Corporate Personhood

Corporate personhood is the legal concept that allows business entities certain rights also extended to individuals. While the rights are limited legally and corporations do not have equal rights as people, there are several areas in which businesses are protected in the same way as a citizen. This concept has morality implications for individuals and businesses operating in a society that grants such protections. At the root of the issue is the conceptual metaphor that relates a living and breathing person as being on the same moral platform as an inanimate object – the corporation. By studying both sides of the corporate personhood argument, an assertion can be made that illustrates the manipulation of the Fourteenth Amendment by business leaders and politicians, and supported by the Supreme Court, which is morally unjust. While corporations certainly need a framework of moral reasoning to support economic operations and subsequent macroeconomic outcomes, sneaking under the umbrella of the Fourteenth Amendment is nothing short of a crafty manipulation to empower corporate America. The metaphorical framework is the application of basic human rights and equality to a business entity.

The Constitution and the Bill of Rights were originally implemented to provide strength in the ability to protect the citizens of the United States. The mission and intent of the legislation were to provide equality and establish rights that had been infringed upon by the British occupation. The founding fathers committed tremendous efforts to design and developing this legislation. The underlying theme of the Constitution is simple – to establish the people as having the power for government. This assertion has been a vision and desire of many developing nations over the course of history. Unfortunately, lawyers hired by corporations have spent countless hours tailoring the applications of the Constitution to businesses instead of people. The intent of the Constitution was never to grant corporations an equal status as people. The metaphorical framework was used by corporations to argue that business entities had the same rights as a human being. This is a moral dilemma because corporations are not people and should be a tool used by people to conduct fair and equitable economic practices.

The first movement towards granting corporate rights as equal to an individual came in the form of dissent on the contractual dispute. In Trustees of Dartmouth College v. Woodward (1819) the college fired the superintendent, and as a result, the state legislature attempted to govern the college as an institution of the State. The grounds had been laid that the individual was the college that was protected by a contract to make business decisions such as the firing of an employee. The State disagreed, arguing authority over the college given governmental rights, and the case landed in the Supreme Court. The decision was to permit the college the ability to make decisions under the terms of the contract and did not have to subject its authority to the State. While this issue may seem unrelated to the topic of corporate personhood as it is seen in our society today, this is considered a landmark case that sparked the argument that corporations are separate entities that have rights and do not necessarily have to yield to government authority. This decision was used as precedent to argue that corporations are similar to colleges; in that, they are also governed by contractual authority. Therefore, corporations should be granted similar privileges to Dartmouth College. Corporations again gained classification as a person in the case Santa Clara County v. Southern Pacific Railroad Company (1886). This case was the first that used the Fourteenth Amendment to assert that a corporation had the same constitutional rights and protections as a living person. Supreme Court Justice Waite was quoted during the case as saying "Court does not wish to hear argument on the question whether the Fourteenth Amendment to the Constitution which forbids a state to deny to any person within its jurisdiction the equal protection of the laws applies to these corporations. We are all of opinion that it does” (1). This comment was the first recorded authority granting corporations the same rights as a person.

Under the terms of the law, a corporation can gain recognition as a person. The argument is that corporations are actually comprised of groups of people, and the law has the responsibility to offer rights and protections to those groups of people acting as a representative to the corporation. Corporate personhood gains its support through the Fourteenth Amendment. Although the Fourteenth Amendment was never intended to offer such rights, business leaders argued that the provisions do offer corporations the same rights as people. The history of the Fourteenth Amendment appears fairly simple and the writing lends itself to derive legislative intent of the provisions. In short, the Amendment was adopted as a result of the Civil War and the handling of issues related to slavery; namely, former slaves, in granting them equal rights under the law as white land-owning citizens.

There are significant social consequences of granting equal rights under the law to corporations. While businesses can be protected, they can only really be punished in terms of monetary gain. When a person’s rights are infringed where the injury is caused, the defendant can find a lengthy prison term delivered by justice. Society has never been able to imprison and deter a corporation from ripping people off or negatively impacting the environment. As such, business leaders are often removed from punishment as the very nature of a limited liability corporation is to remove personal liability from the business activity. So, what holds the negative corporate activity accountable in the case of corporate fraud or unconstitutional business practices? According to Hammerstrom (1) corporate personhood is a “high jacking of the Fourteenth Amendment.” Over the course of time the Supreme Court has used the original intent of the Fourteenth Amendment in response to several cases that have developed the current meaning and application of the Amendment. During the reconstruction period the government was struggling with how public policy can assist in the integration of former slaves with white society. At that same time, the corporate America machine was gearing up and making progress towards the industrial revolution. Corporations were eager to gain additional influence and power within society to further promote enhanced profitability. Businesses started to hire more attorneys to advance their firm’s interests by exploiting the provisions of the Amendment. According to Hammerstrom (1) “Of the 150 cases involving the Fourteenth Amendment heard by the Supreme Court up to the Plessy v. Ferguson case in 1896 that established the legal standing of “separate but equal,” 15 involved blacks and 135 involved business entities.” Clearly, the intent of the Fourteenth Amendment was to address slavery issues; however, the record shows the obvious manipulation of the Policy by corporations acting in their own interests.

Democracy should shape the definition of corporation and grant rights as such. Current law grants corporations the same rights as a person. By legal definition, a corporation is a person. Morally and ethically, corporations are not people and they should possess limited privileges that are granted through democracy and a majority-vote legislative process. By defining corporations the same as people, our society has effectively rewritten the Constitution to consider business interests as being equal to the interests of citizens. When equal rights are granted to corporations, the consequence is the weakening of the freedoms that are supposed to protect society. Legal activity numbers can be used to show this disparity. Corporations have been granted the authority, have capital to invest in setting public policy, and are effectively manipulating the social agenda within the court system and Congress. Citizens have difficulties with asserting authority with the court system and Congress as they are limited by money. On the other hand, big business can use money to influence the outcome of public policy decisions. Of course, that influence is being used to favor the interests of the corporations and not the people.

The moral dilemma is that the very mission of the corporation is to create profits for ownership. People are often selfish; however, it is rarely the primary purpose of a person to create wealth for a set of shareholders. Profits come first and the consideration of the negative impact on people and the environment often comes as a lower priority. Morally, the argument of a corporation being a person is incorrect. While there are certainly businesses that act in consideration of the people and create tremendous social benefits, the majority of corporations cannot sustain a competitive advantage while also considering the full scope of the consequences of the action. In essence, negative impacts are accepted by businesses in exchange for monetary gain. The primary objective of a corporation is to obtain profitability. As such, corporations are not people and should not be granted equal status of people in a democratic society.

This issue will be without compromise. On the side of big business, the restricting of rights as an individual is strongly opposed. This is because such an action would limit the corporation’s power, authority, and influence. The result would be a risk on profitability if a business could be controlled by the politicians or the people as a true democracy would fulfill. The opposite is now true – the corporations control democracy. The shift of power is not in the foreseeable future. While there is growing political support to control the negative impacts of businesses such as the Sarbanes Oxley Act, this impact is minimal in the overall moral framework. Politicians, just as corporations, usually act in their own interests. The current environment is one that lends itself to politicians being influenced by the money given to support their own political gain. Until this institution is threatened, corporations will continue to hold the rights as a person in the eyes of the law.

There are currently resolutions to restrict the application of personal rights to businesses. According to Reclaim Democracy (2011) “America has understood for years that corporations have too much power…The Supreme Court gave corporations more power to buy elections and agree that corporations should not be considered to be legal persons and that money should not be considered to be speech.” While the general public agrees that corporations should not have the same rights as a person, the shift in public policy change must be supported through action and not complaint. Resolution templates are available at websites like Reclaim Democracy (2013) that can be used to file with local councils. The filings do not always pass inspection; however, they can be a valuable tool in increasing awareness among policymakers and can help gain public momentum in support of a proposition.

Increasing pressure on local, state, and federal politicians does have the capacity to change public policy. The people still have the authority to drive public policy change if there are enough willingness and motivation. Just as the public outcry increased business regulations in response to ignored ethics policies in the Enron scandal, an increase in pressure to limit corporate power can also be effective. If the political framework were to shift from serving the interests of whatever provides money to that of actual people (voters), gains can be made to restrict the corporate consideration as a person under American law.

Corporate personhood has used an unethical and immoral metaphorical framework to manipulate public policy in favor of corporations. Businesses have used legal tools and corporate attorneys to gain authority and protection as a living person under the application of the U.S. Constitution. The fact remains that corporations are not people and the power, influence, and authority asserted by corporations should only be granted and regulated by people. Through the application of this power, corporations can exert tremendous negative consequences on society. The previous decade provides endless examples of corporate greed, scandal, and manipulation used by businesses to fulfill the primary mission – increase profits at all costs. Society has a moral obligation to question the application of the metaphorical framework and make changes where necessary. Corporations will not give up the privilege of power and authority easily under any level of public outcry. The change must be brokered through legal and legislative means using the power of group consensus.

Works Cited

Hammerstrom, Doug. "The Highjacking of the Fourteenth Amendment." Reclaim Democracy.N.p., n.d. Web. 28 Oct. 2013. <http://reclaimdemocracy.org/wordpress/wp-content/uploads/2012/07/fourteenth_amendment_hammerstrom.pdf

Justia.com. “Santa Clara County v. Southern Pacific R. Co. - 118 U.S. 394 (1886).” 10 May1886. Web. 28 Oct. 2013.http://supreme.justia.com/cases/federal/us/118/394/case.html#396

Reclaim Democracy. “Corporate Personhood.” N.d., Web. 28 Oct. 2013.<http://reclaimdemocracy.org/corporate-personhood

Reclaim Democracy. “Model Resolution.” N.d., Web. 28 Oct. 2013.http://reclaimdemocracy.org/personhood-resolution-template/