Corporate personhood is the doctrine, under United States
law that corporate entities have the full rights of legal personhood - principally, the rights to hold property, engage in binding contracts, sue and be sued in court, and enjoy the constitutional
and other protections offered to persons in the United States. Though firmly established in corporate and business law, the doctrine of corporate personhood occasionally comes under attack, typically though not exclusively from self-identified "liberals
" or "progressives
" who hold that it gives corporations rights they do not deserve, producing results which run counter to the public interest
. I would argue, however, that corporate rights logically follow from the rights of the individuals who combine to form a corporation, and that corporations (which are not all businesses) allow individuals to bond together to amass and apply collective power in an ultimately empowering manner.
The origins of corporate personhood in America are usually attributed to the Supreme Court case Santa Clara County v. Southern Pacific Railroad, heard in 1886, though in actuality this position was not established in the decision itself, but instead noted in a headnote to the decision as being previously established fact that
The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteen (sic) Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.
This invocation of the Fourteenth Amendment's equal protection clause
is a fairly direct application of the federal government's own definition of "person" in the 1871 Dictionary Act
, the United States Code
's own #define
. While this does represent a shift in the treatment of corporations, the idea of corporations as holding rights in themselves can be seen in earlier precedent and traditions reaching as far back as 16th century England
which considered corporations as "artificial persons" (that is to say, created, in contrast with born "natural persons"), with rights to contract, bring suit, and the like, an important fact given America's common law
judicial system and the weight it gives to precedent.
Before continuing further, it is worthwhile to note that in the American legal system, "personhood" and "humanity" are distinct concepts and by no means synonymous. Non-human entities like corporations can hold personhood and its attendant legal rights, and likewise, it is possible for humans to lack these rights which comprise personhood. Pre-emancipation jurisprudence (sometimes) regarded slaves as humans, though not as persons, and conversely, the Thirteenth Amendment's prohibition of slavery applies only to humans, permitting the ownership of corporations though they may be legal persons. American women and children, though clearly human, have both lacked full legal personhood in some times and places, and in addressing questions of abortion policy, courts have held that fetuses do not hold legal personhood without addressing the question of their humanity, though some opponents of these decisions have tended to conflate the two terms. Though clearly not human, reasonable arguments have been made in favor of recognizing legal personhood in artificial intelligences and "higher" animals like dolphins and great apes.
In Defense of Corporate Personhood
Many who hold opinions hostile to corporate personhood may do so because of a distaste towards capitalist values as put into practice by businesses, believing all corporations to hold a basic worldview opposed to their own. Should you ask the average American to describe a corporation for you, they will likely present an image of a large publicly traded company, directed by charter and stock owners' urgings towards the goal of maximizing shareholder value, with all other considerations secondary. Yes, these certainly are corporations, and I by no means wish to misrepresent their truly massive influence on the social, economic, and political structure of the United States. Not all corporations, however, take this form.
That same citizen probably lives in a city, town, or village which constitutes a municipal corporation (explaining the year of "incorporation" listed in historical literature and border signage), an artificial human construct which may own "public" property, hold and dispose of funds, enter into contracts with other persons like garbage disposal companies, and sue and be sued in court. These municipal corporations maintain continuity through complete changes in the makeup of their elected administration, through centuries which may see the complete death and replacement of their citizenry.
Likewise, many of the charities and political organizations which the typical "anti-corporate" activist might be expected to favor are likewise corporations. Your local nonprofit hospital can go through several changes in its board of directors without having to go through the bother and expense of transferring legal title to its grounds and facilities from one chairman to another because it holds property as a corporation, rather than in any single person. It is its incorporation as a legal entity in the District of Columbia which allows the American Civil Liberties Union to bring its entire weight to bear and sue state or federal governments which it believes to be violating fundamental liberties. Corporate States of America, indeed.
A corporation is, in nature and purpose, intended to be greater than any one of the humans that comprise it. Corporations may be terminated by bankruptcy or dissolution under other conditions, but they do not die, and if carefully managed, may live on forever. Further, in aggregating the power, influence, and interests of multiple individuals, they can accomplish things that no single one could on their own. This power may be wielded towards purposes you support or those you oppose, but the same would hold true if any one of those individuals acted on his or her own. Though corporations may be greater than any one individual human in the sense of their longevity and scope, they are ultimately the product of individual action nonetheless. A town is (ideally, under republican governance) an approximation of the collective will of its citizenry, expressed through voting. You may need to trace it back through cross-ownership, investment houses, pension funds, or other layers of abstraction, but that giant business interest is ultimately owned and controlled by individuals with homes and friends and families. Now, it is certainly no less fair and just to condemn violations of others' rights when committed by a corporate aggregation than when committed by a lone figure, and a just system of law should act against corporate and individual malfeasance alike. But on the other hand, it is no more fair or just to deny men and women the right to pursue their interests when acting in concert than if they had acted individually.
I foresee that some would-be reformers will not find this satisfactory, judging the centralization of power in corporations (or at least those with whose goals they disagree) too dangerous to leave unchecked. Let us imagine that one day they succeed in stripping corporations of legal personhood, or grant them personhood only at the suffrage of some political entity. This would divert enormous amounts of energy to be dissipated in rent seeking as surviving corporations would find another manner in which to jockey for advantage, but we will set this aside for now. Though they might succeed in stripping corporations in personhood, we can logically expect that such reformers could not amass the support to deny personhood to actual humans, and so many businesses and other would-be corporations would return to models of basic partnership or sole proprietorship, which would be less efficient at accomplishing their goals, and would encounter more difficulties in assembling the power, money, or other attributes needed to perform basic functions like research and production. Some, especially those who take issue with capitalism, may be unbothered or frankly pleased with these developments, but it bears noting that though all might suffer under such a system, those who would suffer the least would be individuals with significant resources of their own, with less need to acquire the support or funding of others. That is to say, that classic bogeyman, "the rich".
Of course, I would be a fool if I were to assert that the rich have no advantages under a capitalist system. The rich will always have an advantage, but the corporation gives an advantage to all who would take advantage to it, one which means less, relatively speaking, to the rich than to those who need to join forces to get somewhere. In our day, Bill Gates has made multiple billions of dollars by means of a corporation, but that same corporation has made billions more dollars for the rest of its individual shareholders. More importantly, Gates owns only 11.3%* of the corporation in question, and must convince other shareholders comprising almost 39% of the rest in order to get it to do what he wants (or more accurately, to select directors he thinks will hire people who will do what he wants).
Corporate personhood allows for the creation of structures through which individuals can reap the benefits of collective power - as unions allow individual workers to band together as "labor", drawing strength from numbers, corporations, and the corporate personhood which assures individuals that their collective rights are secure, allow individual investors of modest means to form a stronger, collective body of "capital". (Of course, the two identities are not mutually exclusive - as some of the largest institutional investors through their pension funds, unions and their membership both gain impressive wealth and influence from the aggregating effect made possible by corporations.) Those anti-personhood activists who typically place a high value on collective action and its empowering effects might want to take a step back from their position and reconsider whether corporate personhood is truly incompatible with their values and desires.
*as of June 16, 2003