Exceptionalism, Corporate Edition

Only in America. No other nation gives its corporations as many rights as we do.

Before you launch into a knowing and cynical “sure–big business bought our lawmakers,” consider the fact (highlighted in a recent article in the Journal of Law and Courts) that these expansive rights are almost all the result of federal court decisions, not legislation.

The privileges currently enjoyed by the fictitious “persons” we call corporations weren’t a result of our Constitution, either.  According to David Ciepley, author of the referenced article,

“the framers were so concerned about the possibility of privileged monopolies squeezing out ordinary citizens that they did not endow Congress with the traditional right of Parliament to charter corporations, let alone expressly extend constitutional rights to corporations.”

There are three theories about corporations and their rights: the associational theory (corporations are constituted by their members and thus deserve the same rights as those members); the “real entity” theory (a corporation is distinct from its members–a separate, albeit fictional, “person” entitled to the rights accorded to “persons” under the 14th Amendment); and the grant theory (corporations exist because government has created them, and they have only the powers with which their creator endowed them).

The legal problem with the associational theory is that in the U.S., rights are individual. My family doesn’t have a right to free speech–although each member of my family does. The practical problem with basing a corporate right to free speech on the First Amendment rights of its shareholders is obvious: those shareholders are likely to have different opinions (especially on public policy issues) and to want to say different things.

The notion that a corporation is somehow an organic “person” separate from both government and its shareholders and entitled to 14th Amendment protections is so historically and logically flawed as to require little rebuttal–especially in an era where Justice Scalia remains ambivalent about including living, breathing women within that Amendment’s protections.

The only theory that accords with both history and logic is the grant theory. Governments  created corporations in order to encourage commerce–in large part by limiting the liability of individuals. (We are more likely to innovate if a failure won’t entirely wipe us out.) Corporations should have all of the rights that are required to fulfill their purpose, which is to do business–the right to own property, to contract and to engage in commercial speech.

The Supreme Court has gotten two things very wrong: money is not speech, and corporations are not people. (I have to agree with a popular Facebook slogan: I’ll believe corporations are people when Texas executes one.) Those two errors have massively distorted our politics and corrupted our governing institutions.

The Court failed to recognize the contemporary operation of the golden rule: He who has the gold, rules.


  1. And as to this notion of the religious freedom of corporations, when did you last see a corporation in a church pew asking forgiveness for its sins and seeking salvation for its soul?

  2. The Supreme Court of the United States (or SCOTUS, as some ‘acronymists’ here might put it) is comprised of men and women–persons, if you will–who are as flawed and sometimes as unwise as the rest of us. Since a lot of wrong-headed thinking got us into this awful situation, cannot some right-headed thinking get us out of it? Is there enough right-headed thinking out there to get the job done? Surely, we accept that corporations are not people (nor were they ever), so shouldn’t we be able to find a way to fix the current sorry state of things?

  3. So instead of corporate mergers, they just marry? Where does co-habitation fit in? Do we call failed product lines miscarriages? But once you introduce a product line, you have to let it go full term? Or instead of hiring employees, they adopt kids? And instead of bankruptcy, the Dr. pulls the plug and we have a funeral? And family law replaces business law? Oh, the possibilities!

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