Dinner tonight with some deep thinkers at a private club in San Francisco brought forth an interesting discussion of Mitt Romney's statement that "corporations are people." A quick read of his quote reveals it may have been taken out of context. I think Gov. Romney meant to say that corporations are comprised of people - workers, managers, shareholders, etc. - who make it run by earning incomes and paying taxes. I don't think he meant to say that a corporation is the equivalent of a living, breathing human being with comparable political rights.
Unfortunately, American law seems to substantiate the "corporate personhood" argument more than ever. The most significant legal support for corporate personhood in modern times is the 2010 U.S. Supreme Court decision removing any restrictions on corporate spending in political campaigns. A disembodied corporate "person" thus has the same right to express political opinions as a live person without fear of government interference. This is a significant departure from what legal scholars in the era of our Founding Fathers considered corporations to represent.
I believe a return to the original spirit of the Framers' time is in order. Corporations back then were chartered in the public interest to accomplish a specific project, then allowed to disband. They had a definite life span, which is as close an analogy to a human life as an artificial non-person could possibly get. Corporations chartered for an indefinite life span are the norm today, so our legal system needs mechanisms to deter them from egregious behavior. These mechanisms would be analogous to legal sanctions against individual's lives and property. One such mechanism would be a corporate death penalty. Any corporation with a sufficiently long and troubled history of conduct could be found to be in violation of its corporate charter and disbanded. The capital structure of the company would be rendered worthless and its stock and bondholders would lose their entire investment. The financial assets and physical property of the company would remain intact and could be sold to another corporation. The employees and managers would remain a viable part of the new enterprise. Handled wisely, such a transition could even go unnoticed by customers and suppliers in a manner similar to debtor-in-possession bankruptcy proceedings.
Such a legal solution would be impossible to implement today with corporate spending governing political campaigns. It will have to wait until after the next financial meltdown, when both politicians and corporate executives sufficiently fear citizens in the streets to agree to limits on corporate power. Society needs corporations and capital markets, but it does not need certain corporations that have habitually violated the public trust.
Unfortunately, American law seems to substantiate the "corporate personhood" argument more than ever. The most significant legal support for corporate personhood in modern times is the 2010 U.S. Supreme Court decision removing any restrictions on corporate spending in political campaigns. A disembodied corporate "person" thus has the same right to express political opinions as a live person without fear of government interference. This is a significant departure from what legal scholars in the era of our Founding Fathers considered corporations to represent.
I believe a return to the original spirit of the Framers' time is in order. Corporations back then were chartered in the public interest to accomplish a specific project, then allowed to disband. They had a definite life span, which is as close an analogy to a human life as an artificial non-person could possibly get. Corporations chartered for an indefinite life span are the norm today, so our legal system needs mechanisms to deter them from egregious behavior. These mechanisms would be analogous to legal sanctions against individual's lives and property. One such mechanism would be a corporate death penalty. Any corporation with a sufficiently long and troubled history of conduct could be found to be in violation of its corporate charter and disbanded. The capital structure of the company would be rendered worthless and its stock and bondholders would lose their entire investment. The financial assets and physical property of the company would remain intact and could be sold to another corporation. The employees and managers would remain a viable part of the new enterprise. Handled wisely, such a transition could even go unnoticed by customers and suppliers in a manner similar to debtor-in-possession bankruptcy proceedings.
Such a legal solution would be impossible to implement today with corporate spending governing political campaigns. It will have to wait until after the next financial meltdown, when both politicians and corporate executives sufficiently fear citizens in the streets to agree to limits on corporate power. Society needs corporations and capital markets, but it does not need certain corporations that have habitually violated the public trust.
