Restore Democracy: Abolish Corporate Personhood

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Thomhartmann.com

Corporations aspire to personhood

During this same period, because everybody understood Paine and Jefferson’s argument that human-made institutions must be subordinate to humans themselves; virtually every state had laws on the books that regulated the behavior of corporations.

The corporate form is, after all, just a legal structure to facilitate the conversion of products or services into cash for stockholders. As Buckminster Fuller wrote in his brilliant essay The Grunch of Giants, “Corporations are neither physical nor metaphysical phenomena. They are socioeconomic ploys-legally enacted game-playing-agreed upon only between overwhelmingly powerful socioeconomic individuals and by them imposed upon human society and its all unwitting members.”

Thus, states made it illegal for corporations to participate in the political process: politicians were doing the voters’ business, and corporations couldn’t vote, so it didn’t make sense they should be allowed to try to influence votes. States made it illegal for corporations to lie about their products, and required that their books and processes always be open and available to government regulators. States and the Federal government claimed the right to inspect companies and investigate them when they caused pollution, harmed workers, or created hazards for human communities, even if in the early years that right was unevenly used.

These constraints and oversights had been a thorn in the side of the barons of trade and industry from the earliest days of the new American republic. But what to do about it?

With the passage of the Fourteenth Amendment, the owners of the what were then America’s largest and most powerful corporations - the railroads - figured they’d finally found a way to reverse Paine’s logic and no longer have to answer to “we, the people.” They would claim that the corporation is a person. They would claim that for legal purposes, the certificate of incorporation declares the legal birth of a new person, who should therefore have the full protections the voters have under the Bill of Rights.

It was an amazing irony, given that one of Jefferson’s original proposed Amendments was an explicit ban on corporations becoming so large as to gain monopoly power and be able to easily crush or stifle small, local entrepreneurs. But, setting the irony aside, the railroads threw massive resources into their new campaign to be given full human rights.

Acting on behalf of the railroad barons, attorneys for the railroads repeatedly filed suits against local and state governments that had passed laws regulating railroad corporations. They rebelled against restrictions, and most of all they rebelled against being taxed.

The main tool the railroad’s lawyers tried to use was the fact that corporations had historically been referred to under law not as “corporations” but as “artificial persons.” Based on this, they argued, corporations should be considered “persons” under the free-the-slaves Fourteenth Amendment and enjoy the protections of the constitution just like living, breathing, human persons.

Using this argument for their base, the railroads repeatedly sued various states, counties, and towns claiming that they shouldn’t have to pay local taxes because different railroad properties were taxed in different ways in different places and this constituted the creation of different “classes of persons” and was, thus, illegal discrimination under the Fourteenth Amendment.

For almost twenty years, these arguments did not succeed.

In 1873, the Supreme Court made its first explicit comment on the Fourteenth Amendment. The Amendment’s “one pervading purpose,” Justice Samuel F. Miller wrote in the majority opinion, “was the freedom of the slave race, the security and firm establishment of that freedom, and the protection of the newly-made freeman and citizen from the oppression of those who had formerly exercised unlimited dominion over him.”

The railroads, however, had a lot of money to pay for lawyers, and railroad lawyer S. W. Sanderson had the reputation of a pit bull. Undeterred, the railroads again and again argued their “corporations are persons” position all the way to the Supreme Court.

The peak year for their legal assault was 1877, with four different cases reaching the Supreme Court in which the railroads argued that governments could not regulate their fees or activities, or tax them in differing ways, because governments can’t interfere to such an extent in the lives of “persons” and because different laws and taxes in different states and counties represented illegal discrimination against the persons of the railroads under the Fourteenth Amendment.

By then, the Supreme Court was under the supervision of Chief Justice Morris Remick Waite, himself a former railroad attorney. Associate Justice Stephen Field, who was so openly on the side of the railroads in case after case that he annoyed his colleagues, also heavily influenced the court. In each of the previous four cases, the Court ruled that the Fourteenth Amendment was not intended to regulate interstate commerce and therefore not applicable. But in none of those cases did Waite or any other Justice on the court muster a majority opinion on the issue of whether or not railroad corporations were “persons” under the constitution, and so Miller’s “one pervading purpose” of the Fourteenth Amendment (to free slaves) prevailed, and year after year, the railroads were told that they’re not persons.

Having lost four cases in one year took a bit of the wind out of the sails of the railroads, and there followed a few years of relative calm. The railroads continued to assert they were “persons,” but states and localities continued to call them “artificial persons” and pass laws regulating their activities.

For twenty years corporate personhood was debated. Across America, politicians were elected repeatedly on platforms that included the regulation of corporations, particularly the railroads. But the legal fight continued - and in 1886 the railroad hit paydirt.

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