“Corporations are people, my friend,” Mitt Romney
declared during the 2012 presidential election. Governor Romney is correct; corporations are people, people with too much power. Corporations have a greater amount of free speech and influence than the average American. The debate over corporate personhood should not be if a corporation is a person or not. That decision has been made; the debate should be whether or not this is acceptable. Corporations are people, but they have greater rights than an average person. That should be where the conversation is at in this country, because that is what really matters.
Before we get into the debate of whether it should be acceptable or not acceptable for corporations to have greater rights than the average American. It should be noted how corporation became “people” in the first place. This will be demonstrated through Supreme Court decisions that date back to 1819.
Trustees of Dartmouth College v. Woodward (17 U.S. 518, 1819). This case was one of the first times that a corporation was referred to as being an individual person because a corporation was holding “the power to sue, being amendable to suit, and existing independently of the lives of their shareholders” (
Michalski, 2013, p. 134).
Santa Clara County v. Southern Pacific Railroad (118 U.S. 394, 1886). In this case, the Supreme Court recognized that corporations could be recognized as persons under the Fourteenth Amendment and that entitled them to be treated equally under the law. This case, in essence, was a breakthrough in corporate personhood. Labeling a corporation as a kind of person allowed corporations to “have legal standing to hold property, to enter into contracts, to conduct business, and ultimately, to sue and be sued” (Michalski, 2013, p. 131).
Noble v. Union River Logging R.R. (147 U.S. 165, 176, 1893) continued to establish a corporation’s personhood and granted corporations more rights. The case established that a company has a right to due process under the Fifth Amendment (Michalski, 2013).
Hale v. Henkel (201 U.S. 43, 76, 1906) conferred additional Bill of Rights protections on corporations. This court case established that companies had protection under the Fourth Amendment’s ban on unwarranted searches, seizures, and self-incrimination (Michalski, 2013). This was established after a federal grand jury tried to force tobacco corporations to turn over specific documents.
Citizens United v. Federal Election Commission (558 U.S. 310, 2010). The Supreme Court found that political spending is a form of protected speech under the First Amendment. It also found that the government could not restrict the rights that corporations or unions have in regards to spending money on political campaigns or individual candidates. The Supreme Court did establish that corporations or unions could not give money directly to political campaigns; they could, however, try to influence individual citizens through other means, like through the use of ad campaigns.
Corporate Impacts on Policy
One of the reasons corporations will impact policy areas is that since corporations are people; corporations now have to be a good citizen that tries to help with matters of social concern. Michalski argues that corporations have now entered into a new type of personhood. A modern corporation is not only a person but they are citizen. Since they are a citizen they should be classified as having “corporate citizenship” (Michalski, 2013, p. 141). “On the other hand, if corporations as artificial persons are like real persons, then they must also bear the same responsibilities. Just as individuals may not simply pursue their own selfish ends without regard to others, so too should corporations consider factors beyond profit maximization” (Michalski, 2013, p. 141). Michalski uses what he calls, the Natural Entity theory. Since we are labeling corporations as being a person (a natural entity) then these corporations must have social obligations to the citizens of this country (Michalski, 2013). This is the notion that corporations should be good citizens. They should not just be looking at their profits, but the effects that their business practices have on the community they inhabit. Corporations are leaders that should help in making their community or country a better place to live. In this day in age, corporations are expected to help out in areas such as breast cancer research; supporting the gay and lesbian community; supporting military members and family members; helping reduce human trafficking and human slavery. Corporations have a responsibility to give back to the community, so they are expected to sponsor events through money and other forms of support.
Being a socially responsible corporate citizen is not only voluntary in some aspects, but it is enforced by laws, rules, and regulations. There have been several developments within the past few years in regards to corporate responsibility in a legal sense. “President Barack Obama's Executive Order, aimed at combating human trafficking by making all federal contractors comply with regulations once applicable only in defense-related settings; and new rules adopted by the Securities and Exchange Commission (SEC) regarding conflict minerals” (Reider-Gordon, Funk, Ewelukwa, Feldman, & Wagner, 2013). Corporations, like people, have legal responsibilities to their communities. Corporations will not only be held accountable in a court of public opinion, but they could be liable in a court of law if their actions are deemed unethical and legally abhorrent.
Since corporations are now in the business of supporting social causes and are now being held to the same standards of an individual living in a society, in regards to being a good citizen. Corporations will impact public organizational structure because corporations are now partially in the same business as public organizations. As Scott & Davis notes, “corporations have come to look more like states in the range of their activities, while states have come to look more like business corporations, as both compete for each others’ business” (2007, p. 367). The distinction of what a corporation is and what a public organization is has become muddled. The reason for that is because not much separates how a public organization is structured vs. a corporation. It has already been concluded that the only thing that really separates a public organization and a corporation is profit and revenue. Public organizations are not allowed to make huge profits, but they can bring in revenue and make some profits, but the goal of the public organization is to support society and programs that the government has enacted. Public organizations are trying to administer programs for the greater good of society, while a corporation is out for profit. However, now that corporations are partially in the business of trying to be a good citizen and promote the greater good of society, which means that, their interests can intersect with a public organization. The only real difference, which is not a minor difference, is in terms of profits.
The Negative Impacts of Corporate Personhood
The notion that corporations are persons with the rights and responsibilities of an actual, living person is clear, legally. However, there should be skepticism and concern about this status being bestowed upon corporations. It makes sense that corporations should be protected under the Constitution. They should enjoy the same rights because corporations are made up by people that are looking to make a profit. They are administered and organized by people. They should enjoy some of the same rights that we all do. However, the Citizens United case seems a step to far in regards to using their money to support political candidates or causes. This is argued because of the money factor. Money allows corporations to have more power than the average person. Corporations have millions, sometimes billions of dollars at their disposal so that means that their freedom of speech has more weight than an average voter. Money is what concerns me, corporate rights, not so much. In my opinion, the Supreme Court should have allowed the government to regulate spending in regards to campaign ads and donations to political actions committees. The money corporations have allows them to have a bigger, more influential voice. Again, no one should begrudge them their First Amendment rights, but there should have been a way to cap the money they could spend because that money is an unfair advantage to the millions of other people in this country. Corporations have a bigger voice so they will be able to get a better return on their investment because they have the power. Money is power in this country and the Supreme Court gave corporations an unfair advantage when it comes to the First Amendment of the Constitution.
Citizens United was only the beginning of this concerning journey in regards to corporate personhood and money being used as a tool for political persuasion and influence. On October 3, 2013, the Supreme Court heard oral arguments in the case of
Shaun McCutcheon v. Federal Election Commission. The case revolves around a conservative businessman from Alabama named Shaun McCutcheon. McCutcheon is a man that loves to donate money to political candidates and committees. However, McCutcheon is unhappy with the currently limits on donations to political campaigns and candidates. The Washington Post
discussed those limits, “For the 2013-2014 cycle, individuals can give a total of $123,200 to candidates, national party committees and certain political committees, including a $48,600 limit on what individuals can give to candidates." McCutcheon wants to donate even more money than he is allowed to by law. He believes the law is a violation of his rights’ under the First Amendment. McCutcheon decided to sue the Federal Election Committee.
This case, which was
decided on April 2, 2014, has eliminated donation limits to political campaigns and committees. In theory, we could start seeing rich individuals and corporations (because they are people) donating as much money as they wish to any political cause or individual. This could allow for the total access and total manipulation of campaigns because there is no limit on donation amounts. This has the potential for truly allowing money to win over our political process. If a politician can get any amount donated to his or her campaign that means that they are for sale. They could be easily influenced to change positions on any policy because a person or corporation will have an open checkbook that will allow that politician to be bought. There will be no limits and that is a scary proposition because, like Citizens United, that gives access to people with money. Money buys a person or a corporation access, that seems like a violation of free speech because if money can buy influence then that means millions of Americans will not (and do not) have the same amount of free speech because the more money a person has, the more free speech they will be given. If someone has no money then that means they have zero influence and free speech. This is a scary proposition.
Conclusion
The facts are undeniable. Corporations are people. Since the early 1800’s, corporations have evolved from entities that were tools of the state to entities that have the same rights and responsibilities of living, breathing persons. This transformation took about 200 years. Every case that was listed in this article, slowly transformed the corporate entity into the corporate person. It was a step-by-step growth in rights for corporations that began with the Supreme Court Case of
Trustees of Dartmouth College v. Woodward that ended with the latest Supreme Court Case of
Shaun McCutcheon v. Federal Election Commission. Corporations have been given their First, Fourth, and Fifth Amendment rights (and others that were not listed in this article). Slowly but surely, corporations were given their basic human rights. Since they were labeled a person they were given the exact same rights as everyone else in this country. The outcome seems logical because you cannot bestow the label of personhood to an entity and not expect it to have the same rights as an American citizen or as a human being, in general.
Since corporations are people, the thesis that corporate personhood is a legitimate concern for our country is quite true. Some of the impacts on society will be positive. Since corporations are designated as people, it also makes logical sense that they have to be good productive citizens that are not just looking at their bottom line. A corporation must sacrifice some of their profits for the good of the community and of the country. The idea of the Natural Entity theory is a sound theory because corporations have been labeled as a natural entity then they should be held to the same obligations that all other citizens in this country are held to. Corporations and citizens both have expectations of working in an ethical manner that helps promote the social stability of the country. The modern corporation is now a corporate citizen. A corporate citizen will now be involved with the community. They will help sponsor individuals, groups, and organizations across this country and across the globe in order to promote social responsibility. A corporation may sponsor a non-profit organization that helps research Autism or a corporation could sponsor a church-group in their mission to provide aid to people in distress. A corporation has a responsibility to give back to the community that they make a profit from. Corporations not only have a voluntary obligation to its fellow citizens, but there are also legal obligations that they must abide by so they can bring about social justice. This makes the corporations take on qualities of state and a public organization because they are administering programs that the state or federal government would be in business of doing. That changes public organizations because they will have to have structures that resemble private enterprises and corporations because they will have to work in tandem with businesses.
These evolutionary changes that have taken place within corporations and in public administration is concerning because corporations now have the same rights as a person when it comes to political influence. The
Citizens United case and the
Shaun McCutcheon case, have allowed corporations even greater access into the world of politics. Corporations have millions, if not billions of dollars, at their disposal. They can use that money to fight any political cause, policy, or candidate they may wish. This decision allows corporations to have more rights than an average American. An average American does not have the money to influence politics, but a corporation does, and that allows them to have a greater voice and more free speech than this average American. It is concerning because money will be the key in influencing policy and politicians.
“Corporations are people, my friend,” the debate over corporate personhood should not be if a corporation is a person or not. That decision has been made; the debate should be whether or not this is acceptable. Corporations are people, but they have greater rights than an average person. That should be where the conversation is at in this country, because that is what really matters.
Michalski, R. (2013). Rights come with responsibilities: Personal jurisdiction in the age of corporate personhood. San Diego Law Review, 50(1), 125-189.
Reider-Gordon, M., Funk, M., Ewelukwa, U., Feldman, I., & Wagner, C. (2013). Corporate social responsibility. International Lawyer, 47(1).
Scott, W. R., & Davis, G. F. (2007). Organizations and organizing: rational, natural, and open system perspectives. Upper Saddle River, N.J.: Pearson Prentice Hall.
