Jerri-Lynn here: On the basis of this interview, this looks like an interesting book, discussing the long, successful battle waged by US corporations to win rights once granted only to individuals. That success has led to the current domination of US politics by corporate interests– to the detriment of everyone else.
I think I’ll buy the book (and perhaps report back if I think it merits a more detailed post). In the meantime, enjoy the interview.
By Steven Rosenfeld, who covers national political issues for AlterNet. He is the author of several books on elections, most recently Democracy Betrayed: How Superdelegates, Redistricting, Party Insiders, and the Electoral College Rigged the 2016 Election (March 2018, Hot Books). Originally published at Alternet
American corporate power has never been stronger. It’s not just the Trump administration’s crusade to gut government regulation; the federal courts have increasingly been granting corporations liberty rights once held only by individuals. In his new book, We The Corporations: How American Businesses Won Their Civil Rights, UCLA constitutional law professor Adam Winkler traces the history of how corporate America has successfully waged a civil rights movement on its own behalf since the country’s earliest decades. AlterNet’s Steven Rosenfeld spoke to Winkler.
Steven Rosenfeld: Tell us why you are so interested in informing people about how corporations got their legal rights.
Adam Winkler: In recent years, the Supreme Court has ruled that corporations have freedom of speech, in Citizens United, and religious liberty, in the Hobby Lobby case. I sought to find out: How did corporations win our most fundamental rights? In school, we learn about civil rights, and women’s rights, even state’s rights, but never corporate rights. I was shocked to discover when I looked into it that, like women and minorities, corporations have fought since America’s earliest days to win equal rights under the Constitution. And they use those rights to fight off business regulations designed to protect the public.
SR: Yes, we have certainly seen that today. But did it start that way? Or did it turn into that?
AW: Corporations have always used constitutional rights to strike down regulation. Corporations seek rights to fight back against business regulation. Even when laws are passed to protect consumers and investors and the public at large, rights can be used in court to challenge those laws. It’s not just a new thing. The first Supreme Court case on the rights of corporations was decided in 1809, a half-century before the first Supreme Court case on the rights of African Americans. Even back then, it was a powerful corporation, the Bank of the United States, that was seeking to overturn a Georgia law that imposed a tax on the bank. So from the get-go, corporations were fighting off regulation.
SR: We hear many stories about how corporations became synonymous with people under the law. Can you shed some light on how that happened? I have a sense it wasn’t a single Supreme Court case. What actually happened?
AW: Right. For all the controversy of [2012 GOP presidential nominee] Mitt Romney saying “Corporations are people,” corporate personhood is actually a very longstanding principle of basic business law. And what it means is the corporation has its own independent identity in the eyes of the law—totally separate and apart from the stockholders, the employees and the creditors. That’s why if you slip and fall at Starbucks, you have to sue the company; you can’t sue the individual shareholders. Shareholders have limited liability because they are separate legal persons, in the eyes of the law from the corporation. That idea is a very longstanding one. If you go back to Blackstone and his [legal] commentaries, [written in] 1757, he described corporations as artificial persons designed to carry on the rights of people, when the people themselves may not be able to do so.
SR: The reason I ask this is because we hear a lot of political slogans, like ‘Corporations are not people,’ which would imply that there’s a simple switch that can be flipped somehow in the legal system to turn off those rights. What’s wrong with that?
AW: That’s true; I think that corporate personhood is a very misunderstood idea. In fact, the Supreme Court has referred to corporations as people on a number of occasions. Generally, the logic and reasoning of the court’s opinions depends on ignoring the corporation and referring to the corporation as an association of citizens; and allowing the corporate entity merely to have the right that the people who associate together already have. So the Supreme Court treats the corporation, not as a person, not as its own independent entity in the eyes of the law separate from its stockholders, but treats the corporation as a pass through, as an almost irrelevancy that’s the shell or casing around an association of people.
SR: Today many people are saying that American corporations have become so big that they are larger than states—they’re transnational. I have heard constitutional lawyers at Stanford say that the rules of the internet, which are the private user agreements, would never be found constitutional under the First Amendment’s freedom of speech. But they’re the rules. They transcend national boundaries. It’s not really clear who might rein them in or how. It all points to the question, have corporations become too big? Do they have too much power? Do they have more rights than individuals? What’s your sense?
AW: Those are great points. And indeed, one of the things that my book does show is that corporations have been powerful not just in legislatures but also in the courts. We think of corporate power after Citizens United, primarily in terms of lobbying or campaign expenditures, basically how they influence legislation. And when we see something like the Trump tax bill, you really see the influence of corporations exerting their political power on lawmakers.
But there’s also been a determined effort by corporations to win power in the courts. And not just win favorable rulings, but actually win basic constitutional rights that they can use to strike down legislation. They have been very successful in doing so. Do corporations have more rights [than individuals]? In some ways, yes, because to the extent that you need money to defend your rights—to hire the best lawyers, to argue your cases, to take you cases to the Supreme Court in the first place—to the extent the system depends on money to do that, corporations are uniquely situated with their massive resources to take advantage of the courts.
SR: What are citizens supposed to do then? We have this notion in a democracy that citizens matter. And citizens have rights. And the Bill of Rights was created for individual citizens. Yet it seems the rights of citizens are shrinking.
AW: It does seem that way. It does seem that corporations are winning more and more the rights of citizens, even as we feel that individual citizens are losing some of their rights. For instance, while I trace the history of corporations seeking constitutional rights all the way back to early America, that first case in the early 1800s, it goes throughout American history. Corporations have consistently fought for constitutional rights. But traditionally, the Supreme Court has limited corporations to property rights. Yeah, they have basic rights to protect their property, but not rights to protect liberty. Rights associated with political freedom and personal conscience were off-limits for corporations. The Supreme Court has stoked controversy in recent years by extending more and more liberty rights.
SR: Yes, if you think about it, the way the Occupy protests were shut down in New York City was because it was on a private park. There were other decisions in the federal courts, the labeling on tobacco, for example, where the speech rights of commercial entities was held in higher esteem than the public interest health rights. Am I presenting that in a distorted way?
AW: I don’t think so. Part of what you are speaking to is how corporations have successfully taken over the Constitution in so many ways. We think about the First Amendment, for instance. It was enlivened by the Supreme Court. The court really began to breathe judicial protection of free speech in the early 20th century, in response to the silencing of dissenters like socialists and communists and immigrant radicals. The idea was the First Amendment was going to protect the little guy from being abused by the big guys. But today, 50 percent of all First Amendment cases are brought on behalf of corporations and trade associations that represent corporations. And so the First Amendment has really become a tool for the most powerful entities to strike down laws, like you say, regulating tobacco, or regulating disclosure on the use of conflict minerals, or growth hormones in dairy products. We’re seeing very common use by big businesses of our cherished rights that were designed for outsiders.
SR: What do you hope readers will take away from this book? The narrative is discouraging. The pendulum is swinging away from individuals. Are you hoping people will become aware of this history and seek a rebalancing?
AW: I’ll leave it for others to decide what to do with the information. I’m an academic. I thought there was a very interesting history and phenomenon here that was filled with remarkable and fascinating stories about a hidden civil rights movement in America. It didn’t happen by corporations marching on the street. That doesn’t happen obviously. But it has been in the courts and in the Supreme Court.
I think if you want to solve any problem, you need to understand how you got here and what were the causes and consequences of what’s happened. Hopefully, I can participate and shape that debate a little bit, but I don’t have any big broad goals that I want people to act in a particular way. The story I tell will complicate the views of partisans on both sides. It turns out I find that it was actually conservative courts that drew the initial boundaries on the rights of corporations. And it was often liberals that fought for extending rights to corporations, or fought for First Amendment theories that ended up benefiting corporations. So it’s a more complicated story when you look back at history than maybe any one side in the debate would like to admit.
SR: This is like what you found in Gunfight, your book about the history of the Second Amendment. It’s a complicated history that most people don’t know.
AW: Yeah, there are a lot of overlaps with my book Gunfight, which was also a deep dive into a hidden secret history, to show that things are often more complicated than we are led to believe. And also, there are fascinating and important lessons to be learned from this. One of the lessons I think that we can learn is that corporations do need some rights. They need rights for their property, so that the government doesn’t take their property without just compensation. They need some basic rights in due process. We wouldn’t want the government to say Apple is guilty of a crime for not opening up a terrorist’s iPhone, without Apple having the right of due process of law.
At the same time, the [Supreme] Court has erred in recent years by extending these fundamental liberty rights, like religious freedom and political speech to business corporations. Those are rights that depend on personal conscience and on personal autonomy. Corporations are artificial creatures that are mandated by law to pursue certain kinds of interests, generally thought to be maximizing the shareholders’ value. They don’t have the autonomy that some of those basic liberty rights depend on.
It shouldn’t be underestimated either just how far the US’ reach is in terms of influencing the rest of global capitalism. As one UK Supreme Court justice said in a recent speech (it was a bit long and rambling to be worth linking to here, if anyone is desperate to read it all let me know and I will dig out a link), as corporations are transnational and nation-independent, commercial courts are increasingly looking across jurisdictions and trying to align themselves in a way which avoids creating messy conflicts like what happened in the Lehman bankruptcy resolution (short version: the head office in NY repatriated funds which had been supposedly allocated as capital for regional operations such as London; the bankruptcy courts in each jurisdiction had to then try and work out, not without difficulty, who was entitled to what).
Unfortunately what happens in the US doesn’t stay in the US.
(and yes, this one is going on my reading list as well)
You already gave them the personhood: “waged by US corporations”
We really need to stop this. Corporations don’t do things. People do, for their own reasons (the reason in this case being very obvious, to get a shield from personal responsibility).
Groups of people may do something too, although ultimately, they are still individuals. And yes, I know it’s hard to go against the herd – but it’s possible.
Vlade points out one of two key points the author misses in an otherwise excellent interview; that corporations act as shields for personal misdeeds; the other being that corporations were formed for shareholder value. No, ‘shareholder value’ is a BS term of recent vintage designed to muddy the waters on the real responsibilities of corporations.
It will have a hard time topping “Gangs of America,” which was an excellent book about the history of corporate “personhood.” That one was also written with a (justified) anti-corpo axe to grind. Now the whole book is available free online — someone dropped a link in a comment thread several days ago, so I won’t repeat. “We the Corporations” was published 15 years after “Gangs,” though. The latter came out prior to Citizens United. So that’s one plus for “We.”
The Fed is a private corporation and so too is the IRS, the Fed’s collection and enforcement agent. The majority of US citizens do not know this. The IRS is NOT part of the USG, and under the Constitution, is not legal and the history of its origin is replete with lies, deceit and underhanded political maneuvering. All tax receipts wind up at the Fed after a disingenuous pass through the US Treasury. This was done to ensure that the Fed received its “vig” by printing money out of thin air. Few actually know who the stockholders of the IRS are, but it has been rumored that the shares are held in trust in the City of London for the benefit of the Royal Family.
A ridiculous falsehood. The IRS is an agency of the Treasury Department. https://en.m.wikipedia.org/wiki/Internal_Revenue_Service
Tinfoil hat alert!
Corporations are merely legal entities which exist as a matter of law, not birth. They are not endowed with any particular inalienable rights, but only those rights the law confers. The extension of Constitutional rights to corporations is a weaponization of corporate power for the benefit of the men who control the corporation.
If our Founders had wanted corporations to have rights the would have said so explicitly. They did not, and many even warned of the dangers corporations would present in giving the few outsized powers over the many.
At each step, the establishment of these extra-Constitutional “rights” by the judges for the benefit of these corporations seeks to, in effect, nullify the will of the people as expressed through our Representative government. They seek a separate, unequal Corporate Bill of Rights via judicial decisions, not in laws through the democratic process accountable to the people.
Corporate “rights” are, and have always been, a means to magnify the power of the men who control the corporations. They have metastasized from the Bench because the men controlling the Corporations have been unwilling or unable to achieve their desired power through the legislative process, and because the placement and existence of ideological judges is the easiest way to circumvent the will of the people.
Corporate “rights” are the equivalent of voter fraud: a justification for actions to circumvent the democratic process.
Apparently the constitution was largely based off of contemporary articles of incorporation for companies. A big step for corporate personhood was a freedom of the press case. Here is an extended interview with the author.
I was looking to see if the interview reinforced the following article from the Atlantic:
A few years ago Move to Amend Move to Amend became active in Maine. It is the attempt to pass a constitutional amendment that declares artificial entities (corporations) are not people and money is not speech for political purposes.
I joined the effort to collect signatures…we needed around 64,000 valid signatures to get on the ballot. We got about half that many and fell well short of our goal, but I learned a few things.
1. When you wave a petition at people and say, “Corporations are not people and money is not speech” many say, “Where do I sign!” They understand immediately what is going on. 2. If we had more people collecting, we would have gained ballot access easily, and 3. There was resistance from people who were associated with non-profits. They knew right away that their comfy little niche would come under scrutiny.
And so it goes.
Currently 53 co-sponsors to House Joint Resolution 48 introduced January 30, 2017
Section 1. [Artificial Entities Such as Corporations Do Not Have Constitutional Rights]
The rights protected by the Constitution of the United States are the rights of natural persons only.
Artificial entities established by the laws of any State, the United States, or any foreign state shall have no rights under this Constitution and are subject to regulation by the People, through Federal, State, or local law.
The privileges of artificial entities shall be determined by the People, through Federal, State, or local law, and shall not be construed to be inherent or inalienable.
Section 2. [Money is Not Free Speech]
Federal, State, and local government shall regulate, limit, or prohibit contributions and expenditures, including a candidate’s own contributions and expenditures, to ensure that all citizens, regardless of their economic status, have access to the political process, and that no person gains, as a result of their money, substantially more access or ability to influence in any way the election of any candidate for public office or any ballot measure.
Federal, State, and local government shall require that any permissible contributions and expenditures be publicly disclosed.
The judiciary shall not construe the spending of money to influence elections to be speech under the First Amendment.
This may insult a few people (sorry) but I am afraid that it is because of developments like this that is leading the United States to become something of an international legal backwater. I went digging for a decade-old article that talks about this point and found it at http://www.nytimes.com/2008/09/18/us/18legal.html which is worth reading.
It says that more and more countries are no longer looking to the US to set new laws while in the US, judges are loath to look for foreign laws to guide their decisions. One US professor wrote “Like it or not, Americans really are a special people with a special ideology that sets us apart from all the other peoples.” I wonder if he knows how to spell parochial?
Certainly it does not help when administration after administration seeks to have US laws applicable and enforceable in other countries. In Iraq, the US tried to introduce American laws direct into an Arabic country and wondered why they did not work there. And did not Obama say that it was up to the America to set the rules and regulations for the new TPP?
Should the Washington Post, MSNBC & Random House have First Amendment rights? Should the Electronic Freedom Foundation have First Amendment rights? How about the Democratic National Committee? Should Microsoft have First Amendment rights when they publish binaries that support cryptography?
Should small websites like Naked Capitalism have First Amendment rights?
How does the line get drawn?
I wonder how long it will until the corporation has the right to vote and directly choose its representatives in government.
I think I remember Richard Sennet asking ‘Is your community where you work, or where you sleep?’ In the past both businesses and residents voted in English municipalities. In the City, this continues.
The City has a unique electoral system. Most of its voters are representatives of businesses and other bodies that occupy premises in the City… In elections, both the businesses based in the City and the residents of the City vote.
… in 2009, the business vote was about 24,000, greatly exceeding [the ~9,000] residential voters….
The business or “non-residential vote” was abolished in other UK local council elections by the Representation of the People Act 1969, but was preserved in the City of London. …
The City of London (Ward Elections) Act 2002, a private Act of Parliament, reformed the voting system and greatly increased the business franchise, allowing many more businesses to be represented. Under the new system, the number of non-resident voters has doubled from 16,000 to 32,000. Previously disenfranchised firms (and other organisations) are entitled to nominate voters, in addition to those already represented, and all such bodies are now required to choose their voters in a representative fashion. Bodies employing fewer than ten people may appoint one voter; those employing ten to 50 people one voter for every five employees; those employing more than 50 people ten voters and one additional voter for each 50 employees beyond the first 50….
It’s not just in The City (of London.) In Melbourne, Australia, corporations can vote for the mayor and council. (At least the humans listed as their directors can.) Not only that, but corporations get TWO votes, whereas mere humans like me get one. And the city electoral board goes out of its way to SEEK corporate owners and enrol them. Because of Australia’s mandatory voting laws, it’s not like corpos can slack off and miss the vote, either. So Melbourne, a place which is left-wing enough that its (one-person, one-vote) elected member of the Australian Parliament is from the Green Party, has a city government dominated by corpo real estate cons and landlords. The latter don’t even have to live in town to vote. They get that right because of property ownership.
For those who don’t read the link, here are the nut grafs:
“Unlike other local governments in Victoria, Melbourne City Council automatically requires businesses to vote in council elections.
Corporations operating in Melbourne are allocated two votes. When a company does not appoint its own representatives, the council will automatically enrol company office-bearers.
You are also required to vote if you own a rateable property in the municipality, even if you do not live locally.”
In recent years, Sydney has adopted the same system. For those who think Australia is some lefty paradise in the sun, think again! I’m waiting to see if something similar will be rolled out in the U.S., and what sort of sophistry will be used to justify it.
Veering off-topic into the baroque wonders of the British Contitution, does Melbourne have a City Remembrancer?
Corporations are Golaiths. We need a David.
Note that it hasn’t got to the point yet where Chapter 7 and 11 bankruptcies initiate murder investigations. Interesting were that to happen.
It’s a cute idea—say, can I marry a corporation?—but the concept of corporate personhood exists only to justify profiteering and deregulation. Corporations, by which I mean the humans who direct and profit from corporate business entities, only want corporations to have rights which maximize profits and minimize culpability for their constituent humans. If corporations had a right to “life,” then executives would face serious jail time for crashing the business to line their own pockets. Who profits from that?
I’d be curious to know what the Professor Winkler thinks about the First Amendment, etc. rights of nonprofit corporations. One concern I have with the arguments against corporate First Amendment rights is I cannot find a principled rationale to apply them only to business organizations.
For example, one line of argumentation is based on the fact that all corporations are creatures of law and there is no constitutional right to form a corporation at all. Hence, government can regulate the corporation to whatever degree it desires. But that equally applies to the ACLU and Humane Society as it does to Coca-Cola.
One could also argue that business corporations present special concerns because of the profit motive. But that’s not convincing–I think at this point most readers can think of one or more nonprofit (probably a hospital or university, if nothing else) that acts more out of apparent pecuniary motive than any charitable purpose. In any case, I believe there’s evidence that nonprofit boards do very little oversight so it’s certainly possible for management to push the corporation towards a profit motive. Moreover, some nonprofits have huge amounts of money and present the same aggregation of wealth concerns as any private business, and anyways, the nonprofit designation is wholly a creature of tax law so there’s no constitutional right to be treated specially due to a corporations charitable purpose (just like there’s no right to format a corporation at all).
Maybe the final legal answer under the current Constitution is that government can regulate all corporate speech. But I don’t know if that’s the desired outcome.
Kinda rambling, just thoughts.
Make the Management of the Corporation responsible and liable for its actions. Limited liability protects shareholders, not management.
Why do nonprofits need those rights? If we need to throw out this baby with the bathwater, so be it. A civil society based on nonprofits’ lobbying power is a crummy civil society anyway. There are other models, where nonprofits organize individuals to contribute their speech to a cause (e.g. the John Birch Society or Amnesty International). This seems vastly better to me anyway, and gives nonprofits a democratic function rather than assuming the role of moral entity and reducing individuals to mere donors.
Maybe. But the other side there is that advocacy groups aggregate resources and focus on particular issues. An individual citizen can’t reasonably be expected to make meaningful speech contributions to several different causes while also working, taking care of children, etc., so the organizations serve as a way of outsourcing some of the work to people who have the more time to press the issues (or so one hopes). And the corporate form gives the organizations a legal structure and formal recognition
You could theoretically organize an advocacy organization either informally or via another form such as a partnership or LLC, but I don’t think donors would get a tax deduction that way, which seems to be at least one driving force behind some donations. (Anyways, with the new tax bill, this force behind this motive is likely reduced.)
With that said, a purely voluntary unincorporated association of individuals would, I think, have full First Amendment rights, even if corporate speech isn’t covered under the First Amendment. The practical difficulty then would be on the organizing side and on enforcing proper behaviors (e.g., what happens when the person with the money runs off with it all).
Overall, this looks back to the old Tocqueville vision of Democracy in America, where he emphasized the importance of voluntary associations. Its a very satisfying vision to me, but it requires what used to be called “republican virtue” to work, and that’s something I don’t know if We the People can muster.
Sue corporations in small claims court. Death by a hundred thousand cuts.
Is it worth it to them to send in a high powered lawyer at $500 an hour to defend against a $1,500 judgment?
I forgot in the above post, no lawyers usually allowed in court. Even better for Citizen vs. Corporation.
Here’s CF’s post from today’s Verizon copper lines article:
March 19, 2018 at 2:22 pm
“Try Small Claims Court as an harassment technique. An NC link last week to an Inc. mag article about a fellow who took Equifax to small claims court for the breach that resulted in his information being hacked resulted in a $5,200 payout and much consternation from the big corporate law firm trying to defend against him. Amounts vary by jurisdiction that can be sued for and some don’t allow lawyers at all. May be worth a try.”
A very interesting article, and one that highlights what I believe is a major flaw in Western thought – we need to answer the questions: what are ‘rights’ and how does expanding rights (for individuals or corporations) lead to progress.
According to Socrates, “Agreement on terms is the beginning of Wisdom”. There’s no doubt we’ll need a stronger agreement on what we mean by ‘progress’, which seems to mean different things to different people.
History is useful here for capitalism (at least the Western version) has become an agent of positive change by progressively adding new asset classes over the centuries while simultaneously widening the estate of ownership in society. In widening the ownership of various properties society expanded individuals’ rights (starting with rights of property, then expanding to political and then civil and more basic human rights).
And what are rights, in practice? Well, consider that at one time in the distant past individuals didn’t have any rights; all real rights were concentrated in the hands of a single individual, normally an all powerful king, queen, dictator or emperor. It might sound strange but our individual rights, the ones we enjoy today, were derived from that monarchial power. Each right we have, whether it’s a right to own property, or the right to vote or the right to choose our own religious beliefs, at one time in the past belonged to a powerful sovereign. It was the king who technically owned all the property, who choose the religion and who controlled the political life of the nation. Individuals – if they were fortunate or well connected – had privileges but not inalienable rights. So, surprisingly, all individual rights today are derived from the exercise of sovereignty, which means they are a trinity of power, privilege and social responsibility.
If we understood this more thoroughly we might not object so strenuously to the idea of rights for corporations. What we’d do instead is demand that they the power and privileges corporations enjoy be balanced by an appropriate level of social responsibility, focused on advancing the greater ‘good’ of the Republic.
I’m unaware of any society in history where it has been construed that individuals did not have rights – only an absolute monarch. Certainly this was not the case in the Germanic tribal kingdoms which are the ancestors of Western European states, or their mediaeval successors.
Its the most egregious failure of politicians and the details deserve to be better known.
I did some research into British economic history and it had appeared to me that the birth of this indulgence came in mid-nineteenth century when British shipowners were transporting the bulk of the world’s international trade and their ships were being arrested in foreign ports for damage to cargo. This led ultimately to small limits on compensation under international agreement, the Hague Rules as they were called, but in the interim the shipowners needed something straight away to separate themselves from their ships and the Commons indulged them with an amendment to the Companies Act in about 1860. This amendment amazingly was not restricted to shipping companies but available to all.
The British business community was so shocked by the clause they thought it was an error and no-one took advantage of it until early the following century when a Mr Solomons brought an action in the London High Court to construe it and businessmen learned they were no longer liable for anything. There was still a tincture of morality then but as new young lads came to work with legal and accounting training it was clearly more profitable to own assets only through deniable holding companies. The advent of the tax haven soon followed.
If one was to write of the decline and fall of commercial morality and the political responsibility for it, as I hope Adam Winkler has done in this case, it will surely include these interesting facts from Britain.