Wednesday, April 6, 2011

Corporate Personhood


Today I attended a talk on the Citizens United vs Federal Elections Commission ruling. The speaker was in favor of the ruling, and while I disagree, I would rather not tediously summarize his arguments and criticize them point by point. Instead, I'll present some puzzles about corporate ownership and the implications of the Citizens United ruling as intuition pumps. I dislike the notion of treating legal fictions as persons, and I hope to the intuition pump provided will at least show some reasons for my skepticism.

The one thing I will mention about the talk in question is the speaker's assertion that Citizens United was not a case about free speech not corporate personhood. One might find that view credible if it were the case that corporate personhood were a given. Nevertheless, corporate personhood, and the rights of corporations if any, is the truly vexed question. Regulation and censorship are major issues and the subject of much debate, in courts, among legal scholars, and among philosophers because free speech is considered a basic right of citizens in a liberal democracy. Any law or decision that threatens to limit speech (justifiably) sets off red flags, calling us to attend to the subtleties of the issue and whether the basic freedom to express oneself is truly hindered. If one takes corporations to have the same schema of rights as individual, or some comparable schema at least, the same red flags would be raised. On the other hand, there is good reason to question the coherence of corporate personhood or corporate rights, so the Citizens United ruling set off red flags about power dynamics between individuals and legally recognized collections, and the different levels of influence available to each group. From that perspective, Citizens United is about free speech, individual free speech and the ability to have individual voices heard over the roar of empowered collectives.

From a political standpoint, personhood is an important concept because basic rights and liberties are distributed to persons. In a liberal democracy basic rights and liberties should be distributed to all persons, with perhaps some rights reserved only for persons who are full citizens (the right to vote for instance). Persons are also considered morally (and socially) accountable for their actions, for what they do with the rights and liberties given to them. If one person violates the rights of another, the offender must account for the violation in some way, usually in the form of punishment. Such consequences serve as a corrective measure, as in reparations for damaged property, and a deterrent. Where the negative outcomes outweigh potential gains, the offending action becomes an irrational risk, and the presumption is that rational (or at least reasonable) agents, when given the option, do not take irrational risks. This is the basic framework for social interaction, and while only a skeleton compared to fully fleshed out political theory, the key issues for comparing individual personhood with corporate personhood are in place.

Now, one reason to question the validity of corporate personhood stems from metaphysical issues. The individual human being is our core case of personhood. Any human being can be definitively considered a person. Children or adults with mental disabilities are still persons, we simply recognize them as having different capacities, and therefore we address their responsibility for their actions differently, but we still unproblematically consider them persons. By contrast, corporations are considered persons by way of legal fiat. For certain purposes, collectives of individuals, organized under a charter, can act as if the collective were really a single person. The most straightforward examples all involve economic transactions. For instance, a corporation can own property, commission a factory to be build on that property, hire employees to operate the factory, and enter into contracts with raw material providers and distributors of finished goods. Notice that the notion of corporate personhood is parasitic on the concept of personhood simpliciter. The recognition of the corporation as a legal person allows individuals to act as if they were one person. If a corporation has any rights at all, those rights must be parasitic on the rights of the individuals who formed the collective. In other words, if a corporation has a right that none of its constituent members enjoy, some further justification for that right must be offered. By the same token, if a corporation has any of the rights enjoyed by its constituents, it must be for the purposes of exercising that right on behalf of the members of the collective.

The problems begin to crop up with issues of liability. If a corporation is responsible for a punishable offense, on whom does the punishment fall? Property violations are really the most simple case. The corporation has assets, and those assets can be fined to compensate the offended party. Issues such as criminal negligence, reckless endangerment, and negligent homicide are more problematic. In such cases, punishment cannot be easily rendered into monetary compensation, and that approach is not taken with regard to individuals who commit such offenses. Instead, an individual found guilt of criminal negligence may have to serve a prison sentence, perform community service, or abide by the terms of a probation. While these consequences may require some monetary loss to the convicted, there is also a time investment or behavioral requirements that must be met. The convicted is supposed to be at least inconvenienced, and at best is supposed to learn some greater care or compassion and exhibit more care in his future actions. When any of these consequences are laid on a corporation, they always amount to monetary consequences. A corporation might be required to fund a charitable cause or bear the burden for a community-centered activity or program, but there is no sense that the corporation itself can learn from these experiences. The money is simply spent, the employees ordered to perform accordingly, and the sentence is considered carried out. In such cases, the consequences are reduced to fines, money that could have been spent elsewhere is forcibly redirected, but the corporation cannot be inconvenienced, and it cannot learn compassion or take care in the future. The individuals that compose it can, but in current legal practice they are not necessarily embroiled in the consequences beyond directing that the money be spent, agents hired, etc.

So, with that in place, here's a puzzle. If corporate personhood arises from the personhood of its constituents, and corporate rights are an extension of the rights of its constituents, why does corporate responsibility end at the collective? If my friends and I decide to erect a tall sign on property I own, and our construction work is so shoddy and ill-planned that a passer-by is killed when our scaffolding collapses, we would all be taken into custody and might find ourselves tried for gross negligence, or even negligent homicide. Assuming that we are guilty, we would all face the consequences for our actions, and the organizer of the effort, me for instance, would possibly suffer a harsher sentence because my bad decisions were ultimately responsible for the death of a human being.

If corporations are persons and have rights commensurate with individual persons, why is it that the CEO and board of directors of BP and Transocean are not on trial for the deaths of the workers (and others) in last year's oil spill? If the corporations in question acted as extensions of the will of its members, then the organizers, the managers, should be held responsible. Rights come with responsibilities, accountability. Without consequences, the same bad decisions can be made over and over again, and the only way to deter the corporation is to make the consequences so expensive that even vast multinational conglomerates would be unable to bear the cost. Even in such a case, if there are no consequences for the decision-makers, they are free to leave the corporation, divest themselves of all ties, and form a new corporation and carry out the same practices. While I have my reservations on corporate free speech, I would feel less trepidation about the issue if the consequences for corporate action were visited on those parties truly responsible, the natural persons directing the corporation.

More to follow, just watch this space.