Fleshing out the corporate person
This is my contribution to n+1’s OWS Gazette #2. You can download the PDF here. It’s full of terrific stuff.
There was a witticism circulating—it embarrasses me a bit to say—on Facebook recently that went something like: “I’ll believe that coporations are people when Texas executes one.” Though I’m no fan of capital punishment, but that was the best argument in favor of corporate personhood I’ve ever heard. Because while corporations have the rights of actual living people—more, maybe—they have none of the responsibilities. Corporations routinely get away with murder. Is the problem that they’re legally persons, or that they’re not consistently treated as such?
I first came across the critique of corporate personhood almost 20 years ago, when Richard Grossman and Frank Adams published their snazzy little pamphlet, Taking Care of Business: Citizenship and the Charter of Incorporation. (Snazzy as in nicely designed. The web version isn’t, alas.) At the time, I was struck by the legalism of the approach. Grossman and Adams showed little or no interest in the economic reasons for the corporate form—why, for example, industrial development made the sole proprietorships and small partnerships that dominated the pre-Civil War landscape so unwieldy and unstable.
Making complicated stuff requires organizational stability across time and space; a single capitalist, or even a small gaggle of capitalists, all very mortal, couldn’t run a transcontinental railroad that was expected to last decades. The late 19th century was a time of tremendous economic volatility, with wild booms and busts. Almost half of its last three decades were spent in depression. One reason was that small firms didn’t have the resilience to stand up to shocks. (Another was the absence of a central bank, about which see my contribution to the previous Gazette.) I recall meeting Grossman shortly after the pamphlet was published and bringing these issues up with him. He didn’t seem very interested in the economic arguments.
I’m getting similar feelings now that corporate personhood has exploded onto the scene—first in the wake of the Citizens United decision, and more recently with OWS. There’s a fixation on the legal status of the corporation at the expense of some other, more important things.
Back in a moment to the economic angle, but Citizens United deserves a few words on its own. Basically, the reasoning is this: corporations are people. Money is a form of speech. So restrictions on corporate political spending are unconsittutional restrictions on political speech.
Which is the more serious problem with that chain of reasoning? That corporations are people, or that money is a form of speech? I’m uncomfortable with the urge to treat the Koch brothers as the focus of evil in the modern world, to steal a phrase from Ronald Reagan, but they could spend tons of their personal money spreading their poison and the issue of corporate personhood wouldn’t figure at all. Rich people have a long history in this country of buying elections and politicians. They didn’t, and still don’t, need the dodge of corporate personhood to do that nasty work.
Back to the economic argument. Critiques of corporate personhood tend to blur into critiques of bigness as an evil in itself. There is a great nostalgia for some kind of soft-focus version of the old days when enterprises were small and local. But there’s no way that small, local enterprises could make computers or high-speed rail equipment. Those things require both size and durability, things that the corporate form allows. Who’d buy complex, long-lasting equipment from a small firm that could die with its proprietor the day after tomorrow? How could such a firm design and build a train that does 350 mph while consuming minimal energy?
Of course, there may be some opponents of corporate personhood who don’t want a society that builds computers and fast trains. If so, they should tell us that explicitly.
All this doesn’t mean that we have to make peace with the status quo, however. In one of his more optimistic moments, Marx declared the modern corporation, owned by outside shareholders and run by their hired hands, “the abolition of the capitalist mode of production within the capitalist mode of production itself, and hence a self-abolishing contradiction” (Capital, vol.3, chapter 27.) That is, there’s no reason why such an enterprise has to be run for the benefit of its shareholders, and not by and for its workers, neighbors, and customers. It is now, but it doesn’t have to be that way forever. Of course, getting there from here isn’t one of those self-evident truths, but it’s a very enticing prospect to think about.