I was reading Hansard from 1856 this morning (as one does) and came across this quote from a speech relating to the freform of partnership law which then governed most banking relationships:
The Bill also contains a clause providing that the remuneration of servants or agents by a share of the profits shall not be held to make them partners. Bankers are omitted out of deference to the course of previous legislation, which has constituted them an exception to the general rule applicable to other occupations. This omission is also made because we do not wish to encumber a question of this kind, which is merely one of limited liability, with questions relating to the banking trade, currency, and other kindred matters: although, for my own part, I see no reason why bankers should not be treated in the same manner as any other class of partners.
So in 1856 we had a problem with bankers being treated differently from all others. And a problem with the accounting for bankers' bonuses.
148 years later not a lot has changed.
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Mr Lowe in the Hansard extract, was probably the same Mr. Lowe who introduced the system of Payment by Results in schools, which led to a system of teaching to the test and a fact ticking concept of education. Sounds a bit familiar, a centruy and a half later.
Very recently George Monbiot, love him or hate him, suggested that the principle of Limited Liability had run its course and we should look for different forms of law related to shares etc. that matched 21st Century needs and technology. I have this feeling he could very well be right. As for Robert Lowe I knew people who had been Elementary School teachers when he was still alive. In fact the Elementary School that had the privilege of first educating me was still using the basic Lowe formula for its curriculum. Yes, I know, it explains a lot.
You are right on limited liability
Nothing changes. I am just reading David Carpenter’s excellent “History of Britain 1066-1284”. Apparently it was a time of rapidly rising GDP with the benefit not getting through to the poor. Sounds familiar!