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Abolish Corporate Personhood
by Jan Edwards and Molly Morgan,
Women’s International League for Peace and Freedom
Five years ago, members of the US section of the Women’s International League for Peace and Freedom (WILPF) began studying and researching how corporations became so powerful. Inspired by the Program on Corporations, Law and Democracy (POCLAD) we discovered the hidden history of “corporate personhood”—the legal phenomenon that provides constitutional protections to corporations. Not only is corporate personhood a key component of corporate power, it is one of the greatest threats to democracy that we have ever known. Most people, however, have never even heard of it. In September, 2001, WILPF launched a campaign to abolish corporate personhood. The goal of this campaign is to delegitimize the institution of the corporation as a political entity. The following article is by WILPF members Jan Edwards and Molly Morgan.
Colonies, constitutions and corporation
The history of the United States could be told as the story of who is, and who is not, a person under law. Women, poor people, slaves, and even corporations had long been considered persons for purposes of following the law. This is because early laws were written “No person shall . . .” Corporate lawyers had tried to avoid these laws by claiming corporations were not persons and therefore not required to follow the law. So it was decided that for purposes of following the law, corporations were persons. This allowed corporations to sue and be sued in court among other things. But corporations were not persons with rights in the law, and neither were women, slaves, indentured servants, or poor people. We know some of the ongoing story of human beings’ struggle to gain the rights of persons under law, but how did corporations gain these rights?
To understand the phenomenon of corporate personhood, we start by looking at the foundation of US law, the Constitution of the United States of America. This document was written by 55 gentlemen cleverly described by one historian as “the well-bred, the well-fed, the well-read, and the well-wed.” Many of them wrote and spoke at length about the inability of the common people to be self-governing.
The word “democracy” appears nowhere in the Constitution.
The word “democracy” appears nowhere in the Constitution. The Constitution only mentions two entities: We the People and the government. We delegate some of our power to the government in order to perform tasks we want government to do. In a representative democracy, this system should work just fine.
The problem is that the phrase “We the People” is not defined in the Constitution. In 1787, in order to be considered one of “We the People” and have rights in the Constitution, you had to be an adult male with white skin and a certain amount of property. This narrowed “We the People” down to about 10% of the population. Those who owned property, including human property, were very clear that this was rule by the minority.
So here was the first definition of who gets to be a person in the United States. Ninety percent of the people, including all the immigrants, indentured servants, slaves, minors, Native Americans, women, and people who did not own property (the poor), were, legally, not “persons.”
Without using the words “slave” or “slavery,” the Constitution ensures that even if slaves get to free soil, their status as property remains the same. This is just one of the clauses defining property in the Constitution. It also defines contracts, labor, commerce, money, copyright, and war as the province of the federal government. So the Constitution, the foundation of all US law, was not written to protect people—it was written to protect property. The Constitution does contain some protection for people in Section 9, but the Bill of Rights is the concentration of rights for We the People.
Constitutional fallacies
Most people believe that the Constitution, specifically the Bill of Rights, guarantees our rights to freedom of speech, religion, and press, to peaceably assemble, and so forth. People of all political stripes say this. But the truth is, it does no such thing. Almost all of our constitutional protections are expressed as the absence of a negative rather than the presence of a positive. So the First Amendment, for example, does not say, “All citizens are guaranteed the right to free speech”; it only says, “Congress shall make no law . . . abridging the freedom of speech . . .” The First Amendment just restricts the government from specific encroachments; it doesn’t guarantee anything. This was not a concern for the people because they had strong bills of rights in their state constitutions, and at that time, the states had more power than the federal government.
If those rights were actually guaranteed in the Constitution, people could, for example, take the Bill of Rights into the workplace. Anyone who thinks workers have free speech while they are on corporate property should ask the workers or talk to a union organizer. Because corporations are property, and because the Constitution protects property rights above all, most people have to abandon the Bill of Rights in order to make a living.
Another word that appears does not appear in the Constitution is “corporation.” The reason is that the writers of the Constitution had zero interest in using for-profit corporations to run their new government. In colonial times, corporations were tools of the King’s oppression, chartered for the purpose of exploiting the so-called “New World” and shoveling wealth back into Europe. The rich formed joint-stock corporations to distribute the enormous risk of colonizing the Americas and gave them names like the Hudson Bay Company, the British East India Company, and the Massachusetts Bay Colony. Because they were so far from their sovereign, the agents for these corporations had a lot of autonomy to do their work. They could pass laws, levy taxes, and even raise armies to manage and control property and commerce. They were not popular with the colonists.
So the writers of the Constitution left control of corporations to state legislatures (10th Amendment), where they would get the closest supervision by the people. Early corporate charters were very explicit about what a corporation could do, how, for how long, with whom, where, and when. Corporations could not own stock in other corporations, and they were prohibited from any part of the political process. Individual stockholders were held personally liable for any harms done in the name of the corporation, and most charters only lasted for 10 or 15 years. Most importantly, in order to receive the profit-making privileges the shareholders sought, their corporations had to represent a clear benefit for the public good, such a building a road, canal, or bridge. When corporations violated any of these terms, their charters were frequently revoked by the state legislatures.
That sounds nothing like the corporations of today. So what happened in the last two centuries? As time passed and memories of royal oppression faded, the wealthy people increasingly started eyeing corporations as a convenient way to shield their personal fortunes. They could sniff the winds of change and see that their minority rule through property ownership was under serious threat of being diluted. States gradually started loosening property requirements for voting, so more and more white men could participate in the political process. Women were publicly agitating for the right to vote. In 1865 the 13th Amendment was ratified, freeing the slaves. Three years later, the 14th Amendment provided citizenship rights to all persons born or naturalized in the United States, and two years after that, the 15th Amendment provided voting rights to black males. Change was afoot, and so the ruling class responded.
During and after the Civil War there was a rapid increase in both the number and size of corporations. This form of business was starting to become a more important way of holding and protecting property and power. Increasingly through their corporations, the wealthy started influencing legislators, bribing public officials, and employing lawyers to write new laws and file court cases challenging the existing laws that restricted corporate behavior. Bit by bit, decade by decade, state legislatures increased corporate charter length while they decreased corporate liability and reduced citizen authority over corporate structure, governance, production, and labor.
But minority rulers were only going to be able to go only so far with this strategy. Because corporations are a creation of the government, chartered by the state legislatures, they still fell on the government side of the constitutional line with duties accountable to the people. If minority rule by property was going to be accomplished through corporations, they had to become entitled to rights instead, which required them to cross the line and become persons under the law. Their tool to do this was the 14th Amendment, which was ratified in 1868. From then it took the ruling class less than 20 years to shift corporations from the duty side of the line, where they are accountable to the people, to the rights side, where they get protection from government abuse.
The 14th Amendment, in addition to saying that now all persons born or naturalized in the US are citizens, says that no state shall “deprive any person of life, liberty, or property, without the due process of law; nor deny to any person . . . the equal protection of the laws.” The phrase about not depriving any person of life, liberty, or property without the due process of the law is exactly the same wording as the Fifth Amendment, which protects people from that kind of abuse by the federal government. With the ratification of the 14th Amendment, the states could no longer abuse people in that way either. These are important rights. They are written in a short, straightforward manner. After the Civil War and all the agony over slavery, the people in the states that ratified the 13th, 14th, and 15th Amendments were clear that they were about righting the wrong of slavery.
That clarity, however, did not stop the railroad barons and their attorneys in the 1870s and 80s. As mentioned before, those who wanted to maintain minority rule were losing their grip. There was real danger of democracy creeping into the body politic. Until the Civil War, slavery was essential to maintaining the entire economic system that kept wealth and power in the hands of the few - not just in the South, but in the North as well. It was the legalization of a lie - that one human being can own another. Slavery was at the core of a whole system of oppression that benefited the few, which included the subjugation of women, genocide of the indigenous population, and exploitation of immigrants and the poor.
Now that the slavery lie could no longer be used to maintain minority rule, they needed a new lie, and they used the 14th Amendment to create it. Because these rights to due process and equal protection were so valuable, the definition of the word “person” in the 14th Amendment became the focus of hundreds of legal battles for the next 20 years. The question was: who gets to be a person protected by the 14th Amendment?
In the courts
The watershed moment came in 1886 when the Supreme Court ruled on a case called Santa Clara County v. Southern Pacific Railroad. The case itself was not about corporate personhood, although many before it had been, and the Court had ruled that corporations were not persons under the 14th Amendment. Santa Clara, like many railroad cases, was about taxes. Before the Court delivered its decision, the following statement is attributed to Chief Justice Waite:
The court does not wish to hear argument on the question whether the provision in the 14th Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.
The statement appeared in the header of the case in the published version, and the Court made its ruling on other grounds. How this statement appeared in the header of the case is a matter of some mystery and competing theories, but because it was later cited as precedent, corporate personhood became the accepted legal doctrine of the land.
What was it in the 14th Amendment that was so valuable to corporate lawyers and managers? Why did they pursue it so aggressively? At the time, as is still true today, corporations were chartered by state governments, and the 14th Amendment reads “No state shall...” If the word “person” in the 14th Amendment included corporations, then no state shall deny to corporations due process or equal protection of the laws. This allowed corporate lawyers to allege discrimination whenever a state law was enacted to curtail corporations.
This was also the beginning of federal regulatory agencies, so because corporations were now persons under the 14th Amendment, it would be discriminatory not to give them the same rights under federal laws. With the granting of the 5th Amendment right to Due Process (Noble v. Union River Logging, 1893), corporate lawyers could challenge, and the Supreme Court could find grounds to overturn, democratically legislated laws that originated at the federal as well as state levels.
Once corporations had jumped the constitutional line from the “government” side to the “people” side, their lawyers proceeded to pursue the Bill of Rights through more Supreme Court cases. As mentioned above, in 1893 they were assured 5th Amendment protection of due process. In 1906 they were granted 4th Amendment search and seizure protection (Hale v. Henkel). In 1922 they were acknowledged as beign protected under the “takings” clause of the 5th Amendment (Pennsylvania Coal Co. v. Mahon), and a regulatory law was deemed to be a “takings.”
In 1947 they started getting First Amendment protections (Taft-Hartley Act). In 1976, the Supreme Court determined that money spent for political purposes is equal to exercising free speech, and since “corporate persons” have First Amendment rights, they can basically contribute as much money as they want to political parties and candidates (Buckley v. Valeo).
Every time “corporate persons” acquire one of these protections under the Bill of Rights, it gives them a whole new way of exploiting the legal system in order to maintain minority rule through corporate power. Since 1886, every time people have won new rights, like the Civil Rights Act, corporations are eligible for it too.
Knowing the enemy
It is important to remember what a corporation is to understand the implications of corporate personhood for democracy. A corporation is not a real thing; it’s a legal fiction, an abstraction. A corporation can live forever. It can change its identity in a day. If it’s found guilty of a crime, it cannot go to prison.
Slavery is the legal fiction that a person is property. Corporate personhood is the legal fiction that property is a person.
Corporations are whatever those who have the power to define want them to be to maintain minority rule through corporations. As long as superhuman “corporate persons” have rights under the law, the vast majority of people have little or no effective voice in our political arena, which is why we see abolishing corporate personhood as so important to ending corporate rule and building a more democratic society.
Today the work of corporatists is to take this system global. Having acquired the ability to govern in the United States, the corporation is the ideal instrument to gain control of the rest of the world. The concepts, laws, and techniques perfected by the ruling minority here are now being forced down the throats of people everywhere.
First, a complicit ruling elite is co-opted, installed, or propped up by the US military and the government. Then, just as slavery and immigrant status once kept wages nonexistent or at poverty levels, now sweatshops, maquiladoras, and the prison-industrial complex provide ultra-cheap labor with little or no regulation. Just as sharecropping and the company store once kept people trapped in permanently subservient production roles, now the International Monetary Fund and World Bank’s structural adjustment programs keep entire countries in permanent debt, the world’s poorest people forced to feed interest payments to the world’s richest while their own families go hungry.
A world without corporations
What would change if corporations did not have personhood? The first and main effect would be that a barrier would be removed that is preventing democratic change, just as the abolition of slavery tore down an insurmountable legal block, making it possible to pass laws to provide full rights to the newly freed slaves. After corporate personhood is abolished, new legislation will be possible. Here are a few examples.
If “corporate persons” no longer had First Amendment right of free speech, we could prohibit all corporate political activity, such as lobbying and contributions to political candidates and parties. If “corporate persons” were not protected against search without a warrant under the Fourth Amendment, then corporate managers could not turn OSHA and the EPA inspectors away if they make surprise, unscheduled searches. If “corporate persons” were not protected against discrimination under the 14th Amendment, corporations like Wal-Mart could not force themselves into communities that do not want them.
So what can we do to abolish corporate personhood? Within our current legal system there are two possibilities: the Supreme Court could change its mind on corporations having rights in the Constitution, or, we can pass an amendment to the Constitution. Either scenario seems daunting, yet it is even more difficult than that. Every state now has laws and language in their state constitutions conceding these rights to corporations. So corporate personhood must be abolished on a state as well as a national level.
The good news is that almost anything we do towards abolishing corporate personhood helps the issue progress on one of these levels. If a city passes a non-binding resolution, declaring their area a “Corporate Personhood Free Zone,” that is a step toward passing a constitutional amendment at their state and eventually at the national level. If a town passes an ordinance legally denying corporations rights as persons, they may provoke a crisis of jurisdiction that could lead to a court case. We think both paths should be followed. It was, however, undemocratic for the Supreme Court to grant personhood to corporations, and it would be just as undemocratic for this to be decided that way again. An amendment is the democratic way to correct this judicial usurpation of the people’s sovereignty.
We see that corporate personhood was wrongly given. It was given, not by We the People, but by nine Supreme Court judges. We further see that corporate personhood is a bad thing, because it was the pivotal achievement that allowed an artificial entity to obtain the rights of people, thus relegating us to subhuman status. Finally, because of the way corporate personhood has enabled corporations to govern us, we see that it is so bad, we must eradicate it.
Slavery is the legal fiction that a person is property. Corporate personhood is the legal fiction that property is a person. Like abolishing slavery, the work of eradicating corporate personhood takes us to the deepest questions of what it means to be human. If we are to live in a democracy, what does it mean to be sovereign? The hardest part of eliminating corporate personhood is believing that We the People have the sovereign right to do this. It comes down to us being clear about who’s in charge.
[17 aug 04]