This is a pre-publication draft of a paper published in the GeorgetownJournal of Law & Public Policy. 2014
The Right to Bear Corporations? Reframing the Corporation asa Technology for Lobbying
Chris MacDonaldTed Rogers School of Management, Ryerson [email protected]
Abstract:
Recent debates about corporate political speech have focusedon the question of corporate personhood and the rights and obligations it implies. But even for those of us for whom the notion of corporate personhood is a crucial concept, it may make sense to think of corporations, in their lobbying activities, as tools of humans with interests, rather than as the holders of interests themselves. This paper examines the corporation not as a lobbying agent, but as a lobbying instrument, and asks whether framing lobbying in terms of the appropriate use of technology can enlighten on a vexed topic.
Essentialism is almost always a mistake. This holds
true for essentialism about the nature of the corporation.
There are situations in which it makes sense to characterize
the corporation as a person. There are also times when it
makes sense to characterize it as a collective1. There are
other times when it is apt to describe the corporation as a
nexus, or a hub. And there are times – I will argue – when
1 See e.g., Isaacs, Tracy. (2011) Moral Responsibility in Collective Contexts. Oxford: Oxford University Press.
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it makes sense to describe the corporation as a social
technology. Corporate involvement in the world of politics –
and, in particular, in lobbying –might be one of the issues
for which framing the corporation as a social technology
makes sense, or at least makes a difference.
Let us look briefly at the much-debated United States
Supreme Court decision, Citizens United, as a way of exploring
this point. The Citizens United case raises two issues of
central significance to scholars and commentators in the
world of business ethics. Both have to do, in one way or
another, with personhood. One issue is about whether (or
rather, in what sense) corporations are or ought to be
regarded as persons. The other issue is about the extent to
which the question of corporate personhood is relevant, or
whether it is in fact a red herring, in discussions of the
Citizens United decision and in discussions of corporate rights
more generally. I examine each of those issues here in turn.
My interest, however, is not in the Citizens United decision
itself; rather, that case is used here as a convenient point
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of departure for examining philosophical questions related
to corporate political influence.
Personhood
Some commentators have taken the Court’s expansion of
the free-speech rights of corporations in the Citizens United
decision to imply a new (or significantly augmented)
attribution of personhood to corporations, and have seen
this as a problematic development. More generally, the
debate over corporate personhood vis-à-vis the Citizens United
case has sometimes been cast as a debate between those who
favour corporate personhood (and who hence favour according
to corporations most or all rights and privileges normally
attributed to natural persons) and those who oppose
corporate personhood (and who hence favour few or no rights
for corporations). I argue that this assessment of the
Court’s decision is both factually incorrect and ethically
misguided.
First, the idea that corporate personhood is a new
development is factually incorrect. Of course, only very
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poorly-informed commentators have literally suggested that
corporate personhood is entirely novel. More commonly,
commentators have seen the Citizens United decision as part of a
trend, a continuation of an expansion of corporate
personhood they trace back to what they take to be its
origins in certain U.S. legal decisions of the late 19th
century.2 But as Micklethwait and Wooldridge point out, the
idea of treating corporations (or companies more generally)
as persons – legal entities in their own right – is very old
indeed. Business corporations (as well as associations of
various kinds) have long been treated as de facto ‘persons’
under the law.3 Though the particular rights, privileges, and
obligations of these non-human persons has of course changed
since the day in 1670, for example, when the Hudson’s Bay
Company received its royal charter from King Charles II of
England, the point remains that the idea that corporations
are legal entities separable from the human persons involved
2 The case most commonly mentioned in this regard is the 1886 caseof Santa Clara County v. Southern Pacific Railroad Company.3 John Micklethwait and Adrian Wooldridge, The Company: A Short History of a Revolutionary Idea, Modern Library, 2005.
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with them (whether shareholders or employees) is far from
new.
And it is important that corporations continue to be
thought of as persons. Indeed, it is entirely essential, for
several reasons.
First, corporate personhood is an essential mechanism
of modern capitalist economies. It is no exaggeration to say
that without personhood, there literally would be no such
thing as corporations in any meaningful sense. Hansmann and
Kraakman list “legal personality” as one of “the five core
structural characteristics of the business corporation”
(along with limited liability, transferable shares,
centralized management under a board structure, and shared
ownership by contributors of capital).4 But in fact,
personhood is arguably the core characteristic of
corporations. An organization could still be function
effectively as a business corporation even in the absence of
transferrable shares, for example. Shares could in principle
4 Henry Hansmann and Reinier Kraakman, “What is Corporate Law?” inThe Anatomy of Corporate Law, Reinier R Kraaman et al, eds. (Oxford: OUP, 2004).
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be held in perpetuity; that would have important
implications for corporate governance, among other things,
but the organization would not cease to exist or indeed be
fundamentally changed. But without personhood, there
literally would be no there there. The fact that courts
recognize corporations as persons is what allows them to own
property, to hire workers, and to sign contracts, activities
without which corporations would just be loose and
presumably transient collectives of individuals.
And if it is granted, as surely it must be, that
corporate personhood – including the possession by
corporations of certain rights – is essential from an
economic point of view, then it immediately becomes obvious
that corporate personhood, including a certain range of
obligations, is morally essential as well. After all, without the
notion of corporate personhood, consumers and other
stakeholders would be at an enormous disadvantage in dealing
with corporations. A consumer today can buy an Apple
computer, and Apple (the corporate person) is obligated to
honour the warranty on that computer. That is part of what
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it means to say that a corporation is a legal person – it is
an entity that a court can hold responsible for honouring
its promises. Without corporate personhood, having a
warrantee honoured is nearly unimaginable, especially in the
not-uncommon case in which the particular salesperson from
whom the customer bought the computer has left the company
by the time the customer needs to invoke the warranty. And
if tobacco companies were not persons for legal purposes,
then governments and consumers would not be able to sue them
for the health impacts of thier products. Similarly, if BP
were not a corporate person, there would have been no one to
hold accountable, legally and financially, for the
devastation of the Gulf of Mexico by the Deepwater Horizon oil
spill. The person or persons directly morally responsible
for that disaster – if their identity could even have been
determined – would not have had the financial resources to
mount a cleanup effort, and practical barriers would have
made it impossible to seek financial redress directly from
BP’s millions of individual shareholders.
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In sum, personhood in the sense that is at stake here
just is the possession of some set of rights (e.g., the
right to own property) and obligations (e.g., the obligation
to make restitution for harms). It would be economic folly
not to allow corporations a certain set of rights; and given
that allowance, it would be equally foolish not to attribute
to corporations a certain set of obligations. In short,
corporations must be persons.
The erroneous belief that corporate personhood is
something we could do without is likely rooted in the belief
that personhood is either a) an inherently human quality, or
b) equivalent with some specific, predetermined set of
rights. But personhood is not best (or even plausibly)
understood as a monolithic concept, let alone a
monolithically human one. The fact that the US Supreme Court
rejected some restrictions on corporations does not imply
that corporations are now full-fledged persons in the same
sense that competent adult human beings are. We have always
recognized many different "kinds" of persons, with different
sets of rights and responsibilities. Note that the rights
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and responsibilities of a child, for example, differ from
those of an adult (even though both are persons). And the
rights and responsibilities of a foreign tourist, for
example, differ from those of a citizen (even though both
are persons). The fact that corporations are regarded as a
type of person does not mean that they are next going to be
accorded, for example, the right to vote. And the fact that
they don't have certain rights (e.g., the right to vote, or
to adopt children, or to marry) does not mean they aren't
(in some sense) persons.
It is worth noting that the term “legal fiction,” often
used (by both opponents and proponents) in reference to
corporate personhood, also seems to make the error of
implicitly assuming that personhood is a monolithic concept.
Only if personhood is identified as involving some “true”
list of qualities does it become necessary to regard corporate
personhood as a fictional, second-best kind of personhood.
We ought instead to recognize that personhood comes in
different flavours.
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The point, here, is simply to call attention to the
fact that personhood is a quality we attribute to certain
entities because it makes sense to do so for particular
purposes. In attributing personhood to corporations, we are
merely recognizing that, in order for corporations to
achieve the human purposes we want them to achieve (whether
those be conceived of in terms of the needs of owners or the
needs of society), they need to be treated as having certain
rights and responsibilities.
Personhood as Red Herring
Personhood, even rightly understood, is not the only
way to understand corporations. And avoiding the personhood
debate has the virtue of avoiding fruitless metaphysical
debates. If instead we were to regard the corporation as a
mechanism through which ‘real’ or natural persons (humans)
achieve their ends, then the question before the Court in
Citizens United was really not about the free speech rights that
ought to be attributed to corporations (a part of their
special brand of personhood), but about whether there ought
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to be limits on the ways in which human beings may use the
corporate mechanism to express their political views.
Understood this way, protections offered to corporations are
in fact a mechanism for protecting the rights of
individuals. Compare the notion of the sanctity of one’s
home: no one believes that houses have rights, but most
people agree that protection of the privacy rights of
individuals requires that we treat people’s homes as if they
held special significance – almost as if they had rights
(e.g., the right not to be searched) themselves.
Legal scholar Larry Ribstein argued along similar lines
in a 1992 paper on corporate political speech. Ribstein
argues that the idea that corporations are legal persons
serves to obscure the important interests of individuals.5
Ribstein’s interest, however, is specifically in (American)
constitutional law, and his worry is that focusing on the
corporation as a separate entity the existence of which
depends on the consent of government stands to weaken
constitutional protections for the interests of the parties
5 Larry E. Ribstein, “Corporate Political Speech,” Washington and LeeLaw Review, Wntr 1992, v49, n1, p109-159.
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to the various contracts that (under the ‘nexus of
contracts’ view) make up the firm. If, for example, we
contemplate the property rights of corporations-as-persons,
we may end up ignoring or diminishing the rights of human
citizens over their own property, some of which may be bound
up with various corporations. A practical legal fiction,
then, may obscure or diminish an important set of
constitutional protections. In contrast, I argue that the
need for, and limitations on, corporate personhood are
relevant to a wide range of ethical issues far beyond
questions of American constitutional law.
Corporations are, in effect, a social technology, a
form of organization that has evolved (most especially over
the last century) to serve human interests. Those interests
are many and varied. For the most part, corporations serve
the interests of those who create them, although of course
those that are successful at earning profits in the long run
are successful at doing so precisely because they are able
to serve a range of other parties’ interests, too. A
corporation with a viable service or product to sell has a
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kind of ‘gravitational attraction,’ pulling investors,
employees, suppliers and customers into its orbit. More
generally, organizations (whether they be for-profit
business corporations, unions, or non-profits) exist to
serve human needs – typically, at least at the moment of the
organization’s conception, the needs of their founders. It
is sometimes argued that corporations are ‘creatures of the
state,’ brought into being for the good of the community. It
would be closer to the truth to say that states provide the
legal preconditions for the establishment of corporations
(and other organizations) because they see it as socially
beneficial for individuals to be able to use corporate (and
other institutional) forms to pursue their own ends,
whatever those ends may be (within certain more-or-less
obvious limits).
Seen from this perspective, the question of corporate
free speech is not a question of what rights corporations-
as-persons should have, but what limits there ought to be on
individuals’ use of the corporate mechanism in achieving
their own ends. If an individual’s aims are legitimate ones
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(such as expressing a political opinion) then the state
generally ought not interfere in the achievement of that
aim, provided that the means utilized are not themselves
antisocial ones. The relevant question then becomes whether
use of a corporation as a vehicle for expressing one’s
political opinions is permissible or not.
Two examples are instructive, here, in understanding
the significance of this instrumental view of corporations.
First, consider the use of a technology such as the printing
press or the megaphone in self-expression. In explaining why
the state does not generally interfere with people’s use of
the printing press, no one thinks to attribute rights to
printing presses themselves. It is individuals that have the
relevant rights; the printing press is merely a tool.
Similarly, when contemplating legitimate uses of a
megaphone, the point is not whether a megaphone has rights,
or what rights a megaphone ought to have, but rather the
conditions under which use of a megaphone is consistent with
respect for other people’s right to speak. Does the use of a
corporation as a mechanism of expressing political opinion
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make some voices too loud, effectively interfering with the
rights of others to be heard?
One obvious difference between a printing press or
megaphone and a corporation is that the latter is a social
technology, a way of organizing human efforts. It is a way
of organizing people and other resources, rather than a mere
composition of matter like a bullhorn. We might more
usefully, then, compare corporations to other social
organizations that individuals use to achieve their ends.
With regard to political speech, for example, we might
compare the corporation to a protest or a sit-in. It is
worth noting that under the Bipartisan Campaign Reform Act
of 2002, it would be perfectly legal for 100 citizens to
assemble in a public place, chant political slogans, attract
press coverage, and thereby broadcast their message to what
could in fact be a very large, even national, audience. But
were those same 100 citizens to file papers of incorporation
in order to pool their funds in order to photocopy flyers or
to buy airtime on a local television station, they could be
charged with criminal behaviour under the pre-Citizens United
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BCRA. Why would the one means of collective action – one
kind of social organization – be considered a legitimate
mechanism, and the other criminal? This is not a rhetorical
question; I do not intend to imply that there is no
difference. But surely asking the question this way is very
different from asking whether the corporate person formed by
the joint action of those 100 citizens has or does not have
particular free-speech rights.
Seen this way, the question of the ethics of corporate
lobbying becomes a question of whether it is appropriate to
use corporations as a mechanism through which to influence
government. This is part of a broader question about the
mechanisms by means of which we pursue broadly political
objectives, including not just the mechanisms by which we
influence elected and appointed officials but also the
mechanisms by which we influence our fellow citizens.
The worry about excessive political influence of
corporations is essentially a worry about whether the tool
being used is too potent. It is comparable, perhaps, to a
worry about nuclear arms. No one denies a country’s right to
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defend itself. But using (or even possessing) nuclear arms
is a highly problematic mechanism for doing so. Of course,
the specific analogy here might not be apt. No matter what
supporters of Hilary Clinton might say, the use of corporate
mechanisms to spread an anti-Hilary message is far from the
‘end of the world.’ But framing the issue this way – in
terms of the appropriate use of a mechanism or technology –
is a usefully different way of framing the debate than
framing it as a debate over the rights of corporate persons.
But let us return specifically to the question of
lobbying. Seeing the corporation as a mechanism leads us to
frame the ethics of lobbying in terms of the ethical limits
on using the corporate mechanism. Owning a gun is
permissible. Using a gun to defend your family is
permissible. But using a gun to rob a bank is not. Likewise,
forming a corporation is permissible. Using a corporation to
lobby for more clear and efficient regulation is
permissible. But using a corporation to lobby in a rent-
seeking way is arguably morally impermissible. This is
obviously not a fully-fleshed out argument, and nor is it
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clear that the specific analogy is the right one. But it
should be clear that framing the issue this way makes a
difference. And it has the added virtue of avoiding
unproductive debates over corporate personhood. Seen from
this perspective, personhood is simply irrelevant to the
question of the ethics of (and limits on) lobbying.
How might we go about assessing the corporation as a
technology for lobbying? A full treatment of that topic is
beyond the scope of this paper. But the range of questions
that would need to be dealt with can be sketched briefly. Is
the worry about this (or any) technology a worry about its
existence or its possession or its use? Is it sufficient to
put limits on who can (or can’t) use this technology
(compare: age limits for driving a car), or is any use of it
immediately problematic? Under what circumstances, and at
what times, is the use of this technology morally
appropriate?
At a higher level of analysis, we might ask questions
about whether the objections to this technology (or to
particular uses of this technology) are based on empirical
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results regarding its impact, or whether they are instead a
priori objections. Is the concern about individual use or
aggregate impact? Is possession and use of this technology
condoned as a matter of right, or because the consequences
are good?
Of course, applying such a framework faces challenges.
To ask about permissible uses of a technology implies that
we can identify those who wish to use it. In many cases, it
is not clear who is “using” the corporation. Is it
shareholders? Managers? Is it stakeholders more broadly? In
the case of a nonprofit, is it the donors? Or the members,
if the organization has members? Each of these alternatives
faces well-known problems. But that ought not preclude us
from at least exploring this line of thinking.
Lobbying is just one among many issues that might be
dealt with more constructively by thinking of the
corporation as a technology or as a mechanism, instead of
thinking of it as a legal person. Consider, for example, the
question of religious freedom. It makes no sense to
contemplate the religious freedoms of corporations
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themselves; corporations themselves cannot easily be thought
of as having religious commitments, and I know of no
religious congregation that admits corporations as members.
But limits on the use to which corporations are put might
well imply dubious limits on individuals’ freedom of
religion. Where an individual or group makes use of the
corporate form to pursue religious ends, such activities
ought to be thought of in terms of appropriate use of
technology, rather than in terms of the rights of
corporations. For other issues, on the other hand,
personhood is essential: we can make little sense of the
notion of accountability for the quality of goods sold if we
do not think in terms of corporate personhood.
Conclusion
This paper represents an attempt to sketch an agenda
for reframing the ethics of corporate lobbying as a question
of the ethical limits on the use of a particular social
technology, namely the corporation. Thinking of the
corporation as a technology aligns well with our
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understanding of the economic role of corporations as
mechanisms for building wealth. This framing also offers
instructive analogies with proper and improper use of other
technologies, including information technologies and
weapons. And it reminds us that corporations are many things
to many people, and that essentialism about what
corporations “really are” ought to be regarded as a grave
error.
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