Ask Rockridge: Is ExxonMobil the Kind of Person You'd Like to Have a Beer With?

We recently received this question:

How can we challenge the misconception that corporations have the same rights as individuals?

The reality is that corporations have been given many of the same rights as individuals.¹ Early decisions by the Supreme Court that denied the notion that corporations had personhood have been gradually eroded. From the Gilded Age of the late 19th century forward, courts have recognized more rights for the "corporate person." The problem is that the courts and legislatures have not imposed commensurate responsibilities upon corporations. Possessed of constitutional rights without their attendant responsibilities, corporations have become enormously powerful and largely unaccountable social institutions. We need a public debate about the appropriate balance of corporate rights and responsibilities.

Currently, corporations exist to serve a single purpose: to make money for their shareholders. This single-mindedness of purpose is not characteristic of a human being. In fact, it is wholly inhuman. There is an old saying: If the only tool you have is a hammer, then every problem looks like a nail. Or in the corporation's case: If its only purpose is to make money, then every circumstance becomes an opportunity to get richer. There is little or no notion of the common good or social responsibility inherent in this perspective. This leads to such things as war profiteering and a broken healthcare system dominated by corporate health insurers.

Individuals in a democratic society possess rights tempered by responsibilities. We have the right to free speech so long as we don't shout fire in a crowded theater. We have the right of free association so long as we don't use it to become a lynch mob. Our rights are balanced against all the other rights in society and it is our responsibility to respect those rights as much as we respect our own or we stand to have ours taken from us by civil or criminal courts. Society treats this obligation so seriously in humans that it is willing to take away an individual's liberty or even his life if his transgression is great enough.

Corporations are responsibility black holes. Not only are they not beholden to the common good, they are largely exempt from the accountability imposed by the criminal justice system. On rare occasions a corporate employee is criminally charged for malfeasance, but the corporation itself faces nothing more than fines for criminal wrongdoing. If I put a ticking time bomb on a busy street, I may not know who it is going to kill, but I know it will kill. When it does kill I will be convicted of murder and either lose my freedom or my life. Corporations do not bear the same risk. The Ford Pinto case of the 1970's is a perfect example. Ford was aware of the likelihood that a rear-end collision could cause the Pinto's gas tank to explode. But it did a cost-benefit analysis in which it concluded that it was more expensive to spend a few dollars on each and every Pinto to fix the problem than it was to fight the inevitable lawsuits and pay judgments when they lost. More than 500 people suffered fiery deaths as a consequence of Ford's phenomenally cynical, profit-driven decision. Yet, the company faced no criminal sanctions.

In recent decades, corporations have fought hard to reduce even their civil accountability—their obligation to compensate the victims of their wrongdoing. Through so-called tort reform efforts, corporations have managed to limit the kinds of wrongdoing for which they can be held responsible and the amounts they might have to pay when they are successfully sued. Most recently, they persuaded Congress to limit their liability to class action suits.

Various solutions have been offered to this problem of corporate non-accountability. They range from eliminating the notion of corporate personhood to subjecting corporations to forfeiture of their charter for certain misconduct to requiring a periodic re-chartering procedure in which the corporation bears the burden of demonstrating its societal benefit. These suggestions all have their virtue. But none will advance without a meaningful public discussion of the problem and a recognition that the constitutional rights granted to "We the People" were meant for those who bore responsibilities attendant to those rights. This might signify a return to a recognition that corporations, as creations of state law, should have privileges, not rights.

Scott Parkinson
Guest Fellow
The Rockridge Institute

¹ 14th Amendment Due Process and Equal Protection Rights; 5th Amendment Due Process Rights; Gained "Substantive Due Process" Rights; 4th Amendment Search and Seizure Rights; 6th Amendment Right to a Jury Trial in Criminal Proceedings; 5th Amendment Takings Clause protection (regulation being the taking); Corporations were outside of some state law because of the Interstate Commerce Clause; 1st Amendment applies to corporations, not just the press; Corporate "Free Speech" was used to counter worker's "Freedom to Associate" in unionization; 4th Amendment Right of freedom from searches extended to random fire inspections; 7th Amendment Right to a Jury Trial in Civil Cases; Spending corporate money is equated with "Free Speech"; 5th Amendment Right against double jeopardy; 1st Amendment Right of Free Speech is extended to commercial speech, 1st Amendment Right to not to speak is extended to corporations: More detail is available in this PDF from ReclaimDemocracy.org's work on corporate personhood.