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Corporate personhood

Bond of the Dutch East India Company

Bond of the Dutch East India Company 1622

One common complaint in anticapitalist circles is that the system of rights which once was designed to apply to human beings has been, through judicial interpretation, extended to so-called juridical persons–not persons at all, that is.

Thus, corporations are given the right to free speech, which somehow gets equated to the right to fund electoral campaigns, such as in the US after the infamous Citizens United supreme court decision, allowing for an unprecedented interference with the formation of public opinion.

Moreover, corporations veil their owners and agents from the consequences of their actions. The notion of limited liability, whereby a corporation’s owners aren’t accountable with their own money and goods for the corporation’s misdeeds, practically creates incentives for abuse and is, doubtless, one of the most extraordinary–and yet unacknowledged–subsidies in history. But is the hostility to corporate personhood and limited liability fully justified, or is there a way we can use them towards our own ends, and, perhaps, limit the damage?

Reconsidering hostility to corporate personhood

The notion that particular associations of persons are imbued with a legal personality–which essentially means they are the nucleus for rights and duties–is much older than one may think, and far precedes the existence of capitalism. One of the first examples was the attribution of legal personality to the Roman people as a whole, which held in common the property of the ager publicus–or public land. This land, which came into the hands of the state through the expropriation of Rome’s enemies, was then often parcelled out in long-term leases to veteran soldiers, or poor small tenants. Nor was this the only case where Roman law recognised the existence of a corporate identity. The roman collegia, which were associations of three or more citizens for very heterogeneous ends (priestly functions, guilds, business associations…) were also acknowledged as having a personality different from that of their constituting members, though, of course, they had to be represented by agents at court.

It should not be surprising that the modern identification of personhood with humanity didn’t hold during many periods in history. Roman law recognised no effective legal personality to slaves, and only limited forms thereof to very broad groups such as women, foreigners, conquered subjects, and male sons under paternal authority (which lasted until the death of the father or a formal act of emancipation).

Different forms of legal personality arose in history to deal with the unavoidable fact that humans are cooperative, and can’t achieved all that much by themselves. Thus, in the Middle Ages, cities, church institutions, guilds, business partnerships, and even families, could and did achieve legal personality, allowing them to enter into binding contracts, discipline and choose their members, defend their interests in courts of law, and generally participate in the economic and legal traffic. As a contrast, there were instances where the removal of personality was used as a form of punishment. This is the case of outlaws in the Icelandic commonwealth, or of the civil death imposed by some states.

Without intending to do a full survey–readers probably are noticing I approve of the historical approach–the point is clear that identifying persons–by which the law means subjects of rights and duties–with human beings, and vice versa, is the result of a rather modern expectation. We can to some extent attribute it to the results of the French Revolution, with its declarations of the Rights of Man, and the progressive disolution of complex, communitarian feudal institutions into the more streamlined and rationalised bourgeois ones, grounded on the free binding decisions of equal citizens. Yet this system which worked remarkably well for destroying many of the forms of common property held before then by the people, under more or less disguised feudal forms1, proved inadequate to construct anything but small-scale arrangements.

Rightwing capitalist fundamentalists still believe that it is possible to have a society that is entirely grounded on people entering into freely chosen contracts with each other. Ignoring the realities of the firm as the true nucleus of capitalist production, they think it would be not only feasible but desirable that everyone would constantly negotiate the performance of services and the exchange of goods with everyone else. A firm, they would hold, should be substituted by the different members of it contracting with each other. The individual worker would reach an individual agreement with a capitalist, who would reach such agreements with the landowner. For every step of production there would be bargaining, and the more or less rational organisation of a firm would instead dissolve into a complex and reticulated nexus of personal contracts between individuals.

Obviously, no matter what ideological justifications the Austrian school uses for itself, practical capitalists are perfectly aware that such a notion is impossible. The friction costs alone would kill it, not to speak of the difficult fact that work is produced in a social environment, in such a way that individual contributions cannot accurately be measured.

The result, though, is that there’s a strong strain of anticorporatist feeling, which holds corporations are mere creatures of the law, and should not be granted more rights than they require in order to serve social ends, or should not even legally exist at all, as the true bearers of rights are individual persons. Setting aside for a moment the matter of the extent to which associative forms should have rights normally granted to persons–for instance, granting corporations honour, as the Spanish legal system does, does appear to take things too far–it’s useful to ponder whether this is an argument socialists should be making, at least in this particular form. The position that associative forms don’t deserve recognition by the law and are in any case problematic–it’s not capitalists who cause problems, you see, it’s the corporate form–is in itself a deeply anti-collectivist argument. It’s the sort of methodological individualism we have come to expect from petty bourgeois thinkers, who believe the whole world can be a macrocosm of a small shop, where association plays by far a lesser role than in larger production units.

Beyond individual rights

This anti-collectivist position that only individuals deserve the protection of the law and all associations of persons are nothing beyond an aggregation of interests has two manifestations, both of which can cause problems for the left.

The first is the idea that corporations are simply people pooling resources together, nothing more and nothing less. This notion, which may at first seem to offer opportunities for curtailing what’s perceived as corporate privilege, can easily articulate the defence that, since corporations are simply people acting together, all that a person should do a corporation should be capable of also doing. So from the reductionist view that corporations are simply people, we reach the position that regulating them in ways we do not regulate people would infringe on their members’ rights. Obviously not a place we want to go. This is how Citizens United was argued: since corporations are mere groups of people joining together, the right of assembly and free speech affords them the same opportunities to disseminate propaganda as any individual would have.

The other side of the anticorporatist coin holds that corporations are something different than a simple addition of people. This position condemns them on this very fact, that what an individual person would not do, is done by corporations precisely because of the dilution of individual accountability, and the Frankensteinian goal-seeking behaviour of such entities, unconstrained by common bounds of human decency. This view is undeniably closer to the way corporations actually behave, but it leads us to discarding every form of collective action. It sees a corporate superorganism, effectively a super-human artificial intelligence, and condemns it not for what it does, but for what it is: for its capacity to exceed the capabilities of its individual constituent members. From this position comes the generalised and indistinct hatred for the big: big government, big labour, big business… The problem is sought in the superhuman scale of such concerns, whether unions, cooperatives, bureaucracies or profit-seeking companies. Such an anti-corporatist longs for a turning back to an imagined past where people were essentially self-sufficient and freedom and equality emanated from their sovereign power to isolate themselves and refuse to participate in wider society. That this past has never existed, except, perhaps, and very precariously, during times of territorial expansion into underused land, isn’t even the primary reason why we socialists should reject this strain of anticorporatism.

We don’t believe individuals are the only, or even the primary, holders of rights, duties, and interests. How can we begin understanding the world if we give up the most important collective agent in our analytical repertoire, the class?

The Proletariat has interests which transcend those of their members, hence why socialism isn’t a mere matter of economist struggles. It transcends the interests of some of its sections, hence the opposition to scabbing, racism, nationalism, and other forms of discrimination which, while dividing us as a class, are the basis of material advantage for some members of the class. Nor can we hold that the Proletariat is a mere addition of its members’ interests. Humans are social beings, formed through interaction and dialectic opposition to one another–let’s not forget dialectics is, primarily, the art of dialogue. A human isn’t the mere product of two parents, but a node on a far more complex graph of relations which spans a whole community, as well as its history, incorporated in its material culture. The reproduction of language and culture are processes which could not occur in any other way.

Should we embrace corporations?

So should we adopt an anti-anti-corporatism? No. The for-profit corporation, though in a sense historically necessary to transcend the limited socialisation of production encountered in guild workshops and individually held manufactories, has also, like a conjuration by a sorceror’s apprentice, engaged in some of the most brutal and harmful practices that ever took place. From the extraction regimes of the India companies, to more modern forms of exploitation relying on slave labour and the compliance of weak states, such as that practiced by United fruit Company, corporations have caused untold human damage, as well as incurred unmeasureable environmental costs that we may not be able to recover from for centuries, if ever. Yet our denounciation of corporations has to be grounded on actual materialist considerations: what do they do, for whose benefit, and on the back of whom?

Unions, cooperatives, community associations, or simply groups of friends, often behave in ways that emerge from them being more than the sum of their parts, and this is an inherent fact of humanity we could not, nor should try to, combat. Being on the side of humanity does not compel us to support all human action, nor being socialists to support all action by our comrades. Being collectivists, and understanding the reductionist individualism advanced by those who would dissolve society is specious and wilfully blind to the needs and behaviour of a social animal, should not compel us to defend the actions of those collectives who, on behalf of the ruling class, exploit us and destroy our means of subsistence, endangering our very capacity to endure and reproduce our social formation. What it should compel us to do, though, is to regard vulgar anti-corporatism, and the assumptions it comes embedded with, with the due level of suspicion and inquiry such a trojan horse deserves.

  1. On this topic, see Capital, Volume 1, Chapter 27, exempli gratia:
    After the restoration of the Stuarts, the landed proprietors carried, by legal means, an act of usurpation, effected everywhere on the Continent without any legal formality. They abolished the feudal tenure of land, i.e., they got rid of all its obligations to the State, “indemnified” the State by taxes on the peasantry and the rest of the mass of the people, vindicated for themselves the rights of modern private property in estates to which they had only a feudal title, and, finally, passed those laws of settlement, which, mutatis mutandis, had the same effect on the English agricultural labourer, as the edict of the Tartar Boris Godunof on the Russian peasantry.

     

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About modulus

Modulus is an unaffiliated Marxist from South Western EU (Spanish state). He studied computer science and law, and is at present preparing for civil service exams for the Spanish administration. An avid IRC user, he enjoys arguments and will occasionally play devil's advocate. He regards himself as orthodox and is concerned about unscientific attitudes on the left on such things as nuclear energy, biotechnology, and so on. His support for the European Union as a platform to unify the class struggle across the continent has earned him plenty of strong opposition, and doubtless will continue to do so; until, that is, his view is vindicated by history.
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  1. Pingback: Limited liability: why we should want more of it | Spirit of Contradiction

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