The Corporation as a Person

Sunday, June 20, 2010

What is it

The Supreme Court recently decided that corporations had the right of free speech under the U.S. Constitution, since they are persons.  But what does it mean to say corporations are persons?  Why should they have rights?  If they have free speech, should they have the vote?  What sorts of duties do they have?  Where did the idea of a corporation as a person come from, and should it be retired?  Ken and John examine the philosophical bases of corporate personhood with shareholder activist Robert Monks, co-author of Corporate Governance.

Listening Notes

John and Ken argue over the conceptual similarities between corporations and individuals. John thinks the idea of corporations as persons is entirely ridiculous. Groups of persons are not the persons themselves. Ken insists that there are many similarities between the activity of groups and individuals - making promises, issuing statements, telling lies - that give the analogy credence. But for John, this can be recognized without conceptually combining the idea of groups and persons. Robert Monks joins the discussion and sides with John, asserting that to call a corporation a person is a dangerous misnomer. He explains how corporations were first introduced by Queen Elizabeth with the purpose of accountability to the public good in mind. This has long since been diluted. For him, the implication that corporations have power in the same way that individuals do is simply wrong. Rather, they are creatures of limited delegated authorities, which is why they cannot vote as persons do and - according to Monks - should not influence politics.

The discussion moves to Citizens United in the second segment. John and Ken question Monks about the Supreme Court’s thinking through the case. They then explore the type of ‘person’ that corporations are. Ken compares them to a person with eternal life. John prefers the view that they are some kind of disabled person, insensitive to human needs and with the sole goal of profit maximization, which Monks takes further and labels as a psychopath. Monks believes that if corporations are solely about wealth creation, their activities should be limited to such an endeavor and not extended to the political realm. However, Ken is not so convinced that political participation is not relevant to wealth maximization since the advocacy of certain candidates does financially benefit corporations - is it not why they do it, after all?

In the last segment, the debate centers on different types of corporations. Monks does not think that corporations are comparable to unions where members can check off on agendas they support and decide where their money is used. He thinks the problem of corporations is ownership. A million owners is in fact no owners at all, creating very limited liability. He would like owners or shareholders in a corporation to be required to run more substantially for the public good. Ken adds this is a shift from a shareholder to a stakeholder position. John however questions whether corporations are really about wealth creation, using a university as an example. Monks agrees there are nonprofit and charitable corporations, but profit seeking organizations are the preponderate ones. He also differentiates media organizations, who have the right of free speech owing to their particular enterprise. He thinks even when part of a larger multi-corporation, it is important that a legal differentiation is maintained between the subsidiary and parent comp, where rights can extend to one but not the other.

Roving Philosopher Report (Seek to 5:50): Jill Replobe looks at corporations as artificial persons as depicted in the 2003 documentary The Corporation before discussing the historical evolution of the idea with UC-Berkeley Law Professor Eric Taley. He explains how the 14th amendment, designed to offer equal rights to former slaves, first became applicable to corporations owing to a minor note made by a law clerk on a court case about railroads and taxes.

60-Second Philosopher (Seek to 48:48): Ian Shoales discusses the changed roles of some of the world’s largest corporations before taking the idea of corporations as persons to its reductio ad absurdum limits.

 
 

Robert A. G. Monks, Shareholder Activist and Corporate Governance Advisor

 
 
 

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