I agree that the government does various other things to shield specific companies from liability in specific circumstances, but these are not inherent in the concept of a limited liability corporation under discussion.
Given that I started this discussion I think I have a understanding of what is under discussion.
The main thesis that was/is being debated is one on corruption and the feedback loop between government and corporations. For which I contend that governments created corporations to shield these entities from liability.
you described one type of liability which excluded other types, I maintain that my original comment has a greater scope
> For which I contend that governments created corporations to shield these entities from liability.
The concept of limited liability for corporations, equitable trusts, and the like predates its official recognition in law. For a long time it was simply taken for granted that creditors could not pursue a business organization's debts against its individual members. The term "corporation" may have been a government invention—originally associated with de jure monopolies—but government did not create the idea of an organization with limited liability. It did extend the concept slightly to include protection against liability for certain kinds of torts, which I agree is not something that could exist in a free market. And of course the idea of a corporation in the original sense, as an organization granted a monopoly on a certain kind of trade, is incompatible with the free market. But the idea that large companies with limited liability (only for contracts, not torts) could not exist in a free market is nonsense. And when it comes to torts, liability ought to rest with the individual(s) whose action or negligence caused the harm, not the shareholders, which makes the lack of limited liability for torts for the owners of a large joint stock company less of a concern; they're not the ones responsible for the harm to begin with.
