Corporations are people, too

[This guest post is by Benjamin Lusty, an attorney and an occasional contributor to Publius Online. The opinions are his own.]

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Among the flotsam and jetsam of misguided political ideas and non sequiturs that washed ashore on the nation’s consciousness after the wreck of Occupy Wall Street is the previously obscure movement to end corporate personhood, a legal doctrine that affords corporations certain rights such as the ability to own property, make contracts, and file lawsuits. Although OWS was a swirl of inarticulate rage (and recognizing the unfairness of expecting a disparate movement to crystallize all of its demands into a neat two page executive summary), it is clear that everybody who occupied anything this autumn hates corporations. Their catchiest slogan read something like this: “I’ll believe corporations are persons when Texas executes one.” Another more strident slogan declared that “corporations aren’t people and Money isn’t speech.”

Doubtless, the root of anti-corporate sentiment is the apprehension that corporations wield outsized power. Particularly galling to the Moveon.org set was the Supreme Court’s decision in Citizens United v. FEC, a case that held that it was unconstitutional for Congress to restrict corporations (and labor unions) from advocating for or against a particular candidate so long as that advocacy is not coordinated with any individual campaign. This feeds the narrative that for-profit corporations brandish their supposedly vast and limitless resources to subvert the free operation of our otherwise happy and just republic.

Regardless of the merits of their arguments, however, OWS succeeded in kindling a debate on the nature of corporations, the basis of their existence, and their role in society. Disquiet with corporate power, or for that matter, corporate personhood, is not new. Nor is the doctrine of corporate personhood novel—to the contrary, it is quite old. But now a constitutional amendment to revoke corporate personhood has emerged, the goal of which is to prevent corporations from engaging in political speech or donating money to political organizations. Admittedly, the chance that this proposed amendment would actually run the constitutional gauntlet of ratification is nil. But the ideas espoused in the proposal are serious enough to merit a serious response.

The justification for limiting corporate personhood largely rests upon two uncontroversial observations: 1) our Constitution and society exist to protect the rights of actual living human beings; and 2) because corporations are artificial legal creations, they should be subject to law and regulation in the public interest. These do not, however, by themselves support the conclusion that corporate personhood, or even the corporate form of organization, damage society. But even assuming that corporations flagrantly and routinely abuse their personhood status (which I do not assume), simple calls for revocation of personhood ignore the constitutional cost inherent in diminishing expressive rights.

To begin with, despite leftish revulsion, corporations really are people too. Corporations are nothing more than voluntarily created groups of human beings consisting of shareholders and employees; quite simply, they are people, organized. Revoking or limiting corporate personhood, although it has a populist “us versus them” appeal, would grievously wound existing constitutional rights to speech and freedom of assembly for no real purpose.

Consider the case against corporate speech. All sorts of hyperventilated criticisms are charged against the supposed power of corporations to manipulate the legislative process. Keep in mind, however, that the terrible corporate activity that the left wants to squelch is talking (always fear one who claims the solution to a problem is to stop somebody else from talking). If one believes, however, that these nefarious enterprises can bend the will of the government through talking to legislators, the problem is not corporate speech but elected officials who do not represent their constituents’ interests. In that case, the solution is not jeopardizing constitutional rights but holding free elections. If, however, the left worries that corporations can change voting patterns through speech (or persuasion), their argument is essentially that the people are not smart enough to determine their own interests.

But if the state abridged a corporation’s ability to speak, whose rights would really be affected? If, for example, we banned Apple from communicating to Congress about technology policy, we would essentially prevent its shareholders from acting collectively. This in turn would mean that we would have to abridge the right of each shareholder to participate in collective speech on political issues. Individual shareholders, however, are real people with names, and constitutional rights. Does the mere fact that they assembled themselves together through a corporation mean they lose their First Amendment rights? If you say yes, then should we also prevent labor unions from talking to the government as well?

And that question exposes the flaw that arises from diminishing corporate personhood. It cuts directly against the grain of the right of assembly. The First Amendment has no exception clause for corporations, or even for people assembling to grasp at filthy lucre. If a group of unshaven grad students has the right to encamp and demand legalization of marijuana, why should a group of investors not have the right to form a corporation and argue for changes to consumer electronics sales policy?

Ultimately, because constitutional rights are categorical, it is impossible to diminish the rights of the corporation without diminishing the rights of the people within the corporation. In any event, not all corporations are massive global gladiators. Further, nobody is arguing against sensible rules preventing public corruption. But speech is not bribery, and persuasion is not crime. It is democracy.

And for the record, Texas puts corporations to death every day, without trial and for trivial matters. The Texas Code specifically enables the Texas Secretary of State to dissolve a corporation for something as simple as failing to file an annual form report. Texas corporations thus live under an ever-present threat of an administrative death penalty.