Put me in legal backdrop
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In the previous chapter we stripped the word "corporation" down to its simplest meaning: a body of individual persons, ie., a group. We noted that groups don't behave like individuals; for example, when individuals are put in a group they will conform to a wrong belief if it is popular (Asch) or take the average of all beliefs (Sherif).
Groups are error-prone in their judgements. But we noted that "persons," ie., individuals not formally put into a body, can behave even worse. The bystander effect is one manifestation of this; when drivers, neighbors, or chat room members witness a crime, they are unlikely to report it. Rutkowski finds that the less cohesive a group is, the less likely bystanders are to act at all.
In other words:
The purpose of this chapter is to further explore what makes a group cohere. When do "persons" become and behave like "people"? We'll introduce some basic legal concepts, including the difference between a company and a corporation. We'll conclude by talking about corporate personhood, which is the idea that a corporation is entitled to some of the rights and responsibilities of a person.
TODO: brief comparison of coherence (cars on the highway < Mets < Marines)
To understand corporate personhood we need to start with the sanctity of the contract in the United States government. The Contract Clause appears in the United States Constitution, Article I, section 10, clause 1. It says:
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
Wikipedia adds:
The Framers of the Constitution added this clause in response to the fear that states would continue a practice that had been widespread under the Articles of Confederation — that of granting "private relief." Legislatures would pass bills relieving particular persons (predictably, influential persons) of their obligation to pay their debts.
The Contract Clause is therefore intended to keep parties accountable. If you owe, you should pay. Conversely, if you are owed, you should receive.
It's on this receiving side that we start to see the beginnings of corporate personhood. Two early cases dealt with the government's attempt to seize land from colleges: The Rev John Bracken v. The Visitors of William & Mary College and Dartmouth College v. Woodward. In both cases, the state legislatures fought to invalidate the rights of the trustees. The federal government sided with the trustees both times, citing that the school charters were contracts, even though 1) they had been created George III under colonial law, and 2) they were not acting as individuals but as a group.
In other words, at this stage corporate personhood exists so that corporations can sue and be sued, according to the contracts they enter.
Later, Chief Justice Marshall would write:
"The great object of an incorporation is to bestow the character and properties of individuality on a collective and changing body of men."
Over time then, laws have continued to extend to corporations the same rights that people enjoy. Most critically, this entails rights like free speech (1st Amendment),
This extends the protection of corporatons not just to contracts, but to values and basic rights. Rights like free speech (1st amendment), civil liberties (14th amendment), and protection against unreasonable searches and seizures (4th amendment).
Today, Title 1 Article 1 of the United States Code clearly lays out corporate personhood:
In determining the meaning of any Act of Congress, unless the context indicates otherwise--
the words "person" and "whoever" include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals;
We're going to dive into two of the most controversial contemporary cases of corporate personhood. But before we do so, we should equip ourselves with some vocabulary.
The US Code says that the word "person" includes corporations, except where the context indicates otherwise. So how does legislation indicate otherwise?
Any time a law talks about a "natural person" it is referring explicitly to a human being and not any other kind of entity. So: the constitution sharply separates between a person and a human being.
We don't make the same kind of sharp distinction in casual conversation, but in the next chapter we're going to see why doing so can resolve many of our hangups.
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Rutkowski, G. K.; Gruder, C. L.; Romer, D. (1983). "Group cohesiveness, social norms, and bystander intervention". Journal of Personality and Social Psychology 44 (3): 545–552. doi:10.1037/0022-3514.44.3.545.
Closer examination of corporations shows that they aren’t simply groups of people
If you dissolve Sherif’s cohort of light-watchers, it ceases to exist
In contrast if you fire everyone at McDonalds, McDonalds does not cease to exist
Do better here — give one good example of corporate accountability (eg., you can’t commit a crime and then just dissolve)
And give one good example of protection (eg., bankruptcy; you can’t ruin the lives of the individuals who comprise your company if your company fails)
This is the foundation of corporate personhood
Deep dive into history of corporate personhood
Which rights of personhood should a corporation not enjoy? What’s our justification for this?
Two Cases: Citizens United & Hobby Lobby
There are a number of reasons this makes sense:
People shouldn't be deprived of rights and responsibilities when they act together
A corporation should be accountable for a contract even when the individual who signed it dies or leaves
An individual at a corporation should not carry the burden of the corporation
People should not be deprived of rights and responsibilities when they act collectively.
The laws of the United States hold that a legal entity (like a corporation or non-profit organization) shall be treated under the law as a person except when otherwise noted. This rule of construction is specified in 1 U.S.C. §1 (United States Code), which states:
