In this second conversation with Sunny Ray, mathematician and hedge fund manager Arman introduces the Wakanskan Society, a project named for a Lakota Sioux term meaning those who cannot speak for themselves, including animals, forests, rivers, and structurally disadvantaged people. Drawing on Mahayana Buddhist philosophy, complexity theory, and information theory, Arman argues humans overestimate their ability to comprehend the systems they are disrupting. The conversation then shifts to his twenty year old doctoral thesis chapter, Equitable Liability, written at Duke's Fuqua School of Business. Arman traces the root of corporate harm to a simple flaw, limited liability is granted to shareholders for free, removing any cost pressure tied to environmental or social damage. He proposes that shareholders instead pay market priced insurance premiums scaled to a company's potential harm, turning constraints like clean rivers or safe products into genuine profit objectives rather than external regulations companies lobby to remove. The discussion touches on carbon credits, reversing the burden of proof for product safety, and why this market based fix could be more durable than regulation alone.
A hedge fund mathematician argues corporations should pay market priced insurance for the harm they might cause, not get limited liability for free.
What is the Wakanskan Society and what does the word mean?
Wakanskan is Lakota Sioux for those who cannot speak for themselves, forests, animals, fish, rivers, and structurally disadvantaged people. I'm starting a society built on 18 axioms that will live on the website. In Lakota Sioux culture the highest calling is speaking for those who can't speak for themselves, whether that's an animal being trucked to slaughter or a forest being clear cut on Vancouver Island.
Where can people find this document and the axioms?
It's at wakanskan.org. Everything on that website is going live tonight, the founding axioms, the founding statement, and so on.
What made you realize limited liability was the root cause rather than just a symptom?
I came across a book called Cancer Stage of Capitalism by McMurtry about how money sequences flow to maximize returns. Every system has objectives and constraints, and constraints lower performance, so capital naturally sheds constraints like clean rivers or living wages. I traced this to a free arbitrage: limited liability is granted to shareholders at no cost, so nobody pays for the damage.
Wasn't limited liability created for good reason, so people wouldn't risk their families by starting a business?
I'm not arguing against limited liability, Lloyds of London even has unlimited liability companies that pay out losses. I'm just asking why limited liability is free. If an insurer had to price it, a flower company might pay a dollar a year while a landmine company might pay much more, and that cost would actually reflect the risk.
How do you put a cost on something like animals dying or clean water?
Seven and a half million brains working at insurance companies come up with fair market formulas over time. If they underprice it and damage occurs, they adjust the formula going forward. The market sets a rational premium tied to the real risk a company's product or activity poses to society.
Are carbon credits a step in this direction?
No, carbon credits are a constraint imposed on the system rather than internalized into it. I was actually involved in Canada's emissions trading commission, my platform was recommended by Lloyd Axworthy. The issue is externalization, you need to internalize the cost so companies want to emit less because insurers eventually pay trillions.
How is equitable liability different from just having better regulations?
Regulations are external constraints, and corporations lobby to have them rescinded when new administrations come in, so rivers still get poisoned. My solution makes not poisoning rivers the company's own objective rather than something imposed from outside. It's permanent because it's baked into the profit motive itself, not dependent on political will.
How would a company prove it's safe under this reversed burden of proof?
Drug companies must prove their products safe before selling them, but gasoline companies could put lead in gas without proving safety first, that's a double standard. I'm advocating that all companies must prove a product harmless before commercializing it, or underwriters will penalize them with higher premiums.
Building something daring? Sunny talks to founders like this every day. Fifteen minutes to see if your story belongs on the stage.
Claim your pre-interview