You don't have to hate business to denounce corporate personhood.

One of the most emailed Wall Street Journal items this week was an opinion piece by Jack and Suzy Welch entitled, “It's True: Corporations Are People.”  In it, the Welchs note that:

Of course corporations are people. What else would they be? Buildings don't hire people…. Corporations are people working together toward a shared goal, just as hospitals, schools, farms, restaurants, ballparks and museums are.

Because this is so obvious, the Welchs opine that:

[T]here can only be one conclusion drawn when we hear the pronouncement, "Corporations aren't people"—that it's doublespeak. That is, when people say that corporations aren't people, what they really want to say is, "Business is evil."

However, I would like to offer another explanation.  I believe that when people say, “Corporations aren’t people,” they are best understood as simply saying that corporations should not have rights—particularly Constitutional rights—co-extensive with natural persons, and that since the Supreme Court showed us in Citizens United how difficult it is to regulate an entity that has the benefit of being deemed a person for purposes of, for example, the First Amendment, we might be better off removing that benefit.  Reaching that conclusion does not require one to believe that business is evil.

Take government, for example.  The analysis used by the Welchs to conclude that corporations are obviously people also leads to the inescapable conclusion that government is also people.  However, since our founding we have felt that the particular penchant for abusing power inherent in that particular association of people warrants imposing limitations on its right to act.  Now, these limitations are expressly set forth in our Constitution, but nothing even remotely resembling modern corporations existed at the time of our founding so the absence of an express determination in the Constitution of how corporations should be treated does not inevitably lead to the conclusion that they should simply get lumped together with all other associations of citizens.  (As an aside, while at times seemingly used interchangeably, there is a very meaningful distinction between the phrase “association of persons” and “association of citizens.”  Foreigners are not permitted to influence our elections via campaign contributions (see here).  U.S. corporations, on the other hand, generally have no such limitation on foreign involvement.  Yet in Citizens United the majority repeatedly referred to corporations as “associations of citizens.”  Relatedly, the DISCLOSE Act, which at least some feel could help expose significant foreign spending on our elections, recently failed to garner enough votes to overcome the expected Republican filibuster.)

So, getting back to government: I am more of a Hobbesian than a Lockean when it comes to guessing about the state of nature sans government.  That is to say, I am grateful for our having a strong government because I believe it is one of the primary things standing between us and an existence that is “solitary, poor, nasty, brutish, and short.”  At the same time, governments throughout history have proven that there is no limit to the abuse of power they can engage in, so I think our system of limited government is a pretty good one.  That is to say, my belief that government shouldn’t be treated as simply another association of persons because it is prone to abuse its unique power does not translate into my thinking government is evil.  Quite to the contrary, I think government is necessary to prevent certain types of evil.

Likewise, the fact that I think there are good reasons to be skeptical of all of the conclusions that led to the majority opinion in Citizens United—including, (1) corporations are people, (2) money is speech, (3) only quid-pro-quo arrangements constitute corruption, and (4) none of the government’s justifications for the regulation in question satisfied strict scrutiny—does not mean I think business is evil.  In fact, I think the Welchs may well be correct when they say that:

[T]his movement afoot that hates on business is craziness. It will destroy America as we know it because very few jobs get created in an environment that's outright hostile to business. And without jobs, the whole thing falls down. It becomes a welfare state. We become a welfare state.

Nonetheless, I think a good argument can be made that at least some corporations have become as powerful as at least some governments (and engage in government-like functions, see here and here), and, therefore, I can conclude that it is in our best interest to differentiate them from other associations of persons when it comes to determining their rights and responsibilities.  Now, it may be possible to do that while leaving their current Constitutional personhood rights untouched, but it is certainly not necessary to hate business in order to conclude that change is necessary in that area as well.  You simply need to believe that corporations, like government, have the potential to abuse their power in a way (or, if you like, pose a sufficient systemic risk) that warrants differentiating them from other associations of persons.

Stefan Padfield