Time to Limit Corporate Rights?

Corporate rights have been upheld by the Supreme Court until the "personhood" granted corporations rivals that of real live people, and corporate influence on government far outweighs that of the average voter.

| November 2014

  • Business meeting
    Although corporations are composed of people with certain rights, the corporation itself is only a person in a limited, legal sense, and corporate rights should reflect that status.
    Photo by Fotolia/Rawpixel
  • Corporations Are Not People
    Jeffrey Clements presents a manifesto for ending corporate control of American government in "Corporations Are Not People," with evidence of the toll unfettered corporate rights have taken on society and solutions for this bizarre state of affairs.
    Cover courtesy Berrett-Koehler Publishers, Inc.

  • Business meeting
  • Corporations Are Not People

Corporate rights are a relatively new phenomenon in American society—but a phenomenon that has resulted in corporations having an undue influence on politics. In Corporations Are Not People (Berrett-Koehler Publishers, Inc., 2014) Jeffrey D. Clements explains the history of corporations in America and the Supreme Court Citizens United decision that marked a victory for the doctrine that corporations are people with free speech and other rights. Most importantly, he offers solutions and tools to help readers join a grassroots movement to limit the rights of corporations and return political power to the people. The following excerpt is from chapter 3, “If Corporations Are Not People, What Are They?”

Is a Corporation a Person?

Occasionally, the 1886 Supreme Court case of Santa Clara County v. Southern Pacific Railroad Company is cited to claim that corporations are constitutional “persons” with rights. In that case, the Southern Pacific Railroad Company tried to avoid state and county taxes by claiming that it was a “person” under the recently adopted Fourteenth Amendment to the Constitution. The Fourteenth Amendment had been enacted after the Civil War to ensure that freed slaves and all people in America had equal rights to due process, liberty, property, and equal protection of the law. The Southern Pacific Railroad corporation sued Santa Clara County, California, arguing that a tax assessment violated its rights as a “person” under the Fourteenth Amendment because the tax was not “equal” with taxes applied to other “persons.”

The Court decided the case in favor of the railroad, but not for the reasons for which the case became known. In fact, in the Santa Clara decision, the Court did not discuss Southern Pacific’s Fourteenth Amendment argument at all. Instead, the outcome of the case rested on California law rather than a constitutional question. Nevertheless, the Gilded Age courts, almost as corporate-oriented as today’s Court, repeatedly used Santa Clara as authority to fabricate corporate rights and strike down workers compensation, child labor, conservation, and other laws.

Following Santa Clara in 1886, the Supreme Court faced a wave of cases in which large corporations and the infamous corporate monopoly “trusts” demanded constitutional rights to shield them from the growing movement for laws to protect employees (including child labor), the environment, fair taxes, and other public interests. On several occasions in the 1890s and early 1900s, the Supreme Court agreed with the corporations. The cases stated, without any explanation whatsoever, that “a corporation is a person under the Fourteenth Amendment,” as if saying that with a straight face would make it true. Could it be true?

Not a chance. Absolutely no evidence suggests that corporations were intended to be included in the Fourteenth Amendment or in the Constitution generally. Indeed, the evidence is exactly to the contrary. Since the beginning of our country, virtually every generation of Americans has acted to prevent corporate power from being leveraged into political power at the expense of the people. During the colonial era, only “a handful of native business corporations carried on business…four water companies, two wharf companies, two trading societies, and one mutual fire insurance society,” and only twenty business corporations were formed by 1787, when the American people convened the Constitutional Convention in Philadelphia. Legislatures, however, increasingly permitted the creation of corporations in the new republic to facilitate and expedite all kinds of public purposes, such as the building of roads, dams, and bridges. Yet it remained clear that corporations were legal instruments of the state, defined and controlled by the state, with limitations on their purposes and their duration.

Corporate Rights Are Legally Defined

It would be bizarre if the generation that defiantly declared to the world that “all men are created equal” and that “they are endowed by their Creator with certain unalienable Rights” and who wrote a constitution opening with “We, the People” would have tolerated corporate constitutional rights. Founders such as Thomas Jefferson and James Madison could not have been more clear about the danger of unregulated corporations and the need for, as Madison put it, “proper restraints and guards.” Another founder, James Wilson, a Pennsylvania man who signed the Declaration of Independence, served in the Continental Congress, helped draft the Constitution, and was nominated by George Washington to be one of the first six justices on the Supreme Court, agreed. He well expressed the prevailing view of the time that corporations can be useful tools of the state but must always be controlled by the people:

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