January 25, 2010

Make Corporations Full Citizens

After the American Century #207

In American law the idea developed that corporations ought to be considered individuals – or persons. This idea makes a certain sense if narrowly interpreted. For example, a corporation, like a person, can be governed by the same laws regarding contracts. The corporate “person” could also be sued for liable. But in a revolutionary ruling last week, the United States Supreme Court decided that corporations also have the right to free speech and are protected by the Bill of Rights. The Court might have ruled far more narrowly but instead went out of its way to declare that corporations may advertise freely and directly in political campaigns. (Logically, the Court should also have given corporations the right to vote in elections, but perhaps it is saving that decision for another time.)

In the interest of making corporations into better fellow citizens, here are specific proposals to help them achieve a fuller humanity, since that is what the Court clearly desires.

1. Slavery being outlawed by the Constitution, it therefore should be illegal for one corporation to own another corporation. Holding companies clearly are a modern form of slavery that must be eliminated.

2. Hostile corporate takeovers must henceforth be regarded as acts of aggression that are punishable as crimes. A hostile takeover of a corporation must be considered a form of kidnapping, in some cases followed by murder, and punished accordingly.

3. Corporations that close down should be subjected to the same laws of taxation as the estates of deceased individuals. As it is now, companies can more resources around, closing down one company and opening a new one as often as they wish, without being subject to the taxation (and in effect the audit) imposed on a human being’s estate.

4. Since human beings are not immortal, it seems only fair that corporations be declared legally dead every 60 years (this being the maximum length of most person’s adult life). This death could be followed immediately be corporate rebirth, but only after paying the estate taxes.

5. Corporations should be punished for murder in the same way that people are. If they want to be considered persons, then they cannot pick and choose which legal obligations they want to assume. At present, when a corporation pollutes the air or water and as a matter of statistical certainty, makes some people ill and causes others to die, the “normal” practice is to fine them and to force them to pay compensation to the victims. This is not right, as it allows a wealthy “person” to substitute a cash payment for imprisonment. Real people cannot do that, why should corporations be allowed to get off? The people who give themselves those big corporate bonuses and stock options must also now be held criminally liable for the corporation’s behavior if they accept the payments.

6. The old idea of the corporation included the provision that people who invested in them had limited liability. That is, they could lose only the money originally invested, but had no personal responsibility in case the corporation ran up huge debts. In the nineteenth century, when corporations first were becoming a common way of organizing a business, many ordinary people protested. It seemed unfair that an ordinary grocer or carpenter was fully liable for his actions, while a vast corporation that owned many grocery stores or built many houses had limited liability. Clearly, now that the Court in its infinite wisdom has ruled by a vote of 5-4 that corporations have political rights, it follows that they can no longer claim limited liability. If they want to claim the rights of people, then they muse assume the obligations of people. Alternately, one would have to extend the same right of “limited liability” to all Americans, not just corporate Americans.

Now that the Court has ordered us to welcome corporations into full membership in political and civil society, the essential thing is to make sure that they take on ALL the obligations of citizenship.