Supreme Court

Corporate Personhood and the Constitution

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The Cato Institute's Ilya Shapiro patiently explains why critics of the Citizens United decision completely miss the point about why corporations are entitled to free speech:

This line of attack demonstrates a fundamental misunderstanding of both the nature of corporations and the freedoms protected by the Constitution, which is exemplified by the facile charge that "corporations aren't human beings."

Well of course they aren't — but that's constitutionally irrelevant:  Corporations aren't "real people" in the sense that the Constitution's protection of sexual privacy or prohibition on slavery make no sense in this context, but that doesn't mean that corporate entities also lack, say, Fourth Amendment rights.  Or would the "no rights for corporations" crowd be okay with the police storming their employers' offices and carting off their (employer-owned) computers for no particular reason? — or to chill criticism of some government policy.

Or how about Fifth Amendment rights?  Can the mayor of New York exercise eminent domain over Rockefeller Center by fiat and without compensation if he decides he'd like to move his office there?

So corporations have to have some constitutional rights or nobody would form them in the first place.  The reason they have these rights isn't because they're "legal" persons, however — though much of the doctrine builds on that technical point — but instead because corporations are merely one of the ways in which rights-bearing individuals associate to better engage in a whole host of constitutionally protected activity.

That is, the Constitution protects these groups of rights-bearing individuals. The proposition that only human beings, standing alone, with no group affiliation whatsoever, are entitled to First Amendment protection — that "real people" lose some of their rights when they join together in groups of two or ten or fifty or 100,000 — is legally baseless and has no grounding in the Constitution.

Read the whole thing here. Reason's coverage of Citizens United is here.

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  1. This is one of the stupidest memes on the left.

    1. Corporations help people make money, and making money is evil.

      1. Government prints money.

  2. My in-laws are from Europe and they can never get the corporate personhood convenient legal fiction thing. It’s a way our country’s legal system has developed to adapt old legal processes to modern business methods. But in Europe, they really seem to think that maybe someday I could marry IBM

    1. As long as it is only one IBM you are fine.

      1. And you are the opposite gender.

        1. No longer required in some places and soon not to be required anywhere in the US. I stand by my earlier comment.

  3. Nicely done, Ilya.

    For the most part, corporate “personhood” is simply a necessary precondition for things like corporations entering into contracts, corporation being subject to lawsuits, and the like.

    Truly, the level of ignorance on the left about corporations is impressive. Many seem to believe, in spite of daily reports of corporations being held liable for millions of dollars, that corporate “limited liability” means corporations can’t be held liable. You’d think a bunch of collectivists would know more about collectives.

    1. You’d think a bunch of collectivists would know more about collectives.

      (grins)

      R C, you know some collectives are more equal than others.

    2. I also like how it’s always corporation this or corporation that, like the same issues don’t apply to other types of organizations. What of LLCs, LPs, nonprofits, unions, churches, clubs, partnerships, consumer advocacy groups, political parties, etc.? Some of the foregoing overlap, but the point remains. Should people in groups not be allowed legal protections simply because they are in groups?

      Limited liability is one of the core features of a dynamic and wealthy economy. We need it, otherwise, all of us would have all of our money in savings accounts, earning jack. Investment would dry up to a trickle, and we’d have bigger problems than whatever the left thinks businesses do.

      If the left would purge itself of its irrational, paranoid, and largely illusory beliefs about the power of businesses, they might actually realize that the government isn’t the ultimate solution to everything.

      Sure, there are bad things that businesses do, but that’s a reflection of a flawed humanity more than a flawed system. Not to mention, one huge delusion is the idea that businesses wield influence on government in anything remotely like a unified manner.

      1. Except, then, they would cease to exist, swallowed up by a maelstrom of rationality.

        Self-awareness will do that, you know. Just ask Rumplestiltskin.

        1. A rationalarity?

      2. What of LLCs, LPs, nonprofits, unions, churches, clubs, partnerships, consumer advocacy groups, political parties, etc.?

        Technically, almost all of those are chartered as corporations. They’re just not, as you point out, what people think of when they think of corporations.

        1. I don’t think that’s right. There are some really fundamental legal (and tax) differences among all those entities. LLCs don’t even have “charters” but have articles of organization.

          1. Mine is going to have Articles of Confederation. Just old school that way.

          2. Depends on the state, actually.

          3. Some states make more of a legal distinction than others between the groups.

            1. True enough. I think some states don’t recognize in LLCs the same amount of limited liability as they do in corporations.

      3. Good points, and here’s another issue: even the freaked-out lefties agree there should be an exception for corporations that happen to be “the press.” Clearly they intend to include the NY Times, etc., but what if some citizens formed a corporation to make a political documentary, like, say, Michael Moore or Citizens United? Are they not to be considered “the press”? Why not?

        This case would have a very different flavor if it had been Exxon that made the movie, but I see no practical or essential difference between Citizens United and the NY Times as corporations and the press engaging in political speech.

        1. Really freaked-out lefties see as much of a problem from big media corporations as they do from ExxonMobil. These are the kind of people who think Hugo Chavez has the right approach to media power.

  4. Someone get this article off to Bill O’Reilly. He’s afraid the furrin corporations (Putin was cited) will pour jillions into our elections to influence American politics. To stop this horror, O’Reilly appears to support speech bans on corporations.

    1. I think you may have just hit on a way to get him, and everyone on MSNBShriek to STFU forever.

      It’s a very high price to pay, but it may be worth it. It just may be….

  5. Another point to: without the legal fiction that corporations are “persons,” they could not sue or be sued the way real people can be.

    More important, though, is the point many other posters here have made before: the issue is not the corporation’s “rights.” It is the explicit bar, contained in the constitution, that prohibits government from adopting any law infringing freedom of speech.

  6. I don’t agree with the people who are upset that corporations have First Amendment rights, but I think that their issue isn’t that groups of individuals can have such rights. Instead, I understand them to complain that such groups shouldn’t be able to enjoy special protections, like limited personal liability, without giving up something in return. And, contrary to RC Dean, I haven’t read anyone who misunderstands limited liability in this context.

    1. From what I’ve seen, I don’t think any of these critics understands limited liability very well.

      I will note one problem with the system: Large shareholders often do control decision-making and, really, should be liable for some things. In theory, a plaintiff can “pierce the corporate veil”, but, in practice, that’s very hard. I don’t want to make that too easy, as it would gut limited liability, but it should be less difficult, particularly in regards to criminal acts, than it is now.

    2. And, contrary to RC Dean, I haven’t read anyone who misunderstands limited liability in this context.

      Keep reading. Hell, even around here, we’ve had lefties cry and moan about how corporations have special privileges because they get limited liability and can’t be held responsible.

      1. Oh, I left something off my list: Governments. They have even more limited liability, and, in theory, they aren’t supposed to have any rights. Why doesn’t the left go after them? They kill people and stuff, after all.

        1. Mockest thou not the gods, heretic!

          1. And tell the pleasant prince this mock of his
            Hath turn’d his balls to gun-stones; and his soul
            Shall stand sore charged for the wasteful vengeance
            That shall fly with them: for many a thousand widows
            Shall this his mock mock out of their dear husbands;
            Mock mothers from their sons, mock castles down;
            And some are yet ungotten and unborn
            That shall have cause to curse the Dauphin’s scorn.

    3. Instead, I understand them to complain that such groups shouldn’t be able to enjoy special protections, like limited personal liability, without giving up something in return.

      They do give up things in return. There’s a special tax system, there’s administrative warrants, special regulations, and other things.

      I can’t say whether that’s a fair deal, but they do give things up.

      1. Who are these idiots? Corporations DO NOT have “limited liability.” Only their investors do. The corporation has the same unlimited liability as any individual does. Indeed, precisely because of their greater resources, they are specifically targeted for lawsuits by trial lawyers. They have no “special protection.”

        1. Which, of course, is exactly true. It’s also true that management doesn’t have limited liability in any real sense. There are some gray areas when they act in good faith, etc., but anything fraudulent or criminal won’t fall into that bucket. Board members are a little safer than management in that regard.

  7. It’s fun to watch progressives’ heads explode over this decision. (NSFW!)

      1. I want to form a corporation to promote speech like that…

  8. Sorry, I find this line of argument completely unconvincing. Yes, we have decided to treat corporations as people under the law in some contexts. Do we then have to treat them as people in all contexts? If they were actual people, the answer would be yes. If you are a citizen you get all the rights of a citizen and Congress can’t pass a law stripping some rights from one class of citizens, say naturalized ones. (The Constitution does deny one right to naturalized citizens, but that’s the Constitution)

    Do corporations have all the rights of people? Of course not. They can’t vote even if over 18. Two corporations with male C.E.O.s can merge even if they are not in Hawaii. Congress may have decided to treat them as people in some respects, but I see nothing in the Constitution that requires Congress to do so in all cases. Should I presume Shapiro’s next article will patiently explain that corporations should be allowed to vote and hold office?

    1. Hawaii? I think you are a bit late on that one.

      And as someone pointed out above, the first amendment says nothing about the rights of either individuals or corporations or any entity. It says that the government cannot restrict free speech. What part of “congress shall pass no law” is so hard to understand?

    2. “Congress shall make no law … abridging the freedom of speech, or of the press;”

      How does that imply that anybody or anything has any rights of any kind? All it says is Congress does NOT have a certain right.

      1. And the presiden’t isn’t the Congress and the cops answer to him. Problem solved.

    3. Should I presume Shapiro’s next article will patiently explain that corporations should be allowed to vote and hold office?

      No, because the right to vote and hold office is specifically granted to people and can only be employed by them. Read the First Amendment, and tell me where it says that it’s limited to people.

      Besides, answer the questions posed in the article about the Fourth and Fifth Amendment. Do you think that library records, your call records, and anything else about you held by a corporation should be available without a warrant? Because the records are corporate property, do they lose all Fourth Amendment protection?

    4. Citizen’s United was a bunch of people who formed a non-profit corporation specifically for the purpose of making political speech.

      Why precisely should the fact that the group they formed is called a “corporation” mean that they can’t speak politically.

      That makes no sense at all. Why pick this group of people who are obviously political acitivsts, and not McDonalds or Nabisco, to start squashing corporate speech?

      1. Answering a rhetorical question:

        Because Citizens United was making political speech critical of people in power. McDonald’s keeps their head down and plays nice with Hillary.

  9. Wow. Way to miss the point, Drogo. Let’s try once more:

    1) Individuals have rights.
    2) These individuals do not lose those rights when they join with other like-minded individuals in voluntary collectives of whatever nature.

    Let me know where you got lost.

    1. WHOA!! Slow down there BP!

      I think it got lost right before “no law.”

      1. That must be it, JW. When progressives hear “Congress shall pass no law”, they just can’t wrap their heads around it.

        1. Is this a good point for a 2nd Amendment threadjack?

    2. What rights were those individuals denied before this recent ruling? I can’t think of any. I agree that “Congress shall make no law…”, but I think the confusion over the nature of corporations is legitimate. I think this is something you can not fail to run into when dealing with government created, abstract, legal entities. I think a distinction has to be made between human individuals and abstractions like states and corporations with respect to the idea of rights. I think the SCOTUS was correct in recognizing that any limit on speech is Unconstitional, but that doesn’t change the fact that only humans can have rights. States may have powers and corporations may have privileges, but to talk about rights with respect to abstract, legal entities only produces confusion.

      1. What rights were denied?!? A group of individuals who got together specifically for the purpose of making a film critical of a political incumbent were prevented from airing their position based on an unconstitutional law.

        Only the most basic right imaginable…

  10. “Or would the “no rights for corporations” crowd be okay with the police storming their employers’ offices and carting off their (employer-owned) computers for no particular reason?…Can the mayor of New York exercise eminent domain over Rockefeller Center by fiat and without compensation if he decides he’d like to move his office there?”

    Those things are governed by laws. Ordinary laws. The governor can’t take over Rockefeller Center because it is against ordinary laws, not because Rokefeller has rights enshrined in the constitution.

    The Declaration says it like this: “that they are endowed by their Creator with certain unalienable Rights…”

    Who creates corporations? The government. So any rights corporations have were given to it by its creator government.

    1. So, some dude, you would have no problem if the “ordinary laws” were changed to allow the State to seize property from corporations, or to search and seize evidence without a warrant?

      1. Or force corporations to officially adopt a religion in their charter.

    2. So you think that library records, your call records, and anything else about you held by a corporation should be available without a warrant? Because the records are corporate property, they lose all Fourth Amendment protection?

      1. That’s only wrong when the president is a Republican. Under Obama it is justice.

  11. Drogo, perhaps you could let us know where in the Constitution it says that, while the government is limited in the powers it can exert, those limitation apply only to individuals and not to corporations or other collective bodies.

  12. The government does not create corporations. It recognizes them. They’d exist in some other form if it didn’t.

    Also, and this is an important point, corporations are recognized and chartered by state governments, not the federal government.

    1. Too true, ProL. The answer is obvious. We must destroy Delaware, and the scourge of the American corporation will be restrained.

      1. Damned Delawarean menace!

      2. Can we do it when Biden is back home visiting?

  13. I don’t believe in stripping corporations of the right of free speech

    I believe in stripping corporations owners and the government employees of the special legal protections from liability they get and return them to the same status as all other people.

    1. Really, it’s unfair to conflate limited liability in the private sector to sovereign immunity. There are profound limits to limited liability’s protections. Government, on the other hand, gets away with shit you would not believe. And that’s just in the U.S.!

      1. Limited liability is a subset of the sovereign immunity of the state. That is where the first modern limited liability corporations got their limited immunity. The insiders in Britain and Netherlands got their buddies to give them part of the sovereign immunity and created corporations like the Dutch East Indies Company and the British East Indies Company.

        How do you think that the government can grant corporations limited liability, they simply give them a limited version of their own sovereign immunity

    2. I would believe in stripping majority shareholders, or even some significant shareholders. They actually have significant say in how something is run. However, making a tiny individual personally liable for any action of a company is a recipe for entirely shutting the small investor out.

      Do you really want a situation where an investor holding a single share of old GM or Chrysler would have to have surrendered her life savings when the companies went bankrupt?

      1. They voluntarily joined in the collective known as GM then they take the responsibility for that. Don’t join if you don’t know what is happening and what your risks are

        And if GM’s debts are so large that they will take the single shareowner entire wealth that shareowners should never have bought in the first place. Which would have meant that the badly run GM would not have gotten so large and their debts so deep. Both the shareowners and the management need to work harder on due diligence and proper running of the corporation they own and manage and using the government to shove their debts onto others.

        And if the shareowners don’t pay the who will pay instead? The debt exists, it does not disappear, someone has to pay for it. Who do you think should pay, the taxpayer?

        Once a debt is created it does not disappear until either the debtor pays it off, the creditors pay it off or some third party pays it off.

        1. And if the shareowners don’t pay the who will pay instead? The debt exists, it does not disappear, someone has to pay for it. Who do you think should pay, the taxpayer?

          The creditors knew the bankruptcy law when they lent the money. Unless the government cheats like with GM and Chrysler, of course.

        2. We should bring back debtor’s prison too.

          1. If you steal money shouldn’t you be prosecuted? And borrowing money and not returning it is stealing. No different then if someone pick pocketed you. Whether or not they should go to prison depends on what would be best in getting restitution for the theft

        3. They voluntarily joined in the collective known as GM then they take the responsibility for that. Don’t join if you don’t know what is happening and what your risks are

          The lenders voluntarily lent the money to the collective and they take responsibility for that. Don’t lend if you don’t know what is happening and what your risks are.

          The incredible pointlessness of your argument stems from your misunderstanding of the differences and similarities between small shareholders and bondholders.

          Both of them involve lending amounts of money to the corporation in exchange for certain rights. (At first creation; after that, it’s just trading around those rights from person to person.)

          People voluntarily accept different rights and treatment for these two statuses; chief among them is the order of priority for who gets paid in a bankruptcy.

          If we called shareholders a “special class of creditors” would you not care anymore? Especially for, say, high dividend yielding utilities, there’s practically no difference.

          1. If “shareholders a “special class of creditors” then who owns the corporation? Or do you now propose the free market without ownership? And if there is no ownership then who is responsible? The board or the management, they are nothing but hirelings

            1. Or do you now propose the free market without ownership? And if there is no ownership then who is responsible? The board or the management, they are nothing but hirelings.

              You’re the one who is proposing the free market without ownership, because if the world adopted your rules no one would own a company, they would all just be bondholders with convertible bonds.

            2. Or do you now propose the free market without ownership? And if there is no ownership then who is responsible?

              Non-profits don’t have owners. If we adopted your rules, every company would just switch to bondholders and have no owners, like nonprofits.

              Would you ban all nonprofits to stop that?

        4. They voluntarily joined in the collective known as GM then they take the responsibility for that. Don’t join if you don’t know what is happening and what your risks are

          And if GM’s debts are so large that they will take the single shareowner entire wealth that shareowners should never have bought in the first place. Which would have meant that the badly run GM would not have gotten so large and their debts so deep. Both the shareowners and the management need to work harder on due diligence and proper running of the corporation they own and manage and using the government to shove their debts onto others.

          And if the shareowners don’t pay the who will pay instead? The debt exists, it does not disappear, someone has to pay for it. Who do you think should pay, the taxpayer?

          Once a debt is created it does not disappear until either the debtor pays it off, the creditors pay it off or some third party pays it off.

          You are offering a solution which does not have a problem.

          You realize, of course, that creditors who loan money to corporations require something called “collateral”. Not only that, they accept third parties (such as the CEO of the corporation) offering collateral for the loan to the corporation.

          1. So where is the collateral for AIG? They seem to have come up way short. Yet the owners get to walk away with just the loss of their stock

            1. So where is the collateral for AIG? They seem to have come up way short. Yet the owners get to walk away with just the loss of their stock?

              I do not know; I am not one of AIG’s creditors.

              And the owners did lose their stock value; you seem to not take this into consideration.

              1. “””And the owners did lose their stock value; you seem to not take this into consideration.””

                You better re-read what I posted directly above since I did take that into consideration. That stock is worthless because the owners did not properly supervise their corporation. And how does that compensate the people AIG owes money too.

        5. As it happens I own a single share of Motorola stock. I used to work for Motorola, which has this employees stock purchase program. I never used it, but they put one share in my account when they initialized the thing.

          By your argument, if Motorola got sued for negligence and went bankrupt, my life savings and all my property should be seized to pay the claimants. because I own ONE SHARE of stock.

          If this is your concept of “social justice”, thanks, but no thanks.

          Progressive “Social justice” = fucking over anyone remotely, tangentially connected to “profit making” or “corporations”.

          Libertarian “social justice” = having a simple, uniform set of rules and regulations applied equally to everyone. Respecting private property. Respecting individual liberty.

          I’ll take B, by a landslide.

          1. No only that, but if you have more assets than someone who owns 1M shares of Motorola stock, they should go after you first. Clearly that makes total sense.

          2. Collectively along with all the other stockowners you own Motorola. If Motorola owes 100 million and there was 1 million stockowners then you would owe 100 dollars since you only own 1 share.

            On the other hand if you and your fellow stockowners had limited liability you could simply lose your stock and the people who are owed 100 million get stiffed. How is that not theft? You owe yet your don’t pay

            1. The lenders KNEW that the shareholders had limited liability when they lent the money. It’s their own fault if the loan goes bad and they don’t get paid back. That is a risk they were willing to take.

              1. Not everyone who is owed had a contract. If you run your car into your neighbors house you owe the damages even without a contract.

            2. On the other hand if you and your fellow stockowners had limited liability you could simply lose your stock and the people who are owed 100 million get stiffed.

              No, they get to keep the collateral.

            3. Collectively along with all the other stockowners you own Motorola. If Motorola owes 100 million and there was 1 million stockowners then you would owe 100 dollars since you only own 1 share.

              No, that’s not how unlimited liability works. Under unlimited liability, if there are 1 million stockowners besides you but their total assets add up to 50 million, then you’re stuck for the entire 50 million left over.

          3. Well, wouldn’t your liability be proportional to interest in the corporation? Shareholder limited liability does not exist to protect the guy who owns 3 shares. It exists to protect the officers who often own hundreds of thousands of shares and has a very massive personal interest.

            1. It isnt proportional in other situations, why would it be for shareholders? Its why lawsuits always go after the deepest pockets not the person most responsible.

      2. “However, making a tiny individual personally liable for any action of a company is a recipe for entirely shutting the small investor out.”

        Strictly speaking, it would mean shutting them out of “ownership” that comes without any real control other than the right to sell that stake.

        Small, silent investors would have to become creditors instead of “capitalists”, but that might be for the best in terms of the agency issues corporations have right now.

    3. DJF, the “limited liability” of corporate shareholders is just a formal legal recognition of idea that if you don’t do something wrongful yourself, and don’t have any actual knowledge or authority over someone who does something wrongful, then you shouldn’t be held liable.

      There is no good reason to hold passive investors directly liable for much of anything.

      Example: I contribute $1,000 to a Haitian relief organization. That organization is subsequently found to have smuggled Haitian children to Thailand for sex slavery. Should I go to jail? If not, why should a shareholder who invests $1,000 in Exxon go to jail if Exxon breaks a law?

      1. “”””There is no good reason to hold passive investors directly liable for much of anything”””

        They are not passive investors they collectively own the corporation and can do anything they want with it. The fact that they act like passive investors just means they are lazy and stupid, but that does not mean they do not have full authority to collectively run the whole thing. Some may object to the collective part but if so they should not join collectives

        1. No offense, but that statement indicates a profound misunderstanding of the power of shareholders. Follow a shareholders’ derivative suit sometime and see for yourself how poorly rank-and-file shareholders fare when trying to control–or punish, for that matter–the board or management.

          1. And whose fault is that?

            I will tell you, it’s the fault of those who voluntary join in the ownership of a corporation which the then claim they have no control over, yet at the same time they own. Either get you fellow collectivist owners to take charge or sell the stock. But instead what you want is your unlimited profits and you liabilities limited to whatever you paid for the stock.

            1. But instead what you want is your unlimited profits and you liabilities limited to whatever you paid for the stock.

              What about unlimited liabilities for bondholders and other lenders?

              1. Are bondholders owners? If not then they are just lenders. If the corporation fails and the bondholders because of contract take over then they become owners and now its their responsibility

                1. Simple fix is to modify shareholders to a type of bondholder. And, yes, that would mean that there were no “owners” of the company. Much like with a non-profit organization.

                2. Why are lenders less morally responsible for the actions of a corporation than shareholders?

                  If I loan you $1,000 and you use it to go buy a gun to kill someone, I’m not responsible. But if I buy $1,000 in shares from your LLC, and you use it to go buy a gun and kill someone, I am?

                  If anything, the lender is more directly involved, since lenders usually lend money for a specific purpose, such as an expansion of operations. And if the company is much in debt, lenders often have more control over the company’s operations than shareholders.

                  Indeed, lenders might actually be the ones pushing the corporation to act irresponsibly, since they want to get paid back.

                  1. Because shareowners collectively own the corporation and collectively control it. Lenders do not.

                    Ownership = Control = Responsibility

        2. So if a majority shareholder engages in some action without informing anyone else that results in a liability, Granny Jones down the street with one share that her grandson gave her should be personally liable for it? Whether you like it or not, there are people who are passive investors because rational ignorance makes sense. If I own some penny stocks in a company because I hope it will take off, am I “lazy and stupid” if I don’t watch everything said company does?

          Or what if I’m an indirect investor who owns shares via a mutual fund? Should I be held personally liable if the CEO takes the company off the cliff?

          Your principle is concise and clear and totally unrealistic.

          1. “”Your principle is concise and clear and totally unrealistic.””

            Yes its called personnel responsibility

            I agree corporate stockowners (and many who call themselves free market or libertarians) don’t want anything to do with that

            They want the right for unlimited profit but they want their losses limited to what they invested. But losses cannot be arbitrarily limited, the loss occurs and if one person has their losses limited by government then those losses end up being paid for by others

            1. Still posting with that corporate-made computer, I see.

              1. I am posting using my personally owned computer which I take responsibility for.

                1. Which was made by a corporation, right? Not some mom and pop operation that wouldn’t dare form a nasty ole’ LLC, right?

                  Corporations are the only way to pool enough capital to create anything that requires R&D and other up-front money. That some company I own 0.00000000001% through a mutual fund can’t personally bankrupt me makes this possible.

                  Divest yourself of the fruits of corporate evil! Put your money where your stupidity-spewing mouth is.

                  1. Under your theory you should divest yourself of the computer as well since the corporation which made the computer got its ability to “pool capital” because the government gave it that limited liability and government kills innocent people. So you should divest yourself of the fruits of evil government.

                    1. Once again, the self-serving conflation between libertarians and anarcho-capitalists makes an appearance.

                      Learn what the fuck you are talking about. You want to get rid of corporations? Fine. Start by getting them out of your life.

                  2. He made his own computer just like he made his own light saber and jedi uniform.

            2. Yes its called personnel responsibility

              No it’s called “I have a pathological hatred of capitalism and corporations, and I’ll do anything to justify fucking over anyone that has mroe money than me.”

              1. So how is wanting the owners of corporations to take responsibility for what they own equal hatred. Who do you propose take responsibility for what the stockowners own? Someone has too, as I explained, once a debt is created it must be paid off by someone, the debtor, the lender or some third party. Giving limited liability to the stockowner does not get rid of the debt, only transfers it.

                1. The lenders are AWARE that they can’t seize the shareholder’s personal assets when they make the loan.

                  They agree to the loan anyway.
                  Ergo, the lenders take personal responsibility for the fact that they loaned money to a corporation with the full knowledge that if the corporation went broke, they couldn’t revoer the money from shareholders.

                  1. As I said below, not all debts are with people you have contracts with.

                    And if you think that you can have limited liability corporations without government granted limited liability then you should call your Congressman and tell him to vote against it

                    1. As I said below, not all debts are with people you have contracts with.

                      Name one example, just one .

                    2. Your factory blows up and destroyers the neighboring houses. There is no contract with the neighbors but you are responsible for the destruction of their houses and therefore there is debt owed without a contract.

                2. Lenders know they may not get paid back when they make the loan. They add a risk element to it, which is why junk bonds have higher interest rates attached to them.

              2. Hazel,

                There’s no way they came by it honestly. Working hard to make products that people want to buy is the worst form of theft.

              3. “No it’s called “I have a pathological hatred of capitalism and corporations, and I’ll do anything to justify fucking over anyone that has mroe money than me.””

                If there are corporations in the political economic system – then it is a corporatism AKA fascist system and it is NOT a capitalist system.

                This Corporation/Collective is an amazingly powerful way to control the minds and lives of even liberty leaning intelligent people so that they too join the State Collective.

          2. “If I own some penny stocks in a company because I hope it will take off, am I “lazy and stupid” if I don’t watch everything said company does?”

            Trading some paper for other pieces of paper constitutes a very poor substitute for real ownership – especially in an age where the pieces of paper and the company don’t even have to be even seen once by the so called owner. Real ownership comes from working and taking responsibility over the thing owned.

        3. They are not passive investors they collectively own the corporation and can do anything they want with it. The fact that they act like passive investors just means they are lazy and stupid, but that does not mean they do not have full authority to collectively run the whole thing. Some may object to the collective part but if so they should not join collectives

          Registered voters collectively own the state they vote in.

          You obviously want Bill Gates to be unlimitedly liable if a Washington Army National Guard soldier commits a tort.

          1. And I bet that the voters including Bill would have a greater interest in what their state government is doing and probably decide that a large part of what its doing is best left undone

            1. And I bet that the voters including Bill would have a greater interest in what their state government is doing and probably decide that a large part of what its doing is best left undone

              A single voter can not possibly know everything the state government is doing, much less order a soldier in the state’s National Guard to not commit a tort.

              If a soldier from your state’s National Guard hits my Ford Mustang while driving a National Guard Humvee, will you personally pay for the damage?

      2. Yeah, but RC, don’t worry. DJF says it’s perfectly fine if you lend the money to Exxon instead in exchange for a special sort of zero-coupon bond, or bond with varying dividend payments set quarterly by the board of directors, that falls last in the order for payouts in case of bankruptcy.

        See, those are totally different.

        1. Yes because you as bondholder do not own the corporation

          I find it strange that some so-called free market types don’t understand the different between owning and lending.

          1. The point is that he just created a form of “lending” that gives all the powers of shareholding without being an “owner”. In other words, recreated a limited liability corporation without government liability rules.

            1. So now the free market is not going to have ownership? When did this happen, oh wait, its done by the same people who previously wanted ownership without responsibility. Sounds like a pattern. They want no limit on profits but they want the debts to be limited for themselves which transfers those debts to others.

              So much for the free market type who thought that ownership was important, its now all about dumping your debts on others using the government courts and politicans.

              1. They want no limit on profits but they want the debts to be limited for themselves which transfers those debts to others.

                Once again, you are offering a solution for which there is no problem, and which would create far more problems than it solves.

                1. If there is no problem then we can get rid of limited liability today. If it does not actually limit liability and transfer debt to others then its useless and can be abandoned immediately.

              2. As long as everyone understands what is in the contract, there should be no problem.

                The government didn’t “create” corporations. They just enforce the contracts that the individuals involved agreed to.

                Shareholders agree with the company to certain rights (payment of divdends), and protections (won’t have to fork over personall assets to pay debts).

                Lenders also agree to those terms. When they lend money, they KNOW the shareholder’s personal property can’t be seized. So they accept the fact that if the corporation goes bankrupt, they won’t get anything.

                As long as everyone is aware of what other claimant’s rights and protections are, and enter the contract willingly with this knowledge it shouldn’t be anyone else’s business what they do.

                1. But not all debts are with people who have contracts, there are third parties who have no agreement that you as a stockowner have your liabilities limited. Its only the government which can force this onto third parties

                  And if you think that you can have today’s corporation without government granted limited liability then do so. Try doing it with just contract law. All I have said is we get rid of government granted limited liability. If you think that limited liability corporation can exist without the government then do it.

                  1. Okay. Pass the law.

                  2. But not all debts are with people who have contracts, there are third parties who have no agreement that you as a stockowner have your liabilities limited. Its only the government which can force this onto third parties

                    So why not force the liability on the bondholders that lent the company the money it needed to operate? If you’re looking around for someone to blame. The company couldn’t have injured the third party without that money.

                    Your logic can be taken to any extreme. A giant bondholder has a hell of a lot more influence over a company’s actions than a small stockholder. Bondholders have altered bankruptcy plans, stopped takeovers, etc.

                2. Hazel,

                  Only problem with that is sometimes the liabilities arent with contracturally agreed partners. Lets say my company floods a neighborhood. If the total damage caused by the company exceeds the total value of the company, there ends up being a legitimate problem (assuming no insurance). In this situation, it should be easier to pierce the corporate veil and go after the individual(s) whose acts caused the problem.

                  1. Sure, but that still doesn’t justify going after small shareholders, who have no direct control over the actions of the company.

                    1. Hazel,

                      I agree, just pointing out the incompleteness. And, yes, it doesnt justify going after small shareholders. Or large, if they arent a part of the board. I might favor going after the assets of the board. Encourages them to have liability insurance.

                  2. In this situation, it should be easier to pierce the corporate veil and go after the individual(s) whose acts caused the problem.

                    As a matter of fact, the employees who were responsible for the flooding, as well as everyone up the chain of command from their immediate supervisors to the chairman of the board to the corporation itself.

                    “I was just following orders” is never a legitimate defense in either criminal or civil law.

                  3. “If the total damage caused by the company exceeds the total value of the company, there ends up being a legitimate problem (assuming no insurance). In this situation, it should be easier to pierce the corporate veil and go after the individual(s) whose acts caused the problem.”

                    Unless the State stops lying about the corporation no such action will take place. This is the rule not the exception to the rule. Then who is held responsible? No one.

                    “Sure, but that still doesn’t justify going after small shareholders, who have no direct control over the actions of the company.”

                    What sort of system of ownership has the owners having no direct control over the actions of their property? One which is predicated upon lies, delusions, and fantasies.

                    1. What sort of system of ownership has the owners having no direct control over the actions of their property? One which is predicated upon lies, delusions, and fantasies.

                      The state.

                3. “The government didn’t “create” corporations. They just enforce the contracts that the individuals involved agreed to.”

                  Really? That’s why there are so many statutes and regulations specifying the structure, actions, nature, purpose etc of the corporate form? That’s why in order to form a corporation one must file forms and a bribe to the State? And why the corporation’s magic powers cease when the State “pierces the corporate veil”?

                  1. I’d argue most of those regulations are unnecessary. You could form the equivalent of a corporation on the basis of contractual relationships without getting the state involved. It’s possible the courts would unwind responsibility for some malfeasance down to Granny One-share, but I seriously doubt it. No intelligent person would find it fair.

              3. Dear DJF,

                Thank you for making my arguements better than I can.

                Much appreciated,

                an Anti-Corporatist

              4. So now the free market is not going to have ownership? When did this happen, oh wait, its done by the same people who previously wanted ownership without responsibility.

                Yes, you. Because this is what would happen if we passed your moronic law. Every single company would be structured like a non-profit without owners, but would have all sorts of bondholders.

                1. No, we would have laws that if no flesh and blood person claims ownership then there is no ownership. End the government sanctioned fake corporate personhood

          2. Yes because you as bondholder do not own the corporation

            I find it strange that some so-called free market types don’t understand the different between owning and lending.

            There are stock shares that have no voting privileges. Do they own the company?

            There are bonds that are convertible into equity at the lender’s discretion. Do they own the company?

    4. DJF, please read my comment from above, and educate yourself before you start stripping.

    5. I believe in stripping corporations owners and the government employees of the special legal protections from liability they get and return them to the same status as all other people.

      What exactly is this supposed to solve?

      You too enjoy limited liability. As a voter in the state, you are only liable for the state’s debts up to how much you pay in taxes.

      1. But the government can keep on going into debt and they can keep on raising taxes or create inflation. I would only get a benefit only if I die today and I am not planning on that. Do you think these debts can keep going up and their will not be negative consequences for it?

        1. But the government can keep on going into debt and they can keep on raising taxes or create inflation. I would only get a benefit only if I die today and I am not planning on that. Do you think these debts can keep going up and their will not be negative consequences for it?

          Yes, there will be negative consequences.

  14. Truly, the level of ignorance on the left about corporations is impressive.

    The level of ignorance about humans is pretty impressive, as well. I don’t get how they can see one group of people acting in concert to further their individual interests (corporations) as inherently evil and self-aggrandizing at the same time they see another group of people acting in concert to further their individual interests (government) as inherently noble and beneficent.

    Merely because the label is different.

    1. I’ll posit that liberals/progressives see 4 legitimate groups of people:

      1. War/Pro-choice/Gay pride protest/marches (and groups of giant paper-mache puppets)
      2. Co-ops
      3. Unions
      4. Phish/Streisand/Cher concerts

      Anything else is just sinister and evil.

  15. Damned Delawarean menace!

    You know who else came from Delaware…

    1. Pete DuPont?

    2. George Thorogood and The Delaware Destroyers?

    3. Elisabeth Shue?

    4. Valerie Bertinelli?

    5. Robert Mitchum?

  16. The obvious question that the left will never touch: Why do corporations seek to influence elections in the first place? What is for sale?

    1. Thank you, wheelock. That is the real issue.

  17. “Corporate Personhood” is completely irrelevant. The Constitution does not grant the government the authority to curtail anyone or anything‘s freedom of expression. Remember folks, if it’s not a granted power it doesn’t exist.

    1. “Remember folks, if it’s not a granted power it doesn’t exist.”

      Even if it’s a granted power it doesn’t mean it does exist. Corporations are a “legal fiction” – the only place they exist is within the minds of those who lie to themselves. ‘Tis the same as Santa Claus and the Easter Bunny – except the believers in these fictions lack the apparatus of the State to lend the appearance of legitimacy to the lies they so ardently believe in.

  18. What is for sale?

    What isn’t?

    1. The carefully enumerated powers of the federal government… in theory.

      1. We’ll need to see reproducible results before we can grant that theory any credibility.

      2. Point taken. The best evidence that exists is the relative success of our own flawed system, which has traditionally (somewhat) limited the power of central authority.

  19. Where is Tony? Has he given up the fight? Has his head exploded?

    1. I would say he changed his name to DJF, but Tony’s typing and spelling are better.

    2. I think he is busy making stupid accusations as “everybody” on some of the other threads.

  20. Good discussion, even with my bad spelling and grammar, but I have to leave.

    But for all those who say that contract can give the same protection as government granted limited liability I expect that you will be calling up you local government politician and demanding that the government end its policy. After all if contract can do the same thing then why have the government involved?

    1. I thought someone else around here used to exit like that about this time of day.

      1. Yep, and similar style of argumentation.

        1. Yep, and similar identical style of argumentation.

          FTFY

          1. And neither of you provide any actual counter argument but just vague innuendo. So much for the defenders of government granted limited liability corporations.

    2. If I had that kind of power, I would use it on about 1000 other laws first.

  21. The lenders KNEW that the shareholders had limited liability when they lent the money. It’s their own fault if the loan goes bad and they don’t get paid back. That is a risk they were willing to take.

    And guess what, if the lenders aren’t completely confident that the loan will be paid back, they can demand that the shareholders personally guarantee the loan.

    Doesn’t happen to big companies, of course, (their size creates a certain level of trust and it’s not feasible anyway) but it happens all the time to small ones with only a few owners.

    Of course, lenders can demand security on their loans but we saw how much good that did for GM’s secured creditors.

    1. Yep, been there, done that. My old condo had a lien on it backing a credit line for a few years.

    2. I’ve demanded personal, parent, and cross-corporate guarantees any number of times from those whose assets are. . .unsound.

      1. Are my assets unsound?

        1. I don’t see any assets. . .at all.

  22. Bullshit, my company is me: one person;
    be it Guatemala (United Fruit) or Chile
    (Coca Cola), or Allen Dulles and his Nazi companies he lawyered for.
    And you call your newsletter REASON?
    Why you are humiliating yourselves and simple human intelligence and reason
    is a mystery to me. In print!

    1. Yes, our company is us! Be it GM or the ACLU! Why they, are like Rahm Emanuel, humiliating simple humans’ intelligence?

      In print!

  23. It is bizarre to claim that abstractions have human rights.

    Humans have human rights.

    Corporations exist to deflect responsibility, mostly financial and at times physical.

    As a ghost totally created out of law, they are wholly beholden to their God-creator; the government. It is no surprise that government, as God manifest, would grant its creation equality as if it was a real person. Evil begets evil.

    As the quoted article says “So corporations have to have some constitutional rights or nobody would form them in the first place.” Exactly.

    Their existence is contrived and purposeful to enable those who act to be relieved from the responsibility of potential negative consequences of those actions.

    These people get to enjoy all the positive consequences ? the gains ? but face little or minor of the negative consequences ? that is, little or no personal loss.

    With no surprise, corporations take on risks that would be inappropriate if such risk was taken by real people. As such, corporations will tend to act imprudently, immorally, and leave in their wake real people having to absorb and suffer higher losses.

    To suggest such an evil ghost can also claim real human rights, besides being utterly bizarre, is a complete and total insult to real human beings

    1. Therefore, a bunch of citizens shouldn’t be allowed to air a political film they made.

      Because they got together and formed a “corporation” to finance it.

      QED.

      1. Hazel,

        There is nothing preventing real people getting financing, sharing the cost and splitting the profit.

        But why do you need to create a ghost to make a film?

        Why do you want to avoid accepting responsibility for the debts of your enterprise?

        Those debts do not ‘go away’. Someone has to pay them.

        If you avoid them by playing ghosts, then somewhere, someone – a real person, will have to bear those losses.

        Why do you get to avoid your responsibilities and thrust it on someone else?

        1. Bankruptcy- debts go away when it is determined that the assets do not exist to fully repay the debts. The lender also knew this was the worst case risk. The effect is that lenders are encouraged to make smarter loans next time.

          Whether or not fraud is involved, is a different matter. An individual (or group) can lose everything and not be able to fully repay debts, but that doesn’t mean they committed fraud.

          1. Colonel,

            But with the bankruptcy on a real person, that real person faces the entirety of the consequences. Their asset base is a risk should the act with folly. The person has a stake in the good outcomes and equally in the bad.

            In a corporation, the officers who act can have no stake in the negative outcome. They receive compensation on success, and walk away unscathed on a failure.

            With such a moral imbalance, corporations will tend to act imprudently, as the economic loss is not born by those the caused it.

            1. “With such a moral imbalance, corporations will tend to act imprudently, as the economic loss is not born by those the caused it.”

              Hear hear!

      2. “Because they got together and formed a “corporation” to finance it.”

        They formed a “State permitted collective”. The State owns all such collectives. It decides how much of the collective’s earnings to take or not to take. It decides how often and how such collectives shall do a great many things, such as having meetings and keeping notes on meetings amongst a wide variety of such State mandated duties.

        The State can and has now again decided which natural rights such collectives may assume. The greater the expansion of natural rights of collectives the greater the restriction of the natural rights of individuals. The State permitted collectives shall now grow more powerful and influential over the State.

        The solution isn’t to restrict the speech of such collectives – it’s to eliminate them entirely.

        1. “The greater the expansion of natural rights of collectives the greater the restriction of the natural rights of individuals.”

          Brilliantly articulated!

          Hear, hear!

  24. bestpriceforsales powershot s90 I tested the camera when it arrived and when working in manual mode with a high ISO (1600 and up) there was a prominent red line that ran vertical through the entire image. Sent it back for a refund and I’ll be looking for a non Canon camera for my next purchase.

  25. bestpriceforsales powershot s90 I tested the camera when it arrived and when working in manual mode with a high ISO (1600 and up) there was a prominent red line that ran vertical through the entire image. Sent it back for a refund and I’ll be looking for a non Canon camera for my next purchase.

  26. The dangers of corporate personhood far exceed the dangers of individual persons in any government framework by virtue of the fact that life itself becomes irrelevant to a nation driven by the significance and importance of business entities over individuals.

    Stephen King, himself, could not have come up with a horrow more imaginable as the protocol by which society is to be organized. If the full appreciations of the hazards and foresight of ethical challenges are not anticipated from such a turn of events, humanity has little hope of survival in an environment of predatory capitalism as its own justified scheme.

    Why Congress is not rushing to end this relatively new phenomena of social danger is a mystery, especially since corporate bureaucracy has entered the fields of health care, pharmaceuticals, and funerals.

    There is no insurance adequate to prevent people from being churned as currency in a world where profit can be made by their demise, especially with impunity, so easily arranged in a nation forced to submit to corporate dominance.

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