Sapiens: A Brief History of Humankind

by Yuval Noah Harari

Peugeot is a figment of our collective imagination. Lawyers call this a ‘legal fiction’. It can’t be pointed at; it is not a physical object. But it exists as a legal entity. Just like you or me, it is bound by the laws of the countries in which it operates. It can open a bank account and own property. It pays taxes, and it can be sued and even prosecuted separately from any of the people who own or work for it. Peugeot belongs to a particular genre of legal fictions called ‘limited liability companies’. The idea behind such companies is among humanity’s most ingenious inventions. Homo sapiens lived for untold millennia without them. During most of recorded history property could be owned only by flesh-and-blood humans, the kind that stood on two legs and had big brains. If in thirteenth-century France Jean set up a wagon-manufacturing workshop, he himself was the business. If a wagon he’d made broke down a week after purchase, the disgruntled buyer would have sued Jean personally. If Jean had borrowed 1,000 gold coins to set up his workshop and the business failed, he would have had to repay the loan by selling his private property – his house, his cow, his land. He might even have had to sell his children into servitude. If he couldn’t cover the debt, he could be thrown in prison by the state or enslaved by his creditors. He was fully liable, without limit, for all obligations incurred by his workshop. If you had lived back then, you would probably have thought twice bef...