Licking PA is an extraordinary town name.

Hear, hear! (To the post, not Comment 1.)

not Comment 1

Well excuse me.

I wonder how their town council members get around on foot or hear anything anyone says when they have such enormous gonads clanging against one another?

A question from a non-lawyer: is all this "corporate personhood" stuff purely in the realm of case law, or are there actual laws passed by some legislative bod{y,ies} that grant and define that status? And, were that status removed from them (in a nearby universe), would that also undo their ability to own property, etc., even when they're doing right by their communities? I am, as usual, wholly clueless.

But using the language of civil rights to talk about how how corporations have a Constitutional right to be treated appears to me to seriously misunderstand the moral underpinning of civil rights law, and the moral status of corporations.

Part of the problem I have with your argument is that you asert this in various ways, but never explain why this is so, other than that you believe it to be so. The Supreme Court certainly thinks corporations are entitled to the protections of the Equal Protection Clause. Even before there was an Equal Protection Clause, State courts, acting on the basis of state constitutions or the common law, recognized that corporations were entitled to fair and equal treatment. And, of course, this makes perfect sense. A corporation is owned by people. When you expropriate the corporation's property, you injure those people--owners of capital, but people nonetheless.

Moreover, you overlook the Commerce Clause, Full Faith and Credit Clause and Contracts Clause implications of a municipality suddenly deciding that a legal entity created by another state is null and void within its jurisdiction.

In short, the actions that seem "self-evidently right" to you seem quite the opposite to me, both on legal and moral grounds.

You sure that's not just the shingles talking, Idealist?

There's obviously some delineation of what rights humans have vs. corporations- companies don't get to vote in elections, do they?

For me, I've come to think that public corporations are deeply immoral creatures, or at best, grossly inefficient ones. But I've got nothing in the constitution to back me up on that.

"companies don't get to vote in elections, do they?"

No, they get to buy them. Idealist's position will be the prevailing one. On with corpocracy.

5: Yo, Mr. Originalist -- what's the constitutional language that, read literally, says that corporations must have the same legal rights as a natural person?

A corporation is owned by people. When you expropriate the corporation's property, you injure those people--owners of capital, but people nonetheless.

So, the corporation's property isn't theirs, it's the corporation's, when we're talking about whether they have the privilege of being insulated from liability for the acts of the corporation. But it's theirs, and anything adversely affecting the corporation is a direct injury to them, when we're talking about whether the corporation must be given the rights of a natural person.

This seems inconsistent to me.

5 - Nope. It was decided by the Supreme Court, for sure, in a court packed with business cronies that announced the 14th Amendment applied to corporations before the arguments of the case even began (the pivotal case was in 1886, Santa Clara County v. Southern Pacific Railroad). Moreover, in an earlier case in 1882, Senator Roscoe Conkling (who was working for the railroad industry at the time) claimed before the court that corporate personhood had been part of the original intent of the 14th Amendment, which historians believe was one of the major reasons the Supreme Court decision went the way it did. Historians also believe Conkling was lying on behalf of the railroad industry. So, corruption and moneyed interest wins again over the best interests of the people.

When corporate charters were first granted, in the early days of the Republic, they were explicity for projects that aided the public good, and they were for a limited time only. Jefferson himself once said, "I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country." Nowadays, corporations enjoy all the rights and none of the responsibilities of a person. They pay far less in taxes, if anything at all. They cannot be jailed. Their corporate charter is never revoked. And yet, the they benefit more from the U.S. government than any natural person ever will. The SEC, the U.S. military, the school system, the US highway system (all publicly funded transportation, really) -- all these benefit and protect corporate interests far more than the interests of the average person. Yet, corporations can get away with nearly anything, and we shower tax breaks and subsidies on them just to get them to stay in our community/state/country. It's fucking insulting. Let's tax them like we tax people, at least. And hopefully, one day we can get at least a portion of their personhood overturned.

I've always fantasized about some mischievious anonymous Dem Congressperson introducing a bill to grant corporations the right to vote. Then we could really have this debate.

For me, I've come to think that public corporations are deeply immoral creatures, or at best, grossly inefficient ones.

A corporation is bound by morality and decency to behave in an entirely sociopathic way. To do anything else would be to fail to serve the shareholders.

Human sociopaths are considered persons too, though. But usually if a human person sociopath is incredibly wealthy and powerful he is still restrained by laws against killing, stealing, etc. - unlike corporations.

And, of course, this makes perfect sense. A corporation is owned by people.

But there's a limit to the degree to which you can trace the rights/responsibilities of the corporate person to the rights/responsibilities of the natural persons behind it. Viz. the whole concept of limited liability.

Well, not so fast, all y'all. Obviously we're okay in general with corporations owning property, right? That's part of personhood. And limited liability is essential: the corporation can be sued for all it's got, but not for all its investors have got -- as if it were a person. But these rights were given for the sake of convenience rather than for moral reasons. So while I'll take every right I can get as a person (in the Constitution or not), it's perfectly sound for corporate rights to be more circumscribed.

The real travesty seems to be less corporate personhood in general, more supersizing corporations' rights to override decent law. Did everyone read the article Plumer links? Overturning of a labelling law for the sake for "freedom of speech"? That's really scary.

12 - Yes. The corporation is amoral by neccessity. CEOs and boards are obligated to act in the most selfish way possible, doing anything the law allows to reap the most profit. Socialize risk, privatize profits. That's the way they're supposed to work, but it's also the reason we need strong regulation, since, for example, it would be in any corporation's best interest to dump their garbage in the river and hire 10-year-olds on starvation wages.

14 makes sense. Freedom of speech? I forgot that part of Plumer's post.

Next corporations will be demanding the right to vote, and then setting up hundreds of thousands of special-purpose entities in every Congressional district.

That's the way they're supposed to work, but it's also the reason we need strong regulation, since, for example, it would be in any corporation's best interest to dump their garbage in the river and hire 10-year-olds on starvation wages.

But the free market! It redirects people's selfishness toward the common good! And by common good I mean GDP!

Next corporations will be demanding the right to vote, and then setting up hundreds of thousands of special-purpose entities in every Congressional district.

I've often thought that this could actually happen.

Sociopaths, yes, but also incredibly wasteful sociopaths continually making stupid decisions. When companies get big, they get stupid. The pressure of quarterly reporting renders them short-sighted. They are heavily biased towards inefficient mergers.

This is a great topic, and I'd love to read some serious scholarship on it, if anyone knows of any they'd like to recommend. I'm inclined to agree with LB, but at the same time I'm not sure I want corporate property to be subject to warrantless searches, etc. So where and on what basis exactly do we draw the line? (I feel like I could come up with a consistent, principled position if I thought about this for a few minutes, but I prefer to let other do my thinking for me whenever possible.)

what's the constitutional language that, read literally, says that corporations must have the same legal rights as a natural person?

Gee, we both know that that specific language is not in there. Are you arguing that the absence of that language means that such a constitutional right does not exist? No, I thought not.

Yo, Mr. Originalist

Because I am mostly an originalist (but not a textualist, and thus would not agree that the rights guarangeed by the Constitution have to be spelled out explicitly in the text (not that a textualist would even argue such a silly thing)) I do look to things like I cited above--how courts even at time view the right to equality and equal treatment.

Further, you ignored my comments about the Commerce Clause, Full Faith and Credit Clause and Contracts Clause. These were not surplusage. At the core of all three is the notion of equal and fair treatment. Again, rights guaranteed by these clauses have, as far as I know, always been granted to corporations.

Corporations are creatures of state law, and what the state creates, the state can (within limits) take away. However, that has nothing to do with the facts you have described above, which look like a law school hypothetical illustrating why we have a Commerce Clause, Full Faith and Credit Clause, Contracts Clause and, yes, even an Equal Protection Clause.

This is an old Nader issue.

I don't care so much if corporations have the full protection of the bill of rights, though I do wonder if there would be a host of unexpected consequences of revoking those rights.

But I do want companies to be able to enter into contracts and legal commitments, and I want those contracts to be treated the same for all companies. I'm not a lawyer, but I worry that overturning the '86 ruling that Drymala cites would put the contracting rights and responsibilities of companies at risk. And I think this would have severe, negative consequences for our society.

Brock, the historian Thom Hartmann wrote a book called Unequal Protection about the history of corporate personhood in the U.S. I can't speak to the other side of the debate, though. Go to the Heritage Foundation website. I'm sure they have all kinds of compelling reasons why corporations should be treated as super-people.

I have never understood why corporations are considered persons under the law at all, rather than as entities that are given particular rights and responsibilities just in their own right. Can someone explain it to me? (I really know nothing about this stuff and am not trying to make a particular point here, I just want to know how this quirk (?) of legal definition came about.)

I'm sure it would be good for me to read some serious scholarship on the subject, too, but I'm already procrastinating plenty of engagement with serious scholarship related to my own work.

I think it goes back to the very first corporations. Personhood was the legal fiction created to ensure that individuals could escape their own personal liability. But I have no cite for this.

24 - Legally, it goes back to the Supreme Court decisions cited above.

24- not a legal historian, but I think it's mostly because the common law was developed in terms of persons (before corporations existed), and the most logical way to incorporate corporations was to just deem them to be 'persons' under the law. Plus the fact that this works fairly well for most purposes. But no one really thinks they're persons... which is why LB's post seems so obvious as to be indisputable, but I guess not everyone agrees...

It seems to me that the question is not "should corporations be persons?" but "is there a way to reap the social and economic benefits that corporations provide without them actually being legal persons?" Clearly, if there is such a way of doing things, it would require a gigantic overhaul of the law, both here and abroad and internationally. Which might be a good thing anyway.

It sounds from the above like people have some familiarity with the documentary The Corporation (Jennifer Abbott, Mark Achbar, 2003). What did people think of that? [The basic argument is taken from the idea that, according to DSM-IV, corporations are inherently sociopathic, and the film then moves on to elucidate exactly how this is so.]

Personally, I felt like it was about 1/3rd of a really great trilogy, that could have started with the rise of merchant banking in the 17th century, then continued with imperialism in the 18th and 19th centuries, moving on to the robber barons, and finally coming around to our own "late" capitalist epoch.

Anyway, what always riles me about so-called Libertarians and schmibs online is that they take it as an article of faith that the corporate person always treats everyone fairly, and never tries to put its thumb on the scale. To hear some of these folx tell it, corporations are basically Gandhi, Jesus and MLK all rolled into one, and they only exist to better the lives of all human beings. This conveniently ignores Union Carbide in Bhopal, Chisso Corp. & Minamata, IBM conspiring with the Third Reich, etc. etc. ad infinitum.

Of course, it's just as annoying to see Marxist-Leninists focus on capitalists as the cause of every evil, when state power is inextricably intertwined with corporate power. Even in the hardest of hardline state communist countries, you wind up with quasi-corporations in the form of ministries or agencies which have near-monopoly power over many aspects of life.

I'm inclined to agree with LB, but at the same time I'm not sure I want corporate property to be subject to warrantless searches, etc. So where and on what basis exactly do we draw the line?

This is a perfectly reasonable question; my point is that it's a policy question, rather than a moral question. Mostly, if you're going to allow corporations to own property, it's going to make sense to treat it in a fairly similar manner to the way property owned by natural persons is treated. But analyzing that in terms of the civil rights of the corporation as if it had rights of any kind prior to or overriding the terms on which it was created by the state, rather than in terms of how the legislature, in the public interest, chooses to define the powers and capacities of a corporation, is screwy.

24- Following on 27/28, this is clear and helpful.

Anybody know how other countries treat corporations in their legal codes?

30- sorry, my 20 was very unclear. I agree with you completely... what I find interesting are the policy questions of where to draw the line, and how. (And it's this question on which I was soliciting scholarship recommendations. Not that anyone reading 20 ought to have been able to discern that.)

24, 26, 28: My understanding is like Brock's -- that corporations were thought of from their intitial creation as persons because there's a sense in which they act like persons: they own things, they buy and sell, they generally do things that people do. (I also don't have cites for this, though. Maybe I'll go look at my old Corporations casebook.) It's just that thinking of them as persons doesn't necessitate thinking of them as persons with all the rights of natural persons: the moral arguments against having a class of second-class-citizens that apply with respect to classes of natural persons don't apply with respect to corporations.

So where and on what basis exactly do we draw the line?

I just want to be sure that corporations aren't allowed to get gay married.

I'd rather read awesome fiction about the corpocracy than serious scholarship, but it involves a lot of wading through terrible science fiction. Any recs?

Oh, 31 is useful. Yay, Wikipedia.

U.S. out of Texaco's uterus!

36: The Space Merchants? A classic of what the closed-minded might regard as terrible science fiction, but I liked it.

35: Yeah, aren't corporations getting gay married all the time? Unless someone can come up with a compelling argument proving that AOL and Time Warner were of different genders, I think this should provide the legal basis for overturning DOMA.

I liked that Wikipedia entry's Discussion page.

Smasher, I think Bruce Sterling wrote a bunch of near future books with significant corporacratic elements. Aha! (Thanks, Internets!) This is the one I read.

35: Absolutely. A corporate merger should be limited to the union of one man corporation and one woman corporation.

I can't (after a very quick look) find any actual court decisions in the suits challenging the anti-sludge ordinances that prompted these personhood-stripping ordinances, but the equal protection argument against them strikes me as a red herring here. Whatever the equal protection status of corporate persons, it doesn't protect them from being regulated. Unless I'm missing something obvious (I suppose the ban on previous violators might have EP implications), or the linked accounts miss something important, either of which is quite possible.

More likely the anti-sludge ordinances would run up against (dormant) Commerce Clause/preemption problems, I'd think, but even that's not clear from these accounts. If so, though, the personhood-stripping wouldn't be any help.

I bet Time Warner is the bottom.

And another thing, how come it's legal for two people to form a partnership or a corporation to conduct "any legal business" except having sex with each other and being parents? Why do corporations have special privileges that are denied to ordinary American citizens?

I really like Richard Powers' Gain, which kind of has to do with the rise of the corporation. Plus, you know, it's Powers.

36: Parts of Cloud Atlas, but then I recall you recommending that back before I had read it, so maybe less than helpful.

I can't (after a very quick look) find any actual court decisions in the suits challenging the anti-sludge ordinances that prompted these personhood-stripping ordinances, but the equal protection argument against them strikes me as a red herring here. Whatever the equal protection status of corporate persons, it doesn't protect them from being regulated. Unless I'm missing something obvious (I suppose the ban on previous violators might have EP implications), or the linked accounts miss something important, either of which is quite possible.

This seems likely to me -- that the EP defense the corporations were making was in fact, nonsense. I'd just like to live under a legal regime where that sort of defense (that some regulation is improper because it treats corporations differently from natural persons) simply isn't available.

Idealist, I'm sorry, but your position is silly. Corporations, simply by virtue of *not* being individuals, have powers and capabilities that are beyond those of any single person. That, in combination with considering them persons by law, gives them unconstitutional power.

I'd just like to live under a legal regime where that sort of defense (that some regulation is improper because it treats corporations differently from natural persons) simply isn't available.

I think you misunderstand the Equal Protection Clause issue here. Corporations are often treated differently from natural persons, and where there is a rational basis for the distinction (a very low threshold, as you know) those regulations do not offend the Equal Protection Clause. But this is quite different from the argument you advanced that they should have no constitutional right to Equal Protection (or, given the facts as you presented them, a host of other constitutional rights) or that there is no moral component to this question.

On the moral component, let's start simply: as a moral matter, what is the difference between stealing from an individual, a partnership and a corporation? How about cheating them? Is the right to Due Process a moral right? If so, is there a moral difference between taking an individual's property without due process and taking a partnership's? A corporation's? Why?

I adore Richard Powers -- well, the right novels by Richard Powers -- but my feelings on Gain are mixed. The parts about the rise of the soap company, I thought, were excellent; the parts about the cancer-ridden soap company employee in the present left me cold.

your position is silly. Corporations, simply by virtue of *not* being individuals, have powers and capabilities that are beyond those of any single person. That, in combination with considering them persons by law, gives them unconstitutional power.

Obviously we disagree on how silly I am. I take come comfort in the fact that the Supreme Court has consistently agreed with my view of the law and the constitution.

51: I kinda felt the same way, actually. Sometimes the two-narrative thing gets pretty tiresome.

Ideal, she said your position is silly; you two can still agree about how silly you are.

Apologies; haven't read the thread. Has anyone mentioned the recent documentary The Corporation? Needed pruning, but an outstanding examination of how current law has led to very rational crazy choices (e.g. corporations legally obligated to maximize shareholder "value," narrowly defined).

as a moral matter, what is the difference between stealing from an individual, a partnership and a corporation? How about cheating them? Is the right to Due Process a moral right? If so, is there a moral difference between taking an individual's property without due process and taking a partnership's? A corporation's? Why?

Under all of those cases, the moral issue passes through to the owners of the corporation -- stealing from a corporation is wrong only to the extent that it constitutes stealing from the shareholders. The question is whether the corporation in its own 'person' is going to be treated as if it had rights, or whether we're going to be looking at the legal rights of the shareholders. I certainly agree that corporate shareholders have the Constitutional right to be treated legally on a par with all other citizens; just not that those rights attach to the legal fiction that protects them from individual liability.

I take come comfort in the fact that the Supreme Court has consistently agreed with my view of the law and the constitution.

This is something I wouldn't be proud of, when it comes to this issue and its history.

Has anyone mentioned

Yes.

stealing from a corporation is wrong only to the extent that it constitutes stealing from the shareholders.

So you have no moral qualms about stealing from a trust; a trust has no shareholders? How about the government, it has no shareholders (and it has limited liability, too!)?

I would argue that there's a felt difference between stealing from a person and stealing from a corporation, and that we clearly acknowledge this difference (for example) in how we treat white-collar crime. Or, if you prefer, by ourselves committing petty theft from our employers (go on, admit it). We make stealing from corporations wrong because it costs the corporation money, and is therefore detrimental to business; fine. But the fact that robbing a person and robbing a business are both wrong doesn't mean that they're wrong for the same reason.

Those aren't corporations, those are other types of entities. Also, Jonathan Winters has no shareholders, but it would still be wrong to steal from him.

Stealing from a profit-seeking corporation is wrong only to the extent that it constitutes stealing from the shareholders. And even so, corporations try to steal from each other all the time.

I thought Max Barry's Jennifer Government looked interesting--however, I forgot about it while waiting for the paperback, so I can't say for sure.

What I like about the twin narrative in Gain is that Powers never explicitly relates the personal story to the corporate story--the connection is obvious, and the protagonist of the personal story clearly knows the cause of her malady; but the near-omnipotence of the corporation in the life of her community is so overwhelming that neither she nor any around her even seems to feel the desire to strike at---them? it?

The complete disjunction of the two stories is the only reason it's a novel at all; alone, the corporate history is an essay and the personal story is a Lifetime movie.

Of course, I'm a fan of multiplied narratives anyway...

Also, I must recommend Maxx Barry's Jennifer Government. It's science fictional, but with none of the gee-whiz overexplanation that hampers some genre works. The analysis isn't especially penetrating, but it's a ripping yarn and occasionally funny as hell. Barry's earlier Syrup isn't quite as good, but is also less science-fictional (in case you're inexplicably phobic about that).

63 was to 53 and, what, 30-something? Mother of Gods, this place moves fast.

i've been incensed for some time at the idea that "commercial speech" enjoys 1A protections. seems like a real crock to me.
but it's just a special case of what lb is on about.
nice to hear a lawyer telling the truth.

to do this discussion right, we'd probably want to go back to considering why a system w/out corporations would choose to institute that class of legal fictions, i.e. what benefits there are to it, and then give them only those legal privileges that provide those benefits, and no other privileges beyond that.

e.g.: there is a common argument from the left these days for universal healthcare, that points out how it would encourage beneficial risk-taking and better matching up of jobs to applicants, because it would allow people to change jobs w/out fear of losing health coverage. it's a good argument; i agree with the premises, the conclusion, and how it goes from one to the other.

seems like a similar line of thought applies to the original rationale for instituting corporations. there are ventures i might like to pursue, e.g. developing steam engines for terrestrial locomotion, that are inherently risky. i might blow up myself or others; i might well go broke. if i had some way of limiting my liability to these risks, i might be more likely to go ahead and invent the locomotive. if not, not.

these are old stories, just so stories, but i think they might help focus thought about 'what good are corporations and why might we want something like them next week even if we abolished them all tomorrow'. it also helps to focus on the main question (in my mind): how do you capture the benefits without creating monsters (which is what we have now).

'The question is,' said Humpty Dumpty, `which is to be master - - that's all.'

On the moral component, let's start simply: as a moral matter, what is the difference between stealing from an individual, a partnership and a corporation? How about cheating them?

The central problem is exposure to legal intervention: who within a commercial entity should benefit from legal remedy - or the reciprocal - who within a commercial entity should attract legal sanction. A company protects where a partnership doesn't: there's a legal 'firewall'. It's a device that mitigates risk. And if used in a certain way, it's a device that allows people - actual thinking, acting people - to behave less responsibly than they would otherwise.

There may be a legal fiction of corporate personhood but the additional complexity of limited liability (something a real person doesn't have) is always going to preclude equality. We're talking about a kind of para-equality.

Yeah, the problem is how very Lifetime the Lifetime section is. The corporate section really isn't an essay, though -- there's plenty of narrative about the interactions of interesting, fictional people in there.

65: I have an intuition that some problems arise from stockholders and directors who are increasingly removed from the actual business, whatever that is. This causes moral hazards and also, often, poor decision-making.

Is there an argument against public corporations, specifically, but not against private ones?

65 makes sense - the corporation's rights are an incentive to entrepreneurship. However, corporations that have existed for a hundred years and whose top 50 executives have absolutely no chance of earning less than a million dollars in a given year should not be protected by the government. The government should protect people against them.

69 may have just made that argument.

'Smasher -- Unlike the others, I thought Jennifer Government kind of sucked (bad writing, obviously more of a movie treatment than trying to be a good book) but, if you're looking for something close at hand, it's in the house.

The analytical or moral-of-the-story value of Jennifer Government is in the way it demonstrates how attaching one's individual identiity to a corporation - an organization which is all identity without individuality - can lead an individual to the same sociopathy expected of the corporation. When someone gives themselves over to Company X, their every action is Company X's, not their own. It's like they're all handed Dumbo's feather of immorality with a tasteful logo down the side.

So, here's another hypothetical: based entirely on the legal knowledge I gleaned from one (1) episode of Barney Miller, could Rah and I each form corporations which became the legal owners of our own estates and then merge, and then get around DOMA and income tax? Sweet.

72: See? See? We cannot allow corporations to continue their assault on society's oldest institution!

There's probably something not entirely unlike that you could do, but it'd only work to any extent if you were working with serious assets instead of being a couple of working stiffs. And of course it wouldn't cover all of the social stuff.

I don't think all these amoral/sociopathic tendencies being discussed are inherent in the corporation. That assumes that the shareholders are supreme and that they pursue profits above all else, which is a cultural assumption -- connected to the 80's fetishization of rapacity. It's possible to embed business practice in a normal moral and legal framework. The trend is just otherwise.

There's an explicit argument made lately, although I'd have to google around to attribute it to someone specific (or wait three minutes until one of you tells me) that the corporate form requires rapacity. The argument is that corporate managers are responsible only to the shareholders, and thus are required to make all decisions in the best financial interest of the shareholders regardless of any externalities, social conciousness, or any other considerations. Where an individual proprietor would be permitted to decide to turn down profit for moral reasons, a corporate manager may not, because their responsibility to the shareholders forbids it.

I think this is crap, myself, but it's an argument that's made non-pejoratively.

75: That assumes that the shareholders are supreme and that they pursue profits above all else

AFAIK, it assumes that the management of a corporation as currently constituted is legally obligated to pursue profits above all else.

There are a lot of very good Philip K Dick short stories about the relationship between work and life, and what happens when someone works for an essentially corrupt entity. That isn't about corpocracy specifically, and may not be what you're looking for, but very much worth reading.

This, from Wikipedia, amused me: "Legally, corporations are accorded some corporate personhood, i.e. Constitutional rights similar to those held by persons. Contrary to accepted legal precedent, the U.S. Supreme Court did not rule on this question in the 1886 case Santa Clara County v. Southern Pacific Railroad.

In Santa Clara County v. Southern Pacific Railroad Company (1886), Justice Harlan delivering the opinion of the court said the question regarding whether a corporation is a person within the meaning of the Fourteenth Amendment is an issue upon which the Court 'did not deem it necessary to pass.'

In the head notes of the case prepared by Supreme Court reporter J. C. Bancroft Davis, there is the sentence: "The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution ... ." Because of illness, Chief Justice Morrison Remick Waite never reviewed the head notes.

Thus, without any deliberation, decision or ruling by the United States Supreme Court, the United States law has proceeded since 1886 with an accepted legal precedent based on the mistake of a clerk who reported something that never occurred."

I think it's also important to note that State laws allowing the creation of corporations allow them to be created for the public good, and this phrase certainly means far more than just for the good of shareholders. The Courts have, of course, rendered this phrase meaningless by making the market the ultimate arbiter of what is the public good, allowing the creation of the monsters bitzer laments.

76: That's really just another form of "but I have a duty to behave in this assholish way that happens to serve my self-interest." There's always a market for such arguments, and that one's found a lot of takers, but you're absolutely right that it's crap.

Lurker: Because of the excellence of the comment, I will refrain from berating you about how much it annoys me when people delurk calling themselves some variant of 'Lurker'. By the time you use it, it's simply untrue. And what if you wanted to say something else sometime?

(Damn. I suppose I slipped on the whole 'not berating' thing.)

76, 77, 80: The trends that enforce all that -- hostile takeovers, shareholder lawsuits, obsessive focus on quarterly performance -- were less strong or nonexistent in other times/places. It's perfectly possible for management, for example, to make decisions in line with preserving their positions in the long term rather than profits. If running a company one way means stable, reasonable revenue for decades, why shake it up? It's your decision -- you're the owner, after all! Unless someone else can take it from you on the grounds that you're not making all the profit you possibly can.

Corporations are socially constructed, just like everything else.

82: Right. The arguments about duty to shareholders trumping all are just arguments designed to justify a particular sort of corporate culture. And it's not just a matter of what the owners want. If we're going to allow the creation of limited-liability entities, it's perfectly legitimate to place conditions on how such entities can operate.

I believe Lurker is the same person who has commented before with that handle (correct me if I'm wrong)

Also on other, book thought. Synners is my personal favorite cyberpunk novel and deals reasonably well with many familiar "corporate-state" tropes. If you're at all interested in the cyberpunk vision it's one of the best and not well known.

A couple years ago I attended a book-club discussion of Ehrenreich's Nickel & Dimed. The discussion was hosted by the theatre company at which I was working, and the crowd consisted of patrons who had come to see Arthur Miller's The Price--very Old Left crowd, prosperous and mostly over 70.

The moderator (professor from the U) ventured a number of gambits, but the readers only really wanted to do one thing: bash Wal-Mart. In great detail, and to the exclusion of any other issue raised by the book. I honestly can't remember whether I said anything about this, as I was just the box-office guy and working for rather less than minimum wage, but I saw in a blinding flash what causes the real problem.

The reason Wal-Mart gets away with their business practices, obviously, is that their owners allow them to. And their owners were probably most of the people in the room. There's been much talk from conservatives (and DLC types) about the substantial increase in stock ownership over the past decade-plus; but all those ordinary owners have no influence on management--their infinitesimal stakes are part of some vast fund managed by some Ivy League hotshots who may have plenty of social and financial entanglement with the directors and executives of corporations, but who have no responsibility whatsoever to any non-owning stakeholders or even to the principles of those whose money they invest.

I know there are some "social investing" funds out there, but I assume they're small fry. Unfortunately I can't think of any way to acquaint owners with the responsibility being hidden from them, except to require all sorts of disclosures that will certainly be unread.

85: Which is part of the reason why the crap about duty to owners being paramount is crap, at least in public companies.

LB wrote: Where an individual proprietor would be permitted to decide to turn down profit for moral reasons, a corporate manager may not, because their responsibility to the shareholders forbids it.

While many people believe this to be legally true, it's disputed. I found this paper a very convincing argument that boards are not bound to maximize shareholder wealth. She suggests that it is efficient for shareholders to commit to a board that can take the interest of other stakeholders into account. Because contracts are necessarily incomplete, companies need to follow through on implicit obligations. So, for instance, the board is not obligated to accept a high-valued takeover offer from a group that is committed to liquidating the pension and transferring the residual to shareholders. The company might not be able to get others to enter into agreements with it if it was obligated to renege at every opportunity.

She argues that the law does not require shareholder primacy, and in fact suggests that though companies could add this to their own charter there is no known example of a company doing this.

Now, as many people have been suggesting, other social norms have been running toward this shareholder primacy argument. In addition, as Stout discusses at the end, a stakeholder approach might be used to justify all sorts of self-serving decisions by crappy managers.

society's oldest institution

Oh, I have no problem with prostitution, I just wish it were legalized so it could be regulated for workers' and clients' benefit.

Er, wait.

85: This is exactly true -- where a sole proprietor could decide to take other stakeholder interests into account, ownership of large corporations is often so diffuse that there's no practical way for owners, rather than managers, to make non-rapacious decisions. If the managers aren't allowed to make such decisions, then the corporation becomes, as everyone has been saying, a sociopath.

I think we've reached a consensus on what the argument for privately-held companies but against publicly-held companies would be.

The news story that made me most angry in the last couple of years was in the Post-Gazette about the Heinz corporation and how roving bands of leveraged outbuyers were competing to take it over. Basically it was a series of quotes from Kirk Kerkorian and his ilk about how the Heinz corporation was ludicrously ill-managed because over the past three or four decades it had failed time and time again to act in a sociopathic manner, and how the first act of the new owners should be to beef up quarterly profits by firing an enormous number of presumably randomly chosen workers. The investors' longer-term plans were not mentioned, because they did not exist.

My experience having worked for corporations has been that the "maximizing shareholder value" trope gets rolled out on a regular basis by upper management, yes, but it is rarely the true intent. The mucky-mucks are not afraid of the shareholders because a great deal of the stock is tied up in some way that makes it highly unlikely to be used against them* and individual shareholders wield exactly jack shit in terms of real power. The old "but the shareholders!" line is an almost exact line-trace duplicate of the old "but the children!" game in politics. It is a convenient excuse for bad behavior and to fight it is like shooting a ghost.

* At LastJob, my understanding was that a huge quantity of our stock was held by funds whose ownership of said stock churned so hard that no individual stock or fund manager was ever going to hold onto it long enough to be of consequence and another huge chunk was actually owned by a particular group of clients, as they frequently reminded us, who served as a convenient counterbalance to profits-at-any-cost. The board could do whatever the hell it wanted because shares either weren't going to be voted or their votes were predetermined by back-channel connections and assurances, agreements that transcend any day-to-day or quarter-to-quarter decision-making. No vote at annual shareholder meetings passed with less than 96% of shares voted during the six years I worked there.

89: But I don't necessarily see all this as an argument for privately-held over publicly-held. By me, it's more that I want a stakeholder mentality, whoever owns the companies. Plenty of sole proprietors can be irrationally rapacious, while if, say, the stereotypical German company were publicly held, its shareholders would expect its leadership to keep workers well provided for and think in the longer term.

I have decided to manumit my equity holdings.

Personhood is not unitary. It comes in flavors.

One needn't be a person to own property. Someone mentioned trusts. Other examples include estates and governments.

Not everyone has all the rights of a person. Consider children, and those who have had guardians or conservators appointed.

One may be a person for one purpose, and not for another. The Constitution itself recognized that one could be three fifths of a person for the census and not a person at all for the purposes of the Amendments.

We already distinguish between natural persons and corporations. Corporations must generally have a registered agent and when moving to a different state must file with the state for some sort of certificate before transacting business. Corporations are taxed differently.

There are things a natural person may do but which are prohibited to a corporation. Corporations cannot practice medicine, or prescribe drugs, or practice law.

The moral distinction is that one can't run the Rawls simulation. Asking "would I feel the system fair if I had been born as Mikey's Sewer Service Incorporated rather than as MHS?" doesn't make any sense. Could we universalize the rule that all persons must have a president, a secretary, and a treasurer? Corporations don't have hopes, dreams, ideas, thoughts, or beliefs.

Where are our professors of philosophy and english? They should be all over this discussion.

Personhood is a construct (as someone said) and more than that it's a metaphor or a simile or some such thing. It's an analytical category, a social category. It's a porous category (in that objects can move in and out of the category) and like all categories it's contested. People disagree about what's included (fetuses, anyone?).

This message has been brought to you by Mikey's Sewer Service, Inc., a fully reified service, endowed by its creator with the right to life, liberty, and the obligation to pay a reduced tax rate on dividends.

Analogies. See? They cause trouble.

Richard Powers' Gain was fascinating. He was hit and miss with the modern story-line, but I did loved the way he looped it around in the final scene: a new company is born. He does have trouble conveying some emotions. In this respect, he was best in Prisoners Dilemma. I have his latest, but it sits on the pile as I read Mary Gordon's collection. There's some emotion.

We need market mechanisms so that corporations pay (literally) for their abuses. If corporation X wants to slack in its environmental responsibilities, then they should pay for it. Lawsuits work, but the message to the corporation is received too late.

Here is a milt friedman's version of the argument mentioned in 76:

The Social Responsibility of Business is to Increase its Profits by Milton Friedman

Here is a debate about the issue:

http://www.reason.com/news/show/32239.html

In this respect, he was best in Prisoners Dilemma.

I think Galatea 2.2 and The Goldbug Variations are by far his most emotionally successful books, though I haven't read the most recent one yet.

Re: 79

I second the Dick.

Yes, I just wanted to write that.

Also, regarding the obligation of corporations to be sociopathic: if I read Neal Stephenson's argument correctly, the obligation to shareholders is responsible for this, but not in an explicitly stated way. Rather, any one shareholder may sue for failure to pursue a maximal profit motive. So rather than it being a matter of all shareholders requiring selfish behavior, it's a matter of the most selfish of the shareholders determining the course of action of the company. If you trust Neal Stephenson's grasp of modern corporate law, that is.

Wouldn't you want to protect traditional ares like this though?:

http://travelistic.com/video/show/2018

I think that the arguments is not strong, I have essay of agreeing with Milton Friedman's statement, my point is that I have to write a three page assignment. How can I write an essay with this argument.