as reflexivity. London: Sage.
Zelizer, V. A. R. (1979). Morals and markets: The development of life insurance in the United States. Piscataway: Transaction.
Acknowledgments
We thank the Academy of Management History Division for selecting an earlier version of this article as the 2013 Winner of the Halloran Award for the Best Paper in Business Ethics. We also thank the Theory and Society Editors and reviewers for highly helpful comments.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Djelic, ML., Bothello, J. Limited liability and its moral hazard implications: the systemic inscription of instability in contemporary capitalism. Theor Soc 42, 589–615 (2013). https://doi.org/10.1007/s11186-013-9206-z
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11186-013-9206-z