Front Page Titles (by Subject) CHAPTER VIII: Limited Liability Companies - Socialistic Fallacies
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CHAPTER VIII: Limited Liability Companies - Yves Guyot, Socialistic Fallacies 
Socialistic Fallacies (London: Cope and Fenwick, 1910).
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Limited Liability Companies
Multiplication of capitalists—Two advantages—31,799 holders of preference shares in the United States Steel Corporation—“Shirtsleeves”—Opponents of Socialism in the United States.
We have seen that Herr Bernstein, far from looking upon limited liability companies as instruments of confiscation, considers them as means for the distribution of capital. Mr. Flint says that1 the large industries were formerly in the hands of a small number of people and were confined to a few families; nowadays they are greatly divided. “There are a hundred times as many people interested in our industries now as there were 25 years ago, and there probably will be at the end of another 10 years a hundred times as many more. So these interests are being more widely distributed.”2 Mr. Schwab, who was a director of the United States Steel Corporation, and began life as a workman, has proved by force of example that capitalism is accessible to all. The securities issued by the trusts associate the multitude of holders with them in their success, and, far from adding to the number of the proletariat, increase the number of capitalists.
There are two great advantages in limited liability companies: they enable individuals to embark upon enterprises which they could not attempt with their own capital, and they limit the possible loss of their subscribers. They stand for industrial democracy.
There are few businesses in which it is possible for an individual to make an advantageous investment with 100 francs. If he buys a share or a bond, he can obtain a good profit from it, with a prospect of a rise in value if he has made a good selection. The big companies do not confirm Marx' law of concentration, for so far from calling members of the proletariat into being, they multiply the number of capitalists. In 1903 there were 31,799 holders of preference shares in the United States Steel Corporation. The Americans, instead of considering that they prevent each individual from attaining to wealth, say that there are only three generations between shirt sleeves and a fortune.1
The “Wall Street Journal,” in examining the form taken by Socialism in the United States, after a careful investigation enumerates the following classes of persons as being opposed to it:—2
Undoubtedly, says the “Wall Street Journal,” the classes in this list overlap to some extent. The farmer may be a shareholder in a bank or a railway. Be it so, but making a deduction of five millions, there remain ten million individuals with large or small interests in these different forms of property. These ten million individuals represent families which may be estimated to average five persons. Thus we have 50 million individuals, i.e. 60 per cent. of the population of the United States, who are of necessity opponents of Socialism, and among the most refractory and the least amenable are to be found nearly all the women.
“United States Industrial Commission,” vol. xiii., p. 32.
Ibid, vol. xiii., p. 91.
“Socialism,” being Notes on a Political Tour, by Sir Henry Wrixon, late Attorney-General of Victoria, 1896.
Reproduced by the Journal of Commerce of New York, January 30th, 1906.