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Corporations Are People Too (And They Should Act Like It), by Kent Greenfield. New Haven, CT: Yale University Press, 2018. 296 pp. - We the Corporations: How American Businesses Won Their Civil Rights, by Adam Winkler. New York: W.W. Norton, 2018. 496 pp.

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Corporations Are People Too (And They Should Act Like It), by Kent Greenfield. New Haven, CT: Yale University Press, 2018. 296 pp.

We the Corporations: How American Businesses Won Their Civil Rights, by Adam Winkler. New York: W.W. Norton, 2018. 496 pp.

Published online by Cambridge University Press:  01 October 2019

Amy Sepinwall*
Affiliation:
University of Pennsylvania
Rights & Permissions [Opens in a new window]

Abstract

Type
Book Review
Copyright
Copyright © Society for Business Ethics 2019 

In 2010, the US Supreme Court issued its blockbuster ruling in Citizens United v. FEC, holding that corporations had the same rights as individuals to spend unlimited amounts of money on independent advertisements supporting or opposing candidates for office. Public outcry was swift, vehement, and largely misdirected. “Corporations are not people!” became the rallying call for those keen to overturn the decision. Deriding the supposed legal equivalence between corporations and individuals, one commentator published a set of rules for dating a corporation; a Green Party candidate held a press conference to announce her search for a corporate spouse; and The New Yorker ran a cartoon borrowing Shylock’s lament on behalf of the corporate form (“If you prick it, does it not bleed?”).Footnote 1

Given the rhetoric, one would likely be surprised to learn that nowhere in the decision did the Court state that corporations are persons. Still, opponents of Citizens United are right to worry: corporations have increasingly enlarged their coffers along with their constitutional rights, and this development, at least arguably, threatens key democratic institutions. Two recent and excellent books use the trope of corporate personhood to interrogate the place of corporations in our polity.

Kent Greenfield’s Corporations Are People Too (and They Should Act Like It) takes its title from Mitt Romney’s ill-fated quip in 2011 (“corporations are people, my friend”)Footnote 2 to argue that the way to curb both corporate power and corporate constitutional rights is to embrace, rather than deny, corporate personhood. Greenfield advances two key claims. First, the corporation’s legal personhood entails that it is a separate entity from the individual persons comprising it. As such, the constitutional rights of these individuals should not automatically get grafted onto the corporation itself. Second, while it is necessary that corporations enjoy some constitutional rights, we should ensure that they exercise these rights in the service of the public good. To that end, we should insist on more democratic forms of corporate governance (e.g., boards of directors with members representing all of the relevant stakeholders, 213–4) and institute other legal mandates that would encourage the corporation to attend to the interests of all stakeholders. In other words, we should get corporations to be more like (real) people, who have a variety of aims and interests, and who care about and are duty-bound to a wide swath of individuals (197, 208, 212).

Much of the book aims to determine which constitutional rights corporations should enjoy and why. Greenfield pursues this question systematically, beginning from the premise that “for-profit corporations are economic entities, created for the purpose of benefiting society by creating wealth through the production of goods and services” (62; see also 19–20, 102–3). This conception of the corporation’s purpose provides Greenfield with a general answer: “corporations should receive the rights necessarily incidental to serving [that purpose] and should not receive those that are not germane to that purpose” (62). The book is at its best—careful, balanced, and compelling—in reviewing each of the relevant constitutional provisions. Greenfield identifies the interests each constitutional right is designed to serve, and he then inquires into whether bestowing the right on the corporation would advance or set back those interests—an inquiry he answers by referring to the socially beneficial, wealth-creating purpose of the corporation. He concludes, for example, that corporations should enjoy economic and privacy rights, like protections against government takings, warrantless search and seizures, and procedural due process—all rights central to providing the corporation with the kind of security necessary to induce investments. By contrast, the corporation should not automatically enjoy the religious protections individuals receive. After all, corporations exist as entities in their own right, independent from their owners, and it is the owners who have interests in religious freedom. The corporation has interests only in creating wealth through the production of goods and services, and there is nothing inherently religious in that.

Greenfield devotes a significant portion of the book to the question of corporate free speech rights. He begins by identifying the rationales for protecting speech, and he concludes that on any of these, the corporation warrants some speech rights. This is because each rationale attends to the interests of listeners (individuals), and individuals have reason to want to hear corporate speech, since corporate speech might conduce to the search for truth (112–5), help individuals self-actualize by making informed decisions (119–23), or advance democratic self-government by offering a unique perspective on matters of public importance (126–32). At the same time, Greenfield worries about excessive corporate power. The solution, he argues, is not to deny corporations all constitutional rights but instead to wield corporate law in ways that limit their exercise—for example, by requiring the corporation to disclose its political expenditures (156–7) and denying it exemptions from regulations, like the contraceptive mandate, that would give it a competitive market advantage (162–7).

As an analysis of the proper scope of corporate constitutional rights, the book offers little to protest. For example, Greenfield is right to worry that corporations might seek exemptions not because of their stakeholders’ sincere religious beliefs but instead to evade costs and thereby gain a competitive advantage. His solution is to have the state deny exemptions whenever they would save the corporation money. But there is a more respectful way to ensure that corporations do not use religion as a pretext to avoid costs. The objecting corporation could be required to spend the money it would save through the exemption on alternative measures, just as conscientious objectors to the draft are compelled to undertake alternative service. For example, corporations that refuse to subsidize their employees’ contraception might instead be required to contribute an equivalent sum of money to the women’s or children’s health charity of their choice. Proceeding in this way would deny the exempted corporation a competitive advantage, while accommodating those stakeholders who sincerely oppose the regulation in question.

More likely to rankle business ethicists is Greenfield’s treatment of corporate personhood. Greenfield contends that corporations are persons in three senses. First, they are legal persons: they can hold property, enter contracts, and sue or be sued. Second, corporations are “made up of people” (2). Third, corporations “are holders of constitutional rights” (3). The second and third of these senses are problematic. An entity does not become a person simply because it is comprised of persons. Neither my marriage nor my running club is a person, although both are made up of people. So the second reason for positing personhood is not a reason at all; something else must be doing the work of making it the case that the corporation is a person while my running club is not. Business ethicists have long sought to supply the missing piece, and Greenfield might have benefited from engaging with their work.

The third reason—that corporations enjoy constitutional rights—is either trivially true or else question-begging. If by “person” Greenfield means any entity that holds legal rights, then we learn nothing new by referring to the corporation as a person. On one hand, that the corporation is a person qua legal right-holder does not tell us which rights it should hold. On the other hand, if the corporation is a person in the moral or metaphysical sense, then it would follow that it should enjoy some constitutional rights in its own right. But Greenfield never entertains the possibility of corporate moral or metaphysical personhood, and he never argues against it either. Instead, he embraces a version of normative individualism. Thus, he insists that “human beings are, and should be, the ultimate beneficiaries of constitutional limits on government actions” (63). As such, the constitutional rights corporations receive should be consistent with the normative priority of individuals. But normative individualism can be justified only if corporations have less moral or metaphysical status than human persons. If individual and corporate persons enjoy the same moral or metaphysical status then it is no more justifiable to privilege individual interests relative to corporations’ than it is to privilege the interests of men relative to women, or Texans relative to Mainers. Insofar as the analysis of corporate constitutional rights proceeds on the presupposition of normative individualism, the analysis will fail to convince anyone who believes that the corporation is a coequal moral or metaphysical person. It is in this sense that Greenfield begs the question against those who believe that the corporation enjoys personhood as a moral or metaphysical matter, rather than merely a legal one.

At the same time, Greenfield’s second thesis—that we should make corporations more human-like—would seem to depend on just such a moral or metaphysical conception of the corporation. Greenfield speaks of generating in the corporation caring attitudes and feelings of loyalty. But how could a mere “artificial being, invisible, intangible, and existing only in contemplation of law” feel loyal or exhibit care?Footnote 3 Greenfield might think the answer obvious—perhaps he assumes that stakeholders can do the feeling work for the corporation in its place. But as scholars of business ethics and moral responsibility know, moral feelings cannot be outsourced.

In short, Greenfield offers a fruitful and compelling way of thinking through the proper scope of corporate constitutional rights. It is just not clear, at the end of the day, that personhood (rather than, say, corporate purpose) has much to do with it.

Adam Winkler’s We the Corporations: How American Businesses Won Their Civil Rights shares Greenfield’s thought that the concept of personhood might function as a bulwark against, rather than a justification for, the expansion of corporate constitutional rights. But whereas Greenfield undertakes a workaday legalistic approach, Winkler sweeps majestically while also reveling in colorful details. The book was justly named a National Book Award finalist: Winkler is both a master storyteller and a compelling theoretician.

The book upends any thought of a hallowed, pre-corporate America. Instead, Winkler announces, “in the beginning, America was a corporation” (5)—a statement he amply defends by recounting America’s colonization by the Virginia Company of London more than a decade before the Pilgrims arrived. Further, he describes how the constitution itself was modeled not so much on political precursors in Europe as on the charters specifying the governance of the corporations that were to settle Jamestown, Salem, and Boston (18–30). The idea that corporations have capitalized on our highest democratic achievements receives voice in Winkler’s sly references to the “corporate civil rights movement,” a movement whose beneficiaries never were the targets of oppression, as Winkler recognizes.

Among the book’s key scholarly contributions is an account of the dual role corporations have played in the expansion of constitutional rights in the United States. In some moments, corporations have acted as “first movers” (xxiii, 222). For example, the early free speech cases were brought on behalf of news organizations operating as corporations (242–55). Further, the expanded liberties corporations secured in the Gilded Age provided the hook for individuals to win some of our most prized rights today—rights to integrated schools, abortion, same-sex marriage, etc. (xxiv).

But corporations have also been “leveragers,” exploiting the gains of other civil rights movements for their own advantage (xxiii). Citizens United is an exemplar: there, a corporation claimed, for itself, political speech rights individuals had fought hard to win (369). Winkler draws out a similar dynamic in Burwell v. Hobby Lobby, the first case to extend conscience-based rights to a for-profit corporation (380).

Winkler is no dispassionate scribe of business’s efforts to enlarge the scope of corporate constitutional rights. Like Greenfield, Winkler compellingly argues that corporations prevailed in Citizens United and Hobby Lobby only because the Court problematically “pierced the corporate veil” in each case—looking to protect the interests of corporate constituents, rather than the corporation itself (37, 364, 378, 385, 395).

On that basis, Winkler draws a surprising lesson: corporate personhood, he concludes, is not the problem. “In fact,” he writes, “when the Supreme Court has . . . treated a corporation as a truly separate legal person with distinct rights of its own, the result has usually been more limited rights for business.” (387, emphasis added). But Winkler does not adopt Greenfield’s prescription that we should try to make corporations more person-like. Instead, he argues that we should treat them—and demand that the Court see them—as the limited, single-purpose entities they are. Corporations, Winkler insists, cannot act “with the full range of human concerns” (388), and indeed, insofar as the law enshrines shareholder primacy, it prohibits corporations from doing so. As such, corporations are legally required not to “exercis[e] the very autonomy often thought to be essential to rights of political participation and religious liberty” (388).

One might have wished that the remedy for growing corporate political power were not an insistence on shareholder primacy. A view that staves off corporate efforts to influence elections and government policy by denying that corporations are anything but engines of profit-maximization, and so not civic-minded enough to play a role in politics, is dispiriting, and perhaps even cynical. It is also factually incomplete. The rise of more socially-minded corporate forms (e.g., benefit corporations) challenges the orthodox conception of corporations as entities with the exclusive purpose of earning maximal profits for shareholders, and with it, Winkler’s idea that the state may limit corporate political activity. And if corporations can be run in the public interest, then the bulwark Winkler offered against corporate political power dissolves. Still, even if Winkler does not leave us with a surefire strategy for curbing corporate power, his work powerfully wakes us to the consequences, both salutary and sobering, of the corporation’s constitutional ascendancy.

References

NOTES

1. Cartoon by D. Sipress, The New Yorker, March 14, 2011, p. 25.

2. Ashley Parker, “‘Corporations Are People,’ Romney Tells Iowa Hecklers Angry Over His Tax Policy,” August 11, 2011, https://www.nytimes.com/2011/08/12/us/politics/12romney.html.

3. Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518 (1819).