[Cryptography] People vs AI

[Jerry Leichter]

> TBH, I am honestly skeptical that corporations whose stakeholders are anonymous - or even just anonymous to the public - are a good idea.  In terms of product or service liability, freely available corporate names get registered and then used up like tissues, and factories making shoddy goods just change the setting of a machine to start stamping different corporate names on them. 
> I do not want to replace a defective widget with another widget purchased from the same shyster and made in the same factory under a different corporate name.  When someone fails to provide quality, they should acquire an actively negative reputation, and negative reputations should follow individual human beings, not disappear in a puff of legal smoke when those human beings start pretending to be a different company.
> 
> Yes, you can use a corporation or pot of money as 'stakes' in place of personal liability. But then you need to assure that a particular asset isn't oversubscribed and serving as liability backstop for many times its value in debt, or you get a Ponzi scheme.
> 
Here is where you get to a fundamental distinction between transactions between (sizable) businesses, and transactions between businesses and individuals.

Businesses generally check out their counter-parties.  They check their Dun and Bradstreet listings.  They work through trusted third parties, particularly banks.  Banks (in the US, though those doing international business end up getting pulled into these rules anyway) are subject to "Know Your Customer" rules - which some see as very intrusive, but others see as a way to be sure that those you deal with can be held to their obligations.  While frauds and other kinds of criminality do occur - my accountant lost money that he personally invested with Bernie Madoff! - in the B2B world they are relatively infrequent.  If they weren't, the economy would collapse.

For individuals and small businesses, the story is not so simple.  We have neither the time nor the resources to check into the bona fides of all the businesses we deal with.  That's why reputation is important.  That's exactly why we have trademarks that can be legally protected, and *are* vigorously protected by their owners.  To the extent that the law provides the individual with protection (often not enough, but that's another issue), if you deal with a "known company," you'll be able to take them to court.  If you deal with an unknown fly-by-night - yes, they effectively escape the law.

Knowing the people behind the company probably wouldn't do you much good anyway.  It's easy enough to find shills to play the corporate roles in all the paperwork.  Limited liability corporations are a tradeoff which has proven  to generally be a good one - nothing like our modern economy could exist without it.  And people have been defrauded by, say, itinerant peddlers since time immemorial:  Dealing with a dishonest person is always a risk.

                                                        -- Jerry
 

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