General Motors and I are exactly alike. Can’t you see the resemblance?
The Supreme Court of the United States of America sure can. As far as the “supremes” are concerned, GM and I are exactly alike, perfectly equal. This is all due to a colossally bad idea known as corporate personhood. The idea of corporate personhood goes back only to the 19th century, when the Supreme Court first determined, in Dartmouth College v. Woodward that corporate charters were, in fact, contracts, and thus protected under the constitution, which prohibits states (but not the federal government, curiously) from passing laws “impairing the obligation of contracts”(Article 1 Section 10).
This all seems harmless enough; corporations, once chartered, can’t be simply legislated out of existence at whim. But in the 1880s the justices went a dramatic step forward, and in Santa Clara County v. Southern Pacific Railroad ruled that for the purposes of some rights granted in the United States Constitution, specifically, the 14th Amendment (the right to due process for all persons before state courts) corporations are equal to persons. Again, this might seem harmless, but it has ever since been used to claim that corporations are equivalent to so-called “natural persons” in virtually all circumstances.
Why is this such a colossally bad idea? Santa Clara County v. Southern Pacific Railroad has opened the floodgates to a never-ending line of litigation opening various rights to corporations, the latest of which is the Supreme Court’s Citizens United v. Federal Election Commission decision guaranteeing to corporations the “right to free speech.” This decision is problematical for several reasons. Perhaps at some other time I’ll discuss the problem of equating the spending of money with speech, but for now I’ll remain focused on the problem of corporate personhood.
In the Citizens United v. Federal Election Commission the Supreme Court essentially gutted campaign finance reform on the basis that corporations (which include not only for-profit businesses, but also unions, non-governmental organizations, universities, churches, Rotary Clubs, you name it…) are just the same as people, albeit “people” with billions of dollars and the ability to cajole and coerce their employees and members into contributing even more dollars to their “free speech”.
The real problem with corporate personhood, however, comes when those corporate persons break the law, or act in ways that harm society. If you or I, natural persons, break the law by stealing a large sum of money, or causing the death or serious injury of another person, we will likely be sent to prison for a number of years. If the offense is grave enough, we might even be subject to capital punishment. But despite all the erstwhile claims of equivalence, when corporations break the law the consequences are orders of magnitude smaller. If I am put in prison for ten years, I am unable to do very much of anything I might like. A corporation committing the same act might receive a fine, usually amounting to no more than a month or two worth of income, and often far, far less than even that. Even worse, a large enough corporation simply pays a few hundred lobbyists or bribes (legally or illegally) a few politicians to legislate ex post facto immunity for the corporation and no penalty is paid at all.
It is this inequity in the way natural persons and corporations are treated when the law is broken that is most problematic. It has engendered a complete contempt for the law and a total disregard for the welfare of our society among the titans of corporate boardrooms. It has also encouraged widespread apathy toward and distrust of our government and justice system among natural persons who see our corporate “equals” treated very unequally. The most recent behavior that resulted in the Great Recession of the 2000’s is but the most recent, and hardly the most egregious example.
Corporate personhood is not the only way to protect the contractual obligations of businesses. It creates fundamentally and inescapably unequal “persons” and ensures that they will be treated preferentially before the courts and the legislature. It is, in short, a colossally bad idea.
Until the Revolution, Yours,
Tim