Corporations Revisited

8 Nov

The issue of demands continues to surface (and die) at the Occupations, with a recent casualty being a ‘jobs for all’ platform proposed at Occupy Wall Street. Media coverage has obsessed about the lack of demands, yet it has missed the fact that a number of General Assemblies have approved one: end corporate personhood. As far as we can gather, this is the one point on which the OWS and the Occupy Boston groups have agreed on, and at our various discussions at Occupy Boston in particular, it is the one demand we find nearly everyone there actively supporting. Although we addressed the corporate personhood issue before, it is worth revisiting given its emergence as something of a consensus position.

At a tactical level calling for an end to corporate personhood, especially while rejecting most other demands, is just politically tone deaf. For one, why would a movement claiming to represent the interests of 99% begin with such a technical and dislocated demand? It is hardly high on the list of the many groups and persons who are suffering from the current economic order and who might very well tacitly support the Occupations. While Occupy enjoys a fair, though unmeasurable, amount of tacit popular support, at some point it will have to convert at least some of that support into active support. To do that, it will have to show political insight into the needs and desires of those potential supporters – workers, debt-burdened consumers, immigrants. Corporate personhood is hardly high on their list, and it is certainly not the main obstacle to meeting their demands.

Moreover, the demand to end corporate personhood is a tactical mistake because it is so middling and indeterminate. It seeks to tear down some aspect of the present, but does not even hint at the ultimate structure of ownership, scale of production, and justice of distribution that a more desirable economic order would have. Ending corporate personhood is neither a broad and radical desire, like a demand to create jobs for all or demand to nationalize banks and socialize investment, nor is it a concrete demand, like a millionaire’s tax and suspension of foreclosures. In other words, it does not seem to offer either a utopian vision nor any immediate improvement in the majority’s economic situation. The demand speaks to a kind of poverty of imagination and, at a more mundane level, betrays an odd unwillingness to think about the immediate concerns of the 99%.

Of course, we know why the idea of ‘corporate personhood’ has seized the Occupiers’ imagination. In the Citizens United case, the Supreme Court used the idea of corporate personhood to defend the free speech rights of corporations and to undermine federal limits on campaign contributions and political ads by corporations and unions. Further, Citizens United was decided against the background of Kelo v. City of New London. That case expanded the legitimate use of eminent domain to allow the state to force property owners to sell their land to the government for the purposes of having that land resold to private development corporations (rather than be put to use by the state itself). If the corruption of democracy is generally associated with corporations and concentrated wealth, these cases have made corporate personhood the special object of contempt.

Citizens and Kelo were both bad cases, but they were not bad cases because of the very idea of corporate personhood. They were bad cases because they constructed the legal personality of corporations in bad, undemocratic ways. There is nothing inherent in the very idea of a corporate person that leads to undemocratic outcomes. As we pointed out in our previous post on corporations, a corporation is a collective economic entity with certain powers, rights, and liabilities. These features of its legal ‘personality’ are artifacts of law. The undesirable legal changes to corporate governance – by judges and legislators – are a sign that democracy was already corrupted well before the expansion of certain corporate powers. Under conditions of real democracy, we might construct this legal personality in ways that were more suited to serving the public interest.

In fact, there are elements of corporate personality that still bear the traces of democratic control. In many civil cases, corporations are subject to ‘strict liability.’ That means they are economically liable for the harm some decision they make causes, even if they did not intend harm others and could not have known of the consequence. This is not the kind of liability to which an individual person can normally be held. (An individual generally is liable only if some kind of intent – even if only at the minimal level of negligence – is present.) Part of the reason for this difference in liability is to acknowledge the greater social power that corporations have, and to impose a discipline on them given the risks they take. Knowing they face strict liability, and the prospect of massive damages from hostile juries, forces a degree of self-supervision of corporate activities. Civil lawsuits might not be the best way to deal with the unequal social power of corporations. But the point is that the lower standards of intent that corporations face is a feature of how lawmakers have constructed their legal personhood. That corporations have legal personality is what makes that personality subject to democratic control.

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3 Responses to “Corporations Revisited”

  1. Anthony Kammer (@akammer) November 14, 2011 at 11:18 pm #

    Totally agree. Corporate personhood is far too prevalent in our legal system to think that simply eliminating it would solve the problems people at OWS are upset about. It’s a knee-jerk reaction to Citizens United. And as you argue, it’s often the basis of corporate liability.

    The Supreme Court is actually going to hear a case on the Alien Tort Statute this coming term, and the issue is whether corporations are the type of legal entity that can be sued under that law. See http://www.pepperlaw.com/publications_update.aspx?ArticleKey=2222 The idea that corporations would be held accountable in the US for say genocide they facilitated overseas depends on whether the statute can be interpreted to apply to non-natural persons. And there, a finding of corporate personhood is the outcome you’d expect most OWS participants would be behind.

    I wrote a piece over the weekend on the need to reform corporate governance, which addresses some of the ownership/distributive problems you point to. Would be curious to hear your thoughts. http://blogs.law.harvard.edu/kammer/reimagining-the-corporate-form/

Trackbacks/Pingbacks

  1. Debt and Coercion « thecurrentmoment - November 17, 2011

    [...] can be made slaves of their creditors in ways that real persons cannot (which is incidentally another implication of corporate personhood.) Now the disanalogy between corporations and persons here regarding who [...]

  2. Proposals for freedom in the economy: unconditional basic income, cooperative ownership of enterprise, socialized health care. « thecurrentmoment - March 8, 2012

    [...] the Occupy happenings, which bounced between anti-Fed, goldbug Ron Paulism and a general attack on corporate personhood. But instead of continue to criticize those economic tendencies, we thought it worth presenting [...]

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