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And we continue with our American stories.

Our next storyteller is Tim Harford, an economist and best-selling author of 50 things that

shaped the modern economy. Here he is to tell the story about three of those things, starting with the LLC.

The limited liability company was very important in allowing companies to raise money. What is essentially

true about a limited liability company is that if you and I say decide we're going to invest in a

company and we decide we're going to put $10,000 into a company and try and get it all started,

we may lose our $10,000. But we can't then be pursued for any more money. Like I've put my $10,000

in, you can't get $20,000 out of me or $50,000 or a million dollars if the company does

something wrong. My liability is limited to the amount of money I originally put in. And so having this protection for

investors made it more attractive for investors to put money into companies. It made it easier

for companies to raise money because their investors knew there was a limit to their downside.

And that in turn was important because it meant that suddenly you could raise money

from people who didn't know you. Previously, you would only be able to raise money from very

close friends, from family. So limited liability enables companies to go out and raise money

from a large number of strangers. You think about companies such as General Electric, trying to set up

an entire electricity grid. Or you think about the railway companies. I mean, how is a railway

company supposed to make money? You've got to build an entire railway and you've got to put the

trains on it before you can collect a single dime from any railway passenger. Clearly you've got to raise a huge

amount of money. So the limited liability structure allowed that to be possible. And so you could

have these huge infrastructure projects, water, railways, electricity. There have been a lot of

downsides. Of course, a lot of people have been ripped off by limited

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