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Posted by on Mar 31, 2014 in Uncategorized | 14 comments

Corporations Are People; Really

Do you remember the 2012 Presidential campaign? I certainly do. Many think of Mitt Romney’s 47% comment, uttered at a fundraising dinner in May 2012. During said dinner Romney stated “[T]here are 47 percent of the people who will vote for the President (Obama), no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. … My job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.”

This comment was never intended for public consumption. Rather it was surreptitiously recorded and leaked to the media. Still it was a game changer which may well have costs Romney the election.

But as telling as was the 47% comment, it is not as material as his August 2011, response to a heckler at the Iowa State Fair. The fair attendee suggested to Romney that taxes should be raised on corporations as part of balancing the budget. In response the candidate replied, “[C]orporations are people, my friend … of course they are. Everything corporations earn ultimately goes to the people. Where do you think it goes? Whose pockets? Whose pockets? People’s pockets. Human beings, my friend.”

What? Corporations are people; really; since when? The notion of corporation personhood goes against all of my law school training. I was taught that corporations are legal constructs, designed to facilitate business and economic development by shielding the personal assets of the investor class form the risks of doing business.

Even sans a legal background, the corporations are people philosophy is counterintuitive to say the least. When one thinks of persons, the image of flesh and blood entities, with human emotions, hopes and dreams and who bear and raise other flesh and blood entities comes to mind. Heretofore, I had not thought of business structures as people.

But as is often the case, I could be wrong. So in an attempt to understand the notion that corporations are people, I researched the history of corporations, their powers, limitations and purpose(s). Said research reveals the following.

“When American colonists declared independence from England in 1776, they also freed themselves from control by English corporations that extracted their wealth and dominated trade. After fighting a revolution to end this exploitation, our country’s founders retained a healthy fear of corporate power and wisely limited corporations exclusively to a business role. Corporations were forbidden from attempting to influence elections, public policy, and other realms of civic society.

Initially, the privilege of incorporation was granted selectively to enable activities that benefited the public, such as construction of roads or canals. Enabling shareholders to profit was seen as a means to that end. The states also imposed conditions (some of which remain on the books, though unused) like these:

  • Corporate charters (licenses to exist) were granted for a limited time and could be revoked promptly for violating laws.
  • Corporations could engage only in activities necessary to fulfill their chartered purpose.
  • Corporations could not own stock in other corporations nor own any property that was not essential to fulfilling their chartered purpose.
  • Corporations were often terminated if they exceeded their authority or caused public harm.
  • Owners and managers were responsible for criminal acts committed on the job.
  • Corporations could not make any political or charitable contributions nor spend money to influence law-making.”[1]

Fast forward to today. Corporations have never been more powerful and the move to make them people, to imbue them with personhood including constitutional rights proceeds apace. A number of cases come to mind.

The “corporations are persons” movement commenced with the 1886 Santa Clara County v. Southern Pacific Railroad Supreme Court case. Though the court did not make a ruling on the question of corporate personhood, but thanks to misleading notes of a clerk, the decision subsequently was used as precedent to hold that a corporation was a “natural person.

In the 2000, Citizens United v. the Federal Election Commission decision, the same court ruled that money is speech. Since political speech can not be restricted, corporations and unions may therefore spend unlimited amounts of money to sway political elections. Few have more money than corporations. Thus, few have more speech than corporations. It therefore follows that few have more power to sway elections than corporations.

Currently, the Supreme Court is adjudicating Sebelius v. Hobby Lobby Stores, Inc. The case involves Hobby Lobby, a chain of craft stores and Conestoga Wood Specialties, which makes furniture. Both corporate defendants are owned and controlled by devoutly religious families, who contend that that some forms of birth control, specifically emergency contraceptives and  IUD devices are tantamount to abortion, even though this conclusion is not generally accepted by the scientific community.

The defendants further contend that the coverage of these services under The Affordable Care Act constitutes not only abridges their rights to freedom of religion, but that of their corporations as well.[2] The claim is based in part on the afore mentioned Santa Clara County case and the Religious Freedom Restoration Act of 1993, which provides that “the Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability.”

Blackacre believes that the corporation personhood movement is bad public policy with potential disastrous consequences. Our concerns are as follows:

  • The person hood movement increases the influence and clout of corporations which are already too powerful. Of the 100 largest economies in the world, 51 are corporations, while only 49 are countries.[3] Corporations therefore control our economy, our politicians, our lives and to a large extent our foreign policy.

Granting them person hood further and irrevocably shifts the balance of power. If for example, a person owns 5    corporations and if corporations are people with the right to vote, than the owner has 6 votes instead of one, i.e., his individual vote and the votes of the 5 corporations he/she owns.  If the corporation is owned by a married couple, then the owners have 12 votes instead of two.

Or take the 2nd Amendment. If corporations have full constitutional rights then they also have the right to bear arms sufficient to rival any nation state.

The Hobby Lobby case combines into an irresistible force the very things which divide us, i.e., money, religion, power and politics, thereby making it especially onerous. It is fundamentally unwise to give corporations yet additional unabridged and unrestricted power?

  • Corporations already receive too great a share of societal benefits. No one, absolutely no one receives more government welfare than corporations.  This welfare includes favorable tax treatment, the building of roads and infrastructure with taxpayer dollars, the receipt of tax deferrals, abatements and credits. If it is wrong to expect corporate owners to pay for things with which they disagree, e.g., birth control for corporate employees, then it is equally wrong to provide millions if not billions of dollars in public welfare to already wealthy corporate owners. It is even more wrong for said owners to expect, no demand all of the public welfare they can get?
  • Corporations are both irresponsible and unaccountable. Whether by oil spill, mining disaster, vehicle defect and/or product liability corporations are anything but benign. Their only goal is to make money for their owners and shareholders. As such, corporations are directly responsible for their fair share of death and destruction.

Consider for a moment the 1991 Gulf War oil spill where 240 to 336 million gallons of crude oil was spilled, the 1989 Exxon Valdez incident where 10.9 million gallons were spilled or the 2010 BP Gulf of Mexico incident where 210 million gallons were spilled, in addition to causing the demise of eleven people.

The mining industry also has a bloody history of disasters, including the Fraterville, Tennessee, tragedy of 1902, where 216 miners were lost, the 1902 Sunshine Mine disaster in Kellogg, Idaho where 91 miners died, or the 2010 Montcoal West Virginia, Upper Big Branch mine disaster where 29 miners perished.

Automobile corporations are no better. General Motors, Nissan and Honda have all put defective vehicles on our roads and highways. As Bill Maher noted on the Friday, March 28, 2014 airing of Real Time, one automobile manufacturer knew for ten years that it had built defective airbags resulting in the death of 303 people.

Yet another automobile corporation knew in 2004 that the ignition system in one of its vehicle was defective and would turn off at any moment denying the vehicle breaks, steering and air bags. The corporation further knew that people were dying as a direct result of this defect. Yet it kept the vehicles on the road for another five years before correcting the problem.

Ponder further the damage done by the Wall Street and financial collapse of 2007-2008, caused in large part by high risk lending, regulatory failure, investment bank abuses and inflated credit ratings. And when it comes to big brother, nothing compares to the power and willingness of corporate America to spy on Americans, the currant NSA scandal notwithstanding.

“Collaborative surveillance between government and the private sector is nothing new. For three decades during the Cold War, for example, telegraph companies like Western Union, RCA Global and International Telephone and Telegraph gave the National Security Agency, or NSA, all cables that went to or from the United States. Operation Shamrock, which ran from 1945 to 1975, helped the NSA compile 75,000 files on individuals and organizations, many of them involved in peace movements and civil disobedience.

Data aggregators — companies that aggregate information from numerous private and public databases — and private companies that collect information about their customers are increasingly giving or selling data to the government to augment its surveillance capabilities and help it track the activities of people.

But corporations aren’t the only ones giving private data to the government. In 2002, the Professional Association of Diving Instructors voluntarily gave the FBI the names and addresses of about 2 million people who had studied scuba diving in previous years. And a 2002 survey found that nearly 200 colleges and universities gave the FBI information about students. Most of these institutions provided the information voluntarily without having received a subpoena.”[4]

  • The notion that money is speech or that corporations are people are absurd on their face. Despite what the court has ruled money is not speech. Money is instead personal property as any 1st year law student well knows.

And while there is no denying that corporations tend towards profitability, this does not make them persons within the meaning of the Constitution. There are a lot of things, animate and inanimate, organic and inorganic, that put money in the pockets of people. Race horses, boxing gloves, cars, pool sticks, footballs, tennis rackets, scissors, blow dryers, books, computers, cell phones or any other object which is used in any number of industries are not people regardless of the fortunes they bring.

The fact that corporations are comprised of and controlled by people is also insufficient to bestow person hood. A swimming pool is not made a person merely because it is filled with swimmers on a hot summer’s day. A school bus is not a person even though it is operated by a bus driver and occupied by a gaggle of children. Nor is an elevator magically converted to a person and thereby entitled to constitutional rights even if is filled well beyond its maximum weight limit

Are these conjectures absurd? Absolutely! But they are no more absurd than the misguided notion that for profit corporations are persons. The following logistic syllogism puts the issue to rest.

  • All persons are subject to incarceration upon the conviction of a criminal offense.
  • Corporations are not subject to incarceration upon the conviction of a criminal offense.
  • Therefore, corporations are not persons.

In conclusion, be not confused. The corporations are persons movement is nothing less than a power grab initiated and promulgated by those who own and operate them, enabling their individual and collectively power and influence to grow exponentially. It is no surprise that the top 1% own the very corporations upon which they seek to grant person hood. The last thing we as a society should do is to be a party to our own disenfranchisement by conferring person status upon our corporate masters.

Leo Barron Hicks, Founder and CEO, Blackacre Policy Forum

[2] The Dallas Morning News, “Justices Struggle With Religious Rights for Companies, Wednesday, march 26,2014, Section A, p. 1A and 5A.


    • Thanks.

    • Thanks.

  1. There is a great deal of “walking the line here”

    Corporate officers are accountable for the conduct of the corporations they head and can be incarcerated for those actions. However, the Notion that a corporation is a person would be preposterous since it neither breathes or is a sentient being. It’s a very interesting question to me that, under the premise that a ” corporation is a person”, isn’t a person also a human being with a soul? So how would the law distinguish between a person and a human being? And if I create a robot through my corporation, is it now a person (with ability to vote or be incarcerated) I think it is tantamount to ridiculous that we actually have to define legally what a human and a person is (remember the 3/5’s law and octoroons). The other challenge is that corporations provide jobs that enable the economy. People vote for their jobs usually, which means they typically vote along the mindset of their parent corporation. I spent 12 years in the military and always voted republican because I want to pay raise. Since leaving the military I’ve never voted Republican again. So I employ the exact same way of thinking. The hypocritical part about it is that I own four corporations for the exact same reasons that corporations are created, “to protect my assets and shield me from litigation”. These corporations for the exact same reasons but all smaller scale, does that make me just as wrong? I guess that all depends on what side of the results a person is on.

    • Yes corporations do indeed provide jobs and you are not being hypocritical because you formed four of them. You are being smart. I am nevertheless convinced that corporations are not people and deeming them so is not in our best interest. As always appreciate your thoughtful feedback.

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