Corporations

The Era of Corporate Rule: Why Corporate Personhood is Wrong

Posted on by Jake White

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.”

-Noam Chomsky

(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).

The dissenting opinion by Justice Stevens was joined by Justice Ginsburg, Justice Breyer, and Justice Sotomayor. (Read the Supreme Court opinion paper.) The 90-page dissent held that the Court’s ruling “threatens to undermine the integrity of elected institutions across the Nation. The path it has taken to reach its outcome will, I fear, do damage to this institution.”

Justice Stevens went on:

“Corporations are not actually members of [our society]. They cannot vote or run for office. Because they may be managed and controlled by nonresidents, their interests may conflict in fundamental respects with the interests of eligible voters. The financial resources, legal structure, and instrumental orientation of corporations raise legitimate concerns about their role in the electoral process. Our lawmakers have a compelling constitutional basis, if not also a democratic duty, to take measures designed to guard against the potentially deleterious effects of corporate spending in local and national races.”

Stevens concluded his dissent with:

“At bottom, the Court’s opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self government since the founding, and who have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.”

President Barack Obama stated that the decision “gives the special interests and their lobbyists even more power in Washington — while undermining the influence of average Americans who make small contributions to support their preferred candidates.” Obama later elaborated in his weekly radio address saying, “this ruling strikes at our democracy itself” and “I can’t think of anything more devastating to the public interest”. On January 27, 2010, Obama further condemned the decision during the 2010 State of the Union Address, stating that, “Last week, the Supreme Court reversed a century of law to open the floodgates for special interests — including foreign corporations — to spend without limit in our elections. Well I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities.”

A Statement by Ralph Nader, Published on Thursday, January 21, 2010 by CommonDreams.org:

Corporate Personhood Should Be Banned, Once and For All

Today’s decision by the U.S. Supreme Court in Citizens United v. Federal Election Commission shreds the fabric of our already weakened democracy by allowing corporations to more completely dominate our corrupted electoral process. It is outrageous that corporations already attempt to influence or bribe our political candidates through their political action committees (PACs), which solicit employees and shareholders for donations. With this decision, corporations can now also draw on their corporate treasuries and pour vast amounts of corporate money, through independent expenditures, into the electoral swamp already flooded with corporate campaign PAC contribution dollars.

This corporatist, anti-voter decision is so extreme that it should galvanize a grassroots effort to enact a Constitutional Amendment to once and for all end corporate personhood and curtail the corrosive impact of big money on politics. It is indeed time for a Constitutional amendment to prevent corporate campaign contributions from commercializing our elections and drowning out the civic and political voices and values of citizens and voters. It is way overdue to overthrow “King Corporation” and restore the sovereignty of “We the People”!

In response to the court’s decision, two nongovernmental campaigns have emerged to petition for an amendment to the United States Constitution (source). They have produced a number of proposals to amend the Constitution to remove corporate personhood, and legalize democracy. Organizations advocating the campaigns include Voter Action, Public Citizen, the Center for Corporate Policy, and the American Independent Business Alliance (source). Campaign reform groups Common Cause and Public Campaign issued a joint press release denouncing the court opinion as “judicial activism and arrogance at its worst,” and calling for new legislation to mitigate some of the potential effects of the ruling.

You can TAKE ACTION by signing this petition.

To learn more about this important issue:

“I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.”

-Thomas Jefferson, 1816

Legal history: