The Absurdity of Corporate Rights

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The notion that a corporation has or should have rights — either natural rights or constitutional rights — the same as a natural person, is patently absurd, even when the corporation is regarded as an artificial person for purposes of legal convenience.

Corporations exist only as government franchises. They have no independent existence apart from the state. Corporations are privileged entities. The officers and directors of a corporation enjoy certain legal immunities that ordinary citizens do not. This is privilege. Corporate officers cannot be held legally liable for their honest mistakes nor can they be made to fund losses sustained by the corporation or its shareholders due to management error. There are other immunities enjoyed by those who operate the corporation. All this amounts to privilege not enjoyed by the citizenry at large.

The central theme of the American Constitution is that all power derives ultimately from the people. The people have natural rights and partially enumerated constitutional rights (which the 9th Amendment interprets expansively). The people are the source of government power and the Constitution is a legal contract among the states as representatives of the people, which contract having been ratified by the state legislatures elected by those people.

Now, if the people are the source of government power and the people have in fact created the government, and the government issues a corporate franchise or license, then it follows that unless the people have, via the Constitution, delegated to the government the power to confer rights on corporations (which power they have not delegated), then corporations have no rights except for possible limited statutory rights such as the right to due process of law.

As an artificial entity, it is impossible for the corporation to have natural rights or constitutional rights, and further, it is not possible that a government that was created by a higher power — the people — can confer on an artificial entity lesser than it rights equal to the rights naturally enjoyed by the higher power. That would be like humans creating an android endowed with godly powers. The creators of the android simply do not have the power to do that, just as the government does not have the power to confer rights on a corporation.

Thus corporations have no right to free speech, for example, and no right not to self-incriminate, no freedom from unreasonable search and seizure, etc, etc. Indeed, as privileged artificial entities, corporations are rightly subject to full regulation and are just as rightly the object of taxation. It is right and just and legally appropriate that corporations be fully regulated and taxed. Not taxed out of existence — that wouldn’t be good for anyone — but taxed on their privileged activity, which is the source of their income, which can be used as a measure of the activity.

There is no reason the government could not make laws criminalizing lying on the part of corporations. It could be — and possibly should be — a crime for a corporation to say they don’t use sweatshop or child labor if actually they do. Not just bum PR, but a crime. Similarly, government could proscribe any and all participation in politics by corporations. Even corporate lobbying could be legally prohibited. The justification used now by corporations for lobbying is that the Constitution guarantees the right of the people to petition the government for redress of grievances. That’s a right of natural people, not a right of the corporate artificial person.

Democracy can be restored in the United States by denying natural rights to the artificial entities known as corporations. It’s about time we did just that. The sooner we fix that little mistake, the sooner we restore government of, by, and for the people.

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