A Modest Proposal: Corporations Should No Longer Exist

[Midwest_Doc]

The legal construct known as a "corporation" permits individuals to do as they please WITHOUT PERSONAL CONSEQUENCE.

Personal assets of shareholders and directors are not in jeopardy for all except the most reckless and fraudulent behavior.

Tax breaks for this legal entity are fully without moral justification, as they in no way serve the greater good.

Corporations exist only for bad reasons. I cannot think of a single reason for corporations to exist that benefits the individual, non-shareholding citizen.

[mslawstudent]

1. I disagree

Corporations jump started the industrial revolution and make possible large infrastructure investments by business. I wouldn't invest in XOM if I could be held liable.

Whats needed is just to forbid any form of lobbying or political donations by corporations. Also corporate groups should be severely restricted as they allow hazardous activities to be exempted from the rest of the underlying assets.

Treating a corporation just like a person is ridiculous though.

I'm a lawyer by the way.

[BillZBubb]

4. Good points.

The idea of a corporation, in itself, is a positive thing. Limited liability for shareholders has been a huge benefit to our society.

I've always thought treating a corporation as a person was baloney. If a "corporation" kills or maims somebody from neglect, it doesn't go to jail. It can't serve time.

You are also dead on about lobbying and donations. That is the one thing that is killing our country. We've become a corporatocracy.

How would you suggest restricting lobbying? It seems like there are some Constitutional issues here.

[Geoff R. Casavant]

5. Two points

1. I agree with everything you say.

2. Time to change your user name to get rid of "lawstudent." And congrats on passing the bar!

[No Exit]

6. Treating a corporation just like a person is ridiculous though.

I agree with you on this.

[stepnw1f]

10. Corporate Personhood Needs to Go!

Corporations are shielded way too much from accountability.

[No Exit]

17. In a way, abolishing corporate personhood

would almost accomplish what the original poster was proposing.

Currently, there IS a way to take away that "personhood" for an individual corporation: it's called "piercing the corporate veil".

Once the corporate veil is pierced, it's just a short step to holding the PEOPLE (who are in charge of the corporation) personally (and financially) accountable.

But those corporations which take certain precautions can avoid having the corporate veil pierced. That's why, instead of proceeding in individual cases, we DO need to just abolish the doctrine of "corporate personhood."

[Occulus]

12. How might we address the doctrine of corporate personhood?

What might be the parameters of a test case for doing so?

Use your imagination on this. It should, preferably, be a very simple, minor case.

(If corporate personhood were to be abolished, should we also forbid corporations from taking civil action against natural persons?)

[Igel]

2. They permit the rapid accumulation of large amounts of capital

necessary for investment in large-scale operations and novel interprises that require more funds than an individual would have access to. So it distributes the financial burden over many people, giving them proportional control and stake in the enterprise.

The investor invests as much as s/he wants: those are personal assets, and they're completely at risk. So a corporation shares the risk, with the rewards.

Additional personal assets of the shareholders shouldn't be at risk for improprieties on the part of the Board and management. And the Board's personal assets (beyond what's invested, of course), shouldn't be at risk for malfeasance on the part of the management that the Board is not reasonably expected to know about.

An analogy could be drawn with the US government (like all analogies that aren't tautologies, it breaks down after a while): The citizens elect people whose personal assets are not at risk, but which have fiduciary responsibility over the assets entrusted to them by the electorate. These, in turn, supervise underlings. The underlings may be corrupt, and the elected officials are to look out for it. If the elected folk mess up, they can be removed from office, and the underlings prosecuted. If the elected folk show malfeasance, not just goof ups, they can be impreached.

Moreover, at this point, far more people are shareholders than realize it. I have shares through a retirement account, my savings accounts, and my kid's education account; my parents' retirement is largely through stocks/bonds (not that they invested *before* retirement, mind you), and if those go belly up, I'd likely have to take steps to help take care of them. The civil servants where I live, no doubt, have pensions invested in corporate stocks; and my insurance company's rates (and my physician's malpractice insurance rates) are in part dependent on stock yields.

[TahitiNut]

3. Outlaw corporate ownership of corporations - property owning property.

Your dog CANNOT own your house!! You cannot name your pet as an heir! (They're property.)

Abolish conglomerates. Abolish the shell-games like Enron - over 500 corporations with interlocked ownership. Abolish trans-jurisdictional corporations. Corporations should only be permitted to operate within the political boundaries of the governmental entity licensing them. Thus, a corporation incorporated in Delaware under Delaware law should only be permitted to operate within Delaware. (Use the federal powers of the "commerce clause" to do so.) Create a federal level of incorporation with far more stringent regulation - and a federal sales tax on the sales of shares of stock in the "secondary market," i.e. the stock market.

[Birthmark]

8. Those are some interesting ideas.

I like them at first blush. I'll need to really think about them to try and figure out the effects, but they look reasonable to me.

[Occulus]

11. The logic is actually simpler than that

1. Corporations are persons under the law.

2. Persons cannot own other persons.

3. Corporations, *if* they are to be treated as persons UNDER OUR CONSTITUTION, therefore cannot own other corporations.

Right now, corporations have the best of the worlds of personhood and non-personhood. They are, quite literally, in posession of greater rights than natural persons.

This is a state which cannot stand if our democracy is to continue in a healthy fashion.

I personally would very much like to see corporations stripped of "rights" and granted only priveleges at the pleasure of the people of the state in which they are chartered. As recently as the 1970s, this in fact was the case (I believe) in Wisconsin.

The personhood of corporations was "established"- one could say, decreed- by the SCOTUS in the Santa Clara case. However, I should point out that corporations had been trying for many years previous to that to attain what they collectively considered their holy grail.

I should also point out that it is my understanding that the man who wrote the headnotes for Santa Clara was himself a former railway president. I should also point out that the personhood of corporations is not mentioned in the body of that case's decision; it was only mentioned in the headnotes.

It is my understanding that headnotes for a decision- headnotes are, I understand, something of a summary only- do NOT carry the "force of law" that the decision itself establishes. Therefore, the legal doctrine of corporate personhood is false; it is a paradigm established by no legal authority and carrying with it no legal force.

We need a test case. We need something that can challenge this.

I believe I may have found it.

At work tonight, I noticed a posting for a college savings fund which is provided as a special service by a corporation offering life insurance. In their pamphlet, they state that only individual persons may apply for the college fund; corporate-provided policies are not eligible.

This is a contradiction: if corporations are considered persons for the purposes of law, then their policy violates itself: only individuals may receive the college fund, bt thanks to corporate personhood, corporations "ARE" individuals; logically, they cannot both allow and deny the college fund offer to the same individual.

This may well be a poor example, but I think the DU legal eagles really ought to try and come up with the proper parameters to challenge this doctrine. We need to force the SCOTUS to take a stand, one way or the other. We need them to actually rule on this issue, not simply hear arguments without rendering a decision.

PLEASE correct errors of fact in this post in your responses, if any. It is very, very important that all ducks are in rows if we are to seriously consider challenging a doctrine over a century old.

[Selatius]

16. You are better off trying to push change through Congress

Not the SCOTUS. If Congress passed a law stripping the corporation of its "rights," then the courts would have to interpret the law as they believe the original writers of that law intended. Of course, there will be those who will try and limit the scope of such a law, and there will be others who believe it can be interpreted more liberally, but if the law is written in a very explicit manner, there can be no question what must be done.

Of course, if the SCOTUS decides such a law is "unconstitutional," then the higher hurdle must be jumped: A constitutional amendment. The SCOTUS simply cannot undo such a change of law.

[Occulus]

19. With the way our representatives are beholden to these

very same corporations, I don't believe that is a fight we can win unless and until we first ban corporate participation in the political process. I do mean a complete ban: no speech for or against a candidate, no political donations, etc. Nothing, at all.

I think it is only when we rid Congress of its corporate influence that we can strip corporations of their personhood. This means serious campaign finance reform- and I would not be at all unhappy with requiring at least a five years' absence from any position of corporate responsibility before a candidate can qualify for Congress, but there again, that's something that would require a Constitutional amendment, no?

It all goes round and round, and each element locks the others in all the tighter. It is a truly daunting task, now that I consider it.

[TahitiNut]

18. Since I regard corporate 'personhood' an abomination, ...

I based my argument on the 'property' character of a corporation. The Santa Clara case only (arguably) afforded the protections of the Bill of Rights - or, more accurately, applied the limits on federal powers described therein - it did not legally humanize corporations in any comprehensive sense. You aptly note the imbalance - immunities without liabilities. Global corporations are, in effect, on guaranteed life support and are legally immortal. If capitalism is equated to Dr. Frankenstein, the corporation is surely the monster - and no Prometheus, either.

[Birthmark]

7. Corporations are a valuable and powerful tool.

Eliminating them would be a drastic mistake. However, curtailing what activities corporations can engae in would be a very good idea.

[Joy Anne]

9. may be gone soon

By 2008, the new Supreme Court will be rolling back former decisions rapidly. By 2012, they'll have rolled back a century's worth of jurisprudence, and before 2020 the decisions establishing corporation = person will be gone. That was the late 1800s, wasn't it?

[mb7588a]

13. maybe get rid of retail corporations?

I dunno. there may be some merit in this idea.

[Dunedain]

14. I disagree

I have personal consequence. I had to sign every loan my corporation has with my own personal guarantee.
My house is security for the building where I run my business, I default on the loan, I loose said house. Feels like jeopardy to me.
Tax breaks like depreciation?
I can't morally justify the writing off of my building over 25 years, but I don't feel immoral doing so.
I know that your not talking about me when you speak against the corporation. I don't disagree that right now it seems a good many corporations are very poor citizens.
I don't exist for a bad reason.
I am joe smoe, I rolled the dice, I took a windfall profit from a housing market high, bought a building and started a coffee shop.
I have liabilities in spades, employee's, customers, vendors, regulatory agencies, taxing agencies, codes, it goes on and on, ad nauseam.
It's how it works.
It's how you protect yourself, while at the same time taking a risk.
The things you speak of are not the corporation. It is the spirit of those who run them that is the problem.

[Greyhound]

23. No I think the problem is what they've been able

to do with the extraordinary power they've bought. To get all the benefits of citizenship with none of the responsibility. Allowed to withdraw from paying taxes to support the community that lets them exist, and so forth.

[Selatius]

15. Corporations are the magic genie out of the bottle

They will not go away no matter how much you may want them to go.

The idea of limited liability is, ultimately, a sensibly practical idea. Others such as corporate personhood, though, need to be junked. It's tipped the scales too much. I don't think limited liability is a bad idea because I don't want the creditors and lenders knocking on my door to grab my furniture if a business of mine goes belly-up, but I don't have much tolerance for the idea of a corporation having things such as freedom of speech rights or any rights human mortals enjoy.

[Yupster]

20. we'd have to come up with new ways to handle

the liability issues that a corporation handles, and also the business continuation issues that a corporation handles.

When an individual owns a large business, you don't want the business to be sold at his death. That would hurt too many people. The corporation allows the business to continue.

[Cerridwen]

21. "Corporations could...have their charters removed if the state..."

"Trade-dominance by the East India Company aroused the greatest passions of America's Founders - every schoolboy knows how they dumped the Company's tea into Boston harbour. At the time in Britain virtually all members of parliament were stockholders, a tenth had made their fortunes through the Company, and the Company funded parliamentary elections generously. Parallels with US political life today are hard to miss and the Founders must be weeping in their graves.

After independence, corporations received their charters from states and the charters were for a limited period, like 20 or 30 years, not in perpetuity. They were only allowed to deal in one commodity, they could not hold stock in other corporations, their property holdings were limited to what was necessary for their business, their headquarters had to be located in the state of their principle business, monopolies had their charges regulated by the state, and all corporate documents were open to the legislature. Any political contribution by a corporation was treated as a criminal offence. Corporations could, and often did, have their charters removed if the state considered that their activities harmed its people."

http://www.feasta.org/documents/review2/unequal_protection.htm

Corporations and America's Founding Fathers
Unequal Protection
The rise of corporate dominance and the theft of human rights
Thom Hartmann

edit: punctuation

[Greyhound]

22. How about simply returning to the original concept of the corporation?

Government charters the corporation for an exclusive purpose too big for a single company to do itself (i.e. build a dam, highway, power plant, etc.), upon completion the investors are paid off and the corporation is dissolved and ownership goes to the chartering community.
We absolutely must exclude paper entities from enjoying constitutional rights as well as participating in the electoral process. JMO :shrug:

Edited: of course this would cause massive unemployment among lawyers