On Corporate Personhood (Finally)

On September 12 I headed over to Goergen Hall on the University of Rochester Campus for a panel discussion titled "Block that Metaphor? Corporate Personhood Before and After Citizens United". The panel consisted of Lynn Stout from Cornell Law School, Greg Urban of the University of Pennsylvania, and Elana Shever from Colgate University. It was moderated by Robert Foster at the University of Rochester.

Lynn Stout studies corporations from a legal perspective. She started off by emphasizing that corporations are real, not a metaphor. The term "personhood" refers to a set of legal rights that allow a corporation to, for instance, have the right to own property in its own name. She's enamored of the idea of corporations which give people the ability to perform long term projects that human beings would never do.

The key to this is the ability to lock up capital assets — the ability to hold money indefinitely, and prevent any stakeholder from reclaiming any part of jeir investment. As such, they need some first amendment rights to protect their property from expropriation. But, she added, corporations should never have the right to vote, for instance, and should not have a right to privacy.

As such, it is not simply an association of people: it is a separate kind of entity. And being a unique kind of entity, it does not have the same rights as an association of people.

Greg Urban brought an anthropologist's view of corporations. To him, they are cultural constructions that look like tribes or social groups and act as powerful agents or actors. They are part of a broader human tendency to form groups such a guilds, universities, and towns. He agrees, therefore, that a corporation has a right to exist as an entity unto itself.

Historically, corporations were once chartered which required political clout. And like other kinds of human groupings, they have rituals — business meetings, for instance.

Viewed from the outside, social groups appear as agents: things which exist in perpetuity. This is similar to things like family groups (i.e. family names) or clans which are comprised of — but separate from — their constituent human beings. Precedent exists for treating a group in place of the actions of an individual, for when a group acts, we do not look to the individuals in that group. They are agents with practical efficacy. And for any of these groups to move, it must be done so by discourse and agreement.

Economics had a hard time dealing with corporations what with being a new and separate agent, and in finance they are commodities with assignable values. In neither model are corporations considered persons. The concept of personhood is only in the popular culture and in the legal culture. And the corporate metaphor is dangerous when it is comprised of a single person rather than an aggregate for how would such a corporation exist separate from its sole constituent?

Elana Shever began by noting Michael Polan's work on examining himself as a group of organisms rather than a single entity, coining the term "first person plural". For what is an individual? Theoretically it is that part that remains constant in an ever-changing group. Thus, we can think of both humans and corporations as "ecologies" that contain organisms as well as goods and byproducts. As such, it's a false belief that shareholders define corporate action. Stout responded favorably to the "super-organism" model, adding that it is damaging to think of corporations as the property of shareholders.

Urban spoke of the Shell corporation in Argentina. Internal to Shell's management, there is a belief they are doing good, but many layers away, the people who operate the plants see the external populace as a nuisance. There are actually a series of separations — divisions between managers and workers — that cause this. It is an efficiency in the system that makes good business sense but it is not allowing Shell to work towards a unified goal.

Activists opposing Shell were often strongly reinforcing the idea of it as an individual citizen, and this popular idea is influential in increasing corporate power. So to take a different tack, could it be politically beneficial to rethink "personhood" as it relates to humans?

He said that there must be some kind of communication and common goals within the "divided corporation" model, adding that corporations should benefit society.

People from the audience had a chance to ask questions. Would more regulations be helpful? It seems that corporations are like a "monster that will devour the planet": do we have a super organism that can combat it?

Stout responded, noting that it's common to blame problems on the misbehavior of human beings, but we behave differently inside a group, and institutional environments create bad decisions. Government is probably more broken because lobbying can buy a corporation new rights yet the government needs to be a check on power.

The event organizers began taking questions three at a time (which I thought to be a mistake). I asked, given the way people's behavior changes inside a group, is there a way to make better members of corporations? Another person asked about ontology: if a person is an actor, then what about thinking of functional assemblages, since the parts may change but the unit endures. It seems transparency is key, but giving free speech rights to groups inexorably creates obfuscation. And finally, another person noted that it's less about rights than about responsibilities: how far does responsibility go?

Stout noted that sometimes an individual commits a crime as part of a group, but often it is the organizational design that causes an undesirable behavior. We need to view them as assemblages. How do we keep the useful ones? Should we have a corporate death penalty? Currently, if you want to sell stock, you need to disclose certain financial information, but we should add a requirement to have political disclosure as well.

Urban responded that he is not so excited about laws. For instance, rating agencies (forged organically) work well, but once the quality of the ratings become law, the goals change and the ratings companies just sell good scores.

Shever added that thinking of corporations as "assemblages" means it can easily become disassembled which is dangerous.

The final question that because of discussion of corporate personhood, are people are starting to think of themselves as little corporations? Urban noted that medieval Italy saw families this way. Stout noted that any thing before the law is some kind of person, and a corporation's property and the human agents that represent it are not invisible.

This discussion certainly offered some new information, but I found it lacking.

Stout expressed a belief that corporations let us make great things like railroads and bridges — things that would be impossible if it were attempted by human beings. I was skeptical that the corporate landscape is dominated by such beneficial behavior. And even when something is a benefit overall, it still has numerous negative repercussions.

In an ideal world, when a corporation is founded, it would have a specific benefit to society that serves as its operating goal — and "to make a profit" is not a concept that should be part of that goal. Making a profit should simply be a side-effect of providing a benefit, or a means to an end where providing the beneficial behavior necessitates continued existence.

Also, it seems to me that the only way to circumvent poor behavior of groups is to have a very shallow hierarchy. It seems necessary to have a small group of people whose sole function is to disseminate and clarify the goals of the corporation. The minimal case beyond that would be an anarchistic group that would organically form around tasks to achieve those goals. As layers of management are added, the communication of the goals is necessarily muddied.

Afterward, Stout encouraged us to look into the American Anti-Corruption Act. Echoing Stouts explanation, I'll quote the website:

The Act was crafted by former Federal Election Commission chairman Trevor Potter in consultation with dozens of strategists, democracy reform leaders and constitutional attorneys from across the political spectrum.

The Act would transform how elections are financed, how lobbyists influence politics, and how political money is disclosed. It’s a sweeping proposal that would reshape the rules of American politics, and restore ordinary Americans as the most important stakeholders instead of major donors. The Act enjoys support from progressives and conservatives alike.

It is an impressive list of ideas that appears to have been vetted by legal experts to ensure it can be passed. If all the line items are passed, it would indeed mean a tremendous positive shift in the way elections are held and how the country is run.

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