Cory Doctorow at 7:07 am Mon, Sep 19, 2011
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I wouldn’t tempt my luck if I were him. In jurisdictions with criminal liability of legal persons, it is indeed possible to punish corporations by a “death penalty”/dissolution. (I have no clue if this applies to Texas, though.)
Is dissolution actually how you would execute a company, though?
Or would it be execution of the CEO?
A dry factual reply would state that the CEO, BoD, shareholders =/= the corporation.
But personally, I wouldn’t settle for anything less then a complete extermination of all involved, their families, relatives and pets, burning down of the corporate HQ and a sowing of salt in the resulting ashed ground while playing Never let you go by Justin Bieber. On bagpipes.
A dry factual reply that highlights how corporations gained personhood in the first place. I honestly understand why we need corporate personhood (otherwise fewer people would be willing to take any risks) but I do think it goes much too far.
Allow a corporation to go bankrupt without ruining its founders, sure. That’s fine. Allow a corporation to take the fall for clearly criminal acts due to decisions made by individuals… not so fine.
the corpses have to be staked right? Get back to me soon, I really need to know, or they go in the swamp. Thanks.
I’d add to it that dissolved companies’ patents, technology, work, etc., should go into the public domain immediately.
Please, don’t tease.
Not to be picky, but corporations are “executed” all the time. If you really want to abuse the metaphor, when a company goes bankrupt and the bankruptcy judge determines that it’ll be chopped up and sold to benefit its creditors, there you go. The license to incorporate (which is granted by the state) is ended and the company ceases to exist.
Of course, if you realize that no one (left or right, or for better or worse) really thinks that “corporations are people”, and to say so misunderstands the case law around the issue, then the whole analysis becomes silly.
But all the nasty bits may well continue on in some company or other, and may even reform at some later point (see the coalescing baby bells).
Not really. An execution requires a crime. A bankruptcy is more like euthanasia.
Feel free to cite an example of a corporation being dissolved as penalty for a crime, though. I’d be interested to learn about it.
What about the telecoms, which were broken up for having a monopoly?
hmm.. Arthur Andersen? http://en.wikipedia.org/wiki/Arthur_Andersen
Not a perfect analog, as they seem to have committed suicide rather than be executed, but I think close enough for discussion.
I could try to extend the metaphor to say, revoking the charter of a company, or nationalization. But yeah, the metaphor doesn’t work so hot.
The Supreme Court says that corporations (as somehow distinct from the people who comprise them) have freedom of speech. That seems to come awfully close to believing the metaphor if you ask me.
The Supreme Court says that corporations have freedom of speech because they are made up of people who have that freedom, not because they actually are people — that’s precisely the misunderstanding I’m referring to.
no, not “as somehow distinct”, but because they are not so distinct from the people.
It’s funny, because the way you kind of try to justify it by splitting hairs inadvertently illustrates just how ridiculous it is to even consider a corporation a ‘citizen’ with freedom of speech.
The Supreme Court ruled on the first amendment which does not restrict speech to people.
Quite familiar with the ridiculousness that is Citizen’s United. tx.
and in fact protects some non-person: “the press” and “religion”
I completely agree! It is ridiculous to equate corporations to people. Ford is not a person. They are just organizations of people… people who have freedom of speech rights. Why would a right that is granted individually be denied collectively, when our Bill of Rights also protects freedom of association?
Or following that logic, why can’t Ford Motors run for President?
While he didn’t run, he did serve~ http://en.wikipedia.org/wiki/Gerald_Ford
Sorry, had to do it.
The Corporation for Public Broadcasting has free speech rights, right? The New York Times corp has free press rights, right?
Citizen’s United wasn’t about “speech”, but *cash*. NYT can say what they like in their paper, but they should not be able to give mountains of cash to candidates. The fact that it could even be interpreted that way illustrates just how majorly flawed our system (and constitution) is.
It was about the government censoring a movie just because of it’s political content.
Let’s not be dishonest.
It was about a corporate PAC campaigning via advertisements for that “movie”, and by extension deregulating corporate campaign spending.
But what the NYT says in its paper has a cash value. If they promote a candidate or cause, that is a value-added proposition for the candidate or cause, at least to some degree. Citizens United was about a group funding a movie against a candidate. What next: you can’t pay to publish a book with 100 of your friends (on kickstarter, say) that opposes a candidate or a cause?
Print is protected and movies are not because paper is magical.
Except the Citizens United case was NOT about a collective freedom of speech. It was about the legal entity using its money and resources. So, yes, the SCOTUS invented rights for a fictional entity.
If the case were about collective rights, then EVERYONE at the corporation would have to be consulted to spend money. And that would be my fix—before a corp can spend political dollars it must have 100% agreement by all share holders. Period. No proxies.
Would you apply your fix to unions and political parties?
Although, in the pre-CU case, it already applied to unions. Dues could NOT be used for political action, members have to donate specifically to the political action funds.
From the ever reliable Wikipedia:
“Because of the Supreme Court’s decision in the case Citizens United v. Federal Election Commission,
corporations and labor unions can now use the funds from their general
treasuries to run advertisements for candidates in national elections. ”
You’re right, it was about individual freedom of speech, which the SC upheld was the item at stake. You can disagree, but they weren’t inventing rights. And you say “fictional.” Did the group in Citizens United not exist? Does Ford not exist? I mean I guess they don’t really exist, outside of their legal definition, but then the same applies for similarly fictional organizations like the United States.
If that is your desired criteria, then why are you opposed to the Citizens United decision? Presumably the group, stocked as it was with people of a certain political persuasion, would have all agreed to spend their money on an anti-Hilary movie. Secondly, since unions and organizations like the ACLU and Sierra Club are also corporations under this definition, would you let 1 dissenter prevent them from spending any political money? This is my point: not that money and corruption are good, but that many proposed solutions are worse than the problem.
No. Bankruptcy is analogous to dying in the hospital, perhaps euthanasia. Execution is only when a “healthy” individual is killed as punishment for heinous crimes. Which hasn’t happened to a corporation since the long ago days when they were chartered and required to operate “for the public good”.
No matter what word games you choose to play, corporate personhood is well-established by Congress, the Supreme Court, etc. Except that compared to biological humans, they have vastly fewer responsibilities but a surprisingly high number of rights.
( ^ o ^ ) = holding my breath emoticon
Hi guys. That was my tweet from yesterday. Weird that went viral and weirder yet that DU eventually saw it taped to the window of a vehicle in traffic. And — vye-ola — here we are on BoingBoing. Anyway, FWIW, I’m with Gloster. Especially the part about bagpipes.
Why stop with bagpipes? I’d go with the whole Most Unwanted Song.
If the State of Texas takes up that challenge, corporations made up entirely of African-Americans may start getting a little nervous. (“Eight different witnesses say Bank of America committed the crime, but…”)
Do you mean Africans (from Africa) or Americans (from America) ? I’m confused.
I can’t imagine enough people with dual African/American nationality are floating around to make up more than one or 2 companies…
Africa is a continent, not a nation. No-one has African nationality.
the same is true, of course, of America. Well, nearly.
This quote works great with soylent green too.
Are you being obtuse? If not, the term “African American” is in common usage around the world to refer to American-born citizens of Sub-Saharan African descent, traditionally descended from Africans brought to the U.S. during the Atlantic slave trade.
… or are you being obtuse?
” the term “African American” is in common usage around the world”
Around the world? Not so much. Try traveling the world before you say silly things like that.
It is in common usage around the world. By American tourists, who think it’s less offensive than “black,” even when they are talking to a Jamaican Spaniard.
It’s certainly common in English speaking countries
Try addressing the topic in context. We’re discussing an American political situation, so the American terminology (commonly used on the Census) would be at least reasonably applicable.
These back-and-forth semantics are bullshit.
Isn’t this whole discussion about semantics?
For your edification, the first link in Google for the search terms “African American” and the names of various national news organizations. I can post more if you’d like, but frankly this is an odd lexical argument to be having:
BBC News -”African-American women struggle to overcome wealth gap”
France 24 – “African-American Civil War Museum gets new home
Russia Today – “African-American unemployment at depression levels
Haaretz – “Former thug who found Judaism hopes to be first African-American in the
China Daily – “Art and history meet in African-American exhibit at museum
Al Jazeera – “ African-American still struggling, data shows”
The Times of India – “Kurukshetra man shot dead by African-American in US”
Would African-American-Africans be people born in Africa of African heritage?
A similar point comes up in Joel Bakan’s 2003 documentary, “The Corporation.” He points out that, by centuries of law, the only reason the state allows a group of people to incorporate, to avoid personal liability for their actions, is that in exchange they promise to work for the public good – not for personal profit, but for the public benefit, and that under the same common law, if a corporation is found to be acting solely for the benefit of its employees and shareholders, it’s supposed to lose its exemption from personal liability. Needless to say, this provision hasn’t been enforced in over a hundred years, but technically, selfish profit-seeking behavior IS supposed to be a “death penalty” offense for a corporate person.
all that arguing about common law from hundreds of years ago and how it was better makes you sound like a tea-partier.
‘corporation’ is just a word for people doing things together
No, it isn’t.
‘corporation’ is just a word for people doing things together
Corporations are not generally formed by socialist worker collectives so much as by individuals or small groups of people who want to evade financial liability.
Yes. The ability to invest in a venture without risking everything you own has been one of the greatest generators of wealth the world has devised. Without corporations we would be arguing by letter, in poor light, over several months.
I always thought that corporations should also be eligible for Three Strikes You’re Out laws!
Three felony-level guilty verdicts and it’s over! You can’t have the benefits of personhood without the downsides as well…
In this context, a lethal injection could be the corporation’s decimal points are moved all the way to the left. Corporate Death by LDP, mandatory left decimal points.
“If corporations are people then let them file their taxes like any person: Form 1040, single status, no dependents.”.
No dependents. The only people a corporation has that even might qualify as a dependent would be their employees. So either corporations get no dependents, or every individual taxpayer gets to count anyone they pay (including corporations, eg. the one that runs the local supermarket they shop at) as a dependent.
Because it’s well established in law that political offices can only be held by single, human individuals, not organizations of them. I am not trying to say that there is no difference between the rights granted to organizations of humans and humans. I don’t think it’s crazy to claim that in a legal sense, the “right” to run for President and the “right” to freedom of speech are handled and respected in very different ways by both the constitution and our legal system.
Like the Bible, it seems that The Constitution is interpreted willy nilly based on a person’s own self interests.
Or, you know, because of how the supreme court interprets it. Unless the Honorable William T. Nilly has been selected to replace Thomas.
That would certainly be an improvement. Corrupt bought justices make decision to increase political corruption. Situation normal…
If freedom of speech was intended to include corporations and business (and not intended specifically for individuals), then why even go to the trouble of mentioning “the press” as a separate entity? Methinks “The Founders” would be horrified about the way we interpret and fetishize our ancient documents and twist them in ways to absolutely corrupt the election process.
Arthur Anderson is an example I often use of the corporate capital punishment I’d love to see more of. If shareholders truly believed that their investment could be lost due to a “conviction” of their corp, there would be far more investor scrutiny of practices than there currently is. The fines handed out by regulators usually are less than the cost of complying with the laws they broke.
Personally I believe much of the activity of Wall Street, and particularly the hedge funds, is insider trading in one form or another. Madoff got away for so long because everyone thought he was merely doing all the usual front running and insider trading rather than a Ponzi.
Agreed Sarah. In the Canadian part of North America the official term for demographic and statistical purposes is still “Black”. So it is not the universal term in our part of the English speaking world, as much as more and more Canadians seem to be well-intentioned in using the term “African-American” due no doubt to the influence of American media.
Compaq the computer company would seem to be a good reference here: execution, murder, or euthanasia?
I don’t really care about the founding fathers. I care about how it would work today. And if a group of people, be they members of a corporation, union, ACLU or Sierra Club can’t get together and pool their money to support or oppose a political candidate, that is very, very bad.
It’s backwards day right?
Corruption/pay to play = good.
Will the corporation take a vote among their employees and shareholders regarding which politicians they’ll choose to support?
Let’s just get it over with and install Jamie Dimon and Lloyd Blankfein as “Supreme Leaders”.
What is corruption to you is noble citizens supporting a good and just policy, and vice versa. And yes, corporations do indeed take votes among their shareholders about which politician to support. If the board of a company supported a politician that the majority of shareholders didn’t want them to, how long do you think that they would let them continue to do so? Right up until the next shareholder’s meeting, I would think.
I know in your head you see only shadowy corporate fatcats larding money over to their political cronies, but if we interpret the law the way you want, it would also outlaw the Sierra Club from spending money on ads to remove politicians who want to abolish the EPA, or a union from doing so to support a challenger to Wisconsin’s governor. Do we really need to make incumbents even more unassailable?
If the law was the way I wanted it then politicians wouldn’t have the financial motivation to abolish the EPA as you say. Money corrupts and it’s dishonest to pretend that the more money means more democracy. Quite the opposite obviously, the more money you have the more sway you have in policy. As for the justices, I’m talking about real corruption, as in justices being courted by and cavorting with oligarchs in clandestine situations.
I also noticed that you left out employees purposefully. Are they not part of the business too?
How on earth could you create a system where a company wouldn’t have an incentive to influence the politicians who control the EPA? If the EPA regulates behavior with any force, the people regulated by it will attempt to control it.
Yes, money corrupts, and yes money does not mean more democracy all by itself. But it’s not what I’m trying to say. You are opposed to money in politics, that’s fine — so am I. I am saying that your method of attempting to limit it will cause bad unintended consequences that are worse than the admittedly genuine problem you are trying to solve. I am trying to say is that what I am more opposed to than money in politics is power in politics — if the politicians in power can, via a hypothetical Citizens United decision that was decided differently, determine which groups can and cannot support their opponents, that will create a status quo worse than the one we have now. I am not defending money in politics, I am claiming that the policy of outlawing corporate donations will cause more harm than good.
Employees are part of the business, but of course in a different capacity than a shareholder, though they can be both. Employees aren’t so much members of a corporation as they are other entities who engage in commercial transactions with them, trading their labor for money. If they have enough leverage, either individually or through a union, then they can definitely try to influence the company, as a supplier or customer would, if they didn’t like who they were supporting.
Liking the way you cut your jib sir. Employees. On Airstrip One we call them serfs. Or servants. You like the royal wedding? It takes 180 malaysian slaves to be boiled down into a paste for rich ladies to paint on their stretched, hidebound faces. And don’t both the Princes resemble their fathers? :P
“And if a group of people, be they corporation, union, ACLU or Sierra
Club can’t get together and pool their money to support or oppose a
political candidate, that is very, very bad.”
You are talking as if the resources of a corporation are just the resources of its members, “pooled”. That’s complete nonsense in the case of large corporations, who can have gigantic bank balances not owned by any “human person”.
Uhm, no? The bank balances owned by large corporations are indeed owned by human people, in direct accordance to how many shares you have. If the company were liquidated, tomorrow, you’d have a claim on it, possibly less strong than others such as creditors, but a claim still.
When you bought the shares, you elected to have that money managed by the company’s board/ceo/whatnot. If you don’t like what they are doing, you can sell your shares, or vote in the meetings to get rid of them. If enough people do so, and convey to them that the reason for your actions is their political contributions, you will definitely affect their decisions.
Perhaps in the ivory tower world of a legal theorist, do all shareholders promptly and clearly communicate their preferences to boards of directors.
In the real world, stocks are owned by mutual funds, mutual funds are managed by money managers, and so on, down a chain of ownership. Each link along that chain introduces delay, muddles responsibility, and diffuses communication. The effect of that delay is to insulate and isolate corporate officers from the feedback you think is present in the system.
Bottom line: corporate officers wield the power of thousands of peoples’ money, without any feedback that is timely enough to affect their decisions.
Something like Congress, then?
“Something like Congress, then?”
In some ways, yes. But in the way I am talking about, no. If we consider the chain of control from you to your congressperson, as analogous to the chain of ownership (and ideally, control) of a share, then we can see that the analogy doesn’t hold. Mutual funds and other forms of shared ownership are legal. Selling your vote, or even a fraction of it, is illegal.
My or any citizen’s vote wouldn’t fetch much on the open market in these benighted times. Ah, for the days of Democratic machine politics…
Well that’s what you would seek to return to by dialing up the cash and dialing down the campaign regulations.
Indeed a Congress infested with corporate cash and acting in the interest of corporations. You undermine your own point.
I will never be one to say the system is perfect. I am merely asserting that the flawed system we have is better than one where Citizens United was determined oppositely, which I would consider to be even more flawed. And I would have noted that every single one of these criticisms can be directed at our elected officials, but Walter beat me to it.
Bzzzzt. The boards of most of the mega corps can utterly ignore the “votes” of their shareholders. In fact, the Repub’s were even trying to block *nonbinding* shareholder votes on executive pay packages and even backing being able to keep them secret from the shareholders entirely.
Okay, then let’s fix that — because companies not being accountable to shareholders is a problem all by itself.
They can. But that’s not what CU was about. It was about an entity that has its own cash reserves being to spend them on political action as if it were an individual. Without having to disclose how it got all that cash and from whom.
If you really are “a group of people pooling cash”, have at it. Do whatever you like. Although, at that point, spending limits per person will apply.
Yeah, of course they were raising money outside of their own — like any politically active organization. I’m not violently opposed to transparency, if you want to make them report who gave what. If that’s all you want, then cool. But many people, including commenters here, are taking a much stronger stance; one that would give incumbent politicians immense power to limit the money raised by their competition, while reaping the money-raising benefits of being in office.
I’m not judging here, I’m not from ’round these parts’, but would this be the basic competition between a co-operative (not a housing co-op, one where people get together and buy stuff thats cheaper if you all buy it together) and a company who think that they have the same goals in mind? Except that a company will kill (in a business way) competition, whereas a co-operative, being a business ‘by, and for the people’ (that rings a bell) is a company completely composed of its members……… Oh hang on. Co-ops are socialist and anti-free market aren’t they? Like communists and hippies. OK, I started judging. The rampant capitalism in the US has lead to where the world economy is now. It’s suffering. The only thing that is preventing many, if not all, nations joining with each other on money, trade and people is greed. Old men want everything young people have. They can’t have it, so they throw tantrums. So (Like Berlusconi) they buy it. The women, the sex, the power. One small problem: they’re impotent, so we don’t get any children from those frantic, desperate couplings. But they get to send our young men to war. So they have more women. (I know, sounds strange, but it’s always happened)Don’t waste money, if the old f*ckers want to go to war, let them, I’ll pay the airfare and watch it on SKy Sports. THIS is how it should happen:http://boingboing.net/2011/09/18/russian-oligarch-sucker-punches-rival-billionaire-on-talk-show.html Angry old men have been the downfall of our dreams, they want to fight, let them, on Sky, in a cage. D*cks.
And if a group of people, be they members of a corporation, union, ACLU or Sierra Club can’t get together and pool their money to support or oppose a political candidate, that is very, very bad.
Why? Every member can still contribute individually according to conscience. In the case of a corporation, one person or a small group of people allocate the funds of a larger group according to the small group’s conscience (or lack thereof.) So what exactly is lost except for the ability for one person to hold undue influence over the political process?
Divide the people and you can rule them.
No one is suggesting that a group of people can’t get together to support or oppose a candidate or cause. They just shouldn’t be able to use some corporation’s money to do it! Go ahead, form a PAC, go crazy. I just want you and your friends to use YOUR money, not money supplied by your unwitting and probably unwilling customers.
Justice Stevens’ dissent is a good read:
I refuse to believe that corporations are people while they are immortal.
C’mon, you can tell me now. Kennedy, what happened? We all know about Hoffa. Even here.
Okay, that’s a fair position for you to have, but certainly lots of people ARE taking that stand — such as anyone opposing the citizen’s united ruling, which many people (and 4 supreme court justices) obviously do.
Second, what’s the difference between “my money” and the money that is in my bank account that was supplied by my “unwilling” customers? Do we normally grant one party of a financial transaction the ability to determine what is done with that money after it occurs? All of my (me personally) income comes from “unwitting” customers of my employer. They are mostly Democrats and Republicans who would definitely oppose the political causes I support. Should they be able to prevent me from doing so? Why would this political calculus change if instead of just me, it was a huge group of stockholders who felt the same way? If you feel it should, what monetary levels or # of org members should invalidate political donations? Can you see how perhaps a law of this type might be abused, since it would be interpreted and wielded by incumbent politicians to regulate their opponents?
I totally agree that huge amounts of money flowing into politics from corporations is bad, and that we should discuss methods to deal with it. I have my own suggestions. What I am opposing is suggestions that will, in my opinion, cause large negative unintended consequences, since “causing large negative unintended consequences” is basically the entire history of American policy action.
Second, what’s the difference between “my money” and the money that is in my bank account that was supplied by my “unwilling” customers?I don’t understand why this is so difficult to understand:My money: the money in my pocket/bank account.You money: the money in your pocket/bank account.CEO of X Corp’s money: the money in his pocket/personal bank account.X Corp’s money: the money in X Corp’s bank account.The last one is, really plainly, different in kind from the first three. It’s not any person’s money. It is nominally controlled by X Corp’s executives, board and shareholders, with varying degrees of directness, but it is not their money. Not even the shareholder’s beyond whatever dividend they are entitled to, or whatever they can sell their share for. It is X Corp’s money. Period.AFAIK, that’s a pretty bright line distinction, with well established legal and financial precedents. “Ownership” is kind of a core concept in both disciplines. And nowhere does this rely on any tricky fuzzy lines or sorites distinctions or anything: it’s just a question of what name is on the bank account.And so I don’t really see what it is you’re trying to argue. Your main paragraph there looks like some kind of hand-wavy attempt to muddy up this distinction and make it sound scary, but it falls flat. Under a rule flatly prohibiting corporate contributions, it’s not as if anyone, let alone any “huge group of stockholders”, would be prohibited from making contributions. If any holder of shares in X Corp wishes to make a political contribution, they can do so, selling some shares for cash if that’s how they choose to raise the money. That’s just how it’s done, and nobody will raise a fuss if it’s 1 shareholder or 1,000,000.So, what are the “unintended consequences” of this that you keep going on about?
I would acknowledge that there IS a much fuzzier line when it comes to non-direct contributions – distribution or advertising of a highly political film, for example. (It seems harder to argue that an incorporated film company should be prohibited from distributing a particular film where an individual wouldn’t be.)
That was not my reading of the above argument, though.
Yeah, the comments structure sometimes makes it hard to show who is responding to whom — but I was under the impression that K5G5′s argument was trying to say that the money given to someone by their customers (who may not have wanted them to use it for political purposes) was different than just the “normal” money in a bank account — whatever that means.
” It is X Corp’s money. Period.”
No. Corporations are just shorthand for saying “all the shareholders own this in relation to their stock” — collective ownership. Ford is not a real thing, it can only own things because it is an organization of people; its shareholders do, and that money is controlled by people the shareholders have deputized to do so. If you want to argue that corporate control is only weakly influenced by shareholders, that’s fine — but it’s a different issue.
The unintended consequences are precisely those highlighted by Citizens United — in that the McCain-Feingold act prevented something defined as a corporation (which covers unions, the NRA, and the ACLU) from making a movie denouncing a political candidate, which is clearly political free speech. Does “the government preventing people from criticizing candidates” really sound like something you want?
And, remember that laws are often selectively enforced. If you the governors, elections commissions officers and prosecutors of a given state are controlled by one party, do you really think these laws will be applied fairly to companies donating to the governor’s opponents as opposed to his supporters?
I know that it always seems like you can craft a wonderfully perfect law that accurately punishes the people and actions you don’t like and protects those you do. And internet forums are risk-free places to propose such things. But the history of such laws is chock full of bad results that the laws proponents never would have imagined. I am merely saying that given the complexity of modern life and politics, thinking a “simple” law will surgically achieve your goals is probably misguided hubris.
Oh, another one:
- A corporation’s credit is completely unrelated to that of its shareholders. All 100% of a corporation’s shares could be owned the by motliest collection of uncreditworthy bums the world has ever seen and the corporation could still have an AAA+ rating. Compare to, say, the joint ownership of a house, where the incomes and credit histories of the “shareholders” would certainly be considered before anyone extended them a loan.
This all looks like a lot more than just a shorthand to me.
No. Corporations are just shorthand for saying “all the shareholders own this in relation to their stock” — collective ownership. Ford is not a real thing, it can only own things because it is an organization of people; its shareholders do, and that money is controlled by people the shareholders have deputized to do so.
That does not seem right to me.
Several things, in no particular order:
- The name on the bank account is, most emphatically, Ford Motors.
- The fact that Ford Motors owns, e.g., an industrial welding robot located on a factory floor in Detroit, does not mean that I, as a shareholder, even a major shareholder, “own” an industrial welding robot, or even part of one. Even if this is “collective ownership”, it is inherently, and obviously, a distinct type of thing – and it is that distinction which is central to this debate.
- The same goes for the $X in cash sitting in an account at Bank Of Whatsis under the name “Ford Motors General Fund Account”.
- There are many ways to conceptualize the somewhat complicated idea of a share, but “it’s just a bunch of people who own stuff together” is far from being the most obviously correct or useful. For example, a share is NOT simply a token representing a partial ownership of the cash and assets “owned” by the collective shareholders in a particular company. It is also a financial instrument representing, among other things, a claim on the future earnings of an entity called the “corporation”. It’s as much a weird kind of a loan as a weird kind of a deed.
- Relatedly, the relationship between the value of a share and the (assets-liabilities) of a particular corporation is very loose at best. Even the relationship to things like earning are pretty vague.
- The situation you describe bears a rather closer resemblance to an unlimited liability corporation than to a limited liability one. Limited liability builds an additional, very important, firewall between the assets of a shareholder and the assets of the corporation. You may call this “not a real thing” if you wish, but it seems to me about as real and practical as anything written down on paper ever is.
1. Even if the name on the account is Ford Motors, “Ford Motors” is a collectively owned thing.
2. Yes, if Ford owns a robot (or 100 dollars in a bank), and you own 1 of 100 shares, you own 1% of that robot. Collective ownership by individuals is still ownership. Yes, of course it is different than individual ownership, primarily in that the owners have chosen to grant other people power to manage it. But if you are granting that it is collective ownership by individuals, then if individuals have freedom of speech and association, you are granting that is a way they can express that freedom.
3. Certainly you can think of shares as a loan, but it is explicitly an ownership right, as you can learn if a company is liquidated (I think creditors get preferred compensation, so lets ignore them) You will receive exactly 1% (using above example) of the sales value of Ford and its robot.
4. Sure the relationship between the VALUE of the share and the assets/liabilites of a company are loose at best, because like you said it incorporates the future value of the company (be it up or down) but the legal relationship is clear.
5. Now that’s a good point, which does clearly lay out a major legal difference between individual and collective ownership. Because if the shareholders say, did something illegal, like say bribe a judge, with their donations, they can’t be individually held liable. So I would be fine with a law that levies heavy fines against the company as punishment, rather than arresting you for committing 1% of a crime. But I’m not going to say they can’t do legal political donations.
6. (your credit comment) Sure, but shareholders aren’t applying for a loan — they already paid cash for their share of the jointly owned item — and if the joint owners of a house paid cash, they wouldn’t need a credit check either. So when I consider Ford’s credit history, it isn’t important what the shareholders rate, since Ford already has their cold hard cash, and its ability to pay isn’t depend on their ability to pay, so some kind of aggregate credit rating would be inaccurate — which is a potential lender’s only interest in that rating.
It’s a cute line, but also a huge ‘straw man’. No one — no one! — believes the corporations are people. They’re juridical persons, and they NEED to be. The only sane question is which particular sub-set of personhood rights SHOULD they have.
1. You’re missing the point, which is that a collectively owned thing is still actually a thing, a thing which did not otherwise exist. If you try to imagine a world in which 100 shareholders all spend equal portions of their own money in a quasi-organized way in order to build and sell motor cars… Well, it’s hard to do, because it’s hard to see how that would work. It takes some kind of more complicated organizational system to get that done, and that system of organization is therefore a real thing. A corporation is “shorthand” for collective ownership in about the same way that the sidewalk outside your front door that leads to the supermarket is shorthand for actually being at the supermarket.
In other words, the fact that corporations are operated by small teams of managers rather than 100s or 1000s of shareholders – are in fact insulated from their whims to a high degree – is a fundamental design feature of the system. It cannot be swept under the rug as a “shortcut” when it is convenient to do so – like when the question of who has de facto control of the corporate purse strings becomes a salient issue in the campaign finance debate.
2. Addressing the last sentence: I believe there may be other things wrong here, but addressing one – the monster implicit assumption you make here is that a private decision to purchase a stock share (of, for that matter, a candy bar) can or should be considered an act of speech. The current politicization of these decisions notwithstanding, this does not seem like a consideration a person should necessarily be expected to make. It would not seem at all strange to live in a world where no one considered the purchase of a Snickers bar or a share in Ford to be an essential form of political speech. It would actually seem rather intuitive to make rules that prevented such purchases from becoming de facto campaign contributions or votes of approval over which individuals have no other form of control – and that is a key issue here. It amounts to a restriction on those individuals’ freedom of speech.
Secondly, even individuals do not have unlimited freedom of speech. AFAICT, individual federal campaign contribution limits still apply, post Citizens United. Nor do individuals have unrestricted rights to, say, put up billboards, or operate sound trucks to promote candidates. There can still be rules, as long as they are justified and uniform. “Corporations cannot make contributions on behalf of shareholders or customers” seems like a perfectly uniform rule to me, with a pretty reasonable justification.
(Let me pause to note that my intent here is only to point out the flaw in your “there’s no way to distinguish between things individuals do and things corporations do” logic. I’m not necessarily endorsing the above rule. I have no well-formed thoughts on the best way to achieve what I imagine are our common goals here, and I’m still struggling with the “freedom of the press” factor, which I think is a whole ‘nother can of worms.)
3. The point that things are a good deal more complex than is justified by the word “shorthand” stands. See #1 in this comment.
5. Likewise, if a corporation committed some act of heinous criminality, the stockholders would not be held liable. Nor in many cases would they really be responsible in any meaningful sense – most shareholders today have very little role in the management of the company. Yet you maintain that when it comes to campaign contributions, corporations are just a “shorthand” and corporate managers are simply obeying the (diffuse) will of the owners.
6. What would matter to creditors would obviously the track record of the fictional corporate entity and its management team. They could not care less about the poor credit or decision-making skills of the corporation’s nominal owners – yet the former two are a mere “shorthand” for the latter. Weird, huh?
Even if we go with the argument that corporations are made up of people and are therefore entitled to the rights of people, isn’t it essentially double-dipping? So great, I hit my limit for monetary contributions to a campaign but I’ll just sweep right past those by having my corporation give. In fact, that’s even better because it’s not *my* money, it’s technically my shareholders’. Giving corporations the rights of people seems a bit like giving some people the right to vote twice to me.
That’s a great point.
If individual contribution limits are lawful, and if we assume that corporations are simply groups of individuals acting together, than we would need some mechanism for corporations to track and comply with the individual contribution limits of shareholders: e.g., if a corporation gave $50k in a particular race, that would have to be divided out per share and counted against the individual limits of all shareholders. And if any shareholders were already maxed out, the contribution could not be made. Also, if a single shareholder owned, say, 25% of the shares, than contributions greater than 4x the individual limit would be unlawful for the corporation in any case.
The fact that this is not really the way it works – and that such a mechanism actually seems rather cumbersome, and almost as restrictive as a ban on corporate contributions* – suggests that “groups of individual citizens acting together” is not really a sufficient model for what a corporation is. We therefore shouldn’t necessarily expect the individual rights of shareholders to extend to a corporation they own.
* Not to mention strange and upsetting: imagine deciding to give some money in a congressional race you’re passionate about, only to discover that you were maxed out because you owned a few thousand shares in various companies that had already “contributed on your behalf.” (Or perhaps they already maxed you out on the candidate you oppose! Or both!)
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