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SJA813's avatar

What does it mean to strip the "personhood" of corporations?

Asked by SJA813 (143points) December 26th, 2010

Can you explain the in more depth of what this means to me please?

What exactly would be taken away I mean how would that work and to what extent?

Does it mean that the corporation no longer has certain rights or would that be unconstitutional? But also at the same time if it is a dispute with the corporation how can it be considered a “person” in that since?

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15 Answers

Kayak8's avatar

I think this is referencing the US Supreme Court decision in the case of Citizens United vs.Federal Elections Commission. The case is pretty well outlined here

In short, the question being asked is should corporations be given the same rights to free speech that individual people are given by the Constitution. The case in question was about a corporation being able to have the right to free speech about a political candidate (could they pay for a movie against a candidate)? Part of the concern is that if a person speaks, you know who they are or can decide for yourself that they are an idiot or a genius (depending on your political views). With a corporation, it is often difficult to decide who they represent.

SJA813's avatar

@Kayak8 Interesting read thanks for the link.

Also I started to wonder more after watching this video, it might peek your interest.

http://www.youtube.com/watch?v=Z4g29gS2KUo

It seemed to me from what I read that the “proof is in the pudding” if you will.

“He faced a skeptical Justice Ruth Bader Ginsburg, who asked whether corporate rights aren’t different from those of an individual. “A corporation,” she said, “is not endowed by its creator with inalienable rights.””

laureth's avatar

Corporation: An ingenious device for obtaining individual profit without individual responsibility.
—Ambrose Bierce: “The Devil’s Dictionary”

It used to be that if I started a business making toys (for example), and my toys hurt children, I could personally be held responsible for damages that my business did. Eventually, laws changed that made the business separate from the owner (if the owner took the legal steps necessary to do this), so that if my toy hurt your kid, you could sue the pants off of my toy biz, but my personal wealth was left out of it – that’s what led to a company becoming a “person” (a separate entity from me, the business owner and toymaker).

Now that the corporation (from the same root as “corporal” or “corpse” – a body/entity) was an entity unto itself (when you “incorporate,” that’s what happens), it was somehow endowed with “personhood” for some things like filing taxes. For example, my toy business would be responsible for corporate taxes and I would be responsible for taxes on the salary I drew from the toy biz, instead of the toy profits being entirely counted as my own personal income. (To contrast, if I start a little toy business and I have not incorporated, I claim all the toy biz costs and profits on my personal income tax, which is much simpler, but I also can be destroyed personally by a lawsuit against the biz, too.)

The Supremes, however, ruled that as an “entity” (or “person”) unto itself, though, that the corporation has freedom of speech just like I do, and can donate all it wants to candidates or other organizations that have “Laureth’s Toys” best interests at heart. Corporations have a lot of interests: making a profit chief among them, but also things like “escaping responsibility for lawsuits” or “not being held accountable for pollution” or “not getting sued for unfair labor practices” are also among those interests, because they harm the ability of my toy biz to make a profit. What a corporation notably lacks, though, are personal qualities such as responsibility, conscience, guilt, and others that actual people actually have. Unless I’ve built my marketing campaign around things like “social responsibility” or “eco-something,” chances are slim that the corporation cares what it puts in the sewer (or in the paint on the toys) as long as it makes a profit, and the ability to bring a lawsuit for damages against the corporation is limited.

By stripping this legal “personhood” from my toy business, though, it sort of puts it back where it belongs, as a profit-making endeavor of my own, rather than as something with the right to act as a completely amoral person. Does this make sense?

perspicacious's avatar

In the law corporations enjoy some of the benefits of being a live person. Many people would like to see that changes. AINT gonna happen!

ETpro's avatar

@perspicacious It won’t happen unless “We the people” take back our government from the corporations that have bought effective control of it so they can use it to rig the game.

perspicacious's avatar

@ETpro This is not just an American legal concept. It’s not going to change.

flo's avatar

What is interesting is that more and more corporations are referring to themselves as ‘our organization’ ....the community minded image… I remember reading this somewhere.

ETpro's avatar

@perspicacious It is not an American concept, it is a Corporatist concept and Corparitism goes all the way back to the British East India Company. Corporatism was a driving force of fascism. When the US was formed, there was no such thing as corporations, so to suggest the Founders wanted to give 1st Amendment Rights to legal entities that did not exist in their time is silly. States granted state-wide charters to companies, and that was that.

iamthemob's avatar

I think that much of the specific issues have been well covered here.

I’ll throw out my general take on this. A corporation was endowed with legal personhood in order to enable, essentially, mass ownership so that people could buy shares in a company so that the company could raise capital quickly by not making the owners personally liable for wrongdoing of the company (i.e., the ownership was separated from the management of the company, and by necessity the company needed to be able to act as a separate entity for legal purposes from the owners of the company). However, it’s become a monster of its own – the fact that a corporation by necessity has been considered a person for limited legal purposes to allow the separation of ownership and liability does nothing to suggest that it is endowed with any rights associated with personhood generally.l

bkcunningham's avatar

Where are you guys getting that a corporation can’t be sued or held liable in a court of law?

perspicacious's avatar

@bkcunningham Corporations can sue and be sued. They may also be held criminally liable.

ETpro's avatar

@perspicacious & @bkcunningham The point is that corporations can be held liable, but their officers cannot unless they step over the line of criminal law. The US has been in a slow process of amending our laws for 30 years and thus changing the playing field, rigging the game. It is now harder for an individual to declare bankruptcy, and they are protected from less of their liabilities if they do. It is now easier for corporations to declare bankruptcy, and much easier for them to preserve assets and move on past it.

We have engineered things so that individuals must have credit or be independently wealthy in order to own a home or car. To have credit, you must have credit cards. Credit card providers can now legally charge interest that used to get loan sharks jailed. They can write confusing fine print contracts many pages long and you must accept the contract, because you really can’t be in the game without credit. Their contract is ironclad. However, if you worked your entire career for a corporation that gave you a contractual retirement, they can wipe out their requirement to follow the contract oversight. There is nothing you can do about it.

Corporations can borrow heavily, buy up competitors, go public, make a fortune and then go bankrupt from the debt they took on. The businesses they acquired end up shuttered and the jobs shipped offshore, but the raiders who did the killing get away with millions each ad get to do it all over again. We eliminated the deductions on most consumer loan interest, but corporate borrowing is rewarded with tax breaks. So is shipping jobs offshore.

We are now playing a game that is heavily rigged so the house always wins. A few jackpots get handed out to the little people to keep them playing the game, but the tables are rigged. The playing field is no longer level. And the Supreme Court just tilted it much further in favor of the corporations. Apparently, they aren’t happy with the game rigged as it is. They want to buy legislators and rig it far more in their favor. The American middle class has shrunk dramatically since 1880, and the numbers of the poor have grown while the top has become fabulously more wealthy. We are watching the dismantling of a great nation.

flo's avatar

I don’t know if this helps or not. From:
http://www.thecorporation.com/index.cfm?page_id=312

THE PATHOLOGY OF COMMERCE: CASE HISTORIES
To assess the “personality” of the corporate “person,” a checklist is employed, using diagnostic criteria of the World Health Organization and the standard diagnostic tool of psychiatrists and psychologists. The operational principles of the corporation give it a highly anti-social “personality”: it is self-interested, inherently amoral, callous and deceitful; it breaches social and legal standards to get its way; it does not suffer from guilt, yet it can mimic the human qualities of empathy, caring and altruism. Four case studies, drawn from a universe of corporate activity, clearly demonstrate harm to workers, human health, animals and the biosphere. Concluding this point-by-point analysis, a disturbing diagnosis is delivered: the institutional embodiment of laissez-faire capitalism fully meets the diagnostic criteria of a “psychopath.”

bkcunningham's avatar

@ETpro for the sake of discussion, just supposing that what you say is correct, how did this happen?

ETpro's avatar

@bkcunningham I think the money available to be had as the post-war boom proceeded tipped the scales to the point where those with the wealth to do it and the greed to wish to started buying out the political process bit by bit—perhaps as far back as the 1970s. In the 1980s, Congress (both parties) started changing the rules of the corporate game, making leveraged buyouts more attractive and allowing them to be incredibly leveraged. Imagine being able to buy a $1 million house with $15,000 down. Allowing leverage like that is why so many companies get bought up, repackaged, into corporate conglomerates, and then further leveraged by sale of stock before the debt taken on bankrupted the corporation and closed many of the plants it had bought. The LBO experts who did the IPO bailed out with millions after the stock sale, and had to invest very little of their own money to do pull off the heist. They just start the process over, while thousands of workers lose their jobs, which get shipped offshore by whatever entity takes over the carcass of the bankrupted mess.

We are drifting toward full-blown corporatocracy today, and the middle class is rapidly shrinking because of it. In the days of the robber barons, wealth disparity and highly leveraged Wall Street trading led to the Great Depression. The exact same economic disparity is back today as we saw then, and we have an even greater degree of incredibly leveraged trading on Wall Street. We just barely dragged the economy back from a second Great Depression at the end of the Bush years, but all the signs say the cycle isn’t over yet. All the endemic problems persist, and are being allowed to get worse because the elites who now own politics can make so much money with the system rigged the way it is.

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