The modern corporation is a structure that allows investors to maximize profit while limiting their individual losses. The Volkswagen emissions scandal shows that it also is a structure that enables lawbreakers to limit their individual accountability for their crimes.
Because the corporation is treated by law as a person separate from its owners, the individual investors can’t lose anything more than what they put in. Any debts over and above that are swallowed by the creditor or absorbed by somebody else.
When executives of a corporation break the law, it usually is the corporation, most of whose employees and owners may be completely innocent, that is penalized and not the individuals actually responsible.
Volkswagen since 2009 installed software in 482,000 diesel vehicles to turn on emissions control systems when approaching an inspection station, but leave them off the rest of the time, which improved fuel economy and engine performance.
Dirty-burning fuel sickened many people and made already-sick people worse. By one estimate, it caused the deaths of from 5 to 26 people in southern California alone.
Installing such software is no easy task. Corporate executives would have had to sign off on it.
News stories say that Volkswagen could be liable for up to $37,500 per vehicle, which would mean a penalty of $18 billion. That would be a big fine. Last year Volkswagen reported a net profit of $12 billion on $226 billion in revenue. I would be surprised if VW wound up paying this amount.
Phil Ebersole's Blog 