Time to Rethink Corporate Personhood

January 20, 2010  |   Paul Crist Politics and Policy

Since the early 19th century, the Supreme Court has ruled numerous times on the issue of “personhood” for corporations. That is, they have given corporate entities of all types the legal and political standing of a breathing human being. Some of those rulings were just and fair. Others have had the, perhaps unintended, consequence of subverting the democratic processes of our Representative Republic.
We talk much about how corporate interests have hijacked our legislative process, but the fact is that corporate wealth has always been used to influence our judicial processes in ways that have allowed these “special interests” to legally overrun the legislative branch.
Consider: There were 150 Supreme Court cases involving the 14th Amendment prior to Plessy v. Ferguson in 1896. (That nefarious case established the legal standing of “separate but equal.”) The 14th Amendment ensures due process of law in legislation, equal protection under the law, etc. It was intended mainly to bring freed slaves into American society. Of these 150 cases heard by the Court, however, only 15 involved freed African-American slaves (and of those 15, they only won one case!). But 135 cases involved corporations or business entities.
Corporations, under an expansive legal view of the 14th Amendment, have used it as a shield against regulation and taxes at both the federal and state level.
Corporations have used the 14th Amendment to consolidate their power in the U.S. and the world. They have gained many of the inalienable rights of humans guaranteed by the Bill of Rights with their status as “persons” under the 14th Amendment. Through their right of “free speech” they have captured our legislatures and regulatory agencies. They have used the 14th Amendment to invalidate legislation that wasn’t to their liking. They have used their wealth (well beyond that available to most real persons) to invest in lawyers and flood the courts with the corporate perspective on their right to “personhood.” The result is a corporate culture defining almost all law in the U.S. The U.S. economy has been, essentially, colonized by corporations, and that has become the model for colonization of the global economy by multinational corporations.
In the early years of our Republic, corporations could not own stock in other corporations, and were prohibited from any part of the political process. This grew out of the colonial era, when corporations like the British East India Company and the Hudson Bay Company were able to levy taxes, create laws, and even raises armies to manage and control property & commerce…all in the name of the King who chartered them. Corporations, therefore, were not popular with the colonists. So the early state constitutions and legislatures limited their power.
Note that, while our Constitution is really designed to protect property (including slaves), you won’t find the word “corporation” anywhere in there.  State legislatures oversaw what corporations could and could not do. In early days, state legislatures had more power relative to the federal government. Individual stockholders were held personally liable for any harms done in the name of the corporation. In order to receive the profit-making privileges the shareholders sought, corporations had to represent a clear benefit for the public good, such as building a road, canal, or bridge. And when corporations violated any of these terms, their charters were frequently revoked by the state legislatures.
But something changed in the course of 200 years. Memories of colonial-era corporate oppression faded, and wealthy people began seeing corporations as a convenient way to shield fortunes and maintain ruling power. Minority rule, granted under the Constitution to male, white, landowners, was increasingly under threat during the 19th and 20th centuries (women, Blacks, the poor, all got rights to vote, for example).
Bit by bit, decade by decade, state legislatures increased corporate charter length while they decreased corporate liability and reduced citizen authority over corporate structure, governance, production, and labor. But since corporations are a creation of state governments, the state-by-state strategy would only get the ruling minority so far in protecting their interests. If minority rule by property was going to be successfully defended, corporations would have to gain rights, crossing the line to become “persons” under the law.
Enter the 14th Amendment, ratified in 1868. Within 20 years, the shift was dramatic. Corporations were no longer accountable to the people to perform certain duties…they were now protected from government “abuse” as persons.
The 14th Amendment reads “No state shall… ” If the word “person” in the 14th Amendment included “corporations,” then no state shall deny to corporations due process or equal protection of the laws. This allowed corporate lawyers to allege discrimination whenever a state law was enacted to curtail corporations. Federal regulatory agencies also had to give corporations the same rights as persons, as soon as corporations gained “personhood.” To not do so would be discriminatory. With the granting of the 5th Amendment right to due process (see Noble v. Union River Logging, 1893), corporate lawyers could challenge – and the Supreme Court could find grounds to overturn – democratically legislated laws that originated at the federal as well as state levels.
So, “equal protection under the law” has come to mean, “Whoever has enough money to go to the Supreme Court to fight for it.” Railroad robber barons did; women didn’t; and African Americans most certainly didn’t. In fact, the pattern over more than two centuries of US legal history is that people acquire rights by amendment to the Constitution. Corporations acquire them by Supreme Court decisions.
The Supreme Court ruled in 1976 (Buckley v. Valeo) that money spent for political purposes is equal to exercising free speech, and since “corporate persons” have First Amendment rights, they can contribute as much money as they want to overturn ballot initiatives or referenda (First National Bank of Boston v. Bellotti). Sure, campaign contributions have since had limits placed on them, but can you round up money from your friends and family as much in contributions as, say, The CEO of Goldman Sachs can can raise from shareholders, employees, and their families?  True, such bundling by corporations has been limited under campaign finance law… but it’s seldom proved because those involved don’t talk.

Every time “corporate persons” acquire one of these protections under the Bill of Rights, it gives them a whole new way of exploiting the legal system in order to maintain minority rule through corporate power. And since 1886, every time people have won new rights – like the Civil Rights Act – corporations are eligible for it, too.
A corporation is not a real thing; it’s a legal fiction, an abstraction. You can’t see or hear or touch or smell a corporation – it’s just an idea that people agree to and put into writing.

Because legal personhood has been conferred upon an abstraction that can be redefined at will under the law, corporations have become superhumans in our world. A corporation can live forever. It can change its identity in a day. It can cut off parts of itself. It can also cut off parts of itself and from those parts grow new selves. It can own others of its own kind and it can merge with others of its own kind. It doesn’t need fresh air to breathe or clean water to drink or safe food to eat. It doesn’t fear illness or death. It can have simultaneous residence in many different nations. It’s not male, female, or even transgendered. Without giving birth it can create children and even parents. If it’s found guilty of a crime, it cannot go to prison.
As long as these “superhuman corporate persons” have rights under the law, the vast majority of real persons have little or no effective voice in our political arena.
So, things like term limits for Congress; debates about pensions; Congressional health coverage; etc. are reaction, not a cure for what ails our political system. Instead, we need to get to the root of the problem: Political leaders being installed, co-opted, and maintained by a wealthy minority of “corporate super-persons.” Get rid of the personhood for corporations, and you’ll see a vast change in what happens in our legislative branch, and in who wins elections. That is the key.
With corporate personhood abolished, new legislation would be possible. For example, if “corporate persons” no longer had First Amendment right of free contributions to political candidates and parties, would we be having the same debate over healthcare reform or financial sector reform?  Surely not. If “corporate persons” were not protected against search without a warrant under the Fourth Amendment, then corporate managers couldn’t turn OSHA and the EPA inspectors away if they make surprise, unscheduled searches. If “corporate persons” weren’t protected against discrimination under the 14th Amendment, corporations like Wal-Mart couldn’t force themselves into communities that don’t want them.
Abolishing corporate personhood won’t be easy, of course, because after 200 years, it is woven into the fabric of not just our federal laws, but also the laws of the 50 states. And our model of corporate personhood has been adopted worldwide in some degree or another, so corporations stripped of personhood in the U.S. might opt to pull up stakes and head to greener pastures, in the Caribbean, for example.  But it could be done, either by the Supreme Court reversing itself, or by Constitutional Amendment.  And just as the world has copied our march toward corporate personhood, there are ways the U.S. could exert influence away from it, as well.
Since the existing Senate, bought and paid for by corporate “persons,” must approve Court justices, the Supreme Court route seems unlikely. Certainly the current makeup of the Court doesn’t hold out much hope.  A Constitutional amendment to strip corporations of their personhood would involve a ferocious fight, but it might be a fight we’re ready for…and certainly it’s one worth having.

Paul Crist is an economist, business owner, political activist, and essayist.  His writing and opinions reflect a progressive approach to policy issues on a range of topics.  A Washington, DC native, he currently divides his time between Puerto Vallarta, Mexico, where he owns a hotel and runs an HIV/AIDS non-profit, and Washington, DC, where he currently lobbies on healthcare and immigration issues.

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