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Is the U.S. Government a Corporation? The Corporate Origins of Modern Constitutionalism

Published online by Cambridge University Press:  19 April 2017

DAVID CIEPLEY*
Affiliation:
The University of Denver
*
David Ciepley is Associate Professor of Political Science, The University of Denver, Sturm Hall 466, 2000 E. Asbury Ave., Denver, CO 80208 (ciepley@alumni.princeton.edu).
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Abstract

The U.S. Constitution is best understood not as a “social contract,” but as a popularly issued corporate charter. The earliest American colonies were literal corporations of the Crown and, like all corporations, were ruled by limited governments established by their charters. From this, Americans derived their understanding of what a constitution is—the written charter of a sovereign that ordains and limits a government. The key Federalist innovation was to substitute the People for the King as the chartering sovereign. This effectively transferred the “governance technology” of the corporation to the civil government—including the practice of delegating authority via a written charter, charter amendment, and judicial review. Federalists used these corporate practices to frame a government that united seeming irreconcilables—a government energetic yet limited, republican yet mixed, popular yet antipopulist—yielding a corporate solution to the problem of arbitrary rule. Leading founders considered this new government a literal chartered corporation of the People.

Type
Research Article
Copyright
Copyright © American Political Science Association 2017 

A CORPORATE CIVILIZATION

In the wake of the recovery of Justinian's Digest and the Roman law of corporations in the 11th century, Europe was gradually reorganized as a civilization of corporations—a dense web of monasteries, bishoprics, confraternities, universities, towns, communes, and guilds that governed the associational life of an energized Europe (Davis Reference Davis1905). Making use of a legal form unknown or unavailable elsewhere, these corporations filled, and then overflowed, the organizational niche occupied by clan networks in other civilizations, after Christianity undermined clan ties in the West (Goody Reference Goody1983; Greif Reference Greif2006). Ever since, the corporate form has been the distinctive way in the West of constituting, organizing, and augmenting collective power, with profound and enduring consequences for the structure and trajectory of Europe, and eventually the world, not only by paving the way for the modern business corporation, but by giving a distinct form to other key European institutions, including the Catholic Church and the European state, which were for long themselves modeled as corporations (Gierke Reference Gierke1900; Kantorowicz Reference Kantorowicz1997; Tierney Reference Tierney1955; Reference Tierney1982).

Over the past century, the impact of the corporate form on the business firm has garnered the lion's share of scholarly attention. In contrast, the impact of the corporate form on the European and American state is today barely recognized.Footnote 1 Yet it has been deep and enduring, and largely accounts for what is distinctive about the state forms generated in the West.

The Digest, medieval Europe's central legal text, declares that corporations (in Latin, universitates) exist “on the model of the state” (ad exemplum rei publicae) (Reference Justinian, Watson, Mommsen and Krueger1985, 3.4.1). Europeans, short on juridical models for their nascent states, turned this around and, to a surprising degree, modeled their states on the corporation. However, unlike today's business corporations—wherein one group of individuals, the shareholders, elects a board that exercises authority over another group of individuals, the employees—medieval corporations were typically member corporations (universities, towns, guilds, and cathedral chapters), whose members elected a rector, or mayor, or guild master, or bishop, to exercise government over themselves (although sometimes over others as well). Operating (in Hobbes’ tinted words) as “many lesser Common-wealths in the bowels of a greater, like wormes in the entrayles of a naturall man” (Reference Hobbes1991, chap. 29), they carried into the bosom of Europe's monarchies principles and practices of republicanism and mixed constitutionalism, including popular sovereignty, equal membership, simple majoritarian election, political representation, political consent, written constitutions, and the notion of the “ruler contract,” the heart of social contract theory.

It was borrowings from these corporate principles and practices that ultimately produced, in the Anglo-American line of development especially, the liberal democratic state—a state with juridical personhood (Runciman Reference Runciman2000), a representative assembly (Post Reference Post1943), an elected executive (Tierney Reference Tierney1982), and liberal constitutionalism, with a written constitution and judicial review (Bilder Reference Bilder2006; Lutz Reference Lutz1998). The focus of the present article is on the corporate genesis of the last of these—modern, American-style constitutionalism, with a popularly authorized written constitution enforced through judicial review.

THE U.S. CONSTITUTION IS NOT A SOCIAL CONTRACT

In the common view, “[T]he Constitution was—is—a social compact,” or “social contract” (Henkin Reference Henkin1987, 265, 267; see also Graber Reference Graber2013, 26; Mueller Reference Mueller2016). In the view of Keith Whittington, the Constitution is “an actual contract” and, in the view of Randy Barnett, should at the least be interpreted through “contract law theory” (quoted in Graber Reference Graber2013, 26). Yet the more closely one looks, the less persuasive the contract metaphor becomes.Footnote 2

The social contract theorists of the 17th and 18th centuries, of which Locke is an exemplar, generally describe the origin of government as a two-step process (Gierke Reference Gierke1939).Footnote 3 The first step—the work of the social contract proper—is to constitute a civil society, or people, from out of individuals in the “state of nature” by binding them together as a corporate body with the capacity to legislate and act as a unit in at least basic ways, under majority rule of all members (without the mediation of representative bodies) (Locke Reference Locke1988, 332). Crucially—and every social contract theorist insists on this—this subordination to the will of the majority requires “the consent of every individual” (331). Many American founders subscribed to this view of how legally competent peoples are forged (Wilson Reference Wilson2007, I.635–6), although others held them forged also through lengthy shared history or through alliance in sanguineous warfare (Federalist, No. 2).Footnote 4 Regardless, the Americans of 1787 did not consider themselves to be in the state of nature. They were well past this stage, already addressing the world as a “People” in the Constitution's Preamble, already living under government, and they never considered it necessary to secure the unanimous consent of all individuals to put the Constitution into force.

The second step in the origin of government, included in most social contract theories, is the ruler contract, in which a corporate people uses its capacity for collective legal action to contract with, or commission, a natural person (or ruling family, or group) to provide standing government, with legislative, judicial, and executive powers (Locke Reference Locke1988, 354–66). But this, as James Wilson emphasized in his famed law lectures of 1791, does not describe the American founding either, since the people of the ratifying states were not contracting with any person or persons, but establishing a set of authoritative offices (Wilson Reference Wilson2007, I.712, 727)—an act wholly alien to social contract theory.Footnote 5 Indeed, were the Constitution a ruler contract, a new one would be needed at every change of office holder. Since American offices are not hereditary, the people could not simply contract with a family line.

In sum, the Constitution is neither a contract among individuals to form a people, nor a contract between a people and a ruler. Social contract theory simply does not capture the true lineage, or structure, or purpose, of the American Constitution.Footnote 6

Instead, the Constitution should be seen as a popularly issued corporate charter—an innovative but logical step in the tradition of sovereigns delegating governing authority by corporate charter. To spell this out a little more fully: in the mode of constitutionalism that the Americans pioneered—which, in basic form and function, has become the norm worldwide (Billias Reference Billias2009)—a sovereign (the people) promulgates a charter (a written constitution) that establishes a government with juridical personhood (the right to own property, contract, and appear in court in its own name) and with enumerated and limited powers. These limits are enforced, not by the sovereign directly, but by the sovereign's judiciary; however, the sovereign reserves the right to amend the charter should the sovereign reconsider the purposes, powers, or procedures of the government it created. Substitute “king” or “Parliament” for “people,” and this description of the formation and operation of modern constitutional government is indistinguishable from a description of the formation and operation of an 18th century corporation.

The corporation and the modern constitutional state embody a common governance technology—a technology that began with the corporation and passed over to the state, and at the heart of which is the delegation of authority by written charter. This connection is less surprising than may first appear once it is recalled that the earliest and most influential American colonies, Virginia and Massachusetts, began as literal corporations: the Virginia Company and Massachusetts Bay Company. To catalyze modern, American-style constitutional government, only their chartering sovereign had to be changed (although more was changed than this).

This corporate pedigree of American-style constitutionalism is commonly missed, likely because our understanding of the corporation has changed. The first step in elucidating it, therefore, is to recover the 18th century understanding of the corporation from subsequent liberal and libertarian reinterpretations of it as a private association—for example, as a glorified private partnership (Friedman Reference Friedman1970, 17) or, more generically, as a “nexus of contracts” (Jensen and Meckling Reference Jensen and Meckling1976; for critique, Ciepley Reference Ciepley2013; Robé Reference Robé2011; Stout Reference Stout2012). After this, the essay examines the three key components of American constitutionalism—popular sovereignty, a written constitution, and judicial review—and shows the debt of each to corporate practice. It then shows how Federalists synthesized the three into a new corporate mode of constitutionalism, which they used to frame a government uniting seeming irreconcilables—at once energetic and limited, republican and mixed, popular and antipopulist—yielding a corporate solution to the problem of arbitrary rule.

THE CORPORATION AS FRANCHISE GOVERNMENT

From the early modern period through the Enlightenment, corporations were seen not as private associations but as creations of the sovereign, with governmental powers. As defined in a late 16th century Tudor tract, a corporation is a “unitinge of a Societie . . . into one bodie by the Prince or Soueraigne, havinge aucthoritie to make lawes and ordinances.” (quoted in Bilder Reference Bilder2006, 518). Two centuries later, the definition held. As presented by William Blackstone, the towering English legal commentator, widely read in America, and by James Wilson, a leading American legal commentator, leading participant in the Constitutional Convention, and future Supreme Court justice, a corporation is:

A body politic. . . “Corporations aggregate,” or member corporations, “consist of many persons united together” into an “artificial person,” or “body politic” (in contrast to a natural body), with a legal existence and rights separate from the individual persons composing it (Blackstone Reference Blackstone1893, I.294; Wilson Reference Wilson2007, II.1035).

Created by the sovereign. . . The creation of such bodies politic, argues Blackstone, belongs to the royal prerogative. “None but the king can make a corporation.” The king may grant the power to others, including to Parliament or even private persons, but “it is really the king that erects” (Blackstone Reference Blackstone1893, I.297). The king creates these bodies for specific, approved purposes, such as advancing religion, learning, or commerce, and to this end endows them with special rights (powers and immunities) (I.293), some of which the members of the corporation exercise individually (such as immunity from tolls) and others of which they exercise corporately (such as the legislative rights of the corporation, discussed next). The king's creation is done by declaration, in a royal charter or act of Parliament (I.296–7). A corporation can in turn be dissolved by the sovereign (the King-in-Parliament), even without cause (I.302–3). The only difference in America, is that the royal prerogative of creating corporations, and of reforming or dissolving them, was understood to have devolved at independence to the legislatures of the several American states (Wilson Reference Wilson2007, II.1036).

Exercising governmental authority. . . Incident to its creation, a corporation is vested by the sovereign with a variety of capacities, or powers, two of which give it the form and function of a government.

  1. (1) Like a state, a corporation owns property, contracts, and pleads in court in its own name—that is, as a juridical person separate from all natural persons (Blackstone Reference Blackstone1893, I.297; Wilson Reference Wilson2007, I.636). The Digest singles out this corporate capacity as modeled on the state (Reference Justinian, Watson, Mommsen and Krueger1985 3.4.1).

  2. (2) “Another and a most important power,” Wilson notes of corporations, “is the power of making by-laws. This, indeed, is the principal reason for erecting many of the bodies corporate.” The law of the land is too general to comprehend the specific activities and circumstances of corporate groups. “For this reason, they are invested with authority to make regulations for the management of their own interests and affairs” (Wilson Reference Wilson2007, II.1036). That is to say, the members as a body make supplemental laws for the conduct of the members as individuals (for example, setting standards of workmanship) (Blackstone Reference Blackstone1893, I.297–8), although they are also binding on nonmembers within the corporation's jurisdiction. Blackstone likens them to “municipal laws of this little republic” (I.293). The important point, with which Blackstone leads off his discussion of the corporation, is that these by-laws are legally enforceable, having the sanction of the sovereign. This distinguishes a corporation from “a mere voluntary assembly,” which cannot frame rules “which would have any binding force, for want of a coercive power to create a sufficient obligation” (I.293). A corporation, in other words, exercises legislative, judicial, and executive powers over its members (and sometimes nonmembers), by sovereign grant. This makes it, in Mary Sarah Bilder's lapidary phrase, “a particular type of delegated jurisdiction within the ‘King's exclusive prerogative’” (Reference Bilder2006, 516). This is aptly put; but it will pay to expand upon the special type of delegation involved, since it will reappear in the American constitutional system.

Delegated in special fashion by the sovereign. . . The sovereign's delegation of jurisdictional authority to an incorporated group is comparable to the medieval king's delegation of lordship over a fief to a vassal. Indeed, the early American corporate colonies, such as that at Massachusetts Bay, were expressly chartered as corporate fiefs (Charter of Massachusetts Bay 1629, 1). In the case of a corporation, jurisdictional authority is delegated to an artificial person, and to the members or officers who act in its name, rather than to a natural person. Nonetheless, acting as a mesne lord or as a corporation is equally classified by Blackstone as a “franchise,” that is, “a branch of the king's prerogative, subsisting in the hands of a subject” through “the king's grant.” Like lordships, corporations are part of the overall system of government established by the king (I.324; see also I.180–1). What is special about the delegation of a jurisdiction, whether to a natural or artificial person, is that it does not create a principal-agent relationship—whereby the sovereign, as principal, would exercise ultimate operational control—which is the usual type of delegation. Instead, ultimate control within the jurisdiction rests with the delegate (see also Blackstone on corporate counties, I.92). The jurisdiction as a whole may be rescinded by the delegator; individual decisions within it are not to be. In other words, a corporation is legally dependent, but operationally independent; a creature of the sovereign's constituting power (or “constituent power”), but not under the sovereign's command. This follows from franchising, and the government that it establishes might be termed a “franchise government” (Ciepley Reference Ciepley2013, 140, 151–2).

Limited by the law of the sovereign. .. The government of a corporation, although invested with authority by the sovereign, is not itself sovereign, but is limited in two main ways. First, a by-law “must not be contrary to the overruling laws of the state” (Wilson Reference Wilson2007, II.1036), else it is “void” (Blackstone Reference Blackstone1893, I.298)—a rule both commentators cite as being as old as the Twelve Tables of Rome (449 B.C.). Second, every corporation, having been established for specific purposes, has a duty to “fulfil the purposes for which it was formed” (Wilson Reference Wilson2007, II.1037; see also Blackstone Reference Blackstone1893, I.303) and to abide by any other restrictions noted in the charter of its creation (Blackstone Reference Blackstone1893, I.293). In other words, the members and officers of a corporation, rather than being agents of the sovereign, are instead fiduciaries to the corporate purposes authorized by the sovereign. Both limitations were enforced by the English and American courts (Bilder Reference Bilder2006, 518–35; Blackstone Reference Blackstone1893, I.302–3; Wilson Reference Wilson2007, II.1037).

And structured by the sovereign. What was the structure, the “constitutio,” of these corporate governments? “[W]hile there were hundreds of individual variations,” notes Brian Tierney, “medieval universitates [i.e., corporations] fell into two major groups,” which, allowing for “some slight oversimplification,” may be called “the Roman law model and the canon law model” (Reference Tierney1982, 26). Roman law was interpreted as prescribing majority rule among the corporate members, making the Roman corporation a simple democracy. Or, the members might elect a head, with executive and judicial functions, but this person was to implement the will of the members and remained accountable to them (Black Reference Black2003, 24–5; Tierney Reference Tierney1982, 26). These were Blackstone's “little republics.” All authority lay with the assembled members. This was the legal construction (to which medieval practice was not always faithful) that jurists placed upon guilds, towns, and lay universities (Black Reference Black2003, 24–5, 49–51).

The Roman corporation, however, was too democratic for the hierarchical Church to use, so canon lawyers adapted it, generating two new types, only one of which concerns us here—the canon law member corporation (of which the cathedral chapter of bishop and cathedral priests was the most important example).Footnote 7 The important underlying development is that the governmental structure of the corporation was no longer organized at the discretion of the members, but was mandated by the Church, giving it a “constitutional” status. In particular, Church canon law mandated that a corporation have a head (if a monastery, an abbot; if a cathedral chapter, a bishop; and so forth), with specified powers. Without a head, it could not legally act (except in limited ways during a vacancy). This head was elected by the members, as with a Roman corporation. However, election was for life, meaning the head was not accountable to the members. The head had discretion over quotidian matters; however, on the most important matters, the head and a majority of the members (although occasionally two-thirds) had to concur (Berman Reference Berman1997, 219; Moulin Reference Moulin1958; Tierney Reference Tierney1955, 106–31; Reference Tierney1982, 26–7). It was a “mixed government,” with authority shared between head and members.

Both of these corporate governance forms are mentioned by Blackstone (Reference Blackstone1893, I.294–5). But it is important to note that, as kings asserted more control over the incorporation process in the early modern period by requiring a royal charter, corporations moved beyond these stereotyped governance structures. By the early modern period, the structure of a corporation's government was, in its fundamentals, prescribed by the sovereign rather than by Roman and canon law. Charters mandating a board structure became common. But highly customized structures and procedures were also possible, as with the Alexandrine governance structure of the Dutch East India Company, chartered by the Dutch States-General (Steensgaard Reference Steensgaard and Aymard1982, 239–44). There was in principle no limit to the governmental intricacy that might be mandated in a charter issued by a sovereign.

In sum, the corporation in the late 18th century was seen as a body politic, chartered by a sovereign, with a limited-purpose government under some degree of member control, exercising limited, delegated powers under the watchful eye of the courts. It is not hard to imagine that the corporation, so understood, might become a model for a liberal constitutional republic.

THE CORPORATION AS CONSTITUTIONAL MODEL IN EUROPE

Americans were far from the first to find constitutional inspiration in the workings of corporations. Beginning in the high Middle Ages, both the Roman and canon law corporations, with their legally defined governance structures and procedures, became important constitutional models for government in general, including at the highest levels, with even the largest of collectivities coming to be styled corporations. The Church was a corporation (Tierney Reference Tierney1955, 132–53); the empire was a corporation (Gierke Reference Gierke1900, 39–40); the kingdom was a corporation (Maitland Reference Maitland, Runciman and Ryan2003, 34); and the republic was a corporation (Canning Reference Canning1980). This was putting Digest 3.4.1 into reverse, modeling the state on the corporation. That this should be possible is no wonder. The prototype of all corporations, the municipality of Rome (Duff Reference Duff1938, 62), was also the Roman state (civitas). The forms of state and corporation—bodies politic with separate property and with jurisdictional authority—were cogenerated, and commingled again in the European Middle Ages.Footnote 8

The Roman law corporation, with its member majoritarianism, modeled republican government. It legally rationalized the republican governments of some of the Italian city-states (Canning Reference Canning1980), and inspired the view of the radical conciliarists during the Great Schism, that the pope is but a magistrate deposable at will by the Council, which represents the whole Church membership (Gierke Reference Gierke1900, 51–6; Tierney Reference Tierney1982, 59). It also acquired an important place in resistance theory, generating the theory of popular sovereignty and the ruler contract, as we will see in the next section. This was used to place a republican construction, first upon the Holy Roman Emperor's relationship to the people (Gierke Reference Gierke1900, 39–46; Skinner Reference Skinner2002, 14–7), and eventually upon the king's relationship to his people (Skinner Reference Skinner1978, 135–358).

The canon law corporation, meanwhile, became (alongside Aristotle's Politics) an important model for mixed government. It was applied to relations between the pope and cardinals (Gierke Reference Gierke1900, 67) and also applied, by moderate conciliarists, to relations between pope and council (Gierke Reference Gierke1900, 53–4; Tierney Reference Tierney1955, 3–5, 91). Taking note, the German imperial electors sought to apply it to their relations with the Holy Roman Emperor (Gierke Reference Gierke1900, 67). More importantly, it was applied in the kingdoms of Europe, especially England. Throughout the Middle Ages, a strong analogy was drawn between king and bishop, the temporal and spiritual princes of Christendom (Kantorowicz Reference Kantorowicz1997, 227–8), and partly on the back of this, the constitutional rules for relations between bishop and cathedral priests powerfully shaped constitutional rules for relations between king and Parliament (Post Reference Post1946; Tierney Reference Tierney1982, 24).

Neither of these, however, served as the constitutional model for American government, which is neither a simple republic nor a mixed government, but something new—a chartered republic, combining elements of the first two, but in a new form, through a fundamentally new type of constitutionalism. The constitutions of simple republics and mixed governments mimic the internal relations of member corporations, Roman and canon. Such governments wield the authority of the whole—that is, the authority of all members, or of the members and head—which is to say, they are sovereign. American-style constitutionalism instead derives from the external relations between sovereign and corporation. The sovereign people stands outside the government and withholds its full sovereignty from the government, granting it only a limited jurisdiction, via a charter. This reduces the government to a corporate government in a more literal, or at least a more 18th century, sense—legally limited in purpose and powers, under judicial review. At the same time, its charter may be used to specify a structure of government far more elaborate than the stereotyped relations of “head and members” offered by Roman and canon law.

In recounting the multipronged corporate genesis of this new constitutionalism, I examine first the corporate origin of the concept of popular sovereignty, to which modern constitutionalism appeals to authorize and legitimate the governmental system as a whole.

THE CORPORATE ORIGINS OF INALIENABLE POPULAR SOVEREIGNTY

While the notion of inalienable popular sovereignty is often considered a 17th century development,Footnote 9 or even an American innovation, students of medieval history have known since the seminal work of Gierke that the concept fully and clearly emerges in Europe in the wake of the 11th century reception of Roman law, in a debate over the authority of the emperor. The shared premise in this debate was the imperial claim, promulgated in the Roman law books, that the emperor's authority rests on the Roman people's conferral (conferat) to him of their right of self-government (their ius, imperium, and potestas), in what was known as the lex regia (“royal statute”) (Digest 1.4.1; Institutes 1.2.6; Codex 1.17.1.7). Already from the 12th century, medieval jurists universally accepted the lex regia as the basis of the Holy Roman Emperor's authority (Gierke Reference Gierke1900, 39). Any contradiction with the Pauline doctrine of authorization by God was resolved with the notion that the people are God's chosen instrument (Gierke Reference Gierke1900, 39, 48).

On its face, the lex regia seemed to imply that the people's conferral of authority to the emperor was a permanent alienation, and that all authority now lay in his hands. That was surely the understanding of the Roman emperors.

It was a development of great moment for Western constitutionalism that Johannes Bassianus (d. 1190s) and his very able and influential student Azo of Bologna (c. 1150–1230) laid the foundation for a republican interpretation of the lex regia by reading it through the lens of Roman corporate law. The Roman people did not alienate their authority. Rather, they acted as a member corporation, with members corporately delegating their right of self-government to the emperor (Gierke Reference Gierke1900, 39; Ryan Reference Ryan and Johnston2015, 426; Skinner Reference Skinner2002, 14–7). The dramatic implication that subsequent commentators would draw (Ryan Reference Ryan and Johnston2015, 425–6) is that the lex regia is a revocable delegation rather than a permanent alienation, for, following Roman law on the delegation of powers to corporate officers, “what is once transferred may be taken back” (quoted in Pennington Reference Pennington and Burns1988, 432).Footnote 10 The empire becomes a glorified Roman corporation, and the emperor but a rector of the people, with a conditional authority assigned to him as a matter of administrative convenience; the people retain the right to depose the emperor should he neglect or abuse his office. As Gierke notes, “When the matter was regarded from this point of view, there could be no deep-set difference between a Monarch and a Republican Magistrate” (Reference Gierke1900, 46).

The corporate reinterpretation of the lex regia thus opened a new and important chapter in the history of Western political theory. It established an obligation of the ruler to the ruled that was not just moral and religious, but legal, and it did this by transforming the lex regia, from an alienation that is over and done with, to a conditional delegation in the form of an ongoing quasi-contractual obligation. In other words, it marks the beginning of the doctrine of inalienable popular sovereignty (Gierke Reference Gierke1939, 143), as well as the beginning of ruler contract theory, which motivated the development of, and long lay at the heart of, social contract theory (98–9).

It is not widely appreciated how heavily popular sovereignty and the ruler contract lean on corporate theory for their plausibility. It is by virtue of their incorporation that the people have an original and inalienable jurisdiction, or sovereignty (Tierney Reference Tierney1982, 58); that they have the legal capacity to contract or delegate as a unit (Gierke Reference Gierke1939, 95); that majority consent, and not necessarily unanimity, can be sufficient to bind the whole (Gierke Reference Gierke1900, 40); and that their contract with the ruler binds succeeding generations (because a corporation, like Neurath's boat, remains legally the same even as its individual components are replaced) (Kantorowicz Reference Kantorowicz1997, 282, 294–5; Gierke Reference Gierke1939, 95). All of these aspects of the ruler contract become conundrums for social contract theory once it is separated from the corporate theory that gave it birth. The modern concept of a sovereign people is a naturalized corporation.

In sum, when imbibed straight, Roman law could easily go to the heads of the monarchs of Europe, spiritual and temporal, suggesting to each that he was an absolute sovereign whose pleasure “has the force of law” (Digest 1.4.1). However, percolated through the corporate concept, it provided the constitutional underpinnings of a populist republicanism, with the people as sovereign.

This view of the people as a Roman corporation, although enjoying periods of official favor (Canning Reference Canning1980; Tierney Reference Tierney1982, 66–71), was kept alive primarily as a component of resistance theory (Skinner Reference Skinner1978, 239–348, especially 254–6, 320). In the 1640s it came into the hands of English Parliamentarians justifying resistance to Charles I (Skinner Reference Skinner2005). And two generations later, during the Exclusion Crisis, John Locke revived it, giving it a canonical place in Anglophone political theory.

“When any number of Men have so consented to make one Community or Government,” Locke writes, “they are thereby presently incorporated, and make one Body Politick, wherein the Majority have a Right to act and conclude the rest” (Locke Reference Locke1988, 331, emphasis in original). Neither the Romans nor the medieval Europeans had attempted to explain how a people becomes a body politic—it was a legal given. Locke's notion that a body politic might be formed through private contract or consent traces back to the voluntarism of the dissenting Protestant churches (Höpfl and Thompson Reference Höpfl and Thompson1979). Regardless, the people (or “community,” or “commonwealth,” or “state”) thereby created is nothing other than a pitch perfect rendering of a Roman corporation. Only as a corporate body does the community have the legal capacity to delegate authority to a ruler—for example, to a king and his successors. And it delegates on the usual corporate terms. That is, the king's authority is both limited and fiduciary, with the corporate community the judge of whether the trust has been violated, whereupon “power devolves into the hands of those that gave it” (367).

The Americans would not follow the constitutional imaginary running from Azo to Locke and social contract theory and delegate authority to a specific person. They would instead delegate authority to a constellation of offices via a charter. But they did very much accept from this tradition the notion of the community as a corporate people with legal capacity. “In free states,” noted James Wilson, “the people form an artificial person or body politick, the highest and noblest that can be known. . . . To this moral person, we assign, by way of eminence, the dignified appellation of state. . . . [I]t is its right, and . . . generally, it is its duty, to form a constitution, to institute civil government, and to establish laws” (Reference Wilson2007, II.831; on its majoritarianism, I.640). If social contract theory has relevance to American constitutionalism, this is it: not that the Constitution is a social contract, but that, in the view of some, it presupposed a social contract that (at some unspecified point in time) had incorporated the people (635–6). But others thought other instrumentalities had done this (Federalist, No. 2). What was important for the founders was not how the people had been incorporated, but that it could be taken as such. From there, corporate theory did the real work. It gave sense to the founders’ notion of a legally competent people, with inalienable sovereignty, concluded by the majority, binding future members of the people—the first of the three corporate pillars supporting the practice of modern constitutionalism.

THE CORPORATE ORIGINS OF THE MODERN WRITTEN CONSTITUTION

The corporate origin of written constitutions in America is hardly a matter for dispute. The earliest American colonies, pioneers in the use of written constitutions, were pioneers because they were corporations—the Virginia Company, the Massachusetts Bay Company, and their offshoots (Lutz Reference Lutz1998). Unlike bare bills of rights or contractual agreements with rulers, such as the Magna Carta, a corporate charter establishes a government—its offices, powers, procedures, and authorized purposes—in written constitutional articles. That is why the colonists of Massachusetts Bay could, without changing a word, repurpose their company charter as a colonial constitution (Morgan Reference Morgan2006, 78–81). Their corporate charter, not their social covenant, gave their constitutionalism its form.

Importantly, these corporate charters bequeathed much more to the modern political constitution than mere written form. For what they put into writing was not some close likeness of a constitution as then understood. Rather, these corporate charters created the modern understanding of what a constitution is and does.

Unlike the constitutionalism of antiquity, which concerned the proper ordering of all the institutions of social life—political offices, but also the economy, family, religion, and military—and which aimed at virtue and the creation of the best life;Footnote 11 and unlike medieval constitutionalism, which concerned the duty of the ruler to secure the consent of the various social orders in matters that “touch all” (Post Reference Post1946); and unlike the 18th century British constitution, which comprehended the entire system of custom, ordinary law, and government institutions (Wilson Reference Wilson2007, I.719–20, excerpting Paley and Blackstone); a modern constitution, much more narrowly, founds a government. As put by McIllwain in his classic study of modern constitutionalism, “The constitution is ‘antecedent’ to the government, . . . defines the authority which the people commits to its government, and in doing so thereby limits it” (cited in Graber Reference Graber2013, 24–5). It typically has very little to say about how to fashion virtuous citizen members. Rather, it determines the offices of government, how they are filled, what their incumbents may do, and what procedures these incumbents must follow for their actions and enactments to carry legal force. Additionally, in contrast to the ruler contract of social contract theory, it is not the man, but the office, that carries the authority, and the office has its authority from the constitution (which in turn has its authority from a sovereign, the people). Such a constitution presumes the rule of law and is itself a legal text, the law of the sovereign. It is the fundamental law within a hierarchy of laws, and gives the actions and enactments of government their legal authority (Wilson Reference Wilson2007, I.712).

These traits of the modern political constitution are all simply carryovers from the corporate charters out of which it grew. Indeed, the terms “charter” and “constitution” were used interchangeably by Americans well into the 19th century (Lieber Reference Lieber1830, 547) and certainly were so used by the authors of The Federalist. Madison, for example, refers to the federal constitutional document as the “constitution” (Nos. 20, 41), but also as a “constitutional charter,” and to the powers of government as “chartered authorities” (No. 49). Therefore, more accurate than saying that the American colonists “repurposed” their corporate charters as political constitutions, would be to say, that the colonies were governed on the authority of, and by the provisions of, their charters, and from this grew the American and modern understanding of what a constitution is and does.

Republicanizing the Corporate Charter

At first glance, the “Articles of Confederation and Perpetual Union,” to use its full name, appears very close to a modern constitution, having been drawn up in the likeness of a charter,Footnote 12 and possessing almost all the features noted above. But aside from its central flaw as a frame of government—that the central government it erected acted through the states rather than upon individuals immediately—it lacked the linchpin of popular authorization. It was instead ratified by the state legislatures (Records, II.89, 91; Tuck Reference Tuck2016, 182), which by the 1780s could not claim to be the people's voice (Wood Reference Wood1969, 328–43).Footnote 13 Nor were the Articles a genuine charter, nor the government they established a genuine chartered government, for lack of a unitary chartering sovereign that remained supreme over it. The Articles were instead what one might call a “perpetual treaty”—a written compact or treaty among independent states, but with no legal right of withdrawal. It was in this regard no different than, and made no theoretical or practical advance beyond, other compacts of this type, such as the Union of Utrecht, which, 200 years earlier, bound together the northern provinces of the low countries to create the Dutch Republic.

What emerged from the Philadelphia Convention of 1787 was something fundamentally different. Sent to amend the Articles of Confederation, the delegates instead drew up a fresh charter in the tradition of American charter government. But they made one key substitution, from which dramatic consequences would flow. The Federalist innovation in the practice of chartering was to arrange for the charter of the new federal government, like the charters of some of the new state governments, to be promulgated, not by the legislatures of the states, nor by the British Crown or some other external sovereign, but by its future subjects, the people, acting in its sovereign (corporate) capacity. As James Madison put it at the convention, “the difference between a system founded on the Legislatures only, and one founded on the people, [is] the true difference between a league or treaty, and a Constitution” (ibid., II.93). The fundamental law would be the people's law.

It was not uncommon at the time to describe this new form of chartering in the familiar terms of a “social compact,” or social contract, as one way to emphasize that the government was being grounded in a unilateral act of the ruled themselves, rather than in a bilateral contract between ruler and ruled which implied an independent authority in the ruler (Wilson Reference Wilson2007, I.727; Wood Reference Wood1969, 283–91). This interpretation in effect folds the second step of social contract theory—the ruler contract that founds a standing government—into the first step, the social contract that forms a society or people. It imagines that individuals jump straight from the state of nature into government.Footnote 14 Unfortunately, it also implies that the minority opposed to ratification is subjected to the government by force, never having pre-agreed to be bound by the majority.

Others, however, began to recognize what was really happening, which was a change of chartering sovereign. As Thomas Paine advocated with regard to the Pennsylvania constitution of 1776, the most republican of its day, “that Charter should be the act of all and not of one man” (quoted in Wood Reference Wood1969, 284). Another perspicuous Pennsylvania writer spelled out the legal requirement in full: first a legally competent society, or people, must be formed through a “social compact,” after which “a charter of delegation” was needed, providing “a clear and full description of the quantity and degree of power and authority, with which the society vests the persons intrusted with the powers of the society, whether civil or military, legislative, executive or judicial” (284, emphasis in original). This was chartering republicanized, passing from the King to the people.Footnote 15 And over the next several years, Delaware, Pennsylvania, Massachusetts, and New Hampshire converged on the means to effect it—the constitutional convention (Tuck Reference Tuck2016, 189–97; Wood Reference Wood1969, 306–43).

Use of popular conventions—a signal American contribution to modern constitutional practice—was actually but an adaptation of long-standing corporate practice. In a member corporation, the majority rules. However, for a majority, or even for all, to come to agreement on some rule of conduct while relaxing around a dinner table is of no legal significance. Only when gathered in general assembly at the proper time and place do the members assume their corporate capacity and legislate as a corporate body, with the majority concluding the whole (with all precommitted to adopt the will of the majority as their own) (Post Reference Post1946, 232 n180).Footnote 16 At all other times, the members are but a multitude of individuals and remain bound by the reigning rules of the body until such time as they are duly changed. Following in this tradition, which was particularly strong in New England, a convention was construed as the general assembly of the members of the corporate people, assuming then and there, and then and there only, their corporate capacity and legislative sovereignty.Footnote 17 It was the proper mechanism, as one Philadelphia newspaper put it, for representing the people as “a legal people,” able to exercise sovereign legal powers (Wood Reference Wood1969, 337). Beginning with the Delaware state constitutional convention of 1776, and followed by others, convention delegates were popularly elected specifically to frame a constitution—a “charter of delegation”—and then disband (Tuck Reference Tuck2016, 189–90, 191; Wood Reference Wood1969, 333, 338).

The framers of the federal constitution did not necessarily arrive in Philadelphia with a commitment to this new practice of popular chartering. However, the need to legitimize their endeavors drove them there. Faced with the criticism that they were proposing an unconstitutional change of constitution, they were forced back to the independence movement's appeal to popular sovereignty (Wood Reference Wood1969, 533–5), that the people have the “unalienable right” to alter their form of government to better secure their Safety and Happiness (Declaration of Independence). This spurred the delegates to the idea of ratifying conventions, to seal the Constitution as the people’s charter of delegation.

The ratifying convention was a Federalist innovation. In framing their state constitutions of 1776, Delaware and Pennsylvania had not used any ratification procedure (Tuck Reference Tuck2016, 189–90). Their convention delegates had been popularly elected and were deemed to have sufficient authority to conclude the matter as stand-ins for the people.Footnote 18 The Philadelphia delegates of 1787, in contrast, had been selected by their respective state legislatures, since their original mission was only to amend the Articles of Confederation (Farrand Reference Farrand1913, 10–11, 14). They did not carry the more fundamental authority of the people. Ratifying conventions would be a means to gather the authorization of the people in their corporate, sovereign capacity. In fact, because the new constitution would infringe on existing state constitutions, “a ratification must of necessity be obtained from the people” (Records 1966, II.93 (Madison); see also idem, II.92 (Morris) and II.92 (King)).

There were, however, addition advantages to popular ratification, beyond its ability to secure legitimacy, as noted in particular by Madison. For example, referring the constitution to the whole people would secure the governmental system against legal abrogation or withdrawal by individual states (Records 1966, I.123). Equally important, founding the constitution on the “supreme authority” of the people in convention would authorize and limit the government on terms the government, with its derivative authority, could not revise (ibid.).

Once the Philadelphia delegates had decided against leaving ratification to the state legislatures, Gouverneur Morris of Pennsylvania immediately moved to refer the plan to a national convention “chosen & authorized by the people to consider, amend, & establish” it (Records, II.93, emphasis in original). While this likely would have best embodied the notion of authorization by one sovereign people, a national convention appears to have been judged impolitic and unnecessary, and Morris was not seconded. Madison and other Federalists held for ratification by popular conventions in the several states, which they viewed as amounting to ratification by one people, not several peoples (Records, II.93 (Madison).Footnote 19 “By this means,” wrote St. George Tucker, a judge of the Virginia General Court, “the just distinction between the sovereignty, and the government, was rendered familiar to every intelligent mind; the former was found to reside in the people, and to be unalienable from them; the latter in their servants” (quoted in Tuck Reference Tuck2016, 217).

Although blurred in Britain by the doctrine of parliamentary sovereignty, the distinction between sovereignty and government, or summum imperium and administratio, was not new. In a stimulating recent study, Richard Tuck documents its emphatic articulation by Bodin, and its further application by Hobbes and Rousseau (Tuck Reference Tuck2016). But Americans did not need recourse to these theorists to birth modern constitutionalism.Footnote 20 The chartering of any corporation enacts the same distinction between the sovereign that authorizes and the limited government that is authorized. (And Americans were intimately familiar with such limited, nonsovereign governments, having lived under them from their very first, corporate colonies.) To legitimate the new constitution, and to underscore the limited authority of the new government, the Federalists in effect staged a new chartering, but this time at the hands of the people, assembled in convention. Significantly, their recourse to a two-step process, of framing followed by sovereign ratification, did not lead away from corporate practice, but shadowed it even more closely. Corporate charters are generally drawn up by the legal representatives (lawyers) of the incorporators and thereafter promulgated by the sovereign, if approved. The founding thus evinced a recognizable corporate logic that leading participants would come to grasp, as we will see. Conventions allowed the people as a corporate whole (ut universis) to authorize a limited government to rule over the people as individuals (ut singulis), in what amounted to a sovereign corporate people chartering a subordinate corporate government for its members.

Two points should be made here. First, it is possible to “rationally reconstruct” the founding as a mutation within the social contract tradition, as if the framers set out with social contract theory but (as if this were a natural evolution) replaced the ruler contract with a written charter (Wilson Reference Wilson2007, I.635–6, II.832). Unfortunately for this view, practically the only mention of a social contract, or “social compact,” in the Constitutional Convention notes is by Madison, denying that it describes, even by analogy, the union under the Articles of Confederation, let alone the federal union (Records 1966, I.315). Nor was social contract theory prominent in the public defense of the proposed system. The Federalist, for instance, does not so much as mention Locke. Social contract theory was not the operative intellectual framework for the founding. Instead, the framers began with a commitment to charter-limited government—something of which there is no trace in any recognized social contract theorist, but which descended, rather, from the tradition of chartering corporations. Then, to authorize the charter, they turned to the notion—ready at hand in social contract theory, but 400 years older than social contract theory—of a sovereign people with legal capacity. The real innovation of the founding generation was to deem this people not only competent to contract and commission, but to charter, and to devise the convention as the forum for this. The founding is thus best seen as an innovation within the tradition of corporate chartering.

Second, there was a natural ambiguity in how Federalists talked about the corporation that the people had chartered. Technically, one corporation (the sovereign people, operating by majority rule) had chartered a new corporation (the United States) with the same membership as itself but with a (complex) standing government. Some Federalists, as we will see, thus spoke of this new corporation as “The United States.” Others, however, spoke of the government of the United States as the corporation that had been chartered. There were several reasons for this synecdoche. First, the Constitution, like the charters of the American corporate colonies but even more strictly, was a charter that established a government only. That is, it granted no privileges to members in comparison to others in the surrounding society, because the members (or rather, the members and their “dependents”) simply were the society. Second, individual members were in a sense part of the government, serving as jury members, for example, in addition to serving as electors. For both of these reasons, the corporation and its government were virtually synonymous. Finally, it was centuries-long practice to speak of the standing government of a corporation, or body politic, as itself a corporation (Blackstone Reference Blackstone1893, I.111; Gierke Reference Gierke1900, 67). This is the shorthand I follow, for the expository reason that, to speak instead of “the United States” as the people's chartered corporation evokes, and is apt to be confused with, the much older European view that the “state” (that is, the unity of subjects, or people) is a corporation (Runciman Reference Runciman2000; Skinner Reference Skinner2009). Federalist theorists agreed it was (Wilson Reference Wilson2007, I.832). But that corporate body was not the one being chartered by the Constitution, but the one doing the chartering.

Constitutional Charter and Bill of Rights

The debate between Federalists and Antifederalists over the necessity of a bill of rights began the process of clarifying the corporate logic of the new constitutional system. Antifederalists such as Patrick Henry and George Mason continued to assume the broadly Lockean view, with roots in the lex regia of the Roman law books, that “government is a compact between the rulers and the people” (quoted in Wood Reference Wood1969, 541), that the people's legislative, executive, and judicial powers are therewith placed in trust with the ruler (527), and that “all rights not expressly and unequivocally reserved to the people are impliedly and incidentally relinquished to rulers” (quoted at 541). Antifederalists thus decried the absence of a bill of rights as leaving the rights of citizens and the states unsecured (536–8). The framers had struck a bad bargain for the people, with no contractual protection of their liberty.

Federalists countered with a defense of the proposed government as a popularly chartered government (rather than a contracted government) whereby the people retain sovereignty and the “rulers have no powers but what are enumerated in that paper” (quoted in Wood Reference Wood1969, 540). Corporate charters, it is worth noting, had never contained bills of rights, because (at least classically) the powers of a corporate government (a) are restricted to what is enumerated, (b) may be exercised only in advancing purposes authorized by the charter, and (c) may not transgress the law of the land, including individual rights at common law. These very same points were now emphasized by Federalists defending the proposed chartered federal government against charges that it would swallow the state governments or needed to be hemmed in by a bill of rights (Wood Reference Wood1969, 540, 542, 529, 539, and Federalist No. 46, for examples).

Federalists, however, placed the greatest emphasis on a fourth corporate feature, that (d) a sovereign that charters a corporate government naturally retains all powers not expressly delegated. This completely reversed reigning presumptions about civil government, from the presumption that all rights are relinquished to the ruler unless expressly reserved, to the presumption that no rights are relinquished but those expressly transferred by the charter (Wood Reference Wood1969, 290–1, 370–1). Bills of rights, Federalists argued, harkened from a world in which rulers “claimed all power and jurisdiction” (quoted in Wood, 539). With popularly chartered governments, in contrast, “All power is in the people,” and whatever portion of this they “did not transfer to the government, was still reserved and retained by the people” (quoted at 540). Therefore, “as they retain everything they have no need of particular reservations” (Hamilton, Federalist No. 84). Powers limited and defined would keep the federal government in a prescribed channel, proof against encroachment on states and citizens alike. In effect, wrote Oliver Ellsworth, Connecticut delegate to the Philadelphia Convention and future Chief Justice of the U.S. Supreme Court, “The constitution . . . becomes . . . what originally a bill of rights was to the people” (quoted in Wood Reference Wood1969, 542).

In the end, for the sake of ratification—and for its potential to augment the power of the federal judiciary—Madison promised a bill of rights, and delivered (543). But the debate had enduring value for having coaxed out a fuller articulation of the corporate logic of the new constitutional system, providing guidelines for future constitutional interpretation.

The Contrast with British Constitutionalism

Comparison with the British constitutional system is instructive. Both the British and Americans drew on corporate concepts to model government-society relations, but they did so in crucially different ways.

British constitutionalism was broadly modeled on the canon law corporation, a mixed government of head and members, as discussed above. The kingdom was a corporation, or body politic, with the king its head (Kantorowicz Reference Kantorowicz1997). In what became official doctrine in 1688, the king owed his position—as sole executive—to an “original contract” with the people (Blackstone Reference Blackstone1893, I.144, 159–61), a classic ruler contract straight out of social contract theory. Crucially, this body politic was fully represented by Parliament, which is itself a corporation, or body politic (Gierke Reference Gierke1900, 67; Maitland Reference Maitland, Runciman and Ryan2003, 34, 36). As Blackstone summarized, “The constituent parts of a parliament . . . are . . . the king and these three estates,” which “together, form the great corporation or body politic of the kingdom, of which the king is said to be caput. . .”, the head (Blackstone Reference Blackstone1893, I.111). This conflation of Parliament with the body politic of the whole kingdom followed from the “virtual” theory of representation. Parliament, being an exactly proportionate yet heightened likeness of the body politic—a virtu-al, or more powerful, representation of it—effectively stood in for it, and thus wielded its sovereignty (Skinner Reference Skinner2005, 164–5). Parliament was thus “sovereign and uncontrollable,” “the absolute despotic power, which must in all governments reside somewhere” (Blackstone Reference Blackstone1893, I.115), yet would never oppress the people, because, in the words of one defender, it was “the very people it self artificially congregated” and would never injure itself (Skinner Reference Skinner2005, 164–5).

Americans, in contrast, having learned that even elected governments, including even elected legislatures, could be arbitrary and tyrannical (Wood Reference Wood1969, 197–202, 226–33, 382–3, 273–282, 328–343; Wilson Reference Wilson2007, I.203), rejected the notion that the government fully represents the sovereign people, or that legislative power is necessarily sovereign (Wilson Reference Wilson2007, I.570–1, citing corporations as a counterexample). As John Taylor, Senator from Virginia, wrote in 1814: by the English Constitution, “the nation and the government is considered as one, and the passive obedience denied to the king [is] conceded to the government. . .; whereas, by ours, the nation and the government are considered as distinct” (quoted in Wood Reference Wood1969, 590). The distinction was achieved by having the civil government chartered by the corporate people, rather than having it “embody” the people. The relationship thus became that of a subordinate corporation to a chartering sovereign as opposed to a fully representative relationship.

Of course, with officials in all branches of the government directly or indirectly selected by the electorate, it could be argued—and the Federalists did so with great pride—that unlike in Britain, all branches of their government represented the people (Wilson Reference Wilson2007, I.721; Wood 1988, 388). But none stood in for the people. As Thomas Tudor Tucker argued already in 1784, “It is a vain and weak argument. . . that, the legislature being the representatives of the people, the act of the former is therefore always to be considered as the act of the latter. They are the representatives of the people for certain purposes only, not to all intents and purposes whatever” (quoted in Wood Reference Wood1969, 384). The Constitution made this limit explicit; representatives are limited to the purposes, and duty bound to the purposes, sanctioned in the charter.

This changes the nature of political representation. Current theoretical discussion has fallen back under the sway of English political categories and debates two fiduciary models for political representation, namely, whether representatives are to act as agents (doing the bidding of their constituents) or as trustees (acting in the best interests of their constituents, or of the nation, by their own best lights) (Pitkin Reference Pitkin1967). But in constitutional democracies, a representative's duty to her constituents is constrained by her higher duty to the procedures and purposes prescribed in the sovereign's charter (and usually sworn to by oath).Footnote 21 Such representatives are thus best modeled as a third kind of fiduciary, the corporate director, with a dual fiduciary duty to constituents and chartered purposes.Footnote 22 Indeed, this is their actual pedigree, in a line that runs back to the elected officers—the literal corporate directors—of the New England corporate colonies. Should constituents agitate for action outside the purposes and procedures prescribed by the people in its corporate capacity, they are to be ignored. Not even the full board of these corporate directors (Congress)—indeed, not even the government as a whole—wields the plena potestas of the people needed to set aside the restrictions of the charter (as Parliament can in principle set aside, or frame anew, the British constitution). This is because a chartered corporation does not represent its chartering sovereign. It acts with its license, but not in its name.Footnote 23 The people and its sovereignty remain strictly outside of the government and limit it by charter.

THE CORPORATE ORIGINS OF JUDICIAL REVIEW

To pen restrictions on government is one thing. But how exactly are they to be enforced? Empowering the courts to void legislation contrary to the written constitution—what we now call “judicial review,” or “constitutional review,” though better known as “repugnancy review” prior to the 20th century (Bilder Reference Bilder2006, 563)—is today a defining feature of liberal constitutionalism; but it was hardly a self-evident proposition. It certainly did not follow from the mere writing out of constitutions. Even less did it follow from bare belief that rulers are bound by higher law (Corwin Reference Corwin1955; for critique, McDowell Reference McDowell1993; Wood Reference Wood1969, 292). Never did one of America's corporate colonies establish a constitutional court charged with upholding the colony's written charter and other constitutional agreements against the ordinary acts of its General Court (its supreme legislative body). In the usual arrangement, the General Court was both the general legislature and the highest court and was left to limit itself by the colony's fundamental documents, however it interpreted them (Morgan Reference Morgan2006, 86). It did not thwart itself by voiding its own legislation as unconstitutional.

This raises a difficulty for one thesis on the corporate origins of judicial review—that it followed directly from the equation of constitutions with corporate charters. Acts of a corporation falling outside the bounds set by its charter are struck down by the courts as ultra vires, “beyond powers” of the corporation. One can understand the temptation to see in this the model for constitutional review. “Just as corporate officials lacked lawful authority to go beyond the scope of their corporate charter,” writes Akhil Amar, “so conduct by government officials that transgressed substantive ‘constitutional’ limitations was null and void” (Reference Amar1987, 1434). But again, if this equation were sufficient to launch judicial review, it should have already appeared in the New England colonies, whose constitutions were literal corporate charters.

The reason it did not is inadvertently brought to the surface when Amar compares the source of limitation on corporate officers and government officials. “Like corporate officers, government officials were merely agents of principals who had prescribed limits on the agents’ power in the founding charter” (1434). The problem is, this does not describe the position of corporate officers. The charter that limited them was an act of the king or Parliament (or today, of a legislature, or secretary of state, or some other sovereign or authorized representative of the sovereign), not an act of the members or shareholders (their supposed “principals”; for critique, Ciepley Reference Ciepley2013; Robé Reference Robé2011; Stout Reference Stout2012). In striking down a corporate act as ultra vires of its charter, courts were merely upholding a piece of state legislation (the charter) against an action that transgressed it, as is completely normal. They were not upholding a members’ charter against officer legislation, which is the kind of analog that would be called for to model judicial review. Likely because of this disanalogy, the equation of constitution and charter was not sufficient to birth judicial review.

As Mary Sarah Bilder argues, judicial review has its roots in a different kind of restriction on corporations. As we have seen, a long-standing principle of corporate law is that corporations can impose rules (by-laws and ordinances) within their jurisdiction, so long as the rules are not contrary, or “repugnant,” to the law of the land. And significantly, the first British colonies in America—The Virginia Company, the Massachusetts Bay Company, and the offshoots of the latter, Connecticut and Rhode Island—were all settlement corporations, operating under charters containing express repugnancy clauses (Bilder Reference Bilder2006, 536–7). This repugnancy standard was retained, by analogy, for all new American colonies even after the Crown brought to a close its frustrating experiment with corporate colonies and moved on to proprietary colonies and royal colonies, and was operable on all the American colonies at the outset of the War of Independence (538). A delegated authority could not contradict the law of the delegating authority.

Importantly, this repugnancy standard was more than a paper restriction. From the 15th century, the Crown introduced, and into the 17th century gradually ratcheted up, its oversight of corporate by-laws, setting up judicial bodies for this purpose (518–23). The system of review was also applied to colonial legislation—the by-laws of the colonies—with colonial courts dutifully joining in the review, but with final review authority lying with Britain's Privy Council, the “third branch of colonial government.” All told, it reviewed over 8500 colonial acts for repugnancy to English law (538).

It is this colonial practice of repugnancy review that Bilder argues was fairly seamlessly transformed into the practice we now know as judicial review. With independence, many colonies drew up new constitutional charters for themselves. These new states carried forward the corporate idea that their governments were limited by charter. The break with Britain, however, precipitated a change in chartering sovereign from the Crown to the people. Many state courts, accustomed to reviewing colonial legislation for repugnancy to the sovereign's law, continued the practice. But this now meant reviewing for repugnancy to the law of the sovereign people, viz., their written constitution (542–5).

The theory that government has only a limited commission from the people was not new (even if it was novel for this commission to take the form of a popular charter). But as Jefferson complained, this theory had offered no means of checking legislative encroachment short of “ris[ing] in rebellion” (Wood Reference Wood1969, 343)—Locke's infamous “appeal to heaven.” Now, having passed through years of corporate subordination, Americans had a well-developed institutional means of holding their delegated governments to their limited commission. Corporate colonial governments subject to repugnancy review became state governments subject to constitutional review. The analogy, therefore, that birthed judicial review, was not that constitutions are to governments as charters are to corporations, but that constitutions are to governments as general laws of the sovereign are to corporations. In effect, the new constitutions acquired a dual valence, functioning both as the sovereign people's charter and as its general law (a natural conflation, since a charter at this time simply was a piece of legislation).

Bilder, reacting against scholarship that traces the origin of judicial review to theoretical innovations, emphasizes continuity of practice alone as the origin of judicial review (Reference Bilder2006, 504, 508, 509). But it seems better characterized as a conjunction of three elements, a triple corporate legacy: the metaphysical legacy of a corporate, sovereign people, the material legacy of written charters, or constitutions, that establish a government; and the procedural legacy of courts striking down the legislation of corporate governments when repugnant to the law of that government's authorizing sovereign. The combined result: courts striking down legislation that is repugnant to the written constitution of a people.

These new state practices were reproduced by the federal constitution. In contrast to the view made famous by Crosskey (Reference Crosskey1953, 1000), that the Founders never intended to establish judicial review, it was done almost as a matter of course. To quote only the most authoritative participant at the Constitutional Convention, “A law violating a constitution established by the people themselves, would be considered by the Judges as null & void” (Records 1966, II.93 (Madison)). The historical record also shows that judicial review was presumed at the state ratifying conventions (Bilder Reference Bilder2006, 550), as well as in the debates leading up to these, as in Hamilton's famous Federalist No. 78: “[E]very act of a delegated authority, contrary to the tenor of the commission under which it is exercised, is void. No legislative act, therefore, contrary to the Constitution can be valid. . . . [W]here the will of the legislature, declared in its statutes, stands in opposition to that of the people, declared in the Constitution, the judges ought to be governed by the latter rather than the former.”

With ratification of the federal constitution, judicial review of a subordinate government's law for repugnancy to the law of its superior became a practice common to the following: state courts reviewing the ordinances of their corporations (including their towns) for repugnancy to state law; state courts reviewing town and state legislation for repugnancy to their state constitutions; state and federal courts reviewing town and state legislation for repugnancy to federal law; state and federal courts reviewing town and state legislation for repugnancy to the federal constitution; and federal courts reviewing federal legislation for repugnancy to the federal constitution. This unprecedented hierarchical system is a legacy of the corporation—a mode of delegated government that served as a general model for a system of subordinate governments, each level subject to the law, both ordinary and constitutional, of the next higher level, through a judicially enforced repugnancy standard.

BINDING THE PEOPLE: A CORPORATE SOLUTION TO SECURING LIBERTY UNDER POPULAR SOVEREIGNTY

In its inception, the corporate conception of the people served to counter monarchical sovereignty. But it did so only to raise the problem of popular sovereignty. This made it a double-edged sword for Federalists. It was highly useful against imperial Britain. However, the difficulties with life under the Articles of Confederation as identified by Federalists did not stem from an oppressive monarch or magistracy, but rather from popular state legislatures and the “people out of doors”—activist citizens who, through the use of extra-official political committees, conventions, mobbing, and the instructing of representatives, aimed at draining the legislative power of the state assemblies into the immediate hands of the people (Wood Reference Wood1969, 319–28, 362–89), with inconstant and often unhappy results . . . especially for creditors! (403–13; Federalist, nos. 10, 63).Footnote 24 This only confirmed the lesson Federalists drew from Greek and Italian history, that the people too could be passionate, arbitrary, even tyrannical—a “capricious retail tyranny” in the words of one observer (Wood Reference Wood1969, 327). For Federalists, the corporate conception of the people, with its implication of inalienable popular sovereignty, seemed not the constitutional solution, but their very constitutional problem. The people too needed to be restrained, not just their government. But how could this be done without betraying the republican ideals of the revolution? Indeed, how could one bind a sovereign, “absolute . . . and uncontrollable,” at all?

As nominalist theologians had concluded centuries earlier—in defending God's absolute sovereignty while denying his arbitrariness—the only way for a sovereign to be bound that did not derogate from his sovereignty, was for him freely to bind himself. As propounded by the theologians, God, in his absolute power (Dei potestas absoluta), could have created the world however he wished and could overturn it at any moment; but by his ordaining power (Dei potestas ordinata), he created the world we have and bound himself to it (Oakley Reference Oakley1984, chaps. 2–4).

Analogously, the Federalist response to the problem of sovereignty was to ask the American people freely to “ordain and establish” (by populi potestas ordinata, so to speak) an order that limited not only the government, but also the people's capacity (its potestas absoluta) directly to intervene in it. And the institutional mechanism that would effect this? Once again, it was the corporate practice of delegating jurisdictional authority via a charter.

The corporate mode of delegating is noteworthy not only for creating charter-limited governments, but also for excluding the chartering sovereign from any role in these governments. Indeed, these are two sides of the same coin. If the sovereign were not excluded, the government would not be limited. The sovereign serves as a constituting power only, authorizing the government but thereafter serving neither as a principal nor a managing power within it. The same would now apply to the corporate people upon issuing the national charter. In the words of the Federalist, “The true distinction between [ancient republics] and the American governments, lies in the total exclusion of the people, in their collective capacity, from any share in the latter” (No. 63, emphasis in original). And being excluded in their collective capacity, meant being excluded in their sovereign capacity. Broken into atoms, the citizenry (the people as a collection of individuals) would certainly play a role in government as assigned to it by the Constitution—including the vital republican role of electing, directly or indirectly, all federal officers. But strictly speaking, this was not an act of the sovereign people, for these are the polls of groups of citizens, not of the people as a corporate whole. Not even in presidential elections does the people vote as a body, but votes in fragments through the states and the electoral college. In other words, the electorate is not to be confused with the sovereign people, and those elected cannot claim sovereignty from it.Footnote 25 The elected exercise only the circumscribed authority with which their office is endowed by the sovereign people's charter.

In sum, the corporate people does not participate in government, whether through popular assembly (as in antiquity and in some New England towns), direct action (such as ad hoc conventions and mobbing), or through “virtual” representation (as in Britain). Rather, it is limited to a constituting (“constituent”) role, the “original fountain of all legitimate authority” (Federalist, No. 22; see also No. 49) but not itself a governing power.Footnote 26 Like any other chartering sovereign, the corporate people is left only the device of charter amendment to redirect the course of the government it ordained. At all other times it is, to use Hobbes’ clever conceit, a “sleeping sovereign” (Tuck Reference Tuck2016, 89–90). The Federalists thus tamed the sovereignty of the corporate people by having the people delegate via a corporate charter rather than rule directly or delegate directly to persons by contract, trust, or agency (as did the Italian city-republics of the 12th and 13th centuries; Skinner Reference Skinner1978, I.3–4). It was a new mode of republicanism—charter republicanism (that is, constitutional republicanism), as opposed to ruler contract republicanism.

Again, the point of excluding the people was not to block popular influence on the government (which would be pervasive), but to better secure members of the polity from arbitrary government, including from transient popular majorities (Federalist, No. 63). Excluding the people in their corporate capacity made available two additional means to this end.

Constitutional Balance

The leading ancient, medieval, and early modern constitutional device for checking arbitrary power, whether of the one, the few, or the many, was a “mixed,” or “balanced,” constitution—a constitution that divided sovereignty among the various social orders, or between “head and members,” such that in the weightiest matters, no part could act unilaterally and arbitrarily, but needed the concurrence of the other parts. The famed Montesquieu cited Britain as its leading 18th century practitioner (1989, 156–66). And indeed, Britain had long touted the balance of its constitution among democratic, aristocratic, and monarchic elements, because, in order to change the law, Lords and Commons had to concur and the king condone (that is, not exercise the royal negative) (Blackstone Reference Blackstone1893, I.111–3).

By 1776, however, Americans had come to see Parliament not as compound and balanced, but as unitary and arbitrary, because of the king's corruption of it (Wood Reference Wood1969, 200–2). Yet Americans, by dispensing with aristocracy and monarchy, and embracing the doctrine of inalienable popular sovereignty, seemed to cut themselves off from constitutional balance not merely in practice, but in principle. Corporate republicanism had long appeared to be inconsistent with mixed constitutionalism because it kept sovereignty in the hands of the people as an active element in the constitution, with the authority to override and cashier the ruler.

Excluding the sovereign people from the government allowed the Federalists to appropriate the benefits (and burdens) of a mixed constitution. The key was not that the people was the common source of power for each branch of government (Wood Reference Wood1969, 550), but the converse, that the people's sovereignty or supremacy was not lodged with any of them. Therefore, no branch had the authority to redraw its own constitutional boundaries and encroach upon other organs (contrast Locke Reference Locke1988, 368–9). Only the external sovereign could do this, by amending the charter. Therefore, the possibility was opened for the charter to specify a governmental structure that recapitulated the checks and balances of a mixed constitution, incorporating the insights of Montesquieu without abandoning the principle of popular sovereignty. The government was divided between state (provincial) and federal (national) jurisdictions, with the federal government divided into an Executive, a bicameral Legislature, and a Judiciary. Major action could not be undertaken unless all branches concurred, and each was granted a check on the others to prevent aggrandizement (Federalist, No. 51).

However, this was in reality but a simulacrum of a mixed constitution, for the parts did not actually share sovereignty (Wilson Reference Wilson2007, I.711–2). That is, they were not sovereign taken as a whole; sovereignty lay wholly outside of them. What they shared was a limited jurisdiction, delegated by the people. They were the parts of the people's chartered corporate government. This made possible the novelty of a “balanced republic”—a constitutional order in which the people is sovereign and all branches of the government are “popular,” yet no branch is supreme, because none embody the sovereignty. Again, the key was the application of corporate theory. Corporate theory was used, first, to differentiate the people into two capacities—chartering sovereign and electing multitude—and then to exclude the former from the government by virtue of its act of chartering. This was “charter republicanism,” a new and safer way to institute a fully popular government yet safeguard the individual from arbitrary rule. (What its exclusion of sovereignty meant for governability under conditions of sharp societal dissensus, is a different and serious question.)

The theoretical watershed involved has not been sufficiently remarked. The concept of a popularly chartered government allowed the Americans to bring together two powerful strands of European thought on government that had previously been distinct, even irreconcilable. On the one hand was a discourse on popular sovereignty, with powerful legitimating (and delegitimating) capacity, but short on institutional depth, and usually invoked in critique of the existing order, including by American Patriots in 1776 and by Federalists in 1787. On the other hand was an institutionally rich, almost “sociological” discourse on mixed and balanced government, from Aristotle to Montesquieu, that eschewed questions of sovereignty and the right to rule and instead rested a government's legitimacy on the goods it secured (justice and liberty, for example). Had it specified a sovereign element, the balance would have been spoiled. Charter government allowed a synthesis, putting an institutionally complex and balanced constitutional order into written articles ratified by the people (bringing popular sovereignty behind the order, while restricting it to a constituting role only). It created a constitutional order that could be defended by appeal to both the right and the good, to both its efficient and its final causes.

Sovereign Self-Binding

As a second means against arbitrary government, the people, by delegating via a charter, voluntarily barred itself from exercising its sovereign right of intervention. The people established courts to keep the government to the terms of its charter, but it would not be the case that, as in a Roman-style corporation, elected officials were “at all times accountable” to the people.Footnote 27 There was no popular recall of elected officials, as the Antifederalists wanted—only the next election.Footnote 28 There was no allowance for ad hoc conventions, committees of correction, or the instruction of representatives. There was no initiative or referendum for direct popular legislation. The constitutional order could be changed, but only through a prescribed (and burdensome) amendment process.

To put this in theological terms, the people would not perform “miracles,” exercising its absolute power to override the ordained order—that is, the normal operation of government—in special cases. Rather, in a free act of self-binding, the people committed itself to act through its ordained order and only ever to alter that order by the rules of the order (Federalist, No. 78).

To put this in corporate terms, the people was a Roman corporation for a day—just long enough to promulgate the Constitution, its “lex regia”—and thereafter withdrew from the scene (like any other chartering sovereign). The people is only ever reconstituted as a sovereign corporate body when meeting in convention to amend the Constitution—the sole procedure initially proposed for amending the Constitution (Tuck Reference Tuck2016, 209–10). Until such time, the people has effectively translated its sovereignty to the Constitution, the expression of its ordaining power—giving rise to that curious locution, that it is the “Constitution” that “vests power” in Congress, the Executive, and the Judiciary (Article I, Section 8.18).

To summarize, establishing a government by corporate charter does two things simultaneously. It limits the government in its purposes and powers, and it excludes the authorizing sovereign from that very government. For Federalist centralizers suspicious of popular power, yet trying to win over a populist audience suspicious of centralized power, this was a marvelous governance model to have hit upon. By styling the founding as a popular chartering, the Federalists could claim the populist high ground against their Antifederalists opponents. As James Wilson rebutted an Antifederalist during the Pennsylvania ratifying convention, “His position is, that the supreme power resides in the States, as governments; and mine is, that it resides in the PEOPLE, as the fountain of government” (Wilson Reference Wilson2007, I.214). They could also tout important constraints on arbitrary government, such as elections, charter limitations, and checks and balances.Footnote 29 Yet, because it was a popular chartering, the sovereign people was left only the unwieldy agency of charter amendment; it was otherwise removed from direct or virtual participation in government, damming the populist flood. Federalists could thus appeal to populist and antipopulist sentiments by turns. It was a position of great rhetorical strength, appealing to all sides; and it carried the day.

CONSTITUTIONAL STATES AS CORPORATIONS

At a minimum, we can say that Federalists transferred the theory and practice of corporate government to the proposed federal government. But for key members of the founding generation, this was not based on a mere analogy. They came to identify the United States, or the government of the United States, as a literal corporation.

On one definition prevalent in the founding era, any body politic with the attributes of a juridical person (owning property, entering into contracts, and subject to legal suit) was a corporation. Given the focus of the courts on legal standing, this was the definition that dominated at the bar, and it meant that even supreme or sovereign governments were to be considered corporations. Justices including John Marshall, William Cushing, James Iredell, James Wilson, and many others, propounded this view from the Bench, that “all states whatever are corporations, or bodies politic” (Chisholm v. Georgia (1793), 468 (Cushing)), and the United States itself, a “great corporation” (United States v. Maurice (1823), 11 (Marshall)). It matters not whether the power of a body politic “be restricted or transcendent,” wrote U.S. Supreme Court Justice James Iredell. “[N]ot only each State singly, but even the United States, may without impropriety be termed ‘corporations,’” and thus subject to legal suit (Chisholm v. Georgia (1793), 447). Similarly, defending the legal competence of the federal government to enter into binding contracts, Marshall wrote, “‘The United States of America’ is the true name of that grand corporation which the American people have formed, and the charter will, I trust, long remain in full force and vigour” (Dixon et al. v. United States (1811), 4). This identification of state and corporation, and of constitution and charter, explains why no new body of interpretive principles had to be developed by the justices to engage in constitutional review, as if confronting a new form of legal document, for the existing principles for interpreting corporate charters were ready at hand. Principles such as “strict construction” and “implied powers” migrated seamlessly from corporate litigation to constitutional litigation (Davis Reference Davis1905, II.207).

On another definition more common among political theorists interested in the structure of power, the American governments were corporate governments, but as such were to be distinguished from sovereign governments precisely in that they acted under legal limits imposed by a sovereign. (Those subscribing to the first definition recognized the relevance of this distinction and referred to these latter as “subordinate” or “inferior” corporations.)Footnote 30 In other words, all legally limited governments were classifiable as corporations, including those of companies, churches, universities, towns, the states, and even the federal government, legally limited by the people.

This was the view espoused by Hamilton, for example, in his written opinion to George Washington defending the authority of the federal government to charter corporations and to charter the Bank of the United States in particular. Quoting Madison's contrary opinion, Hamilton observes that, on Madison's own account, the Constitution authorizes “the institution of a government” in the western territories, and this, Hamilton is quick to point out, means “the creation of a body politic, or corporation of the highest nature” (Hamilton Reference Hamilton1791).

Hamilton could be confident that his identification of constitutional governments and corporations would have purchase with the President and cabinet, for the same identification had been made by Madison and others during the Philadelphia Convention. Madison, for example, intervened several times to correct loose talk about the states as “sovereign.” In his notes, Madison recorded himself as observing that “[t]here was a gradation . . . from the smallest corporation, with the most limited powers, to the largest empire with the most perfect sovereignty,” and that, with regard to the states under the Articles of Confederation, “their laws in relation to the paramount law of the Confederacy were analogous to that of bye laws to the supreme law, within a State” (Records 1966, I.464). In other words, they were in the position of inferior corporations within a state.Footnote 31 His point was seconded by others, that “the States are now subordinate corporations . . . not sovereigns” (Records 1966, I.331 (Wilson); see also I.323 (Hamilton); idem (King); II.363 (Mason)).Footnote 32 By extension, once the principle was established that the national government has only a limited commission from the sovereign people, it too fit the definition.

James Wilson made exactly this point in his widely circulated State House Yard Speech of 1787 in favor of ratification:

The next accusation I shall consider, is that which represents the foederal constitution as . . . designedly framed, to reduce the state governments to mere corporations, and eventually to annihilate them. Those who have employed the term corporation upon this occasion, are not perhaps aware of its extent. . . . [I]n its enlarged sense, it will comprehend the government of Pennsylvania, the existing union of the states, and even this projected system is nothing more than a formal act of incorporation (Wilson Reference Wilson2007, I.174).

Wilson's point with respect to the states is that they would indeed be corporations under the new constitution, but not chartered corporations of the federal government as feared (which would have made them subject to Congressional dissolution). Rather, as his Supreme Court colleague James Iredell would write for the Court, a state is a “corporation” that “derives its authority from the same pure and sacred source . . .: the voluntary and deliberate choice of the people” (Chisholm v. Georgia (1793), 448). His point with respect to the constitutional system as a whole is precisely that being here argued, that the Constitution is an “act of incorporation”—that is, a popularly enacted corporate charter establishing a limited corporate government, canalized into national and state governments.

That constitutional governments are literal corporations remained learned opinion for at least two more generations. An especially comprehensive corporate vision was articulated by Francis Lieber, the founding father of American political science, who explained in his popular Encyclopedia Americana of 1830 that “[a] corporation is a political or civil institution, comprehending one or more persons, by whom it is conducted according to the laws of its constitution. . . . Its acts. . .are considered those of the body,. . .not those of the member or members composing the corporation.” “All the American governments are corporations created by charters, viz. their constitutions.” Indeed, “[t]he whole political system is made up of a concatenation of various corporations, political, civil, religious, social and economical,” with the “nation itself. . . the great corporation, comprehending all others” (547).

In short, whichever definition one subscribed to—and here I add that, in the view of this author, the two in combination provide a definition that is unimpeachable—all American governments qualified as literal corporations, for all were juridical persons, and all were legally limited. Of course it was not the everyday practice of Americans to refer to their governments as corporations. But the corporate connection was recognized by the historically informed, the legally expert, and the theoretically astute—people like the framers, once they had been pushed to clarify the inner logic of the system they had created.

This was not the end of the story for American constitutionalism. The corporate logic of the American constitutional system was never accepted by Antifederalists, and was subsequently challenged, in different ways, by Jacksonian Democrats, Nullifiers, Secessionists, and Progressives, to name but a few. As Jason Frank notes, “The [Federalist] attempt to overcome the people by appeal to the people . . . authorized an ongoing history of constituent moments, of effective claims to speak in the people's name that nonetheless break from the rules established by their authority” (Frank Reference Frank2010, 31). Nonetheless, the system remains largely intact, even as its corporate roots have been forgotten. It includes: the delegation of a limited jurisdiction by a sovereign to a subordinate government via a charter, with prescribed offices, powers, procedures, and purposes outside of which the government's actions and enactments lack legal force; the sovereign's retention of all rights and powers not delegated by the charter; the ordaining of this government as a separate legal entity, or “juridical person,” that owns property and enters contracts in its own name; the sovereign's removal from participation in this government, while reserving a right to amend or rescind its charter; the placement of authority in the office, not in the officeholder; the officeholder serving, not as a direct agent of the sovereign, but as a dual fiduciary, to the electorate and to the purposes and procedures established by the sovereign's charter; the requirement that the government's enactments not be repugnant to the law of the sovereign (establishing a hierarchy of laws); and the enforcement of this repugnancy restriction by courts established by the sovereign rather than by the sovereign directly. All of this simply recapitulates the corporate form of delegated authority. If the “sovereign” is a king or legislature, the above describes a corporation; if it is “the people,” it describes modern constitutionalism. Its formal theoretical structure includes, first, the formation of a corporate people (whether through a social contract or some other means), followed, not by a classic ruler contract, but by the chartering of a subordinate corporate government.

In sum, corporate government and modern constitutional government employ the same governance technology, which the latter borrowed from the former. They are both “franchise governments” established by charter. What is more, the authority of each is franchised by (that is, delegated in special fashion by) the same ultimate sovereign. There is this difference only—one is chartered by the people directly, the other indirectly, being chartered by one of the governments chartered by the people. Modern governance is corporate from top to bottom.

We are wont to attribute our modernity to “the rise of individualism”—religious, legal, political, and economic. This is not so much wrong, as one-sided. It is not individuation, but organization, that generates capacity for action, or power. And when we consider leading markers of the rise of Europe—including the growth of towns, universities, religious orders, trading companies, and the European state—what we find is not individualism per se, but individuals organized, and organized in corporate and quasi-corporate forms. The ascent of modern constitutionalism, followed by the ascent of the modern business corporation (on the back of the unprecedented protection which the former has provided it), only intensifies this trend. The institutional matrix of our modernity turns out to be quite “medieval.” Liberal and neoliberal concepts of individual self-interest, individual responsibility, private ownership, contract, (human) principals and agents, and a sharp public/private distinction, are simply inadequate for grasping our corporate reality, and must at a minimum be supplemented with corporate concepts: franchised (delegated) jurisdictions, chartered governments, judicially enforced hierarchies of law, “immortal” juridical persons, fiduciary duty to these juridical persons and their purposes, juridical persons as owners and liable parties, and the limited liability of the natural persons who control them.

Finally, to return to the question posed in the title of this article, is the U.S. government a corporation? If by this we mean a separate property-owning entity, then certainly (Runciman Reference Runciman2000). But on the more exacting definition of a corporation as a legally limited government, a more qualified answer is called for. On the one hand, the U.S. government and its people is not subordinate to any other government. This is the mark of a sovereign state and differentiates the U.S. government and its people from an ordinary corporation.Footnote 33 However, while the government is sovereign with respect to other governments (i.e., is not legally limited by them), it is not sovereign domestically, for it is subordinate to, and limited by, a sovereign people (a constituting power rather than a governmental power). And limitation by a sovereign is the mark of a corporation. We seem driven to the conclusion that the U.S. government is a sovereign state with respect to other states, but is a corporation with respect to the people. And the same is true of the many other governments founded on that American contribution to constitutionalism, the people's charter.

Footnotes

The author gratefully acknowledges helpful comments from Danielle Allen, Eldon Eisenach, Paulina Ochoa Espejo, Alin Fumurescu, Robert Hockett, Turkuler Isiksel, Hélène Landemore, Jacob Levy, Samuel Mansell, Jan-Werner Mueller, Miguel Padro, Philip Pettit, Elizabeth Pollman, Aziz Rana, Robert Reich, Steven Shiffrin, Quentin Skinner, Philip Stern, Anna Stilz, Lynn Stout, and the members of the Cornell Law School faculty workshop and Stanford University political theory workshop, as well as from the APSR editorial team and the journal's excellent anonymous reviewers. Generous research support was provided by the American Council of Learned Societies, Princeton's University Center for Human Values, and the Institute for Advanced Study.

1 Leading exceptions are Oakley (Reference Oakley2012, 147–59), Runciman (Reference Runciman2000), and Skinner (Reference Skinner2009). See also Stilz (Reference Stilz2011) and the current debate on the “corporate responsibility” of states.

2 Graber (Reference Graber2013) raises doubts of his own about the contract metaphor at 26–7. See also Levy (Reference Levy2009).

3 Gierke's account is stylized (Höpfl and Thompson Reference Höpfl and Thompson1979). Rousseau rejects the second step (as Gierke knew). And Hobbes might not fit at all. But Americans did not follow these variations, either.

4 References to The Federalist Papers found in The Federalists, edited by Jacob E. Cook (Reference Cooke1961), will be referenced as Federalist. Similarly, Records of the Federal Convention of 1787 edited by Maxwell Farrand (1966), will be referenced as Records.

5 See, e.g., Grotius (Reference Grotius and Tuck2005), Hobbes (Reference Hobbes1991), Pufendorf (Reference Pufendorf and Tully1991), and Locke (Reference Locke1988). By the “office” of the sovereign, Hobbes only means the “duty” of the sovereign, following the Latin meaning of officium. On earliest social contract theory, Höpfl and Thompson (Reference Höpfl and Thompson1979). In fact, it is impossible in principle to establish an office through the legal device of contract. To be valid, a contract must involve at least two parties—one to offer and one to accept—and must also include a “consideration,” something of value offered by each side. The ruler contracts of social contract theory contain these elements, with a people offering obedience and the ruler offering protection, for example. But in establishing an office, there is no counterparty, and there is no consideration.

6 For critique of the separate notion that the constitution is a treaty among sovereign states, see Amar (Reference Amar1987, 1446–63).

7 The other type was the property corporation (universitas rerum), such as a bishopric, which had no members (Berman Reference Berman1997, 239–40). The English subsequently relabeled it a “corporation sole,” misconstruing its office-holder as a “member,” a one-person corporation (Ciepley Reference Ciepley2017).

8 That sovereign bodies were styled corporations appears to contradict the notion that corporations are subordinate governments authorized by a sovereign. However, medieval thinkers were not particular on this point, and in any case might not have seen any inconsistency. Accordingly to a much-cited Novel of Justinian, both Church and Empire are authorized by God (Preamble to Novel 6 (April 17, 525), quoted in Mass Reference Mass2003), and there is no more eminent sovereign than He. Kingdoms, meanwhile, were often treated by medieval legal commentators as provinces of the Holy Roman Empire, and Roman provinces were corporations (Woolf Reference Woolf1913, 113). The commonplace kingdom-bishopric analogy reinforced this corporate interpretation.

9 Typical is the Wikipedia entry, http://en.wikipedia.org/wiki/Popular_sovereignty (accessed Jan 15, 2015).

10 Even more strongly, Azo argues that the people “never transferred power except in such a way that they [as a universitas] retained it themselves” (non transtulit ita quin sibi retineret) (Skinner Reference Skinner2002, 16n31).

11 See discussions of the politeia and constitutio by Aristotle, Plato, and Cicero.

12 Compare its opening line with that of the Massachusetts Bay Company charter, or any 17th and 18th century royal charter or letters patent.

13 In contrast, Federalists would call for ratification of the federal constitution by popular conventions in the several states, on the understanding that this would amount to ratification by the American people as a whole. See discussion later in this section.

14 See, for example, the Preamble to the Massachusetts Constitution of 1780 (http://www.nhinet.org/ccs/docs/ma-1780.htm).

15 Contrast Wood (Reference Wood1969, 282–3), who, (mis)construing charters as reciprocal agreements between ruler and ruled (i.e., ruler contracts) rather than as delegations, sets aside this interpretation as inconsistent with the people's unilateral creation of the government.

16 This corporate distinction between the will of the multitude and the corporate will is the historical foundation of Rousseau's distinction between the will of all and the general will, although the point cannot be pursued here.

17 On one interpretation, these conventions wielded the people's full sovereignty (Wood Reference Wood1969, 333). There was precedent for this as far back as the elected Church Councils of the 13th century, which acted as an assembly of the whole corporate Church (Tierney Reference Tierney1982, 24). On another interpretation, these conventions received only a limited authority from the people to frame a constitution; they were not to pass ordinary legislation or issue edicts (Wood Reference Wood1969, 333, 339).

18 Two years later, in 1778, the Massachusetts constitutional convention submitted its handiwork to a colony-wide referendum, doubly confirming its popular authority. This was a historical first, but in the founding period it was imitated only by New Hampshire (Tuck Reference Tuck2016, 191–2, 196). During the Jacksonian era, many states adopted the practice (ibid., 197–8). But the federal convention delegates developed the more corporate alternative of ratifying conventions.

19 Carefully read, Federalist No. 39 (Madison) is seen to be making the same point. Consistently, Federalists insisted that, already under the Articles of Confederation, Americans constituted one people and one nation. For reference in The Federalist to an existing American nation, see especially No. 2 (Jay). See also Federalist, Nos. 41, 44, 46, and 53 (Madison), and Nos. 25, 29, 31, 65, 66, 69, 72, 75, 80, 81, 85 (Hamilton). References to an existing American people are too numerous to cite. Naturally, some Antifederalists disagreed with this interpretation, seeing the constitution as a confederation among sovereign states (Tuck Reference Tuck2016, 207, 220).

20 Nor does Tuck claim they did. “[A]lmost . . . by accident” the Americans created “a constitutional structure which could most easily be theorized in the language” of these theorists; however, American jurists didn't draw on them until later (181, see also 218). This article explains how this could be. An open question is whether this complementarity is because of the debt of Bodin, Hobbes, and Rousseau themselves to corporate theory.

21 For the U.S. Constitution, the Preamble is the charter's purpose clause.

22 “Directors owe duties of loyalty to the corporation and to the shareholders.” TW Services, Inc. v. SWT Acquisition Corp (Del. Ch. 1989).

23 Walmart does not represent the state of Delaware, for example.

24 For more sympathetic treatments of the “people out of doors,” see Arendt (Reference Arendt2006, 231–73), Frank (Reference Frank2010).

25 This was the heart of the American Whig case against what they described as the Caesarism of Andrew Jackson and his supporters. See Howe (Reference Howe1984, 81–2). Another common way for Federalists to express this distinction was to grant that the electorate, too, was the people as a fountain of authority, but that elections authorized imperfect representatives whose laws had an authority less than the people's own law, the Constitution (Federalist, No. 78; see also Benjamin Rush, quoted in Wood Reference Wood1969, 373–4).

26 Indeed, evidently to avoid populist misinterpretation, Federalists largely avoided speaking of the people as “sovereign,” preferring the expression “fountain of authority.”

27 This is the wording of the radically republican Pennsylvania Constitution of 1776 (http://avalon.law.yale.edu/18th_century/pa08.asp).

28 Impeachment is intergovernmental accountability, not direct accountability to the people.

29 The framers used indirect restraints on arbitrary rule as well, such as large electoral districts to prevent factional interests from organizing (Federalist, No. 10), and the Takings and Contracts clauses to force government respect for property and contract.

30 See, e.g., Chisholm (1793, 447–8), drawing this distinction.

31 Convention notes taken by Yates, King, and Paterson record Madison explicitly denominating the states “corporations” (Records 1966, I. 472, 477, 479).

32 Doubtless in consideration of state sensitivities, the Articles had continued to speak of the “sovereignty” of the states on all questions not delegated to the central government—giving rise to the American neologism of a limited or “residuary” [sic] sovereignty (Federalist, No. 39, 43). This was good politics, though not good theory, as Madison and other delegates now pointed out. By accepting a limited jurisdiction and waiving their right of withdrawal, the states ceased to be truly sovereign and became corporations. But many of these same delegates, including Madison, when called on to defend the proposed constitution, themselves espoused the more politic formula, that the states retain “sovereignty” within their jurisdiction (Federalist, nos. 9, 32, 39, 40, 42, 43, 62). This decision to verbally conceal their reduction to corporations abetted later nullification and secessionist impulses. It also helped obscure the debt of the Constitution to corporate theory and practice.

33 “Every civil society . . . not subordinate to another, is a sovereign state” (Wilson Reference Wilson2007, 673).

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