In American colonial times, corporations had been chartered by the king for the purpose of exploiting the so-called “New World” and shovelling wealth back into Europe.
They were not popular with the colonists.

Early corporate charters were very explicit about what a corporation could do, how, for how long, with whom, where, and when. Individual stockholders were held personally liable for any harm done in the name of the corporation, and most charters only lasted for 10 or 15 years.
Most importantly, in order to receive the profit-making privileges they sought, corporations had to represent a clear benefit for the public good. And when corporations violated any of these terms, their charters were frequently revoked by the state legislatures.

After a series of lower court cases, the watershed moment came in 1886 when the US Supreme Court heard a case called Santa Clara County v. Southern Pacific Railroad. Citing the 14th Amendment, and without hearing any arguments, the Supremes declared unanimously that corporations are persons deserving the law’s protection. There was no public debate about this and no law passed in Congress — corporations received the status of persons by simple judicial fiat.

A key witness before the Supreme Court in the lead up to the 1886 was former Senator Roscoe Conkling, who had helped draft the 14th amendment to the Constitution. In his evidence he claimed that it was the intention of the drafting committee that the rights to be conferred on former slaves to citizenship were meant to be equally applied to corporations.

He had lied to the Supreme Court, but by then the legal fiction of corporate personhood had defined corporates’ as natural persons across the world.

Along with this abstract existence, corporations have acquired a lot more abstract property. Ownership of land and buildings is still important, but now corporate property also includes concepts like mineral rights, drilling rights, air pollution credits, intellectual property, and even — under NAFTA — rights to future profits.

Slavery is the legal fiction that a person is property. Corporate personhood is the legal fiction that property is a person.

Agreed John. The US just replaced one 'imperial' type entity with another equally as omnipotent.

The rights to future profits with the implication that taxpayers continually bail out the big end of town as with the GFC and many trade agreements, just beggars belief.

When you look at two-plus centuries of US legal history, the pattern is that people acquire rights by amendment to the Constitution — a long, drawn-out, difficult process — and corporations acquire them by Supreme Court decisions.

The writers of the Australian Constitution included reference to corporation powers in Section 51 xx. Four referendums from 1911 to 1926at which the people of Australia had been asked to enlarge the scope of Commonwealth power in relations to corporations were defeated. However in 1971 the high Court overruled its 1908 decision and thereby rendered those four referendums irrelevant.

Rights for corporations, because they’re about property, is about who is excluded; Rights for human beings, is about who is included.

Once corporations had crossed the line, they proceeded to pursue the Bill of Rights through more Supreme Court cases.
In 1893 they were assured 5th Amendment protection of due process.
In 1906 they got 4th Amendment search and seizure protection.
In 1925 it was freedom of the press and speech.
In 1976 the Supremes determined that money is equal to speech, and since corporate persons have First Amendment rights, they can basically contribute as much money as they want to political parties and candidates.
We find ourselves in a time when corporations have amassed enormous power and wealth, and control nearly every aspect of our lives, because they masquerade — under the law at least — as one of us.

Those who wished to end slavery, for example, worked for many years collecting information, refining their analysis, and debating among themselves. They came to understand the issue as one of human rights and that the whole institution of slavery was fundamentally wrong.

If you look at corporate personhood the same way, you will see that corporate personhood was wrongly given — not by the People, but by Supreme Court judges. Corporate personhood is a bad thing, because it allowed an artificial entity to obtain the rights of people

Interesting.

But it all seems to hinge on one premise:

>>In his evidence [Senator Roscoe Conkling] claimed that it was the intention of the drafting committee that the rights to be conferred on former slaves to citizenship were meant to be equally applied to corporations. He had lied to the Supreme Court<<

Do you have any evidence that he lied?

Very interesting post.

However it is highly dubious that the granting of an exclusive monopoly could ever be justified on the ground of the public good. (The granting of monopolies came in vogue, not because it conduced to the public good, but because it was one of the Crown's main and only ways of raising revenue in the 16th and 17th centuries after the decline of feudal tenures and before the advent of the modern tax base. Monopoly-granting is alive and well in its modern form of occupational licensing btw.)

Also in terms of modern political philosophy, based on democratic premises, how could you see your way clear to concluding that the old kings had the capacity to decide for themselves that something was for the public good anyway?

Pelican, governments bailing out the big end of town is not in the nature of corporations, it is in the nature of governments. They did it before corporations became the dominant form of business association, and they would do it whatever form of business association were dominant.

John, suppose corporations - by which I mean grant of limited liability and separate legal personality to an association - were abolished. This would still enable entrepreneurs to carry on in partnerships and joint stock companies. The advocates of corporation say the disadvantage would be the loss of all the benefits from entrepreneurial ventures that would not otherwise take place!

The advantage would be that entrepreneurs would be unable to privatise the profits and socialise the losses of their activities. The benefits lost, would be precisely those arising from activities that would not have taken place if the entrepreneurs had had to undertake the full losses. In other words, why shouldn't entrepreneurs bear their losses as well as enjoy their profits?

Could you please paint us a picture of what you think society and economy would look like if corporations were abolished?

"...governments bailing out the big end of town is not in the nature of corporations, it is in the nature of governments."

True but the corporations lobby for those policies and exert huge influence on governments. Just look at the influence of the armaments industry in the US and those contractors that feed off the war, and we would be naive to think that war is not only a strategic decision but an economic one. Ultimately governments need to grow a spine and corporations need to live or die by the principles of business.

I don't know why governments keep bailing out companies while blindly mouthing and extolling the virtues of free trade. I can understand if not agree with the thinking such as the subsidising of some industries (like the car industry) in an effort to save jobs. It just grates when at the same time governments keep telling us free trade is good for us then contradict that stance by subsidising industries because of the impact of free trade and access to cheap labour.

I don't think the author of this subject talked about abolishing corporations. He was discussing the status and rights of corporations under the US Constitution.

The provision for a safety net for a guarantee of future profits is one of the worst aspects of the 'socialisation of debt-privatisation of profit' scenarios.

It is a cake and eating it too situation.

Pelican
Yes I agree.

"Ultimately governments need to grow a spine and corporations need to live or die by the principles of business."

That's the whole thing in a nutshell.

The Corporates took control of the USA when President Woodrow Wilson signed away the right of Congress to issue currency in the name of all the people.The Private Federal Reserve now has absolute power.They elect presidents,start wars and bring on recessions and depressions for profit.You are all witnessing it right now.

Yes but the people wouldn't be any better off if it was the president, or the congress, who were issuing the same amount of fake fiat currency, would it?

Peter Hume the currency is only fake when a Govt or private banking system produces more than the increases in GDP.Our private bankings system already does this.If the Govt produces new money it comes to us as a tax credit,private banks create new money as debt so we pay 3 times as much.How you ever thought where the new money comes from? Not all new money creates inflation.

The increases in GDP belong to all Australians and not select group of private banks.30% of our mortage money comes form OS banks who just create it in their computers anyway.What's wrong with our Govt computers.In the USA the amount of mone in the econmy is now equal to the amount of debt.The debt can never be repaid.It is the Private US Federal Res who created too much money and now is causing this depression by further inflating the derivatives bubble and restricting the supply of money to the real econmy.The bailouts were for the very devils who created the problem in the first place and so it continues today.

@John Jawrence Ward

Hi John.. I see you are new to OLO... (I've been in my usual spot.. Siberia for a month so have not had a chance to say "g'day" until now.)

All I want to know please is what is the underlying motive of you bringing your piece ? Do you propose an alternative.. a solution..an ideology or ..how and if so...what?

Pelly, you say:

"The US just replaced one 'imperial' type entity with another equally as omnipotent."

*smile*.. and there we have it... C'est la vie

Arjay
"Peter Hume the currency is only fake when a Govt or private banking system produces more than the increases in GDP."

Prove it.

Peter Hume,money has no intrinsic worth,it just represents human potential,store of wealth and the medium of exchange.Our financial wizards have turned money into a commodity thus perverting the direction to the true productive economy.

Who should own your increases in productivity Peter? New money needs to be created to equal it,other wise your potential withers away.Should a private banking system own it or should it be shared in a collective system of tax credits ie you pay less tax because your Govt can create this new money as a credit.

When we let private banks create new money to equal increases in GDP,the wealth can never be realised since the harder we work the more debt we incur, ie the private banking system creates increases in our productivity as debt.Do you now understand the conundrum.

What would change if corporations did not have personhood?
Well, here are a few examples. If corporate persons no longer had first amendment right of free speech, we could prohibit all corporate political activity — no more contributions to candidates or parties, no more lobbying. Just think of the ripple effect on our political process if no corporate money could contaminate it!
We could have done without the idiocy of Work Choices.

Queen Elisabeth I gave limited liability to the 'Golden Hind' and allowed piracy to benefit the royal purse; we still live with privateers feathering their nests behind the corporate Person.

Corporate persons are now protected against search without a warrant under the 4th Amendment.

This means that OH&S and the EPA have to schedule their inspections at a time convenient to corporate managers. If you think the air, land, or water in your community is being polluted, or the workers mistreated, neither you nor the government can go on corporate property to get information without legal permission. Just think of the consequences if corporate polluters were no longer shielded by the Constitution!
Here in Tasmania whether it is Poisoning of forests or OH&S the directors simply plead guilty on the corporations behalf, pay the fine, and carry on doing whatever they were doing. No real person is held accountable.
If Directors and Executives were licensed as Doctors are to be struck off if they do harm to society, other industries and the corporation the are responsible for, we would see less robber baron or sociopathic behaviour by corporations.

If we simply accept the "way it is" we will continue to have more GFC's, Massive environmental damage and remain powerless to confront Global Warming or avoid wars made to profit Halliburton and others.


If corporate Personhood is eradicated; a floodgate of possibilities opens for citizen sovereignty to replace corporate governance.

In Tasmania we must not let Corporate Personhood contaminate the Human Rights Charter. We can prevent this by inserting a clear and unambiguous exclusion into the charter to turn this insidious legal disease back on itself.

Hi, AlGorish,
1. We can start by revoking the charters of especially harmful corporations who have inflicted mass harm on innocent people..
2. We can recharter corporations to limit their powers and make them entities subordinate to the sovereign people. For making corporate managers and directors liable for the harms done by corporations.
3. We need to reduce the size of corporations by breaking them into smaller units with less power to undermine democratic institutions.

4. We can initiate referendum campaigns, or take action through state legislatures and the courts, to end constitutional protections for corporate persons.
5. We can prohibit corporations from making campaign contributions to candidates in any elections, and from lobbying any local, state, and federal government bodies.

6. We can stop subsidy abuse and extortion by corporations through which large corporations rake off billions of dollars from the public treasury.
7. We need to launch campaigns to cap salaries of corporate executives.
8. We can encourage worker and community-owned and -controlled cooperatives and other alternatives to conventional limited liability profit-making corporations.
9. We can prepare model corporation codes based on the principle of citizen sovereignty, and begin the campaign for their adoption.
10. We can invigorate, from the grassroots up, a national debate on the relationship between public property and private property -- including future value -- and the rights of natural persons, communities, and other species when they are in conflict with those corporations.
This whole subject of how we define property rights is at the heart of much of the accumulation and codification of corporate power.

Why are so many corporations plowing their excess cash into mergers and dividends and buybacks instead of jobs and research and development? Top corporations are plowing their cash into mergers, buybacks, and dividends because the executives who run these corporations have all the incentive in the world to do just that.
Top executives today don’t get rich making the sorts of investments that create jobs and make their companies more efficient and effective. Those investments, after all, may take years to produce positive results. Instead, 21st century execs take the fast track to fortune. They manipulate their corporate share price. The higher and quicker their share price rises, the bigger their personal windfall — since top execs get the vast bulk of their pay in stock-related compensation.
Since then, stock-based awards have sent executive pay soaring. After adjusting for inflation, as an Institute for Policy Studies report recently noted, CEO pay last year more than doubled the CEO pay average for the 1990s and more than quadrupled the CEO pay average for the 1980s.
Since the 1980s, the economic recovery from recessions have also been getting weaker and weaker. The share price manipulation strategies that work just fine for executives aren’t working for everyone else.

Lawmakers certainly could — if they dared to leverage the power of the public purse. Almost every major corporation currently profits big-time off that public purse, either via government contracts or subsidies or tax breaks. Lawmakers, if they chose to deny these benefits to companies that pay execs excessively more than workers, could turn corporate pay incentives upside-down.

JJW
The purpose of economic activity is not to “create jobs”. We could create jobs by digging holes and filling them in again.

The purpose of economic activity is to satisfy human wants so as to allocate scarce resources to more urgent and important wants in priority to lesser.

So your argument against corporations is not that they are not creating jobs per se, but that they are misdirecting scarce resources from more to less urgent or important uses, fair enough?

The problem is more radical than you diagnose. If corporate personhood and limited liability cannot be justified, then they should be abolished.

You criticize corporate personhood and limited liability, but then go on to assume they should continue, with a whole lot of proscriptions and compulsions which assume that you know how to run the economy. You don’t. No-one does. You make all the same assumptions that were made by central planners in socialist states in the 20th century. It is NOT an intellectually or practically approach to a) see a problem and b) assume that government has a god-like power to fix it. Governments are NOT gods or supermen or angels. They CANNOT just redesign the economy at will. If they could there’d be no need for private property or individual freedom. It is a complete and total furphy.

The idea that we should keep legal personhood and limited liability for corporations, and then impose a whole lot of central planning controls over the economy is crazy. Look at the United States government. It’s finances are a complete mess, and it can’t and doesn’t even comply with its own accounting standards that it imposes on corporations! If it was a corporation, all its directors would be in prison for life! What absurdity is it to *presume* that it has the knowledge, competence or goodness to direct or manage the economy?

Arjay
Maybe so, but that still doesn’t prove that currency is only fake when a Govt or private banking system produces *more than the increases in GDP*.

Please prove it.

Peter Hume,

My purpose in these posts is to stimulate a discussion to prepare submission to the High court under section 75.5 to amend corporations powers in the Australian Constitution as our references are 'fruit from a poisoned tree'.

In 1886. The US Supreme Court ruled in Santa Clara County v. Southern Pacific Railroad, that a private corporation was a "natural person" under the US Constitution, sheltered by the 14th Amendment [(even though that amendment had been written and ratified in 1868 to protect the rights of freed slaves).

Following this ruling, huge, wealthy corporations were allowed to compete on "equal terms" with neighborhood businesses and individuals. "There was no history, logic or reason given to support that view," Supreme Court Justice William 0. Douglas wrote 60 years later.

Once corporations were legally defined as "natural persons", they automatically were endowed with the same "Bill of Rights" as human beings, and so came to possess and then exploit with devastating consequences, the same "rights" of the freedom of speech, and the ability to participate in elections and lobby elected officials.

To understand how corporations prior to the Civil War were legislatively defined, so we may better appreciate what we can discover and make use of today.

Up to the mid-1800s,corporations had limited duration, 10 years, 20 years, 30 years -- they were not given forever, like corporate charters are given today.

The amount of land a corporation could own was limited.

The amount of capitalisation a corporation could have was limited.

The corporation had to be chartered for a specific purpose -- not for everything, or anything.

The internal governance was very different --shareholders had a lot more rights than they have today, for major decisions such as mergers; sometimes they had to have unanimous shareholder consent.

There were no limitations protections on liability -- managers, directors, and shareholders were liable for all debts and harms and in some states, doubly or triply liable.

I say these are the conditions that both private and public enterprise should be held to.

Do you mean to say you are preparing to make a submission in the High Court? They don't "amend" powers in the Constitution, other than by re-interpreting them. Do you mean you will be asking them to re-interpret the corporations power down so as to restrict legal personality?

For my money, incorporation started out, and subsists, as privileges granted by the state. There is no reason why anyone should have these privileges. If they were abolished, it just means that business would be done through partnerships and joint stock companies, who would stand or fall on their own merits, which is as it should be.

But government should neither be granting limited liability on the one hand, nor dictating terms of business, such as capital limits, on the other. How would government know what the appropriate limits are? They wouldn't have the faintest idea. The remedy for dysfunctional governmental meddling is not more meddling, it's less.

During and after the Civil War there was a rapid increase in the number and size of corporations, and this form of business was starting to become a more important way of holding and protecting property and power.

President Abraham Lincoln wrote.
"We may congratulate ourselves that this cruel war is nearing its end. It has cost a vast amount of treasure and blood. . . .

It has indeed been a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavour to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.
God grant that my suspicions may prove groundless."

The passage appears in a letter from Lincoln to (Col.) William F. Elkins, Nov. 21, 1864