March 29th - Barriers to economic growth

I've come to see that so many of the changes during my lifetime can be seen as resulting from capital’s need to overcome barriers to growth so perhaps it'll help my understanding if I explore just what's been going on.  

Limited Liability, the foundation on which great share-owning companies were built,  is to do with economic activity being organised by groups of people who don’t necessarily know each other investing their money into business as share holders.  Limited liability  came into general use in the mid nineteenth century when private individuals were unlikely to have sufficient funds for the large-scale investment needed for the building of railways, steel mills and the like.   Before the introduction of limited liability a businessmen had to be pretty brave to start up a new enterprise because if the venture failed then he stood to lose his home and everything he owned and could well end up in the debtors prison.   Shareholders in a limited liability company, however, only stand to lose their investment, that is, the value of their shares.  
Limited Liability gave birth to huge international companies and made possible the funding for massive projects such as railway networks and the channel tunnel.  An individual's savings, including pension funds, could be invested to make a profit and another way of making money was opened up with the  advent of financial advisers.
Limited liability also meant that entrepreneurs were prepared to be much more innovative than would be the case if they personally were responsible if the project went bust.
In the UK during the latter years of the 20^th Century privatisation meant that profit could be made from activities previously undertaken by the state.  Margaret Thatcher's great push towards privatisation in the 1970s which promised a great 'share owning democracy' has turned out to be a sham because, contrary to her promise,  during the second half of the 20th Century there was a massive decline in the number of indidivuals who owned shares.   In 1963  54 percent of the value of UK quoted shares was owned by individuals but by 2008 that had dropped to just over 10 percent. .

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