The Hypocrisy of Corporate Personhood

“Corporations have neither bodies to be punished, nor souls to be condemned; they therefore do as they like.” — often misquoted as “Did you ever expect a corporation to have a conscience, when it has no soul to be damned, and no body to be kicked?”

Edward Thurlow, 1st Baron Thurlow. 1731-1806. Lord Chancellor of England, 1778-1783, member of Parliament at end of eighteenth century

In light of the Supreme Court’s outrageous decision about campaign finance, I would suggest a move to treat corporations as persons — making them liable to imprisonment and even the death penalty, when they cause loss of life.

But no, the pro-corporate types invoke a brilliant act of legerdemain, making the death penalty for corporations unthinkable.  As I noted in Manufacturing Discontent:

“during the height of the scandal regarding Enron’s multibillion dollar frauds, a “Wall Street Journal opinion piece entitled, “Corporations Aren’t Criminals,” noted:  “Under the common law, a corporation could not be guilty of a crime because it could not possess mens rea, a guilty mind” (Baker 2002).  Sadly, the author was correct — at least in so far as the current courts are concerned. In the eyes of some judges, the law goes even further than ruling that corporation that violate the law lack a guilty mind.  They insist that corporate managers, who should possess a mens rea, have an ethical responsibility to violate the law when doing so will prove profitable for stockholders.  For example, Frank H. Easterbrook and Daniel R. Fischel, the former a federal judge as well as a senior lecturer at the University of Chicago School of Law, wrote:

It is not true, however, that there is a legal duty to enforce every legal right ….  Managers do not have an ethical duty to obey regulatory laws just because those laws exist.  They must determine the importance of these laws.  The penalties Congress names for disobedience are a measure of how much it wants firms to sacrifice in order to adhere to the rules:  the idea of optimal sanctions is based on the supposition that managers not only may, but also should violate the rules when it is profitable to do so. [Easterbrook and Fischel 1982, pp. 1171 and 1177 n]”

3 comments so far

  1. Rochelle Gordon on

    The corporation is viewed as “person” under corporate law principles. It is a form of business entity created by statute to provide a shield for its “owners” from personal liability. How about doing away with the corporate form of business entity altogether, along with the legal protections for its “owners” i.e. stockholders. If they had personal responsibility for corporate wrongdoing and corporate debt, then maybe their executive employees would take fewer risks.

  2. xoxdegxox on

    If they had personal responsibility for corporate wrongdoing and corporate debt, then maybe their executive employees would take fewer risks.

  3. […] The Hypocrisy of Corporate Personhood « unsettling economics. Leave a Comment […]

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