In 2011, then presidential candidate Mitt Romney famously remarked “corporations are people, my friend” when confronted by hecklers at the Iowa State Fair. He was mocked and derided in many circles for this comment, which seemed to represent a politician blinded by his own corporate experience and success. But Romney was at least partially correct. in order to understand why we have corporate personhood, as well as to analyze what limits it should or should not have, one must examine both the nature of the corporation itself as well as the history of rights granted to these “fictional” entities. This podcast gives a brief history of the corporation and an overview of its various forms, at least in the U.S., and discusses the challenges our recent expansion of corporate rights has created.
U.S law (as well as laws around the world) recognize that corporations have some specific rights separate from the natural persons who may own or operate such business. These rights include the ability to enter into contracts, take out loans, sue others, be sued, own assets, pay taxes, etc.
There are very good reasons why we have corporations, and why they are separate legal entities often characterized by a “corporate shield” to separate the liability of a company with that of its owners or operators. One could argue this has been essential to promoting innovation and growth, and in fact central to the whole notion of capitalism.
However, just because a corporation has (and should have) some rights, that does not mean it is equivalent to a person. For one, starting and running a business isn’t an inherent right – it is done by license (effectively a contract) between the government (often a state) and the business owner. Second, unlike a natural person, a corporation can’t be held accountable in the way that humans can – no corporation can be put in prison! Therefore, humans have rights granted by the Constitution and laws, but these are granted in the context of an accountability system that can punish someone for violating laws or another persons’ rights. A corporation can never have as strict of an accountability system.
This exaggeration of corporate personhood by our modern society (and court cases) leads us to anthropomorphize and give businesses characteristics that they can not, by definition, have, including a religion, morals, love, etc. When one combines the notion of the Corporate Shield with this anthropomorphization of business, we get logically flawed rulings such as the 2014 Hobby Lobby case where a company can maintain the corporate shield to limit liability but can pierce it the other way to equate the owners’ expression of their individual free speech rights as an expression of the company.
So, the question is, where do we draw the line? Clearly corporations are not literally people, but we must create a framework for Corporate Personhood with a set of rights more limited than those for human beings. This podcast discusses some ways to think about these issues.
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