Organized by Ralph Nader and the Center for Study of Responsive Law, more than 200 activists and scholars convened in Washington, DC, on April 2 for an all-day conference on "Controlling the Corporation."
Nader opened the conference, outlining the growing corporate role in everyday life. "Mega-corporations use the public's own resources against it, planning intimately and relentlessly our future," exercised in many spheres, including "mass media, health care, transportation, tax code, housing, trade agreements," even "patenting our genes."
He also mentioned the historical, anti-corporate stances of such diverse figures as Franklin Roosevelt, Dwight Eisenhower, Friedrich Hayek and Smedley Butler.
Nader explained that the conference would address these issues in two-pronged strategy. The first, highlighting ways to constrain corporate power through such means as campaign finance reform, prosecuting corporate crimes and protecting the commons from privatization. The second strategy involved "displacing" mega-corporations through "cooperatives, small entrepreneurs, new economies, local and renewable energies and democratic credit unions."
Speakers on the first topic included former Congressman Bob Edgar (D-Pennsylvania), who proposed to amend the Constitution to declare that "corporations are not people, money is not speech and legislative bodies have the power to regulate financing."
Activist and author Harvey Wasserman proposed further reforms, including abolition of the electoral college, automatic voter registration for all 18-year-olds, elimination of electronic ballots, weekend voting and authorizing national referenda. The discussion, moderated by Theresa Amato of Citizen Works, also aired ideas such as providing public financing, voting rights for felons and free airtime to political candidates.
A second panel examined ways to curtail corporate crime. Russell Mokhiber of the Corporate Crime Reporter, for example, called for criminal prosecution of corporate malfeasance instead of deferred and non-prosecution agreements, arguing that criminal conviction sends a message that "a civil fine or a deferred and non prosecution does not."
Bill Black, professor at the University of Missouri-Kansas City and renowned former bank regulator, contrasted the regulatory response to the savings and loans crisis of the late-1980s with the generalized impunity of the present.
"The Office of Thrift Supervision," a branch of the Treasury Department, "made 30 thousand criminal referrals in four-and-a-half years, produced 3,000 felony convictions and went after the top 100 violators, said Black. "We brought 800 civil actions and $1 billion in recovery." Despite the prevalence of present-day mortgage fraud, the same agency, according to Black, "made zero criminal referrals for this crisis."
Marco Simons of EarthRights focused internationally: "Although corporations may be persons for influencing elections," Simons said, "they are not bound by international human rights law like everyone else." He added, "you can prosecute [them] for bribery, but it's difficult for environmental crimes, genocide, torture, [and] crimes against humanity" abroad.
Kent Greenfield, professor at the Boston College Law School, championed ending limited liability for corporations. He explained that one could "disagree on limited liability for shareholders, but not when the corporation itself is a shareholder." Often, during mergers and acquisitions, companies create "a wholly-owned subsidiary and merge the target into the subsidiary to enjoy limited liability."
Robert Weissman of Public Citizen noted that companies like Pfizer, which paid a $2.3 billion fine in 2009 (or less than three weeks worth of sales), rely on the government for monopoly rights to their drugs for outsize profits. In cases of wrongdoing, such grants "could be rescinded."
A third panel, titled "Protecting the 'Commons' from Insatiable Advocates of Privatization," began with an account by David Morris of the Institute for Local Self-Reliance on a decision by Fort Worth, Texas, to remove the word "public" from its public library to "keep up with the times" and because of its "potentially negative connotation." He noted that he was pleased, however, by the Occupy movement's effect of shifting the narrative.
Wenonah Hauter of the Food & Water Watch cited Willem Buiter, chief economist for Citibank, who said that he expects "to see a globally integrated market for fresh water ... futures markets and other derivative water-based financial instruments ... will follow" and argued for the need to maintain public control over water.
Dr. Margaret Flowers, a pediatrician and a lead organizer of the conference, discussed her advocacy for universal health care. She believes there are ways of connecting with concerned citizens across the political spectrum, recounting a personal anecdote of meeting older, right-wing protesters who enthusiastically supported extending Medicare for all US citizens.
The panel associated with "Actions" to advance the Occupy movement included Christopher Hedges, Kevin Zeese, Dean Baker and Mary Bottari. Hedges advocated for making the Occupy movement militantly nonviolent and imposing a zero-tolerance policy for other forms of action.
"The resources of the state are tremendous and have been employed against the Occupy movement," said Hedges, which included the "physical eradication of the encampments." Hedges argued that those who engaged in acts of vandalism or covered their faces, unwittingly abetted the authorities' ability to justify force when reacting.
The aim is "very clear," for those in power, Hedges stated. It's "to sever the Occupy movement from the mainstream. Because it is fundamentally a mainstream movement," he asserted. "It articulates the aspirations and grievances of the majority of the US: Health care, jobs, the looting of treasury by Wall Street," and the assault on civil liberties, exemplified by the passage of the National Defense Authorization Act.
Hedges hoped the movement would proceed in a similar way to what he had witnessed, for example, in East Germany. "I saw the Stasi state," he recalled. "It was the most pervasive security state in the history of humankind. For every 63 people, there was one Stasi informant - and yet the state fell."
Zeese, a conference organizer, began by congratulating Occupy activists who had successfully blocked an eviction earlier that day. "The Occupy Our Homes project has saved a hundred people from being kicked out of their homes," he added. He saw Occupy as an extension of the 1999 protests against the World Trade Organization in Seattle and called for more development of "democratized economic institutions so people get control over their own lives."
Baker, co-director of the Center for Economic and Policy Research, thought Occupy Wall Street had wisely chosen a very appropriate target for anger. "We should see the financial sector as a real demon and it doesn't take a lot to convince people these days," Baker argued. "The financial sector got us here."
"Now that we have five times as many resources in finance [relative to the size of the economy since the 1970s], is our money more secure?" Baker asked, rhetorically. "Is it easier to start a business? Is it easier to save for retirement? Public pension funds have been losing money because they pay so much in fees."
Baker noted that "hedge fund managers make $3-4 billion a year." Baker estimated that the median net wealth for a couple over 65 was $170,000, which meant that hedge fund managers "make in 10 minutes what a typical family would have accumulated over a lifetime."
Mary Bottari of the Center for Media and Democracy discussed the "unique" consequence of the Wisconsin protests against the pro-corporate policies of Gov. Scott Walker, which led to Wisconsin state "Democrats with a backbone."
Carl Mayer, a lawyer representing Hedges and other co-plaintiffs suing the Obama administration over the National Defense Authorization Act's constitutionality, expressed his alarm at the criminalization of protest. He cited a City of London police report to the area's business community, which listed al-Qaeda as a top international terrorist threat and referred to Occupy London as a top domestic threat. He quoted the document, which raised alarms against "individuals who would fit the anti-capitalist profile."
Acrimonious exchanges characterized the question-and-answer period after this panel. Several rebutted Hedges' condemnation of black bloc and anarchist tactics; others questioned the level of Zeese's participation in the Occupy movement.
"It's an attack on stupidity," not anarchism, Hedges retorted. "When you carry out acts of feral or spontaneous vandalism, what you're doing is taking the easy way out. It involves no planning or strategy," he said to applause.
The following panel directly engaged on the question of building community wealth and alternative economic institutions. Gar Alperovitz, a professor of political economy at the University of Maryland, noted, "Ralph used the term 'displace,' not simply 'control.'" Alperovitz noted that the word "systemic" had not been mentioned. The goal, Alperovitz said, must be "changing the system, not just changing or controlling the corporation."
"In the coming three decades," Alperovitz declared, "we should lay the foundations for a fundamental base for a truly democratic economy." State initiatives and battles for single-payer health care, Alperovitz noted, are one means to "displace corporate power," as are the efforts to create public banks modeled after the Bank of North Dakota. Already, Alperovitz noted, there are "130 million Americans involved in co-ops," and more workers with ownership stakes in their firms than there are union members in the private sector. These institutions, Alperovitz suggested, are ripe with political potential "waiting to be activated."
Greg LeRoy of Good Jobs First emphasized the role public money plays in subsidizing corporate giants. "Three-quarters of the for-profit private prisons in this country get economic development subsidies," LeRoy said. He noted, however, that broad coalitions of labor, housing, civil rights and environmental activists and progressive developers can successfully organize to use public economic development funds instead to promote local hiring, affordable housing, living wages, local businesses and community facilities.
Gayle McLaughlin, mayor of Richmond, California, highlighted the success her city had in restraining the expansion of Chevron, which has a large oil refinery based in Richmond, to protect the local environment. McLaughlin also discussed the importance of building economic alternatives. Last year, McLaughlin visited Mondragón worker-owned cooperatives in Spain, a model that she hopes to see implemented in coming years in Richmond.
The conference closed with a panel titled "Mobilizing for Sustained Action," with representatives from SumOfUs, the United Steelworkers and the Industrial Areas Foundations all making supportive remarks. Nader closed the conference. "Conferences have left and created new groups," he concluded. "Young people have reoriented the trajectory of their lives" as a result.
For more information on the Center for the Study of Responsive Law, see: http://csrl.org/
Saturday, April 28, 2012
Sunday, April 22, 2012
Wednesday, April 18, 2012
Corporations as Persons.....Activists Gather in Washington to Debate the Future of the Corporation
Activists Gather in Washington to Debate the Future of the Corporation
This article is a Truthout original.
This article is a Truthout original.
Keane Bhatt
Keane Bhatt is an activist and musician in New York.
Out of Santa Clara University...Occupy the Courts: Corporate Personhood Reconsidered
Occupy the Courts: Corporate Personhood Reconsidered
This piece was reprinted by Truthout with permission or license.
The Occupy movement was widely lampooned by critics for failing to bring forward a coherent set of demands. But a random survey of participants in the protests that spread across the country late last year would likely turn up a large number who agree that ending the recognition of corporations as legal "persons" is a critically needed reform. Ballot measures in Boulder, Colorado and Madison, Wisconsin calling for an end to corporate personhood passed last year. A popular poster seen at Occupy events read, "I'll believe corporations are people when Texas executes one of them." While humorous, it is fortunate Texas does not execute as many persons every year as it does corporations. That corporations in Texas, and across the country, are recognized as legal persons makes the process of dissolving them far easier and less costly than would be the case otherwise. Filing a form and paying a nominal fee are practically all that is required. In fact, corporate personhood allows business firms to enter into contracts, to sue and be sued, to hire and fire workers, to own other corporations, and, most notoriously, to engage in free speech.
The obvious convenience of recognizing the corporation as an entity separate from its investors leads many on the right and even some on the left to defend the concept and denigrate its critics. Conservative UCLA law professor Stephen Bainbridge, for example, lambasted Occupy's "moronic campaign against corporate personhood," noting that "[a]lthough the corporation's legal personality obviously is a fiction, it is a very useful one." Meanwhile, left-wing writer Doug Henwood expressed concern with the "fixation" of some in Occupy "on the legal status of the corporation at the expense of some other, more important things." Henwood reads this concern with personhood as a possible proxy for concerns about size and reminds his fellow Occupy activists that, after all, big corporations build "computers and fast trains" and thus represent economic progress.
Nonetheless, the recognition of corporations as persons, which reaches back at least as far as the 1886 decision of the U.S. Supreme Court in Santa Clara County v. Southern Pacific Railroad, raises challenging questions about the nature of modern economic organization. These questions, relegated for many decades to obscure corners of legal academia, were highlighted, though to a certain extent misunderstood, by the modern Supreme Court's controversial decision in 2010 in Citizens United v. Federal Election Commission. Untangling the doctrinal confusion around the concept of corporate personhood must begin with the proper framing of these key court decisions. Once the concept itself is clarified it is more straightforward to consider its impact on society at large. It should then become clear that the rationale has long outlived its relevance and social value. To paraphrase Marx, the integument of corporate personality has been burst asunder by the reality of modern capitalist production, thus, the knell of corporate personality sounds.
A CENTURY before the Santa Clara Valley, south of San Francisco, became known around the globe as Silicon Valley, it was ground zero for the titanic conflict between railroad "robber barons" like Leland Stanford and Charles Crocker and legions of struggling small farmers, mixed in with some opportunistic land swindlers, looking to get by after the end of the Civil War. Historian of the American West Richard Maxwell Brown, noting Marx's keen interest in California events at the time, described the confrontation as a "revolutionary situation."
The conflict raged across the state of California and made its way into the national consciousness. Frank Norris's populist novel The Octopus: A Story of California, published in 1901, captured the ethos of the period, chronicling in fiction the low point of the conflict: the Mussel Slough Tragedy of May 11, 1880. On that broiling hot day on a farm in the San Joaquin Valley some 150 miles south of Santa Clara, a gun battle reminiscent of the O.K. Corral broke out. Two groups confronted each other: one a small group made up of two land buyers armed with a shotgun and a court order, accompanied by a U.S. marshal and a notorious Southern Pacific Railroad employee, and the other a larger informal "militia" of local homesteaders (or "squatters," if you accept a Railroad view of the events). The homesteaders were angered that the Railroad was not following through on its apparent promise to sell them good title to their land at relatively low prices. After a brief but fierce gun battle, one of the land buyers and five of the homesteaders lay dead or mortally wounded. The second land buyer, a marksman who apparently fired the deadly shots against the farmers, fled but was hunted down and killed by a second vigilante group.
This conflict was waged not just on rural California farmland but also in nearby urban courthouses. The same federal judge who had provided the U.S. marshal an eviction order for Mussel Slough, Lorenzo Sawyer, presided over the subsequent trial of five of the surviving farmers accused of resisting that order. Sawyer heard dozens of other eviction cases brought by the Southern Pacific in the 1870s and early 1880s and used them as an opportunity to help undermine the theory that corporations are created solely by state charter and hence must be subject to state control. And it was Sawyer who sat alongside his "circuit riding" colleague and friend U.S. Supreme Court Justice Stephen Field in the Santa Clara case when it was heard by the California circuit court in 1883. The battle between farmers and the railroads had by then shifted to the state legislature, which attempted to use its taxation power to rein in the "Octopus." Field's detailed defense of the application of the Fourteenth Amendment to corporations was, in essence, adopted by the Supreme Court itself three years later when it ruled in favor of the Railroad.
Sawyer was a shareholder in the Railroad and socially close to Crocker and Stanford. Both Sawyer and Field were close friends of the Railroad's legal counsel, a leading author of the version of the "corporation as person" theory that Field would later adopt. Both judges had risen through the rough-and-tumble politics of California in the post–Gold Rush era. Both were former justices of the California Supreme Court, and Field became that court's Chief Justice. While on the state court Field wore a jacket specially designed to conceal two pistols he carried in self-defense. A fellow judge once challenged him to a duel, though neither ended up firing a shot. Field was elevated to Chief Justice because his predecessor, David S. Terry, had killed a U.S. Senator in a duel. Terry was a well-known advocate of the interests of the Mussel Slough homesteaders and became a fierce opponent of Field inside the California Democratic Party. (Incredibly, several years after the events at Mussel Slough, Terry was shot and killed by Field's bodyguard as Terry confronted Field, apparently because of an unfavorable ruling in a divorce case involving Terry's wife and a wealthy silver baron who was allegedly her first husband.)
Field, appointed to the high court by Abraham Lincoln upon the recommendation of Leland Stanford, undertook an ambitious national agenda: first, to use the new Fourteenth Amendment's limits on state powers to protect not just freed slaves but corporations, the emerging institutional form for a new era of private as opposed to state-led capitalism; and, second, to build on the success of that effort by undertaking a campaign for the presidency itself. His success in the former, however, would undermine his political acceptability for the latter. Farmers and workers blocked his road to power in the California Democratic Party. Revenge, nonetheless, was his. After succeeding in Santa Clara he sided with the majority when it applied the Fourteenth Amendment in the Lochner decision (1905) against protective state labor laws, and yet declined to use the same amendment to undo Jim Crow laws on railways in Plessy v. Ferguson (1896). And for good measure, Field wrote the majority opinion in the racist Chinese Exclusion Case (1889), despite a pre–Santa Clara record of using the new amendment expansively to defeat California's attempts to discriminate against Chinese immigrants.
UNFORTUNATELY, A landmark essay about the Santa Clara case is likely responsible for having discouraged a generation of scholars from exploring deeply the connections between this vital social history and the modern concept of the corporation as a legal person. Harvard legal historian Morton Horwitz argued in a widely cited, if less widely read, 1985 essay, "Santa Clara Revisited," that the case was far less significant than was often thought. He contended that the theory the Court implicitly adopted, articulated more fully by Field in his circuit court opinion, was not the theory of corporate personality that we recognize today. In fact, Horwitz contended, the Supreme Court of 1886 was "still actively suspicious of corporate power and the emergence of concentrated enterprise" and thus would have been hostile to a theory of the corporation as a distinct and natural entity standing apart from its shareholders.
Yet it is hard to imagine a corporation at the time of Santa Clara that was more powerful, and more centralized in its manner of governance, than the Southern Pacific Railroad. The firm had hundreds of shareholders and bondholders, thousands of employees, and a relative value that would place it in the category today of Exxon or GE. It is also hard to imagine a jurist more conscious of corporate power and its social impact at that time than Justice Stephen Field, described by one mid-twentieth-century legal scholar as "an apostle of reaction." As Field wrote to a fellow federal judge at the time the Santa Clara case was making its way through the courts:
I have not hesitated to explain the true situation of things in California to the President....I have let [him] understand that the question was not whether A or B should have a particular place but whether the men of order and law, men who believed in the great institutions of society should have the ascendancy in the State, or whether the outcome of the sandlot [a reference to members of the radical San Francisco–based Workingmen's Party], and the agrarian and nihilistic element should control...the real question [is] between civilization on the one hand and anarchy on the other....
Horwitz attempted, however, in the "deconstructionist" style of the faux left-wing Critical Legal Studies school to which he belongs, to dethrone the place that the Santa Clara decision had always held as "one of the prominent symbols of the subservience of the Supreme Court during the Gilded Age to the interests of big business." In the course of doing so, Horwitz claimed American legal theory suffers because it is so often applied in a "historical vacuum." Yet Mussel Slough and the decades-long battles among the state of California, its farmers, the judiciary, and the railroad robber barons is absent from his account altogether.
Nonetheless, Horwitz's work is important for laying out a historical account of three of the four critical stages in a complete theory of the legal status of corporations: first, the "artificial being" approach that dominated until Santa Clara; second, the short-lived "partnership" or "aggregate" approach of Justice Field in his circuit opinion, adopted without comment by his brethren when Santa Clara finally reached the Supreme Court; and third, the post–Santa Clara triumph in the early decades of the twentieth century of the modern "natural entity" theory that gave more robust recognition to corporations as legal persons distinct from the aggregate of their individual shareholders.
Horwitz argues that the second of these, the "partnership" theory relied upon by Field, did not "represent a significant departure from American constitutional jurisprudence." This does an intellectual injustice, however, to the life project and significance of Justice Field. The critical step that he accomplished with the aggregate approach was to sever the link between the corporations emerging in his era, the era of the Octopus, from those business firms organized in the earlier state charter era of, for example, private turnpike corporations. If Field's approach did not prevail then it would have remained difficult for corporations to resist the state's use of police powers to regulate these entities as it saw fit—whether in the service of populist agrarian movements, progressive labor legislation, or racist exclusionary laws.
The aggregate theory, therefore, viewed the corporation as protected by the Fourteenth Amendment not so much because the corporation itself was a person but because natural persons, its shareholders, made up the corporation. As Justice Field wrote in a companion case to Santa Clara, the court had to "look beyond the artificial being [a corporation chartered by the state] to the individuals whom it represents." Once freed of the shackles of a state charter, once viewed as private and even democratic associations of individuals, corporations were free from the attempts of those same states to impose "discriminatory" regulations on them. From there it was a much easier step to recognizing these free associations as entities in their own right, which today we would understand as elements of civil society, independent of the state. It was also a necessary step, as Horwitz explains, because the courts had to deal with "less material, less property-centered claims [where]...it was difficult to reduce the constitutional claim of the corporation to the constitutional rights of the shareholders."
If Horwitz understates, in my view, the significance of Field's aggregate shareholder–centric view, he misses entirely its potential relevance to the fourth view of the corporation that was taking hold, even in the seminar rooms of Horwitz's own law school, while he was writing his iconic article. Horwitz ends his account with the emergence of the centralized "natural entity" theory, solidly in place by the late 1920s, conveniently just in time for the attempt to rein in the new managerial class said by some New Deal intellectuals like Adolf Berle and Gardiner Means to have been responsible for so many ills. But by the early 1980s the natural entity version of the corporation that was critical to New Dealers was under sustained attack. Berle and Means had theorized the separation of the ownership and control in the modern corporation, but this understanding gave way to an "agency" theory of the corporation that reduced the corporate person to a mere convenient legal fiction.
The corporation, the agency theorists argued, was nothing more than a "nexus" of contractual relations among the various contributors of inputs to the entity, including capital, technology, and labor. Each could negotiate the terms and conditions of those contracts as necessary within the constraints of surrounding market forces. There was no problem of corporate power as long as those markets were kept competitive. That these markets might lose competitive fervor was, indeed, a problem for political economy but it was not a fundamental problem for corporate theory. This was, in a sense, a restatement of the Field "conception," in Horwitz's words, "of the corporation as a creature of free contract among individual shareholders," but this time ready made for a world of larger, more comprehensive, and more competitive markets for managerial talent, specialized technology, and flexible labor.
Justice Field took the corporation out of the hands of the state and put it in the hands of freely associated capitalist entrepreneurs. The Progressive era's legal thinkers helped legitimate the collapse of legal constraints on the new giant trusts and conglomerates while at the same time looking for ways through law to constrain the new "kings of industry." The "law and economics" school that rose to prominence in the Reagan/Thatcher era of smaller government and deregulated product and labor markets returned the corporation to freely associating entrepreneurs, properly disciplined by surrounding vigorous markets for capital, corporate control, and managerial talent. The transition from Santa Clara Valley to Silicon Valley could now be completed. And it is at the end of this long historical and theoretical process that the debate over Citizens United emerges.
DESPITE THE effort of conservative law and economics theorists to deconstruct the corporation out of existence in favor of freely contracting individuals, conservatives in actual seats of political power have continued to act as if the corporation is a real entity deserving of legal protection. Until Citizens United, perhaps the most striking case involving free speech for corporate entities was First National Bank v. Bellotti in 1978, when the southern reactionary Justice Lewis Powell wrote the majority opinion in another 5-4 decision. Powell tried to slide around the question of whether the corporation itself had speech rights by claiming that it was the speech not the entity that was being protected. Powell nonetheless cited Santa Clara for the proposition that the Court had long ago recognized corporations as persons and that simply because the speech in question comes from a corporation does not alter the Constitution's protection of it under the Fourteenth Amendment. This is no less clever an approach than what Justice Field attempted when he tried to distinguish between the wealthy investors in the Southern Pacific Railroad and the corporation itself. Neither decision really fooled anyone. Powell, of course, had an agenda as ambitious as that of Justice Field. His impact was felt on affirmative action in Bakke as well as in a series of decisions that significantly weakened federal securities laws.
Although it was completely unnecessary to his opinion, Powell, for good measure, reminded the litigants and corporate reformers that there could be no turning back the clock to the era when corporations were "creatures of the State" with "only those rights granted them by the State." This was also an attempt to dismiss the dissent of Chief Justice William Rehnquist, who made a valiant if lonely attempt to restore what Horwitz might call "old conservatism" to the Court by reviving the artificial entity theory of the corporation, where the business firm is viewed solely as a creation of the state and thus subject to that state's regulatory authority.
The dissent in Bellotti by Justice White, joined by Justices William Brennan and Thurgood Marshall, was rooted, if unconsciously, in the real entity view that took hold in the Progressive era. White noted that mechanisms inside the corporation had centralized power such that one could no longer find a reliable link between the corporation and the desires of its individual shareholders. The natural person element of the Field aggregation theory had indeed disappeared, even if one wanted to imagine the corporate entity now as a mere "nexus of contracts." Corporate speech, White argued, is "not fungible with communications emanating from individuals" and thus must be examined carefully for the potential "threat" it poses to the "functioning of free society." It is precisely this centralization of power in a market economy and its break with any realistic notion of genuine free association that must lie at the center of any attack today on the constitutional rights of corporations rooted in personhood.
For the majority in Citizens United, the case was in essence a replay of Bellotti. They relied on Powell's opinion to bolster their rejection of the restrictions on speech emanating from corporations. To the majority the social reality of centralized corporate power, standing apart even from shareholders who nominally "own" their corporations, was nonexistent. Justice Kennedy wrote, "All speakers, including individuals and the media, use money amassed from the economic marketplace to fund their speech. The First Amendment protects the resulting speech, even if it was enabled by economic transactions with persons or entities who disagree with the speaker's ideas." The homeless and the unemployed, in other words, are as free to amass money in the marketplace and to express their views as Exxon, Apple, or, for that matter, the nonprofit Gates Foundation. Thus, Anatole France: "The law, in its majestic equality, forbids the rich and the poor alike to sleep under bridges, to beg in the streets, and to steal bread."
It is true, of course, that not all corporations are as wealthy and powerful as Exxon. In fact, most are not, and most will fail and dissolve, using the convenience of corporate personhood to do so. Yet that is precisely the point. Not all corporations are the same and the current view of corporations as persons fails to distinguish among them. For the 99 percent of for-profit and nonprofit corporations, constraints such as those examined in Citizens United may make no sense. But when it comes to the 1 percent who dominate the "marketplace of ideas," it is hard to imagine a genuine democracy without such restraints. What might be considered an economically convenient mechanism can also be used to distort our democratic culture, which has long stood on the basis of recognizing the value of a diversity of views expressed by freely associating individuals. And corporations, as the dissent by John Paul Stevens in Citizens United reminds us, "are not themselves members of 'We the People' by whom and for whom our Constitution was established."
Unfortunately, the dissent avoided explicitly any interest in a coherent theory of the modern corporation to underpin its claim. That weakens the political and legal potential in their opinion. The need for a theory that explains the vast inequities of the modern corporate economy is great. The Occupy movement has performed a valuable service in putting that debate back on the table for public consideration.
Stephen F. Diamond
Stephen F. Diamond, associate professor of law, teaches corporate law at the Santa Clara University School of Law.
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