Kill the Corporation

My son, a second-year student at USC, wrote this essay for some advanced writing class. He obviously inherited more than my good looks.

Kill the Corporation

“One hundred and fifty years ago the business corporation was a relatively insignificant institution. Today it is all pervasive. Like the church, the monarchy and the Communist Party in other times and places, the corporation is today’s dominant institution” (Abbott & Achbar, 2003). Since the late 1800s when a Supreme Court ruling led to the interpretation that corporations were persons, corporate lawyers and lobbyists have been advocating for increased corporate rights. The result is that corporations have become so rich and powerful that they can use these rights to infringe on the rights of real human people. Currently, this problem is largely going unaddressed. In the contemporary United States, within the manifestation of the law, corporate rights and profit are valued more highly than any negative externalities imposed on consumers. The only way to stop corporations from destroying the earth for profit is to strip them of their legal status as persons and recognize them for what they are: institutions that value profit over life.
Corporate dominance over the global economy is not a natural law of market economics, nor is it a necessary evil to enable technological advancement. Originally, corporations were created to fulfill a specific charter, like building a bridge or maintaining a road (Abbott & Achbar, 2003). This all changed in 1886 when the Southern Pacific Railroad sued Santa Clara County for applying a special tax to railroad property, claiming that under the 14th amendment, persons cannot have their property taken without due process. Although the court declined to comment on whether corporations should be considered persons, the court reporter who summarized the case made the erroneous assertion that the court had decided that “corporations are persons within… the Fourteenth Amendment” (Santa Clara County v. Southern Pacific R. Co., 1886). This seemingly innocuous mistake would have enormous ramifications for the future of corporate personhood, as over the next few decades, it was cited as precedent dozens of times when corporations were suing for expanded rights. Despite the Fourteenth Amendment being written to protect the rights of individuals, “between 1890 and 1910 there were 307 cases brought before the court under the Fourteenth Amendment, 288 of these brought by corporations, nineteen by African Americans” (Abbott & Achbar, 2003). This enormous disparity was just the beginning, and in the following century corporations used the courts to become the most dominant institution of our time. Seeing an opportunity to expand their power, corporations perverted a law written specifically to protect the historically disenfranchised, and now use it to dominate the lives of the people the law was originally designed to protect.
Admittedly, only referring to corporations in their institutional role fails to acknowledge that they are essentially a group of real human people working together with a common purpose. Ilya Shapiro, Editor-in-Chief at the Cato Institute, argues that “individuals do not lose their right to speak or act simply because they chose to exercise those rights by pooling their resources in a corporate form.” He concedes that obviously corporations are not real persons, but that corporate personhood provides a “useful legal fiction” that enables them “to form certain legal relationships, [and] behave as a (legal) person for certain purposes” (2011). Shapiro is correct in these assertions. Corporations are made up of and owned by people, and there is no reason those people should lose their rights because they choose to associate together.
The primary flaw with this argument is that it implies that if a group of people decide to incorporate, they somehow lose their rights as persons unless those same rights are guaranteed to the corporations themselves. Defenders of corporate rights are aware of the erroneous nature of this claim. Shapiro (2011) himself admits that if you accept “‘the corporation as a separate person, then taking its property violates its rights. But if you reject that fiction, as a means of arguing that the corporation should lack rights, then taking its property violates its owners’ rights.’ Either way, the result is the same.” Therefore, the claim that corporations need rights to protect the individuals within them is not only untrue, but also deceitful. Corporations do not need the rights of persons; those are already guaranteed to its executives and owners under the constitution. Instead, corporate personhood gives executives legal impunity to break the law in their quest for profit, often infringing on the rights of real human people in the process. For example, when the 2008 financial crash destroyed the market and millions of people’s financial assets, only “a single investment banker… who happened to be several rungs from the corporate suite at a second-tier financial institution” was jailed (Eisinger, 2014). Although corporate personhood is not the only reason this happened, the shield from individual liability it provides was an enormous factor in helping the executives responsible escape with a slap on the wrist.
This near legal immunity also allows corporations to lie and manipulate their customers, under the guise of freedom of speech. There are countless examples of this, but one of the most well known is the multi-decade misinformation campaign run by the tobacco industry. Beginning “in the early 1950s, the first studies documenting tobacco’s role in cancer… began to appear” (Stauber & Rampton, 2004). This sent the entire industry into a tailspin. “There is no question that the tobacco industry knew what scientists were learning about tobacco” (Stauber & Rampton, 2004), but this did not stop them from attempting to undermine the findings in any way possible. The strategy they settled on was to create “doubt about the health charge without actually denying it, and [advocate] the public’s right to smoke, without actually urging them to take up the practice” (Pollay, 1990). To achieve this, the industry nearly doubled their spending on advertising, while simultaneously creating compromised independent research and phony grassroots organizations that advocate for smokers rights (Stauber & Rampton, 2004). This led to a plethora of lawsuits, many of which were decided in the tobacco industry’s favor. Supreme Court Justice Clarence Thomas summed up the reasoning behind this writing that the tobacco industry is “no different from the purveyors of other harmful products, or… ideas… they are all entitled to the protection of the First Amendment” (Vile, 2009). Personhood enables corporations to manipulate the public, creating uninformed consumers who cannot make decisions in their own best interests.
On the subject of protecting commercial free speech, Shapiro agrees with Justice Thomas’s assessment that it must be protected. He argues that corporate free speech is necessary because it “eliminates the risk of those in power suppressing criticism” (2011). This is an honest statement when applied to humans, but laughably dishonest when applied to corporations. It implies that “those in power” are government officials, but this is simply a convenient illusion that corporations like to maintain. In reality, the vast majority of elected officials’ campaigns are funded by corporations and super PACs, leaving them beholden to these companies (Top Organization Contributors, 2020). Ironically, “suppressing criticism” is the primary thing that corporations use their free speech to do. The tobacco industry is just one example. Corporations use their wealth and power as a megaphone, to amplify their opinions through aggressive and expansive advertising campaigns. This combined with the definition of commercial free speech being so broad as to encompass junk science, fake grassroots movements, and in some cases outright lies, allows corporations to drown out dissenting voices from real human scientists and activists who warn of the potential harm their products can cause. Corporations have no morals, and as a result, use their “speech” to protect their profits over human health and safety.
In fact, corporations are so focused on generating short term profits that they will jeopardize their long term customer base and product market if it helps them turn a profit in the next quarter. There is a common misconception that corporations are required by law to maximize shareholder value. Corporate law does “instruct directors to use their powers in ‘the best interests of the company’” (Stout 2015), but this is a broad statement that does not equate to simply maximizing profits. Rather, the tendency of corporations to prioritize profits over everything else is a “product of the pressure that activist shareholders, stock-based compensation schemes and financial markets impose on corporate directors” (Cornell Information Technologies, 2020). In other words, when corporations “focus on short-term earnings; cut back on investment and innovation; mistreat their employees, customers and communities; and indulge in reckless, irresponsible and environmentally destructive behaviors” (Stout 2015), they are doing it voluntarily based on internal incentive structures. This disregard for human well-being exemplifies the corporation’s amorality; it does not care about its effects on others, so long as there is money to be made. Nowhere is this obsession with short term profit more apparent than the oil industry. Exxon has known about the dangerous effects of burning fossil fuels since 1978, yet together with other oil companies they launched a multi-billion dollar, multi-decade campaign to undermine science and shift public perception, downplaying the urgency of the problem, “suppressing criticism” of their policies and products, and jeopardizing their ability to remain a profitable company in the future (Westervelt, 2018). Nobody will be buying oil if we “destroy almost everything we have built up over the last two thousand years” (Spratt & Dunlop, 2019). Because this is protected behavior, corporations’ right to profit trumps the right of the individual to life itself.
This shortsightedness is a result of the fact that corporate personhood allows the corporation to act as a monolithic representation of all of its shareholders. As Shapiro (2011) points out, allowing corporations “to ‘stand for’ the constantly changing group of individuals behind the scenes” does have some important benefits. Listing every single employee and shareholder “on every corporate document, press release, or court filing…. would be an intolerable burden.” While this is undeniably true, monolithic representation on documents does not necessitate constitutional rights. Rather, this representation creates a barrier of liability that allows activist shareholders to pressure corporations to prioritize their profits over basic human decency.
The anthropomorphization of corporations begs the question, if corporations are legal persons, what type of persons are they? Fortunately, this question is not very difficult to answer. According to Dr. Robert Hare M.D., a consultant for the FBI on psychopaths, “if you look at a corporation as a legal person, then it may not be that difficult to actually draw the transition between psychopathy in the individual to psychopathy in the corporation” (Abbott & Achbar, 2003). The DSM provides a list of traits common in psychopathic individuals. It includes: grandiose sense of self worth, deceitfulness (pathological lying and conning others for profit), failure to conform to lawful behaviors, failure to accept responsibility for actions, incapacity to experience guilt, reckless disregard for the safety of others, manipulation, lack of empathy, parasitic lifestyle, and lack of long term goals. As I have demonstrated throughout this paper, and as Dr. Hare confirms, the corporation “would have all the characteristics, and in fact… the corporation… is the prototypical psychopath” (Abbott & Achbar, 2003). It should come as no surprise that these psychopathic tendencies often extend to the high ranking individuals within corporations. In a 2016 study by the Australian Psychological Society “21% of [corporate executives were] found to have clinically significant levels of psychopathic traits.” By contrast, in the general population psychopathy occurs in about one out of every one hundred individuals.
If any sane, rational human person were asked if the economy and world should be controlled by immortal psychopaths, their answer would be no. For these reasons it is morally imperative that we move away from the incentive structure of wealth accumulation that is so common in industrialized countries. In much of the developed world, greed is understood to be good. It is seen as the driving force that promotes production and innovation, and leads to increases in the standard of living for everybody. However, it is often easier to profit by exploiting workers, manipulating consumers, and polluting the environment, than by being truly innovative and acting ethically. These underlying assumptions about the nature of progress are what ultimately allowed corporations to gain so much wealth and power while their methods went unquestioned. Fixing this underlying problem would require a complete value shift towards a more utilitarian vision. This is easier said than done, but revoking the rights of corporate personhood through a constitutional amendment would be an important first step. For the past century and a half, corporations have been chipping away at the limitations of their power through the use of strategic lobbying and lawsuits. A constitutional amendment would prevent this because it is extremely difficult to undermine and revoke, as demonstrated by the fact that it has only happened once in the history of the United States. This quality makes it a perfect first line of defense against corporate power and manipulation. Corporations are nothing but a “useful legal fiction” originally created to serve the common good. If humanity is to survive this century it is vital that they are harnessed to serve the public once again.
Corporations may be the dominant institution of our time, but they do not need to be. Much like the church, the monarchy, and the Communist Party, the corporation has undeniably harmed humanity more than it has helped us. Endless pursuit of wealth and power has left us in a situation where taxpayers are routinely asked to bail out industries that collapse due to poor internal business practices. Meanwhile uninformed consumers are convinced to buy products harmful to their health, and the global ecosystem is in danger of collapsing. Clearly this undermines our fundamental rights to life, liberty, and happiness, yet the people responsible for these infringements live in luxury while 78% of Americans live paycheck to paycheck (Friedman 2019). If we want to live in a world with a flourishing environment, where people can live their lives free from the fear that one turn of bad luck could destroy them financially, we must hang these immortal psychopaths and reduce them back to their intended purpose, institutions that serve the public good.

Works Cited
Abbot, J., & Achbar, M (Director). (2003). The Corporation [Film]. Big Picture Media.
Australian Psychological Society. (2016, September 13). Corporate psychopaths common and can wreak havoc in business, researcher says. https://www.psychology.org.au/news/media_releases/13September2016/Brooks/
Cornell Information Technologies. (2020). Common Misunderstandings About Corporations. https://www.lawschool.cornell.edu/academics/clarke_business_law_institute/corporations-and-society/Common-Misunderstandings-About-Corporations.cfm
Eisinger, J. (2014, April 30). Why Only One Top Banker Went to Jail for the Financial Crisis. New York Times. https://www.nytimes.com/2014/05/04/magazine/only-one-top-banker-jail-financial-crisis.html
Friedman, Z. (2019, January 11). 78% Of Workers Live Paycheck To Paycheck. Forbes. https://www.forbes.com/sites/zackfriedman/2019/01/11/live-paycheck-to-paycheck-government-shutdown/#1ed4f0134f10
Pollay, R. W. (1990). Propaganda, puffing and the public interest. Public Relations Review, 16(3), 39–54. doi: 10.1016/s0363-8111(05)80068-2
Santa Clara County v. Southern Pacific R. Co., 118 U.S. 394 (1886)
Shapiro, Ilya & McCarthy, Caitlyn W., So What If Corporations Aren’t People? (2011, June 27). John Marshall Law Review, 2011. Available at SSRN: https://ssrn.com/abstract=1873158
Spratt, D. J., & Dunlop, I. (2019, July). The third degree: Evidence and implications for Australia of existential climate-related security risk. Retrieved from https://www.academia.edu/40017143/The_third_degree_Evidence_and_implications_for_Australia_of_existential_climate-related_security_risk
Stout, L. (2015, April 16). Corporations Don’t Have to Maximize Profits. New York Times. https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits
Top Organization Contributors. (2020). https://www.opensecrets.org/orgs/list.php?id=
Vile, J. R., (2009). Lorillard Tobacco Co. v. Reilly. The First Amendment Encyclopedia. CQ Press.
Westervelt, Amy. (2018-present). Drilled [Audio Podcast]. Critical Frequency. https://www.criticalfrequency.org/drilled