Corporations are not mentioned in the Constitution. During our first century, the U.S. Supreme Court consistently ruled that corporation are not persons. This changed in 1886 when the Supreme Court recognized corporations as “persons.” The Santa Clara County v. Southern Pacific Railroad ruling open the door to applying the Bill of Rights and the Equal Protection Amendment to corporations. The Due Process clause of the Fourteenth Amendment states that: States [shall not] deprive any person of life, liberty, or property, without due process of law.” This protection was now being applied to corporations. The court’s decision was not debated publicly or in the halls of congress. This society-changing decision was made by the Supreme Court (though some have doubted that even the Supreme Court made this decision). It is one thing to give corporations the right to enter into contracts with other persons or corporate entities, or to limit the liability of its owners, but it is another thing to grant a corporation the rights of a living person, especially when corporations act nothing like a normal person.
In 1933, Supreme Court Justice Louis Brandeis called corporations “Frankenstein monsters” capable of doing evil. Joel Balkan pointed out that, “The corporation’s legally defined mandate is to pursue , relentlessly and without exception, its own self-interest regardless of the often harmful consequences it might cause to others…The corporation is a pathological institution, a dangerous possessor of the great power it wields over people and societies” (source, p. 1-2). The corporation could be seen as manifesting the characteristics of a sociopath, with no regard for the harm its actions may inflict to individuals and communities (think BP, Massie Energy, Enron, Humana). When real people act like this, their rights are taken away and they are locked up. In this sense, corporations are given greater freedoms than individual citizens.
The case against corporate personhood is not a criticism of responsible entrepreneurs who create healthy competition for goods and services. The free market can have very positive outcomes for our society. But some segments need to be heavily regulated or even taken over by government for the sake of transparency and removal of the profit-motive (healthcare is one example where the profit-motive can harm people while increasing profit for corporate owners and managers). Regulations are designed to force corporations to pay for the costs that would otherwise be forced onto society and the environment (source, p. 150). To minimize harm, the corporation simply needs to be limited in its reach. Without effective regulations, the free market self-implodes (as we saw in the Great Depressions and again in 2008), and it can produce unintended and harmful consequences to individuals and communities. If unchecked, it can also destroy democracy.
|“Whatever one thinks of government, they’re to some extent publically accountable, to a limited extent. Corporations are to a zero extent. One of the reasons why propaganda tries to get you to hate government is because it’s the one existing institution in which people can participate to some extent and constrain tyrannical unaccountable power.”
(source, p. 152)
Corporations now have a disproportionate influence on our political system. OpenSecrets.org pointed out that, “the 2010 midterm elections will be remembered for spawning a new breed of political animal — the ‘super PAC,’ officially known as ‘independent expenditure-only committees,’ which are legally allowed to raise unlimited amounts of money from individuals, corporations and unions to expressly advocate for or against federal candidates.” When the Supreme Court removed the ban on election spending earlier this year, in the Citizens United v. Federal Election Commission ruling, it opened the flood gates for corporate control of elections. This is a serious threat to democracy. When corporations are declared “persons,” and given freedom of speech, and money is called “speech,” we have a broken system. Barbara Steisand said it well when she called the ruling a “corporate coup d’état of America’s Democracy.” She went on to say, “By reversing well-established election law, their judicial activism has set the stage to possibly erode the very fabric of our country” (source).
A New York Times editorial noted, “The Supreme Court has handed lobbyists a new weapon. A lobbyist can now tell any elected official: if you vote wrong, my company, labor union or interest group will spend unlimited sums explicitly advertising against your re-election” (source). Jonathan Alter called it the “most serious threat to American democracy in a generation” (source). » Read more: The Era of Corporate Rule: Why Corporate Personhood is Wrong