Sunday, August 14, 2011

Corporations are not people.

I'm a business lawyer, so some of my favorite clients are corporations. I don't think corporations are inherently evil any more than any other form of business organization. And I think I understand what Mitt Romney was trying to say the other day in Iowa when he tried to explain that when you tax corporations, that is not really different from taxing people since ultimately the money comes out of people's pockets.

But it is still absurd for Romney to have started off his statement by equating corporations with people. Corporations are not people. The idea of corporate "personhood" is merely what is called a legal fiction that recognizes the separate existence corporations have from their owners and officers. That legal separation is recognized primarily to limit the risks of shareholders--in most cases--to the money they actually invest in a corporation. That is important to the economy, otherwise people would be reluctant to invest in equity. The Supreme Court has recently, in the Citizens United case, stretched the concept of corporate personhood somewhat beyond that traditional meaning. But even that recent Supreme Court opinion does not fully equate corporations with people. If it did, the Court  would have to grant corporations such rights as the right to vote and the right to marry. Obviously, there are limits to corporate personhood.

The preamble to the Constitution starts by placing sovereignty in "we the people" so as to distinguish our democracy from monarchy. That does not include "we the corporations." Legally speaking, corporations are creations of the government granted only those rights that the government allows them. Corporations are not the source of the government's power.  When Lincoln talked about government "of the people, by the people, and for the people," he was not including government "of the corporations, by the corporations, and for the corporations." The very idea ought to give most people chills.  Therefore, while we can allow corporations some of the same rights that people have--we can even give them more legal protection than flesh and blood people have in some situations--we cannot simple substitute "corporations" into any legal document in place of the word "people." Indeed, I shouldn't even have to take the trouble to explain that living, breathing human beings are not equivalent to an artificially-created legal entity. 

Not only does the simplistic equation of people and corporations stretch the concept of corporate personhood beyond any meaning recognized by the law, it is also a profoundly tone deaf and dumb thing to say.  People--that is to say, actual human beings--understand that corporations are different from themselves. A lot of people also have a distrust and suspicion of corporations, which I have seen exhibited at times when people sit on a jury in judgment of corporations. If Romney was trying to overcome that suspicion and distrust, he doesn't do a very effective job of that by simply equating corporations with people. He is only inviting more distrust.

Which means that Romney completely deserves the kind of treatment shown in the video below, which the DNC remarkably was able to put out only a couple of hours after Romney's Iowa appearance where he made the "corporations are people" remark.  It's going to be an interesting campaign.

1 comment:

  1. Agreed, not the sharpest moment for Romney. One he would probably like back. Still, it was upsetting to see the woman do a shoutdown at him from a few feet away. I see too much of that. I don't think that is the way to get your message across. Americans are over that type of behavior from both sides.

    Contrast that to the civil Q&A discussion between tea party members and the president in Iowa. Thumbs up to the questioners for using normal voices and avoiding shout downs. And thumbs up to the president for taking the time to answer them in similar tones. It was a spirited discussion but there was give and take. That was well done. You don't have to like or dislike the questions, answers or politicians to see the stark difference.