Posts tagged corporations

Column on Are Corporations People?

Are Corporations People?

Tibor R. Machan

Much fussing is in evidence from certain circles–some heavy hitters, like Professor Ronald Dworkin–about the Supreme Court’s recent ruling that protects corporations against government intervention when they make political contributions. The common complaint appears to be that corporations are not, after all, people.

When I run across this I always run through a thought experiment or two. I think of a corporation and ask myself, what am I thinking of. Do I think of buildings? Trucks? Limos? Parking lots? The plants that adorn the entry ways to the buildings where the corporation is housed?

None of the above, I conclude. It is people, that’s who. They are the ones I am thinking of, a bunch of human beings engaged in various activities, mostly in offices, sometimes in mail or conference rooms. And I think what else is familiar to me that fits this analysis? Well, universities, colleges, orchestras, choirs, sororities, fraternities, families, and the like–they are all made up of people and without the people they wouldn’t be what they are. Yet they can all act in unison, as well, as “one body,” so to speak, provided those who belong to them see eye to eye.

So then why all the fuss about the court’s ruling that acknowledges that business and other corporations are indeed people? Well, probably because many of the people who make up corporations disagree with the politics of those who deny them their humanity, the folks who keep insisting that corporations are something impersonal and heartless. One way to demean such folks is to write them off as something other than human beings–big faceless entities of some kind, yet with consciousness and the capacity to make good and bad choices and also capable of being sued in a court of law.

The bottom line seems clearly to be that those who make up a business corporation are people engaged in profit making endeavors, something that many folks around the country and the globe deem to be unseemly. In the Soviet Union these people were considered profiteers and accordingly taken to be criminals, given that the USSR was committed to the Marxist communist ideal that wealth may not be pursued by individuals but must be shared among all. Not that most Soviet citizens bought into this but the official ideology adhered to the idea.

What business corporations are, by my common sense understanding, is organizations established by a bunch of human beings for the purpose of conducting commerce and reaping economic benefits from this. The organization usually employs some managers and the like who are responsible to guide it toward economic success. If they fail, they are usually let go but if they succeed, they often get very well paid–after all, they helped a lot of people, shareholders and stockholders, to reap profits.

So what is the fuss all about? Why is a symphony orchestra accepted as comprised of human beings but not a business corporation? Well, I think maybe it is the widespread prejudice among intellectuals against wealth care. This is why public enterprises like PBS, NPR and most educational institutions are deemed by them holier than all get out but private enterprises are besmirched routinely. As if those involved in public undertakings were all morally superior, while those seeking profit must all be cads.

But as public choice theory has so well demonstrated, those standing up for the public interest are by no means without the temptation to pursue their own agendas instead of the public interest, something that hardly anyone knows enough about to actually serve conscientiously.

Let’s stop this business bashing that is, especially now, so damaging to society, what with everyone needing business to forge ahead and succeed so that we can all make a decent living from the employment their profit pursuits make possible. It is utterly bizarre that this kind of an attitude toward business corporations can be in place when those corporations are so necessary for us all to recover economic well being.

So the answer to the question about corporations being people or not is that they definitely are although they may not be the sort of people the critics admire or want to have around much of the time.

Column on Are Corporations Persons?

Are Corporations Persons?

Tibor R. Machan

Actually, no one thinks corporations are persons but some do believe they are groups of persons. No one thinks orchestras, or football teams or universities are persons but many do think they are variously configured people. If this is so, then they, as groups of persons, have rights, including the right to private property and freedom of speech.

When people come together for some common purpose, they do not lose their basic human rights. So all the hollering about how the recent Supreme Court ruling about whether corporations have the right to engage in political advocacy, based on the allegation that corporations aren’t persons, is off base.

Even those who oppose the ruling implicitly acknowledge the above. Thus Justice Stevens, the major dissenter on the Court, wrote, that “[T]he distinctive potential of corporations to corrupt the electoral process [has] long been recognized.” But only persons can corrupt something! Theodore Roosevelt advocated prohibiting “all contributions by corporations to any political committee or for any political purpose.” And this, too, implies that corporations are made up of people, people who have rights! There is no other way corporations can make contributions–buildings, trees, land, the sea, none of these can make contributions, only people can. Ergo, corporations are people!

In any case, I have no idea what else corporations would be. Yes, they have some kind of legal identity but that is completely derivative of their being made up of people. Usually, it is a bunch of people who get together and incorporate–now that monarchs no longer create such associations–which is to say they form a specific type of organization, usually involving pooling some resources and hiring specialists to administer these resources either for profitable or non-profitable purposes. But whichever it is, it is persons who are doing this and nothing else. You may not like those types of persons but in a democracy they have the right to obtain and wield political power.

Now it is true that when people unite with one another, they tend to gain in influence, even power, if power is at issue. Sadly, given how much politics is not a matter of upholding principles, as the American Founders envisioned it, but of confiscating funds and then distributing them–that whole redistribution thing that candidate Obama had out with Joe “the Plumber”–having united powers can go a long way to gaining political clout. But this has nothing to do with corporations as such, which are perfectly benign outfits unless they commit crimes, just as this is so with individual citizens.

So then what is up with all the corporate bashing? Mostly that if you aren’t a part of the corporation but a lot of others are, it is they and not you who will wield more political power. And if one believes in democratic politics, why complain about this? If a huge company, owned by thousands of stockholders and other investors, exerts power, such is democracy. You cannot cherry pick which group of citizens should get democratic power and which should be ignored.

The remedy for out of control corporate political influence and power is to limit democracy to very few tasks in the country, such as the selection of public officials. They will then represent those who elected them but not by doing them special favors but by helping in extending the principles of the country to new and uncharted areas of the law.

I am no corporate attorney, nor a constitutional scholar but our legal system must make sense to all citizens, not just to experts. And as a plain, ordinary citizen it seems to me that all the derision extended toward corporations amounts to rank prejudice, bias, as a generalized dislike of movie actors or farmers would be. This is nothing to be proud of, that’s for sure, even if it is widely accepted and practiced. So was racial prejudice once. Not that those who have shares or manage corporations are all fine people, not by a long shot, but neither are all doctors, teachers, engineers or bureaucrats upstanding citizens. At any given time the bulk of the members of a professional could be engaged in malpractice or be decent in how they conduct themselves.

But there is no reason to suspect those who own or run corporations of any greater predilection toward malpractice than anyone else. Sometimes, of course, they operate in a system that encourages corruption, which the welfare state clearly does, what with all the selling and buying of political favors it involves. And big firms will probably be able to get more from politicians than little ones. That, however, is the problem of the system, not of any given profession.