What would change if corporations lost personhood?
(Supplement to Santa Clara Blues: Corporate Personhood v. Democracy by William Meyers)
[We are talking here about personhood under the 14th Amendment and taking from corporations the rights that should be reserved for natural persons. Corporations would remain artificial entities under the law, sometimes called artificial persons, but more properly called artificial entities.]
There are two broad areas that could change. One is directly related to corporations not being persons for the purposes of the 1st, 4th, and 14th Amendments. The other is the critically important secondary effect of what can be achieved if we push corporations out of the political process, which can be achieved only if we remove their personhood. Knowing exactly what would or could change has to be based on what changes have been made, or prevented, since the establishment of corporate personhood as a legal principle in 1886.
Fortunately we do have a road map of sorts, a mirror image of this issue. In 1896 the U.S. Supreme Court, in Plessy v. Ferguson, effectively declared that Anegros@ were not protected by the Fourteenth Amendment, were not in fact the persons it was meant to protect. In 1956 in Brown v. Board of Education, the Supreme Court ruled so that suddenly ANegroes@ again became full legal persons. I hope I don't need to describe the plight of African-Americans and other people of color during the period from 1896 to 1956, nor will I recount the campaign necessary to get the court to change its mind in 1956.
Were African-Americans (and others classified as non-white) suddenly better off the day after the 1956 ruling? Potentially yes, but factually no. It took years of protests, court cases, legislative changes, changes in people's awareness and semantics, and even many people's murders at the hands of those who opposed change, before African-Americans began to be treated, legally, socially, and economically, as citizens and persons. The process is not yet complete.
When corporate personhood is terminated, whether it be by a Supreme Court decision, an Amendment to the U.S. Constitution, or by State or Federal legislation that will hold up in court, the next day it may seem like nothing really has changed. But the potential for change will be as great as it was for people of color after Brown v. Board of Education.
Just as in 1956 you could predict that, finally guaranteed the protection of the Federal Government under the Fourteenth Amendment, people of color might soon be able to shop with white people, have the vote, elect people of color to office, and make substantial economic gains, we can predict what can happen after the ending of corporate personhood. But these things will not happen unless there are years of protests, court cases, legislation, and changes in people's awareness. We can't predict the details, but since we know what has been obstructed in the past, we can see what freedoms the people might gain once we begin to end corporate dominance.
Corporate personhood is at the root of such Supreme Court rulings as First National Bank of Boston v. Bellotti [435 U.S. 765 (1978)], which equate corporate donations to political campaigns with free speech. They allow corporate money to govern the political process. These rulings can be reversed once the 1886 decision is reversed, since they are directly dependent upon it. Then we should be able to force corporations out of the political process. We could do this through legislation or through the chartering process. Without personhood the corporations are not entitled to 1st Amendment rights; they will have only what privileges the people, through our government, gives them. We can and should prohibit them from making any kind of contribution to politicians, to lobbying groups, or to campaigns involving referenda. Any advertising that does not sell products, that is, any advertising meant to directly or indirectly affect the political process, should be prohibited.
Later in this essay the secondary effects of removing corporations and their money from the political decision making (including regulatory) process will be examined. First other changes that are directly dependent upon revoking corporate personhood need examining.
Without the protection of the 14th Amendment, corporations could be purposefully discriminated against in legislation. It would even become possible to discriminate against particular types and sizes of corporations. The citizens would thereby gain much greater control over the economy, both nationally and at the local level. For instance, the Supreme Court in the past, based on corporate personhood, has held that States and localities cannot favor small or local businesses over corporate chain stores or out-of-state businesses, as in Liggett v. Lee [288 U.S. 517 (1933)]. Towns that want all business to be local, or even that want to keep out certain chains but allow others, will be able to have that control, if they wish. They could also finally have truly effective Abad boy@ laws, as opposed to the current ineffective ones (because we'll be able to limit corporations appeals to the courts).
Without personhood the due process used for corporations could be different than the due process used for individuals or unincorporated businesses. As an illustration, corporations might only be allowed a single hearing when their actions effect an endangered species, rather than the current system where they can spend millions of dollars of their own money, and of taxpayer money, and of the non-profit environmental groups that oppose them, in an unending series of appeals and diversionary legal filings.
Another example would be that corporate charters, granted by the states, might channel certain types of corporate wrongdoing into special courts where justice is swift and stern, including the immediate closing of businesses that violate environmental, consumer safety, or labor laws.
Another important constitutional Aright@ given to corporations is protection under the 4th Amendment, which states, AThe right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons to be seized.@ The key Supreme Court decision here was Hale v. Henkel [201 U.S. 43 (1906)], which established that corporations have protection under the 4th Amendment based in part on their status as persons. It was decided that a subpoena issued by a federal grand jury to the secretary of a corporation, MacAndrews & Forbes Company, amounted to such an unreasonable search and seizure. This ruling made it difficult to enforce the Sherman anti-monopoly act, which naturally required the papers of corporations in order to determine if there existed grounds for an indictment. Oddly the same ruling recognized it would be very hard to give the 5th Amendment right that Anor shall any person ... be compelled in any criminal case to be a witness against himself,@ because a corporation, not being a natural person, cannot testify at all. It can be represented in court by natural persons, who cannot take the 5th on the corporation's behalf, because you only have the right to not incriminate yourself; you have no immunity to testify against other persons.
The importance of the 4th Amendment right of corporate persons is shown, among other places, in Marshall v. Barlow's, Inc. [436 U.S. 307 (1978)]. The Occupational Safety and Health Act of 1970 (OSHA), enacted to try to get employees safe working environments, allowed for surprise inspections of workplaces. These inspections were struck down by the Supreme Court, which declared that OSHA inspections required either the corporation's permission or a warrant to take place. Apparently the constitutional personhood rights of corporations trump the rights of real persons. Thousands of workers have died, been maimed, or poisoned since 1978, while on the job; many of these accidents were preventable, but the Supreme Court did not consider the liberty of the workers, only the liberty of corporations and their wealthy owners in making this murderous decision. No workplace that follows OSHA safety rules need fear a surprise inspection.
Revoking corporate personhood would allow the government to make reasonable inspections to insure worker safety, to insure that toxic substances are not being emitted, and to insure that corporations are operating as allowed by their charters and the law. Revoking personhood should not be feared by law-abiding, legitimate businesses and corporations who are obeying the law.
We now return to the possible secondary results of ending corporate personhood and getting corporations out of the political process.
With corporations out of the political process the whole nature of regulation would change for the better. Whether regarding the environment or food safety, we would not have to compromise with powerful corporate political machines. Do the people want to prohibit clear-cutting? Then the laws will prohibit clear-cutting, because no politician will be on a wood-products corporation's payroll. Do the people want zero emissions into streams and rivers? Then the law will prohibit any and all toxic emissions, because the politicians will rely on people for votes, not on polluting corporations for money to buy votes.
The main roadblock to single-payer, national health care has been the enormous amount of lobbying and campaign contributions from those corporations that profit from the current system. By prohibiting corporate-sponsored campaign contributions to politicians and corporate-sponsored propaganda on television, the national consensus in favor of national health care could no longer be thwarted.
Ending corporate personhood is no more a magic-bullet than was the Brown v. Ferguson ruling, or the passing of the Fourteenth Amendment itself. As long as there is a society there will be struggle over how resources, including political powers, are allocated. Ending corporate personhood would result, not in a level playing field, but in a field where We the People have the advantage again, where in any particular issue that is fought out in the public arena, the people are more likely to win than the corporations.