Saturday, August 27, 2011

The Corporate Death Penalty

If corporations are people, they should not only have the rights of people, but also the responsibilities.  They should be able to suffer the same consequences individual people do for immoral and illegal actions, including, in particularly heinous crimes, the death penalty.

Now what I'm not going to say here is that corporations are not people.  It should be obvious that they are not, but the notion that they are has been a legal reality in the United States for over 100 years.  So as much as the Democratic Party was ostensibly up-in-arms over Mitt Romney's "Corporations are people" gaffe, they've been on the same bandwagon for over a century (since, in fact, the Democrats were the conservatives and the Republicans the liberals).

No, the point here is that, if corporate personhood is a legal and philosophical reality in the United States already, we ought to extend it to its logical limits.  As is, the corporation (capitalized?  I think maybe yes)...  Ahem, Mr. Corporation is protected by the constitutional rights of individuals.  That is, his individual rights are protected under the 1st and 14th amendments, among others.

Obviously, this has created all kinds of problems, not the least of which being the (increasingly less) recent Federal Election Commission vs. Citizen's United Supreme Court ruling that allows corporate entities to give unlimited sums of money to political causes.  The result was the meteoric rise in spending in the 2010 midterms, and the even more insane fundraising that has already occurred in the 2012 election cycle (Barack Obama is on pace to shatter George Bush's reelection fundraising totals, and not because of grassroots support).  Of course, corporate personhood has been around and caused trouble for a long time before FEC vs. CU, but this particular piece of legal interpretation has dire, self-perpetuating consequences in a way that few previous corporate personhood rulings and legislation have.

How do we get ourselves out of this mess?  Well the root of the problem is, in some sense, that we've endowed personhood on entities that have no conscience, no fundamental ethical code, and no accountability to anyone except for shareholders.  Because most shareholders are only distantly involved in the companies they are invested in, and because of the cultural maxim that all public companies must maximize profits at all costs,* there is little concern for little stuff like making sure people or the environment aren't harmed by defective (or even effective) products and services.  The result is a set of beings with human rights, but without human responsibilities.

* Indeed, they must not only maximize profits, they must actually make more profits than they were expected to make if they are to do well in the market.

 Getting rid of corporate personhood is well nigh impossible.  There's no political traction for it, no reason that either major party will challenge a nearly two-century old legal statute.  What I propose, then, is to force the corporate person to have a conscience by forcing him to be accountable for his actions.  There have been a great many well-known cases where corporations knowingly engaged in immoral behavior at the expense of consumers, the environment, or both.  While there are repercussions for such actions, they are usually slight and monetary.  While there are people held accountable for heinous corporate crimes, their prison sentences are lenient and their fines meaningless (and frequently uncollected).

Rather than approaching corporate responsibility quantitatively, let's approach is qualitatively.  When a corporation is convicted of a heinous crime - the intentional killing of a human being (or murder, as we call it in human-speak), for example - it should be subject to the same kinds of penalties an individual is subject to.  In particular, I believe we should sometimes put corporations to death.

What does that mean, exactly?  It means that the corporation is dissolved, it's assets liquefied and seized, and its board and CEO barred from serving with any other for-profit corporation in the future.  Is that too harsh?  Ironically, a great many people would say "yes," even though I'm talking about a corporation convicted of murder.  "Why," the argument goes, "should the people inside the company (and the shareholders) be legally responsible for the actions of the corporation?  The CEO is not the murderer."  Too which I respond, yes, but the corporation is being put to death, not the CEO.  The CEO and board, however, do share some responsibility for the corporation, and thus should not be allowed to serve with other for-profit corporations in the future.

What about the shareholders?  Well, they could conceivably cash out between indictment and conviction.  Otherwise, their investment would come to nothing.  What about the employees?  Well, unfortunately, they'd be out-of-work.  Now if that seems harsh and unfair to employees and shareholders (the "little people" in the equation), think about the other side of the equation.  If every single employee and every single shareholder of a corporation has that much stake in the corporation not committing heinous crimes, suddenly said company actually does have a conscience.  The CEO and board stand to lose plenty under this proposal, but the employees and the shareholders stand to lose even more, which makes them powerful advocates for the moral behavior of the corporation.

While the corporate death penalty - complete with severe professional ramifications for the board, as well as loss of employment for the employees and loss of investment for shareholders - would be a significant step towards ensuring a more ethical moral climate in the corporate world, it's far from a silver bullet.  Indeed, the hassle of prosecution, the potential economic ramification of a "too big to fail" company being put to death, and the difficulty of enforcement of the stipulations that would be necessary to stop the most corrupt of CEOs and boards from profiting even from the death of their companies (see Ken Lay at Enron) would prove significant hurdles to implementing such a proposal.  Hopefully, however, the very attempt would at least force us to recognize the absurdity of legal corporate personhood to begin with.

The biggest hurdle to the corporate death penalty, however, is that corporations would resist it, just as they resist rescinding corporate personhood in general.  Given their political influence, it would be nearly impossible to gain traction on a bill that allowed corporations to be put to death.  Given the Supreme Court's political leanings, it is also hard to believe they would uphold such a bill (though, in the process, they might at least be forced to declare the individual death penalty unconstitutional).  Nevertheless, I suggest that it might be an easier path to the end of corporate tyranny than any other we have before us.

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