Are Corporations People Too?
Editor’s Note: “Corporations are people, my friend” – Mitt Romney
Well, he is half right. Corporations are made up of people anyway. But are corporations entitled to the same rights as individual people? To understand this complex subject, let’s start with Wikipedia’s definition for Corporate/Legal Personhood”
“Today, in statutory and corporate law, certain social constructs are legally considered persons. In many jurisdictions, some corporations and other legal entities are considered legal persons with standing to sue or be sued in court. This is known as legal or corporate personhood. In 1819, the US Supreme Court ruled in Dartmouth College v. Woodward, that corporations have the same rights as natural persons to enforce contracts.
Whoa! Most small businesses are either LLC’s, sole proprietorships etc and even the C Corps don’t have deep enough pockets to make a difference. Giving Big Corps unlimited rights as “legal persons” changes the intentions of the First, Fifth, and Fourteenth Amendments.
Thoughts on Citizen United by John Bain:
Shocking as this might be: corporations are treated in many ways like individuals already, enjoying some of the same privileges of “legal personhood.”
In fact, corporate/legal personhood is already in use in the American capitalist system and is an integral part of the legal machinery that makes our economy the most robust in the world.
Legal personhood provides an easy route for individuals to enter into contracts, sue and be sued, and own property. Corporations operate under similar legal rights. Most importantly, without legal personhood, corporations would not have 14th Amendment protection (Santa Clara County v. Southern Pacific Railroad, 1886). This protection means corporations have a right to due process under the law – without it, they could be restricted or even dissolved by government at any time. Investors would be hard-pressed to justify putting their money into such vulnerable enterprises.
These are the legal fictions we abide by to keep our economy solvent. For this reason, those advocating a complete end to corporate personhood are pretty naïve.
What these starry-eyed activists probably mean is that we should end certain aspects of corporate personhood that make big firms too powerful in the political realm.
Specifically, they’re talking about the Citizens United ruling, which essentially allows unlimited corporate donations to political causes. Companies can give to magnate organizations called Super PACs, whose main purpose thus far is to hammer away at opposed politicians with attack ads. As you’ll see, while corporations have been allowed to give to political causes for years, Citizens United greatly loosened any remaining legal restrictions on this brand of largesse.
Citizens United is predicated on the notion that spending money is part of free speech. Traditionally, you have to spend money to get your message out there. And even if social media means it’s no longer necessary for you to buy a full-page ad in the New York Times to communicate with people, it is your sacred democratic right to do so if you please.
Thus follows the Supreme Court’s logic: since campaign contributions are legally “speech” (owing to the 1974 ruling on Buckley v. Valeo), you can’t restrict how they are used. However, the same Court that decided Citizens United ruled that speech by terrorist groups is not protected under the First Amendment. Since time immemorial, it has not been legal for a person to yell “Fire!” in a crowded theater.
These are two examples of “legislating morality” in a way that works for the common good. Allowing corporations to use their massive coffers to “speak” with endless attack ads logically follows from the First Amendment, but morally it’s a bad idea.
Things like this are part of why we have a Supreme Court in the first place: you can’t just make laws then expect things to follow through without incident. We need real human oversight for cases when people are acting within the law, but in a way that’s harmful to society.
In fact, organizations like Super PACs were an issue even before Citizens United. Everyone remembers Swift Boat Veterans for Truth, the organization that arguably derailed John Kerry’s presidential bid by questioning his record in Vietnam. This group was bankrolled by big corporations who supported George W. Bush. This New York Times article by Matt Bai goes in-depth about these “social-welfare groups”, which were permitted to exist thanks to a rule in the Tax Code that allowed unlimited corporate contributions to “single-issue” advocacy groups which ostensibly had nothing to do with electoral politics.
So here was an obvious problem – the fact that corporate bigwigs could pay their way into influencing national politics – that the Supreme Court neglected to fix. Instead, they made it worse. Citizens United made it legal for corporate-funded ads to talk directly about any candidate, by name, right up to Election Day.
Now, the First Amendment is sacred, but there comes a point when you need to open your eyes and look at the situation beyond its legal dimension.
Because corporations aren’t really people! Long ago, we accepted that they are people on an abstract level, for legal purposes – but now, because we’ve had that idea for so long, there’s this drive to give them full rights as people. Nowhere does it say that a corporation “deserves” any rights besides those expressly granted to it already. In fact, a corporation can’t even be said to have authentic “rights” because it lacks any kind of subjectivity.
Consider this. Even though normal, emotional, thoughtful people are actually behind every big firm, as legal constructs they have one directive: to make money for shareholders. The corporate space is one where people suspend their normal ethical impulses in pursuit of this goal. Allowing such a “sociopathic” (in that it has no sense of social responsibility) institution full political rights is very dangerous.
You see it in every interview with a big Wall Street banker from a firm responsible for the 2008 collapse: it’s our job to make money; we were just doing what were supposed to do, etc. That’s because they were acting in a way completely aligned with what was good for the corporation, in effect acting as the corporation itself, since they questioned what they were doing so little.
And that, ladies and gentlemen, is why we need to repeal Citizens United and start holding corporations on a shorter leash when it comes to political contributions. We can’t trust corporations to make ethical decisions because they are not ethical enterprises, and politics is an inherently ethical project. It requires a level of subjectivity and thoughtfulness that a corporation, as a non-human entity, simply does not have. I say this even though there are obviously real people behind that entity, because the law says they must always act with the best interests of the corporation in mind.
A billionaire oil magnate can write a check to the Romney campaign, but he should do it as a private person drawing from his private funds. To allow a corporation to make a donation as a corporation is to invite the impulse of an unfettered money-making machine into our political system. And who is surprised when that donation ends up benefiting only the corporate cause?
Tweet it out if you agree! Tell Congress: Corporations are NOT REAL PEOPLE! Repeal Citizens United @goodb
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