Sapiens: a brief History of Humankind

5.
 The Peugeot Lion
It doesn’t mean that Peugeot SA is invulnerable or immortal. If a judge were to
mandate the dissolution of the company, its factories would remain standing and
its workers, accountants, managers and shareholders would continue to live – but
Peugeot SA would immediately vanish. In short, Peugeot SA seems to have no
essential connection to the physical world. Does it really exist?
Peugeot is a gment of our collective imagination. Lawyers call this a ‘legal
ction’. 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 ctions 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

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recorded history property could be owned only by esh-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 before you
opened an enterprise of your own. And indeed this legal situation discouraged
entrepreneurship. People were afraid to start new businesses and take economic
risks. It hardly seemed worth taking the chance that their families could end up
utterly destitute.
This is why people began collectively to imagine the existence of limited
liability companies. Such companies were legally independent of the people who
set them up, or invested money in them, or managed them. Over the last few
centuries such companies have become the main players in the economic arena,
and we have grown so used to them that we forget they exist only in our
imagination. In the US, the technical term for a limited liability company is a
‘corporation’, which is ironic, because the term derives from ‘
corpus
’ (‘body’ in
Latin) – the one thing these corporations lack. Despite their having no real bodies,
the American legal system treats corporations as legal persons, as if they were
flesh-and-blood human beings.
And so did the French legal system back in 1896, when Armand Peugeot, who
had inherited from his parents a metalworking shop that produced springs, saws
and bicycles, decided to go into the automobile business. To that end, he set up a
limited liability company. He named the company after himself, but it was
independent of him. If one of the cars broke down, the buyer could sue Peugeot,
but not Armand Peugeot. If the company borrowed millions of francs and then
went bust, Armand Peugeot did not owe its creditors a single franc. The loan, after
all, had been given to Peugeot, the company, not to Armand Peugeot, the 
Homo
sapiens
. Armand Peugeot died in 1915. Peugeot, the company, is still alive and
well.
How exactly did Armand Peugeot, the man, create Peugeot, the company? In
much the same way that priests and sorcerers have created gods and demons
throughout history, and in which thousands of French 
curés
were still creating
Christ’s body every Sunday in the parish churches. It all revolved around telling
stories, and convincing people to believe them. In the case of the French 
curés
, the

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crucial story was that of Christ’s life and death as told by the Catholic Church.
According to this story, if a Catholic priest dressed in his sacred garments solemnly
said the right words at the right moment, mundane bread and wine turned into
God’s esh and blood. The priest exclaimed ‘