Friday, January 22, 2010

The Hypocrisy of Corporate Personhood

"Corporations have neither bodies to be punished, nor souls to be condemned; they therefore do as they like." -- often misquoted as "Did you ever expect a corporation to have a conscience, when it has no soul to be damned, and no body to be kicked?"

Edward Thurlow, 1st Baron Thurlow. 1731-1806. Lord Chancellor of England, 1778-1783, member of Parliament at end of eighteenth century

In light of the Supreme Court's outrageous decision about campaign finance, I would suggest a move to treat corporations as persons -- making them liable to imprisonment and even the death penalty, when they cause loss of life.

But no, the pro-corporate types invoke a brilliant act of legerdemain, making the death penalty for corporations unthinkable.  As I noted in Manufacturing Discontent:

"during the height of the scandal regarding Enron's multibillion dollar frauds, a "Wall Street Journal opinion piece entitled, "Corporations Aren't Criminals," noted:  "Under the common law, a corporation could not be guilty of a crime because it could not possess mens rea, a guilty mind" (Baker 2002).  Sadly, the author was correct -- at least in so far as the current courts are concerned. In the eyes of some judges, the law goes even further than ruling that corporation that violate the law lack a guilty mind.  They insist that corporate managers, who should possess a mens rea, have an ethical responsibility to violate the law when doing so will prove profitable for stockholders.  For example, Frank H. Easterbrook and Daniel R. Fischel, the former a federal judge as well as a senior lecturer at the University of Chicago School of Law, wrote:

It is not true, however, that there is a legal duty to enforce every legal right ....  Managers do not have an ethical duty to obey regulatory laws just because those laws exist.  They must determine the importance of these laws.  The penalties Congress names for disobedience are a measure of how much it wants firms to sacrifice in order to adhere to the rules:  the idea of optimal sanctions is based on the supposition that managers not only may, but also should violate the rules when it is profitable to do so. [Easterbrook and Fischel 1982, pp. 1171 and 1177 n]"


Charley said...

To sound an optimistic note: For the moment at least, people are still considered people as well.

Anonymous said...

How about letting corporations vote & run for public office? Of course, they'd have to have been incorporated for at least 18 years before being able to vote, at least 25 years before being allowed to take a seat in the House, etc., etc. Allow them to sit on juries, etc., etc. Until age 16, at least in most states, they'd have to spend 6-8 hours a day in school rather than maximizing profits; this would be of course so they could developing 'human' capital.

Anonymous said...

On a more serious note, Kleiman, or someone else at his blog, has pointed out that this ruling gives a legal way for foreign governments to spend unlimited amounts on US elections, just by buying a controlling interest in an American corporation.

Another problem with the ruling, I think, is that if managers of a corporation have a fiduciary responsibility to maximize shareholder wealth by legal means (I'll ignore the point in the blog post about ignoring the law), they now have a responsibility to push to change the law if that will help profits. If slavery is more profitable than free labor for some corporation, it must now attempt to change the Constitution, etc., etc. Similarly for anything else you can imagine. Corporations are now not merely free to do all this, they are obliged to.

Sandwichman said...

But during the Vietnam War millions of corporations were drafted and sent overseas onto the battlefield where tens of thousands of them "paid the ultimate price" for our freedom.


Noni Mausa said...

"Under the common law, a corporation could not be guilty of a crime because it could not possess mens rea, a guilty mind"

Which tells me that a corporation is not a "person," but an animal. A very clever animal, but still an animal.

michael perelman said...

Yes, a corporation is an animal. Here is what a distinguished judge wrote:

Posner, Richard. 2009. A Failure of Capitalism: The Crisis of '08 and the Descent into Depression (Cambridge, MA: Harvard University Press).
284: "But although the financiers bear the primary responsibility for the depression, I do not think they can be blamed for it -- implying moral censure -- anymore than one can blame a lion for eating a zebra."

TheTrucker said...

My own take on this has to do with sovereignty. I am not real interested in debate about personhood. I am much more interested in attacking this ridiculous decision based on sovereignty and national security. Only American corporations should have the "rights" accorded legal persons in this nation. The Chinese do not have the right to attack or recommend a person running for office in the USA any more than American corporations have such rights in other sovereign nations. Sovereignties are closed political systems and that is as it should be.

Therefore, unless a corporation is 100% American owned and pays 100% of its income taxes to the US government then said corporation is barred from political activities.

Jack said...

I'm cross posting this from AB.
I made this comment in response to DOLB's first post on this topic. I have not yet seen any reply that reconciles the issue of responsibility for corporate misuse of this new found "freedom of speech," or should we say group-speak. What if the corporate entity disseminates lies in the pursuit of political advantage? Who is to be held accountable for libel, defimation and slander if done by a corporation in its pursuit of political advantage? A corporation is an an artificial entity set up for the purpose of shielding real people from liabilities that they should be made to bear in their pursuit of political advantage. The use, or misuse, of "treacherous pens and tongues" has a long, sordid history. It grossly interferes with the education of the people. If the truth of any issue is attacked then those who make such an effort should be held accountable by the law for their misrepresentations.

"One significant purpose of forming a corporation is to limit the liability of the stakeholders and decision makers of that corporation. If a corporation has the rights of an individual, and the individual stakeholders and decision makers of that corporation are shielded from the liabilities that may accrue from that corporation's actions, is there anyone responsible for anything that the corporation may be found to have been responsible for? Worse yet, if the corporation is formed as a shell having few if any finacial assets, what penalty can be applied to the corporation, its stakeholders or its decision makers in the event that the corporation is shown to have been responsible for criminal activity? Who is it that said that "The law is an ass?" Did that person know our current quintet of judicial activits?"

And this:
Another thought along these same lines. Is a corporation a citizen? That's a rhetorical question, Cantab. I'm not looking for confirmation. If an entity can't claim the Constitutional rights of a citizen and cannot even claim the human rights of a legal immigrant, how can that entity enjoy any of the protections afforded by that Constitution? Haven't we been told repeatedly that a corporation has an obligation only to its share holders? Arguments have even been made that the officers of a corporation have a greater obligation to the share holders than they do to laws governing corporate behavior. It certainly seems warranted for the Congress to revisit the concept of a corporation as a person.

I feel strongly about these points. Hope that the cross post is ok.