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An Existing, Ecologically-Successful Genus of Collectively Intelligent Artificial Creatures
May 13, 2012 3:33 PM   Subscribe

Our planet is inhabited by two distinct kinds of intelligent beings — individual humans and corporate entities — whose natures and interests are intimately linked. To co-exist well, we need to find ways to define the rights and responsibilities of both individual humans and corporate entities, and to find ways to ensure that corporate entities behave as responsible members of society. (SLAX)(pdf warning)
posted by AElfwine Evenstar (88 comments total) 8 users marked this as a favorite

 
A discussion of “corporations” typically focuses on for-profit corporations, since these have distinctive legal properties and are influential in our society. However, we will treat for-profit corporations as one species within the larger genus of corporate entities, which also includes non-profit corporations, unions, governments large and small, churches old and new, and other species of corporate entities.

Excellent point from the author. Anything you do to for-profit corporations, you do to unions, Planned Parenthood and the like.

The problem isn't that corporations are deemed entities with free speech--I want my unions and my Planned Parenthoods and my New York Times Co. to be able to say all they want. The problem is the dicey idea that donating money to campaigns and PACs constitutes a form of speech. It is not. It says nothing, it communicates nothing to others. Money donated to candidates and to PACs is not speech.
posted by Ironmouth at 3:40 PM on May 13, 2012 [44 favorites]


Holy shit I agree with Ironmouth. :) High-Five.
posted by AElfwine Evenstar at 3:43 PM on May 13, 2012 [6 favorites]


Free speech is nice and all, but there's no such thing as a transnational human, but transnational corporations not only exist but are effectively beyond the rule of national law.

I want Planned Parenthood to enjoy freedom of speech, sure, but I also want BP to fear for its continued freedom and existence if it commits criminal negligence causing death.
posted by mhoye at 3:47 PM on May 13, 2012 [15 favorites]


Applying Darwinian evolution to Corporations is nonsense.
posted by PJLandis at 3:48 PM on May 13, 2012 [3 favorites]


This concept of corporations as collective entities of one sort or another has be floating around the 'net comparatively recently. MeFi's own Charlie Stross made a similar point, if a little more whimsically:
We are now living in a global state that has been structured for the benefit of non-human entities with non-human goals. They have enormous media reach, which they use to distract attention from threats to their own survival. They also have an enormous ability to support litigation against public participation, except in the very limited circumstances where such action is forbidden. Individual atomized humans are thus either co-opted by these entities (you can live very nicely as a CEO or a politician, as long as you don't bite the feeding hand) or steamrollered if they try to resist.

In short, we are living in the aftermath of an alien invasion.
Of course, we all know how this ends—Cyberdyne Systems Corporation.
posted by Doktor Zed at 3:56 PM on May 13, 2012 [9 favorites]


The problem isn't that corporations are deemed entities with free speech--I want my unions and my Planned Parenthoods and my New York Times Co. to be able to say all they want.

Weren't they doing that the hell before Citizen's United?! In the case of the Times, is it not the individual people in the corporations who are exhibiting free speech, like reporters? Why isn't that not sufficient for fucking PACs? Doesn't the idea of a corporation-level "free speech" lead us eventually to more institutional loudspeakers like Fox News?
posted by JHarris at 4:01 PM on May 13, 2012 [2 favorites]


Our planet is divided into two types of beings: those who read PDFs and those who don't.
posted by jonmc at 4:17 PM on May 13, 2012 [7 favorites]


I will believe corporations are people when Texas executes one of them.
posted by localroger at 4:17 PM on May 13, 2012 [21 favorites]


I agree with Ironmouth that money should not be considered outright speech.

We should conversely take care that speech cannot be censored by banning its financing. I'd expect this concern sheds light upon the precedent that money is speech, but obviously the financial blockade of wikileaks demonstrates that such protections are basically non-existent in practice.

At present, we must find methods to prevent funding from drowning out other messages though, which means reducing the extent to which money is speech.

Also, I'm comfortable with the idea that funding should be broadly traceable and public, perhaps eventually eliminating all anonymity and privacy for all financial transactions between two corporations, while still permitting individuals to engage in anonymous and private financial transactions.

I'm fine with David Koch rewarding some climate change denialists personally, but the public should know once he hires himself a staff to administer such rewards.
posted by jeffburdges at 4:54 PM on May 13, 2012 [1 favorite]


I will believe corporations are people when Texas executes one of them.

It's called Chapter 7 bankruptcy.
posted by ZenMasterThis at 4:56 PM on May 13, 2012


The problem isn't that corporations are deemed entities with free speech--I want my unions and my Planned Parenthoods and my New York Times Co. to be able to say all they want.
Weren't they doing that the hell before Citizen's United?! In the case of the Times, is it not the individual people in the corporations who are exhibiting free speech, like reporters? Why isn't that not sufficient for fucking PACs? Doesn't the idea of a corporation-level "free speech" lead us eventually to more institutional loudspeakers like Fox News?


You don't think that Fox News should have the right to air what it airs? What legal limits would you like to place on it? As much as I hate the things they do, denying their right to do it seems like an awfully dangerous precedent.
posted by nebulawindphone at 4:56 PM on May 13, 2012 [2 favorites]


"Applying Darwinian evolution to Corporations is nonsense."

Well, yes, but as organisms evolve they simultaneously adapt to their environment and change their environment to suit themselves. Both have downstream influences on the continuing expression of the organism, whether that be a later life stage or subsequent incarnation.

It's not Darwinian evolution, no - more like Lamarkian or Lysenkoism, with the understanding that just because they're (more or less) invalid in a biological context doesn't mean they're not valid in non-biological contexts. But, at the heart, it is ecology - which is based on a Darwinist view of evolution - and a lot of very similar principles apply.
posted by Pinback at 4:56 PM on May 13, 2012 [1 favorite]


Ladies and gentlmen, William Fucking Gibson! Give the man a big hand!
posted by newdaddy at 5:06 PM on May 13, 2012


(Honesty I don't know what his real middle name is.)
posted by newdaddy at 5:08 PM on May 13, 2012 [1 favorite]


The problem isn't that corporations are deemed entities with free speech--I want my unions and my Planned Parenthoods and my New York Times Co. to be able to say all they want.

Why? If corporations had no free speech in themselves, would unions in themselves need it? And why exactly does PP or NYT in themselves need rights above and beyond those the CEOs and members have?
posted by DU at 5:23 PM on May 13, 2012 [1 favorite]


If no organizations have freedom of speech, then government will blockade anyone seeking to criticize favored corporations.
posted by jeffburdges at 5:29 PM on May 13, 2012


The pre-Citizens United world was divided between media corporations, which could spend unlimited amounts of money on overt or covert political advocacy, and non-media corporations, which could not. Is that a particularly sustainable or defensible divide given the way technology and communications are evolving?

When you look at actual spending in the post-Citizens United world you aren't seeing that it is big corporations spending cynically in their self-interests, but in fact it is their CEOs and owners who are spending in idiosyncratic and not necessarily cold-blooded ways. The guys who staked Rick Santorum and Newt Gingrich were thinking about many things, but it sure wasn't "who can actually beat Obama in November." The Koch brothers and George Soros are just doing what they've always been doing; Exxon and Fidelity are, too. Not that much of a change.
posted by MattD at 5:32 PM on May 13, 2012


I get that etymologically incorporation is corporeal, but is it really all that different from an affiliation, a consortium or an association? It's a legal distinction, but is it a functional one?
posted by StickyCarpet at 5:39 PM on May 13, 2012


...individual humans and corporate entities ...

And nothing about governments?
posted by Chocolate Pickle at 5:40 PM on May 13, 2012


The pre-Citizens United world was divided between media corporations, which could spend unlimited amounts of money on overt or covert political advocacy

I've heard this argument before and I don't buy that media corporations 'could' spend unlimited amounts of money on anything (for any reasonable definition of 'could'). News Corp makes less in total revenue than Exxon Mobile makes in straight profit. And presumably even the dastardly Murdoch spends a little corporate revenue on something other than advocacy.

I don't think there's any real evidence that the first amendment right to freedom of press has turned media organizations into oligarchical king-makers.
posted by muddgirl at 5:41 PM on May 13, 2012


I think I remembered that slightly wrong. News Corp's annual international revenue is somewhere around 35 billion, while Exxon's annual profit is somewhere around 30 billion.
posted by muddgirl at 5:49 PM on May 13, 2012


Okay, so I study corporations, and work with lots of people who do the same, and this is a political screed, rather than a real effort at insight. I get the Citizens United anger, so I understand the guy wanting to vent, but he makes it sound like a scientific paper, which it isn't. In fact, if you have ever worked for a corporation, most his "hyper-intelligent corporation" talk should feel like insane hyperbole.

So, to address his wider point:

Corporations are organizations. Organizations have been around a long time: political organizations, religious organizations, tribal organizations, economic organizations. Corporations are, like all other organizations, in fact, embedded in webs of other organizations, including governments, unions, social structures, etc. And corporations emphatically do not operate like "creatures." Corporate behavior is determined by the complex interactions of psychology, sociology, and economics at work on the members of the corporations.

He also says a lot of stuff that is just wrong, for example:

"Unlike individual human beings, a corporation does not have a bounded lifespan."

Sure, but most corporations do have lifespans, the average lasts 40-50 years, much less than most humans.

Darwinian evolution ensures that surviving corporations are focused on accumulating and protecting wealth, which is life’s blood to a corporation.

All corporations are focusing on economic success, but organizations tend to get increasingly bad at this as they age. Anyone who has worked in organizations knows they are not hyper-competent Darwinian competitors, but agglomerations of people, culture, structure, politics, and all sorts of crazy irrationalities.

Corporate influence, or indeed Church influence, or Republican influence, or union influence is always potentially dangerous. But corporations are not artificial creatures, they are human organizations. Other human organizations also act on corporations: monopolies are broken, political movements arise, and so on. Vigilance for abuse is important, but this paper is no more substantial than a blog post.
posted by blahblahblah at 5:51 PM on May 13, 2012 [4 favorites]


I should say "the average Fortune 500 company lasts 40-50 years" - the average corporation lasts much shorter periods of time, and the amount of time that a Fortune 500 company is influential is shrinking rapidly.
posted by blahblahblah at 5:53 PM on May 13, 2012


Ironmouth is exactly correct. The problem is not corporate personality, because there's no way of getting rid of that without also stripping away, for example, the protections against the government just randomly seizing corporate assets or conducting warrantless wiretapping of corporate phone lines.

The problem is not with the fact that corporations as such have rights but with the categorization of spending money as expressive conduct protected by the First Amendment. Get rid of that and your problems are solved.

Unfortunately, the only ways to get rid of that are to 1) amend the Constitution (which ain't happening), 2) have the Supreme Court take a second look at it (which isn't that much more likely but isn't impossible either), or 3) go to straight public financing of campaigns, which might well be able to work.

I'm in favor of the third, as it would not only fix the Citizens United issues but probably resolve a lot of other problems, especially the stranglehold that the two main political parties have on electoral politics.
posted by valkyryn at 5:56 PM on May 13, 2012 [4 favorites]


You don't think that Fox News should have the right to air what it airs? What legal limits would you like to place on it? As much as I hate the things they do, denying their right to do it seems like an awfully dangerous precedent.

I don't think Fox News has the right to say anything, because it's not a person, it's a financial machine, like all corporations. Its reporters have free speech, which they are expressing through Fox News. In any case "denying their right" is not the same damn thing as "saying their right is not guarded in the highest law of the land," but thanks for conflating the two, hyuck!

The idea that a corporation itself, which doesn't have a brain but does have executive leadership, can in some way exercise "free speech" is pernicious and bad. The assumption that it can have an opinion of its own, however, leads to the idea that it can somehow "speak," and that it is valid for it to do so. In a way, it serves as a trojan horse to make the idea of organizations that exist only to trump some idea in the marketplace more reasonable.

At least, this was all the case before the even more pernicious idea that spending money was speech was introduced. Because a corporation can legally have money, then in a sense it is speaking when it spends it. It's actually its executives, of course, but saying that it's the companies themselves who are somehow speaking kind of distracts the audience away from the strings of the puppeteer.

(All of this is off the top of my head. I'm still thinking this through.)
posted by JHarris at 5:57 PM on May 13, 2012 [2 favorites]


Sure, but most corporations do have lifespans, the average lasts 40-50 years, much less than most humans.

True. The number of corporations that are even a century old is quite small. One can certainly trace businesses back further than that, e.g., ExxonMobil came from Exxon and Mobil, which were originally Standard New Jersey and Socony, which in turn came from Standard Oil, which was founded in 1870. But we're looking at at least four "generations" of corporate entities there. And hey, if I count my ancestry back four generations, I wind up... around 1870.
posted by valkyryn at 6:01 PM on May 13, 2012 [1 favorite]


Sure, but most corporations do have lifespans, the average lasts 40-50 years, much less than most humans.

A human being, if they live a very careful and conservative life, can live past 100 years. A corporation, if it makes no mistakes and continues to adapt to changing marketplaces, has a potentially infinite lifespan. That's what the author clearly meant by a 'bounded lifespan.' The max lifespan of a human being is different than the average lifespan.


But corporations are not artificial creatures, they are human organizations.

I believe that's the basis of the concern with decisions like Citizens' United. The corporation is group of people, but it is also a separate legal entity. Whether that separate legal entity should be treated as a 'composite person' with the assorted rights of personhood is a legitimate question. Arguing about whether most large corporations are really that sensible (when viewed from the inside) is a bit like cells in a body saying that human beings make no sense.
posted by verb at 6:02 PM on May 13, 2012 [1 favorite]


Its reporters have free speech, which they are expressing through Fox News.

Yeah, that's just not how corporate law has ever worked, even aside from the freedom of expression. Remember: one of the most important things that corporations do is act as a liability shield for owners and employees. The idea that corporations can "have" free speech is a consequence of the way corporations act in their everyday business functions, not something fundamental to the corporate form.

It's actually its executives, of course

No. It may sort of look that way in practice, but the theory is that it's actually the shareholders taking action, not the executives. Executives may be significant shareholders, but 1) this is only largely true of the huge, publicly-traded megacorps, and 2) needn't even be true there. Corporate executives work for shareholders, and the shareholders are ultimately the ones that call the shots.

This is especially true in closely-held corporations, and the vast majority of corporate entities are closely held.
posted by valkyryn at 6:07 PM on May 13, 2012


Before you know it they'll be getting the right to vote too.
posted by dazed_one at 6:09 PM on May 13, 2012


A corporation is not a person. Individual human beings are persons.
Money donated to candidates and to PACs is not speech.
@Ironmouth is correct that it's not speech. The fact that this has to even be argued or agreed with indicates a much, much deeper structural problem. The problem is not that corporations have the same rights as people but rather that basic human rights do not supersede the right of an intellectual concept.

Consider the argument of political campaign donations. Corporate donations do not make much sense in the spirit of the constitution. The constitution was designed for individual people to rule and govern themselves. It's commonly said that there are checks and balances established amongst the three branches of the Federal government, however, those were not the only checks and balances established.

There is also the distribution of power between the Federal government and the States, as well as in the people themselves. The idea was that through a process of rhetoric, disagreement, agreement, and voting, the ultimate power in the society would rest with the individuals. That is the ultimate balance of power. One (white male) citizen, one vote.

That is the basic unit of power that is being usurped by corporate citizenship. Elections should be run by men, for men. There was no mention of a two party system in the constitution, or superPACs, or any of that bollocks. Those are layers and layers and layers of fictitious organisation resting on the premise that anyone beside individual people were meant to be involved in the political process.

We should not be arguing against corporate power in politics. If anything, we should be rebelling against it, for it is a caustic perversion of a couple of different entities. And as mentioned, at this point, it is so engrained, that the perversion has the high ground!

Corporations were established Back In The Day as vehicles of risk-mitigation. New "technology" – like ships – required massive capital investment, larger than individuals could – or were willing – to take. Thus, the corporation was a way of distributing investment risk and reward across a group of willing individuals. That's it. That's the basis of a corporation. It's a vehicle for allocating risk and reward.

That allowed for the separation of owner and operator. Ten dudes could build a ship and pay another guy to go sail it. They would pay him a wage, which was integrated into costs, and he returned the booty to them. Now we have a problem, for if that hired dude rams the ship into the dock, killing women and children, who's responsible? Surely the hired dude is, but he doesn't have any money. If he did, he would be on the shore, hiring other dudes. The investors have the money. But they didn't make the decision for ram the ship into the dock, thus is it right that they pay? The old Smith and Wesson argument. Guns don't kill people, people kill people.

Thus, the next iteration. The limited liability company -- and the birth of the principle–agent problem. So now the investors are protected from the action of their managers, and likewise, the managers are protected from the actions of their investors. Much the same as private murder is illegal, but sanctioned murder by an individual in context of the army is legal.

What a dangerous fucking structure. You have people sitting in the countryside smoking pipes and looking at old maps, playing the harpsichord. The investors. And then you have the managers, who are the men on the boats going to foreign lands, to basically do whatever is necessary to bring back the booty for the people in the countryside. Somewhere along the lines we get bonus culture, insurance, and basically the rest of Western Capitalism.

But the principles have not changed. The corporation is about concentrating wealth to achieve goals that cannot be achieved individually. The constitution itself specified a diffusion of power to prevent concentrations of power.

Thus, the problem is not that the corporation somehow attained personhood. That was understandable at the time, for corporations needed some rights that had previously been attributable to people, like intellectual property, real-estate, and all that. That's fine.

The problem is that being a corporation is better than being a person, due to the limited liability shield. Being a corporation today is like being a soldier in the army. You do what your told by your commanding officers, and you are not responsible for the outcome of your actions. As long as you are doing exactly what you are told. Same with a corporation.

The limited liability aspect is what is taken advantage of. How different would the world be if instead of "limited liability", we had "distributed liability", so that responsibility was distributed the same way as ownership?

In separating ownership from responsibility, we created something that is quite ugly. It's simultaneously creating and destroying our planet. It's given us the best quality of life yet and the worst atrocities imaginable.

A corporation is not a person. A corporation is better than a person. And that is the core problem. Well, the first half of the core problem.

The second half of the core problem is the acceptance by the people of capitalist societies of the dominance of capitalism in its current form. China is proving that you can have a totalitarian society with both socialist and capitalistic structures. The European social democracies are proving that you can have capitalist private sectors and socialist public sectors.

And before you bring up anything about Greece or France or the Euro or any of that bollocks, I'll make you a deal silver-tongue. You redistribute wealth to a level that makes sense, and we'll see then if the global economy has the same problems it does at the moment. The problems with the global economy are precisely wealthy groups of individuals being over-represented in social governance.

We are accepting the worst kind of corporate models. That is the problem with Romney, the Private Equity President and Bloomberg The Billionaire Mayor. They are GREAT at running businesses, for business is primarily about creating narrow entities that are very efficient at tackling large investment problems.

But that is NOT what the government is designed to do. If you run a government like a corporation, you will get something very, very nasty. Government is about realising that whilst people within a society have different value to the society, everyone has an inherent value as a citizen. That is the key difference, as in a corporation, you reject that which does not have value for that which does. If the government was run like a great business, there would be people on the streets dying of hunger. Oh wait. There are.

It's VERY seductive to intermingle business and government. Business is so good at what it does, partially because of the limited liability structure. You can take a lot of risks and do a lot of experiments (in deep water oil drilling and other things) when you do not have to bear the responsibility for the consequences. Lots of progress is possible indeed. It's amazing. You get computers, and iPhones, and satellites, and medicine, and all kinds of great things. But corporations are terrible at taking care of people. Similarly to how the government has a poor track record with risk-taking and efficiency.

Thus, to return to the topic. Until we 1) recognise that corporations are better than people at the moment, and 2) that corporations have been allowed to way over-reach the bounds in which they were required, we are going to continue to end up with something very nasty.

The funny thing is that those driving the corporate bus have shifted the argument around, so that the people are on the back foot. "Tell us why corporations aren't like people! Until you, do they are." There is no argument actually. Corporations are not and were never people. The fact that they are considered people is a big big fuck-up that could easily be fixed.

Problem being that the biggest distinction is society has nothing to do with Red or Blue, but have and have not. As long as the voters are playing the vertical game, they're not playing the horizontal game. The corporate game is the horizontal game.
posted by nickrussell at 6:12 PM on May 13, 2012 [28 favorites]


A corporation, if it makes no mistakes and continues to adapt to changing marketplaces, has a potentially infinite lifespan.

This is true, but not in any way that matters. True, corporations can technically last forever, but functionally they never do. It's a red herring.
posted by valkyryn at 6:18 PM on May 13, 2012


The problem is the dicey idea that donating money to campaigns and PACs constitutes a form of speech. It is not. It says nothing, it communicates nothing to others. Money donated to candidates and to PACs is not speech.

I'm not getting what's so dicey about this. I find it difficult to believe money is not speech, unless one's willing to take a pretty serious bite out of the First Amendment.

Which isn't to say that there are not risks with powerful collectives being able to influence elections. However, unless the game is seriously reformed, I don't see how McCain-Feingold could have stood and not be considered a violation of free speech.
posted by 2N2222 at 6:25 PM on May 13, 2012


There's a lot of fuzzy thinking going on in this thread of this form: "Of course corporations have to have rights! Because otherwise they would be treated as entities that had no rights!"

Yes. And? Organizations are not people. That's the entire point of this. The individual people would still have their rights, the organization would not. What precisely is the problem with that?
posted by DU at 6:26 PM on May 13, 2012 [3 favorites]


The frogs wanted a king. They prayed to Zeus, "Almighty Zeus, send us a king!" Zeus, amused at their effrontery, threw a log down from heaven, which landed in their pond. The frogs were very impressed and they anointed the log as their king, held processions and masques in its honor, and treated it with the greatest of respect. After a while they noticed that the log wasn't doing anything and they became dissatisfied so they prayed to Zeus once more. Zeus, tired of the game, sent them a new king. It was a stork, and it ate the frogs all up.

Moral: don't mess with economic systems unless you know how they work.
posted by Joe in Australia at 6:27 PM on May 13, 2012 [1 favorite]


verb: A human being, if they live a very careful and conservative life, can live past 100 years. A corporation, if it makes no mistakes and continues to adapt to changing marketplaces, has a potentially infinite lifespan. That's what the author clearly meant by a 'bounded lifespan.' The max lifespan of a human being is different than the average lifespan.

But that's what's interesting - we find over and over again that corporations cannot continue to adapt to changing marketplaces indefinitely. The things that make them good at one thing ultimately make them inflexible. That doesn't mean corporations couldn't last indefinitely, in theory, but they don't (at least without being part of a government). The oldest corporations are two monastery bell makers in Japan, by the way, from the 1300s. One just went out of business.

I should mention that the reason this matters is that it is indicative of the shallowness of the linked article. The points about political processes and corporations are important, but discussed in many places and forums. The points about corporations as a "genus of collectively intelligent artificial creatures" are just pure and simple BS.

There is enough to worry about involving corporate influence given our current structure of campaign financing without invoking singularities and Blade Runner.
posted by blahblahblah at 6:27 PM on May 13, 2012


Corporations were established Back In The Day as vehicles of risk-mitigation. New "technology" – like ships – required massive capital investment, larger than individuals could – or were willing – to take. Thus, the corporation was a way of distributing investment risk and reward across a group of willing individuals. That's it. That's the basis of a corporation. It's a vehicle for allocating risk and reward.

Your entire post is a misrepresentation of the history of the corporation so blatant if it were not so wildly contradictory one might almost suspect it to be willful.

The way corporations accomplished the distrubtion of investment risk and reward was by the corporate liability shield. The way risk is allocated is by limiting the liability of investors to the amount that they'd invested. It was the entire point. Your suggestion that the liability shield came along later as some sort of perversion of the original point is ludicrously false. The liability shield has always been a feature of corporate law.

Further, a "limited liability company" is not the same thing as the corporate liability shield, or even a corporation. LLCs are actually very recent creatures of statute, dating to about the 1990s, and are sort of a hybrid corporate/partnership entity. They act like corporations for liability purposes and partnerships for tax purposes. Your confusion about this terminology suggests a deep and fundamental ignorance of the subject matter. Because asking this question:

How different would the world be if instead of "limited liability", we had "distributed liability", so that responsibility was distributed the same way as ownership?

Is asking "What would the world be like if corporations never existed?" Turns out we know the answer to that question, i.e., "It would be like the world that existed before corporations were invented." We'd probably be living in some sort of feudal monarchy, the vast majority of the population would be engaged in subsistence farming, the average life expectancy would be in the mid-forties, and women wouldn't be able to own property, much less vote (because men couldn't do that either).
posted by valkyryn at 6:27 PM on May 13, 2012 [5 favorites]


Organizations are not people. That's the entire point of this. The individual people would still have their rights, the organization would not. What precisely is the problem with that?

The problem is that unless organizations have rights, individuals lose their rights as soon as they organize.
posted by valkyryn at 6:29 PM on May 13, 2012


The problem is that unless organizations have rights, individuals lose their rights as soon as they organize.

How? If you and Joe want to organize, which one of you can the government eavesdrop on without a warrant?

AFAICT, the biggest change in a "corporations don't have rights" paradigm would be that corporate statements would have to come from some individual human who was responsible for the content. The horror!
posted by DU at 6:33 PM on May 13, 2012 [2 favorites]


TL;DR rebuttal of nickrussell: you're conflating "business" and "corporation" in ways that are neither accurate nor helpful. The two are not the same thing. There are plenty of "businesses" that are not corporations, and many corporations aren't actually engaged in "business" in any commercial sense.

The Greeks and Romans were perfectly aware of the corrosive effect of commercial interests upon the body politic well over a thousand years before the corporation was invented. Such concerns have nothing whatsoever to do with the corporations as legal entities.
posted by valkyryn at 6:35 PM on May 13, 2012 [1 favorite]


>The problem is that unless organizations have rights, individuals lose their rights as soon as they organize.

How? If you and Joe want to organize, which one of you can the government eavesdrop on without a warrant?


If you're content with it being impossible for individuals to go into business together, then neither. But if you're not, i.e., if you want individuals to be able to pool their resources in order to accomplish things that are impossible to do by one's self, then as long as the wiretapping has to do with the business... potentially both.
posted by valkyryn at 6:38 PM on May 13, 2012


The way risk is allocated is by limiting the liability of investors to the amount that they'd invested. It was the entire point. Your suggestion that the liability shield came along later as some sort of perversion of the original point is ludicrously false. The liability shield has always been a feature of corporate law.

Trees? Trees? Can you see the forest? You want to read the history of the corporation? Go read wikipedia and stop trying to smack me in the face with the fish. My point is not to give an accurate portrayal of the corporation throughout history. It is wilful. Wilful story-telling because I spend the rest of my life being accurate and being right. So go smack yourself in the face with the fish because I don't care about being right or accurate. If I was right or accurate, what would you and the persecution posse have to go on about?

You are talking about the liability limited to the original investment. Thank you for adding that detail. I am talking about the gross externalisation of costs that has come with that over time. If I am an investor and I put $1,000 into an investment and that investment blows up and causes $1,000,000 in damage, who picks up the tab?

Now, if I am an individual person, and I cause $1,000,000 in damage what happens? The point is not about the history of the corporation dude. It's about HOW BEING A CORPORATION IS BETTER THAN BEING A PERSON. (note the yelling.)

They act like corporations for liability purposes and partnerships for tax purposes. Your confusion about this terminology suggests a deep and fundamental ignorance of the subject matter.

Your focus on the terminology of my post and completely missing the theme has illustrated my view on the subject. Please stop smacking yourself in the face with the fish.
posted by nickrussell at 6:42 PM on May 13, 2012 [2 favorites]


The problem isn't that corporations are deemed entities with free speech--I want my unions and my Planned Parenthoods and my New York Times Co. to be able to say all they want.

Weren't they doing that the hell before Citizen's United?! In the case of the Times, is it not the individual people in the corporations who are exhibiting free speech, like reporters? Why isn't that not sufficient for fucking PACs? Doesn't the idea of a corporation-level "free speech" lead us eventually to more institutional loudspeakers like Fox News?


Hang on. Are you proposing that Fox News not have the right of free speech? Because I disagree wholeheartedly with that. So does our entire system of jurisprudence. It is wrong.
posted by Ironmouth at 6:56 PM on May 13, 2012


Joe in Austrailia: I have no idea on earth how you get from your analogy to your conclusion.
posted by JHarris at 6:59 PM on May 13, 2012 [2 favorites]


Hang on. Are you proposing that Fox News not have the right of free speech? Because I disagree wholeheartedly with that.

Fox News is not the same thing as its employees. It is possible that I'm misunderstanding something here, but how can an entity without a brain exercise free speech? All it can do is repeat what someone else is saying, correct?
posted by JHarris at 7:01 PM on May 13, 2012


The problem isn't that corporations are deemed entities with free speech--I want my unions and my Planned Parenthoods and my New York Times Co. to be able to say all they want.

Why? If corporations had no free speech in themselves, would unions in themselves need it? And why exactly does PP or NYT in themselves need rights above and beyond those the CEOs and members have?


Because news outlets publish. It is the act of publication, not writing we are concerned with most. If the government can enjoin the act of publication, it can censor. The writer only writes. The publisher disseminates to a wider world.

Let's think of it practically--the government censors a newspaper. Who sues? 49 writers and editors? With what money? Even one censored story, how does the reporter sue on his $1,000 a week salary?
posted by Ironmouth at 7:04 PM on May 13, 2012 [1 favorite]


Corporations are not and were never people. The fact that they are considered people is a big big fuck-up that could easily be fixed.

So, Ford builds a car that blows up when it gets rear-ended. How do I sue them? They are not a person, so they lack what is called standing.

How do I sue a trust or represent an estate in court? The problem in the past was that you had to sue, find and serve everyone who was a shareholder.

It was not a fuck up and it can't be easily fixed. If you know the first thing about civil procedure you'd know that.

The problem is money=speech.
posted by Ironmouth at 7:10 PM on May 13, 2012


Hang on. Are you proposing that Fox News not have the right of free speech? Because I disagree wholeheartedly with that.

Fox News is not the same thing as its employees. It is possible that I'm misunderstanding something here, but how can an entity without a brain exercise free speech? All it can do is repeat what someone else is saying, correct?


No. It is precisely the corporation that is talking. Without the TV cameras Sean Hannity is a guy talking in a room. I'm the government and I ban manufacture and use of TV equipment. Sean can talk all he wants, but no one can hear him. Get it? Whose gonna sue? Sean Hannity? He's just talking and doesn't have standing to sue because he doesn't make or operate TV cameras. Hell, Hannity doesn't even own his own copyrights. Fox News does.
posted by Ironmouth at 7:20 PM on May 13, 2012


it can't be easily fixed.

Easily fixed.

Dear America, corporations no longer have the same rights as people. Signed, Grand Wizard of the Supreme Court.

See? Easily fixed.
posted by nickrussell at 7:21 PM on May 13, 2012 [1 favorite]


it can't be easily fixed.

Easily fixed.

Dear America, corporations no longer have the same rights as people. Signed, Grand Wizard of the Supreme Court.

See? Easily fixed.


You didn't even respond to any of my points. Care to respond to my points?
posted by Ironmouth at 7:30 PM on May 13, 2012


He's just talking and doesn't have standing to sue because he doesn't make or operate TV cameras. Hell, Hannity doesn't even own his own copyrights. Fox News does.

In our hypothetical world where Fox News is just a group of people making some shows, I suppose the investors would sue. They paid some guys to make a show to appeal to a particular group of people, and are being prevented from making that show for those people.

I guess if you really want the whole Fox News to be in on the suit you could do it as a class-action thing.

Anyway, "corporations should not have the rights of persons" isn't equivalent to "corporations should have no rights". For instance, if I think the main problem with corporations is that they're too good at keeping lucrative secrets, I might want to remove just their Fourth Amendment protections, requiring them to publish e.g. their inventories and internal phone numbers publicly.

I do not actually hold that view.
posted by LogicalDash at 7:33 PM on May 13, 2012


In our hypothetical world where Fox News is just a group of people making some shows, I suppose the investors would sue. They paid some guys to make a show to appeal to a particular group of people, and are being prevented from making that show for those people.

The individual shareholders? In the hypo, they're not speaking because corporations have no free speech rights, remember?
posted by Ironmouth at 7:38 PM on May 13, 2012


In the hypo, they are speaking for themselves because there is no corporation. They are speaking as a group using a class action suit. Or a TV show, if they can get it made.
posted by LogicalDash at 7:40 PM on May 13, 2012 [1 favorite]


You didn't even respond to any of my points. Care to respond to my points?

Sadly, I don't know the first thing about civil procedure. I suggest you chat with valkyryn, since you both seem to be legal eagles. I'm just a lowly social entrepreneur, attempting to democratise different areas of commerce. Don't speak legalese. Standing is what I do when I'm not sitting. If I had to sue trustees, I would hire someone sharp -- probably valkyryn -- to do it.

Until those matters arise, I will continue to believe that the problem is easy to fix. When the people want it fixed, it will be fixed. Most things go that way. Right now, corporations have convinced people that other people are the problem. Many people's lives are allegiance to brands. Coke or Pepsi. Ford or Toyota. Democrat or Republican. Tea Party or Occupy. Meanwhile, wealth concentrates, poverty spreads, and we sit here debating what the meaning of the word "is" is.

I won't respond to your points because I don't think we should have to argue things like that. I think the people should own the corporations, not the other way around. I think the corporations should exist as servants to the people, not the other way around.

So if you want to talk about how to make today's corporations better? I don't want today's corporations to be better. The corporations in my mind bear little resemblance to the corporations, thus, it's not your question I do not want to answer, it's your allegiance to the current model of the corporations I find invalid.
posted by nickrussell at 7:44 PM on May 13, 2012 [1 favorite]


In the hypo, they are speaking for themselves because there is no corporation. They are speaking as a group using a class action suit. Or a TV show, if they can get it made.


But who pays for the TV systems? And how can Hannity sue if he personally makes no tv equipment?
posted by Ironmouth at 7:48 PM on May 13, 2012


But if you're not, i.e., if you want individuals to be able to pool their resources in order to accomplish things that are impossible to do by one's self, then as long as the wiretapping has to do with the business... potentially both.

I'm not sure, but it sounds like you're supposing that somebody decided that the police need to know what's going on in that business. If true, they'd get a warrant for it.

Both individuals still have the right to privacy, right? If they lose that when they go into business, that means the business is still a legal entity of some description, and DU suggests that it not be.
posted by LogicalDash at 7:48 PM on May 13, 2012


DU wrote: AFAICT, the biggest change in a "corporations don't have rights" paradigm would be that corporate statements would have to come from some individual human who was responsible for the content. The horror!

"Corporate statements" include things like articles in newspapers. Your proposal would mean that anyone who felt defamed by an article would be able to sue the reporter, the editor, the publisher, the person who owned the press, and so forth. If the press were owned by a partnership then s/he could sue any member of the partnership for the entire amount of damages, and leave it up to the partner to get reimbursed. This is called joint and several liability.

More generally, the same thing applies to every act that is presently done by a corporation. Right now I own (through my pension fund) shares in lots of corporations. I don't know or need to know what they do; I'm just an investor. Under your proposal I would be a partner and I would be jointly and severally liable for their acts. I'd be crazy to invest in so many companies! If any one of them went bankrupt I would lose my house! On the other hand, there would be no large partnerships because the active members of the partnerships also have joint and several liability for the acts of any partner.

So my pension fund wouldn't invest in anything; it would just lend money. And it wouldn't be able to lend money to a large partnership, because there there wouldn't be any. Instead of a partnership I would have a small moneylending operation, probably with a goldsmith or pawnbroker as intermediary. And I would really hope that I could trust my intermediary, because without corporations I have no standing to investigate their accounts or any hope that a corporate officer would blow the whistle on corporate malfeasance.
posted by Joe in Australia at 7:49 PM on May 13, 2012 [1 favorite]


You didn't even respond to any of my points. Care to respond to my points?

Sadly, I don't know the first thing about civil procedure. I suggest you chat with valkyryn, since you both seem to be legal eagles. I'm just a lowly social entrepreneur, attempting to democratise different areas of commerce. Don't speak legalese. Standing is what I do when I'm not sitting. If I had to sue trustees, I would hire someone sharp -- probably valkyryn -- to do it.

Until those matters arise, I will continue to believe that the problem is easy to fix. When the people want it fixed, it will be fixed. Most things go that way. Right now, corporations have convinced people that other people are the problem. Many people's lives are allegiance to brands. Coke or Pepsi. Ford or Toyota. Democrat or Republican. Tea Party or Occupy. Meanwhile, wealth concentrates, poverty spreads, and we sit here debating what the meaning of the word "is" is.


You proposed changing the law. I raised some objections on legal grounds. You don't need a law degree to learn enough about these issues to contribute.

It is important to understand that these are systems of trade offs and some trade offs sound great, but aren't when you look at them.
posted by Ironmouth at 7:52 PM on May 13, 2012 [1 favorite]


This discussion is getting complicated, but I've often felt that it should be easier, or spend more resources prosecuting cases where it is already a viable option, to pierce the corporate veil and hold individuals responsible for corporate actions especially in situations where there is a loss of life or other catastrophic damage; that is one way to encourage corporate responsibility without vague overtures to them evolving as corporate beings.
posted by PJLandis at 7:54 PM on May 13, 2012


Until those matters arise, I will continue to believe that the problem is easy to fix.

Well, we're having a conversation about those matters, so I guess you could say they have arisen.
posted by LogicalDash at 7:55 PM on May 13, 2012 [1 favorite]


Applying Darwinian evolution to Corporations is nonsense.

This is child's play compared to these guys.
posted by AElfwine Evenstar at 8:07 PM on May 13, 2012 [1 favorite]


You proposed changing the law.

A Marxist said in his presentation once: "It is not the structure of the capitalist pyramid that I seek to change. It is the necessary existence of the capitalist pyramid that I am challenging. I do not need to 'fix' the system, for the system itself is broken and we need a new system. If I believe we need a new system, what is the use of recognising the old system?"

I did not propose changing a law. I proposed fixing a problem. If the problem is corporate personhood, let's get rid of corporate personhood. If someone is abusing you, do you ask them to abuse you less or differently? Or do you seek end the situation of abuse?

Well, we're having a conversation about those matters, so I guess you could say they have arisen.

Frankly, this is a terrible 'conversation'. I humbly apologise for any role that I have had in it, for whilst I think many solid points have been raised by others and myself, something's just a bit stuck, isn't it. I'll take myself out of the equation. Hopefully it'll get better.
posted by nickrussell at 8:09 PM on May 13, 2012 [1 favorite]


How different would the world be if instead of "limited liability", we had "distributed liability", so that responsibility was distributed the same way as ownership?

What you're proposing is that all businesses should be run as partnerships, with the owners of the business personally liable for its debts. The result would be a lot fewer investments made because nobody would want to be left holding the bag.

The corporate form is a kind of socialized risk. A certain amount of socialized risk is acceptable if it encourages risk-taking that is, on average, socially beneficial. Corporations are certainly capable of generating enormous amounts of profit; what we fail to do in the US is recapture the profits for the benefit of society at large instead of a narrow class of investors and executives.

Now, if I am an individual person, and I cause $1,000,000 in damage what happens?

You declare bankruptcy (unless it was an intentional tort, then you're out of luck)?
posted by jedicus at 8:57 PM on May 13, 2012 [1 favorite]


I find the approach of this article problematic, because it neglects to consider the difference between creatures and machines. As a result the "co-existence" narrative on the first two pages comes across as quite patronizing.
posted by polymodus at 9:17 PM on May 13, 2012 [1 favorite]


Hey Polymodus, I think that is why almost none of the discussion on this thread addresses the actual post.
posted by PJLandis at 9:26 PM on May 13, 2012


I'd be happier to live in a world that had limited limitations of liability for C-level officers and board members in companies. A world where if the Union Carbide Bhopal disaster happens under your watch, you are almost certainly going to be severely punished and your life "ruined" (for rich upper class meanings of ruined).

It would also perhaps make sense to, after situations such as that and the Deepwater Horizon spill and so forth, force the entire board and all relevant C-level officers entirely out of the company within some limited timeframe, in an attempt to kill the corporate culture that lead to the oversight happening in the first place. It would be about as close to a death sentence as you could get without actually disbanding a company and its assets.

When a small group of people have meaningful control over an organization that permanently disables 4,000 people, kills another 4,000, and injures half a million more, I think it's fair to stop those people from directing anything larger than the vehicle they drive to work at their new job at a local McDonald's franchise.

The current crop of elites would be angry as hell as they are escorted out of the building, but the young, talented, and hungry upstarts slavering to take their places would be more than willing to support this system in order to take their turn in the hotseat.

This fantasy of mine isn't really about corporate personhood or money as speech, but inasmuch as the thread is interested in accountability for corporations, there's my take on what a better system would look like.
posted by jsturgill at 9:29 PM on May 13, 2012 [2 favorites]


We are now living in a global state that has been structured for the benefit of non-human entities with non-human goals.

and

While a corporation can have goals, plans, and ac- tions of its own, it seems unlikely that a corporation can be considered conscious in any meaningful sense (Kuipers 2008). Without the ability to feel things like pain, or fear, or shame, or guilt, the concept of “taking responsibility” cannot mean for a corporate agent any- thing like what it means for an individual human being. Therefore, a corporate entity, as such, does not have a conscience: the ability to understand, feel, and regret what they have done wrong.

Utter bullshit! Human beings own and profit from the subjective rendering of the structure that we call "corporation". Corporations are collections of PEOPLE who have found a way in the law to exempt themselves from the risk they take as a collective group. Period.

I am really getting weary of this "corporations have rights" trope. What is in fact the case is that individuals who have rights have collectively decided that certain groups of those individuals have special rights.

For instance, the author says that

I completely disagree with the premise of this article because all it would take is a legal deconstruction of corporations, and then an *actual* deconstruction of corporations, person-by-person, starting at the top, to start to change things. How world culture has permitted itself to be made a chump by powerful *people* with access to power of buying policy, and calling themselves something other than what they are - i.e. *individuals* who have made it their business to use the law to their own ends! Period. End of story.

People make up corporations, and PEOPLE are responsible for what corporations do. Corporations are NOT separate from the intentions of those individuals who give them purpose, and drive their activities.. So, corporations ARE people, and those people are to be held responsible for the good AND bad that they corporate vehicle they created commits in this world. Anything else is self-serving doublespeak.
posted by Vibrissae at 9:38 PM on May 13, 2012 [4 favorites]


Our planet is inhabited by two distinct kinds of intelligent beings — individual humans and corporate entities

I think it incorrectly elevates corporations to call them "beings", especially so to give them equal status with humans. I disagree with CU and I disagree with the premise of this article, both for the same reason.
posted by Revvy at 10:32 PM on May 13, 2012


I can't stand all this wooly-headed talk about people being "alive". People are not RNA replicators. People are made of RNA replicators.
posted by erniepan at 11:51 PM on May 13, 2012 [1 favorite]


If corporations are people, do they have a vagina?

"I don't think there's any real evidence that the first amendment right to freedom of press has turned media organizations into oligarchical king-makers.
posted by muddgirl

You obviously don't live in England. The government is completely in bed with Murdoch.
posted by marienbad at 2:31 AM on May 14, 2012


I think the people should own the corporations, not the other way around.

Umm. People do own corporations. Those people are called "shareholders." I'm seriously failing to understand what your actual beef is here, because your concept of what's actually going on is so remarkably skewed as to not even be wrong.

If you want to talk about why things are screwed, you need to care about how things are screwed. You've got a bee in your bonnet about corporate personality and the corporate liability shield, when neither of those things are really the problem. Those are legal doctrines, without which modern society would not exist. What we have here is a political problem.

What you don't seem to understand is that the corporate liability shield doesn't actually stop corporate employees from being liable for their own torts. I do civil defense litigation, and I can tell you that it's every plaintiff's attorney's wet dream to find a defendant that was acting on behalf of a corporation. Why? Because individuals have no money, so the chance of recovery is minimal, but corporate employees will be backed by the resources of the corporation, enabling those million dollar verdicts that let plaintiff's attorneys buy vacation homes. Here, I'm mostly talking about car accidents, because the most common way that corporations find themselves getting sued in tort, but there's no reason it has to be limited to that.

So here's the thing: if a corporation, through its employees, engages in misconduct, both the corporation and the employees are liable for the damages. The shareholders aren't, or at least their liability is limited to their investment, but the employees, who were personally involved in committing the tort, are. This is frequently sort of glided over, because in most cases the corporation steps in and indemnifies the employee, which in most cases is what we want to happen, because the employee probably doesn't have any money, per the last paragraph.

By way of example, let's take a look at the recent banking crisis. Tons of corporate misconduct. And you know why no one went to jail? Not because the corporate form protected anyone. Not because there weren't laws on the books making lots of that stuff illegal. Not because the SEC investigated and found no criminal activity. But because the Obama administration,* working together with Wall Street C-suites, decided that no one was going to jail. It was a political failure, not a legal failure. There is absolutely no legal reason why the people who were most involved in the recent financial crisis couldn't be prosecuted. The politicians simply lacked the will to do it.

There's your problem. Corporate personality is not implicated in the slightest, except to the extent that it protects shareholders from being personally liable for these things, which is the right result. No, there were already laws that should have acted to both prevent the recent crisis and punish those who had a hand in creating it, but the politicians, addicted to commercial funding for their campaigns, refused to enforce them. If we've already got laws that no one is enforcing, legal reform is not the solution. Political reform is the solution, i.e., electing people who will actually do their damn jobs.

And this is why being "right and accurate" is important. I don't know what your problem is, but if you want to have anything positive to say about the state of things, you need to understand what said state actually is before you go about making up erroneous historical arguments in support of problems that don't exist.

*Just like any other administration that might have been in office at the time.
posted by valkyryn at 2:42 AM on May 14, 2012 [4 favorites]


I think the backlash against "corporate personhood" is really against the campaign-trail sorts of uses of the term, where the implications of "person" are twisted about and made to mean things that have nothing to do with the legal concepts thereof.

This is a real and legitimate problem, in much the same way that it's a problem when gay people can't get "married" even though their "domestic partnership" offers all the same rights, privileges, and responsibilities. But as valkyryn says, it is mostly a political problem, and the eventual changes to law (if any) will be about as significant as legalizing gay marriage, e.g., find and replace "corporate person" with "corporate collective".
posted by LogicalDash at 3:49 AM on May 14, 2012


"I don't think there's any real evidence that the first amendment right to freedom of press has turned media organizations into oligarchical king-makers.
posted by muddgirl

You obviously don't live in England. The government is completely in bed with Murdoch.


Last time I checked, England does not follow the US Constitution or enforce the US Bill of Rights, including the First Amendment protection of a free press. I wouldn't speak to any UK problems with the 4th estate, but feel free to elucidate on how the UK handles corporate rights to free speech, or the issue of whether money is speech. From what little I do know of UK politics, I think that the issues are quite different.
posted by muddgirl at 3:52 AM on May 14, 2012


I don't know or need to know what they do; I'm just an investor.

This is why we can't have nice things.
posted by kengraham at 5:31 AM on May 14, 2012 [1 favorite]


I'm a bit surprised this thread has brought in so little context:

Move to Amend is an activist group trying to build support for an amendment to the constitution. Note: their tagline is "end corporate rule" but they are not trying to get rid of corporations altogether. Their position is significantly more nuanced than that. This is an interesting list of rights corporations have that don't necessarily make sense. (certainly there are beneficial effects to giving corporations those rights; there are also drawbacks)

B-Corporations are an alternative legal structure to the traditional corporation. The entities are legally responsible not only to shareholders but also workers, communities, and the environment. It's worth noting also that other countries have quite different setups to the american standard: germany for example requires that workers and other non-shareholders be represented on the board.

Here is a classic article in the same vein as the original post.

In my own opinion, I think we can agree on the ends (and if not then I'm not sure how much it's worth talking about corporations, the means): greater material welfare, greater freedom of choice and self-determination, a fairer and more equitable system. The question is then, how can we best organize production and incentivize certain types of risk taking while still keeping our eye on the ball with regard to the other goals.

Regarding the article:

The author of the article make some good points. The fact that corporations' lives are far more "fluid" than humans' is important. I like the emphasis on responsibilities as opposed to just rights: we talk about corporate "citizenship" plenty but the concept is vague. I think other social sciences can learn from the computer science experience with AI, and the theory that surrounds it.

The author clearly misses the boat with regard to institutions and politics. As others upthread have mentioned, there is another "intelligent agent" that he completely ignores: the state. The state creates the legal ecosystem that corporations swim in, but it seems quite odd to treat it as some static entity when he goes so far to define corporations as agents.

Limited liability is obviously important to corporations, but there are obviously problems with it. I think it's worthwhile to ask whether we can organize production as successfully as corporations in their current legal form have done in ways that minimize externalities and risks to society.
posted by ropeladder at 6:23 AM on May 14, 2012 [3 favorites]


You obviously don't live in England. The government is completely in bed with Murdoch.

Yeah, the UK is a whole different environment here. The British government can impose far more draconian restrictions upon corporate freedom of speech because it can impose draconian restrictions upon individual freedom of speech, not because their corporate law is different from American corporate law. They simply do not have a constitutional provision protecting freedom of speech, period.
posted by valkyryn at 6:37 AM on May 14, 2012


Limited liability is obviously important to corporations, but there are obviously problems with it.

Again, most people misunderstand what this is and what it does. When most people hear "corporate limited liability" what they hear is "not being able to sue corporations" or "not being able to hold corporations accountable." The corporate liability shield doesn't mean either of those things. Corporations, as such, are fully liable for the torts of their agents. The doctrine of respondeat superior pre-dates the corporate liability shield by over a millennia, and it's never been seriously questioned. Furthermore, just because a corporation is liable for the acts of its agents does not mean that the agents stop being liable.

The corporate liability shield does one thing and one thing only: it limits the liability of investors who do not take part in the running of the corporation to the value of their investment. That's all.
posted by valkyryn at 6:41 AM on May 14, 2012 [1 favorite]


valkyrn: but there are many, many pro forma legal maneuvers resulting as bi-products of the convolutions of corporate law that people can and do deliberately use to shield themselves from personal financial and legal liability in ways that are not at all strictly consistent with the vanilla picture of how limited liability is supposed to work and why.

In practice, corporate officers are shielded by virtue of the complexity of corporate governance from real personal criminal and civil liability--regardless of how or why it's supposed to theoretically work, in practice, we've all seen corporate law create situations where things that are very bad for the public happen and there's no way to hold anyone accountable in a way that matters or to create sufficient regulatory mechanisms to discourage recurrences.

Regardless of theory, in practice, current corporate law can be and often is exploited to create a sort of legal/social/moral void where the consequences for bad business practices are sloughed off on the public while the negligent or criminal parties see nothing but upside.

The argument is that the convenient legal fiction of treating corporations as people under the law (rather than pushing through deeper legal reforms that specifically address the particular legal questions surrounding corporations) causes more problems than it solves. Simpler and better than trying to shoe-horn corporations into the same legal structures as people so we can sue them would be creating new legal concepts and tools for dealing with corporations--we could, for instance, define new kinds of qualified standing for non-human entities.

The problem is we're too lazy/complacent to do the hard work of upgrading our legal framework; we'd rather keep patching it to maintain compatibility with newer problems than roll out any major upgrades. But the current law surrounding corporate entities is an ugly hack that tries to treat two completely unlike things (people and logical machines made out of people) as if they were like.
posted by saulgoodman at 7:37 AM on May 14, 2012 [3 favorites]


"So, ask me what corporate power means to me, it means the ability of
the individual to sacrifice his own instincts, his own decent
instincts, in the name of the corporation, that people will do things
to—on behalf of the corporation, to a group of people, which they
would never do to their next-door neighbor, so that all the decent
humanity seems to be set aside the moment they walk through the
corporate doors."


John Le Carré
posted by Trochanter at 7:48 AM on May 14, 2012 [2 favorites]


But the current law surrounding corporate entities is an ugly hack that tries to treat two completely unlike things (people and logical machines made out of people) as if they were like.

I'm not getting into this again with you. I've explained ad nauseum why the way you think about corporate personality isn't accurate, and you just can't seem to draw a distinction between the morality of commercial activities and the function of the law of corporations.
posted by valkyryn at 7:51 AM on May 14, 2012


but there are many, many pro forma legal maneuvers resulting as bi-products of the convolutions of corporate law that people can and do deliberately use to shield themselves from personal financial and legal liability in ways that are not at all strictly consistent with the vanilla picture of how limited liability is supposed to work and why.

As to this specific point, it's entirely false.

I dare you to name me a single example of a corporation using the corporate liability shield in this way. I fully grant you that there are plenty of sneaky ways of getting out of stuff, but you won't find that any of them have to do with corporate personality as such.
posted by valkyryn at 7:53 AM on May 14, 2012


I'm not getting into this again with you. I've explained ad nauseum why the way you think about corporate personality isn't accurate, and you just can't seem to draw a distinction between the morality of commercial activities and the function of the law of corporations.

Yes I can. My argument is the functional one. The law doesn't function as intended.

I dare you to name me a single example of a corporation using the corporate liability shield in this way.

I'm not sticking to the specific "corporate liability shield" thing here because I know you mean by that some very narrow legal idea. The fact is, there's a whole complex body of jurisprudence that has the effect of limiting the personal responsibility of corporate officers and owners and it's a lot more complicated than any one legal principle or idea.

I don't want to go around and around again on the person-hood issue. Forgive me, but I just don't find the argument "but, but--it's a good legal workaround that makes it possible to sue companies" a very persuasive one. There's too much potential for unintended legal consequences here because we are in fact treating two completely different kinds of things as essentially the same things under the law simply because its convenient. It just doesn't make sense. It's likes extending person-hood to cars just so its possible to sue the driver. Corporations have more in common with machines or computer programs than with people. People use them, sure, but they are not people and any legal fiction that propagates such a basic error for whatever reason is bound to cause more problems than it solves.
posted by saulgoodman at 8:12 AM on May 14, 2012 [1 favorite]


The fact is, there's a whole complex body of jurisprudence that has the effect of limiting the personal responsibility of corporate officers and owners. . .

No, there isn't. There's a whole complex body of politics that makes this true, but there's nothing in the law that prevents it. Further, I'm not going to accept that there's "a whole complex body of jurisprudence" on any point just on your say so. I'm a lawyer. You're not gonna confuse me.

You're going to need to discuss the specific legal doctrines or outcomes you think are a problem, because otherwise you're just bullshitting.

. . .and it's a lot more complicated than any one legal principle or idea.

Which is what I've been saying this whole time. Corporate personality isn't really responsible for the whole host of problems people complain about. It's the complex interaction of commerce and politics that has been a problem since there has been commerce and politics. And it won't be fixed any any proposed legal reforms, because the legal system isn't really the problem. Failings in human virtue are the problem, and no legal reform in history has ever done anything about that.
posted by valkyryn at 8:35 AM on May 14, 2012


No, there isn't. There's a whole complex body of politics that makes this true, but there's nothing in the law that prevents it.

What? The law of piercing the corporate veil is quite complicated. There are whole books on the subject. Then there's the business judgment rule, which is most certainly something in the law that prevents the personal responsibility of corporate officers and owners.
posted by jedicus at 9:56 AM on May 14, 2012 [2 favorites]


The debate about corporations vs. people is an interesting one, but for me the interesting idea in this paper is that humans have possibly already constructed A.I. without even knowing it. This is not without precedent, as humans engaged in genetic engineering thousands of years before knowing anything about dna or genetics.

That being said it is not entirely clear how serious the author is being. Is he really arguing that corporations are artificial collective intelligence? Or is he, as other have suggested upthread, simply trying to make a political point?

Ideas like this, though, are not without precedent. I would be interested to see a study done that examines the relationship between corporations and people from the viewpoint of cybernetics. Linkypoos anyone?
posted by AElfwine Evenstar at 10:29 AM on May 14, 2012


Without writing another book on the subject, here's an interesting related article from the Yale Law Journal about how the US is really the only modern nation that allow criminal liability to be transferred from individuals to corporations as entities (rather than having the liability land squarely on the individual officers and agents of the company involved in the criminal activity). In practice I think this particular quirk of US law allows people to use corporate structures to direct criminal liability away from themselves and toward the corporation as legal entity (and unlike the individual people involved, the corporation isn't going to be as easily deterred by criminal penalty because it can't know or care what it's like to spend a few years in jail, among other things).

But yeah, the corporation as emergent artificial intelligence idea is a compelling one. It does feel a bit like we're living in a world designed for the benefit of an invasive alien species at times.
posted by saulgoodman at 11:21 AM on May 14, 2012


No, there isn't. There's a whole complex body of politics that makes this true, but there's nothing in the law that prevents it.

What does that even mean?

Further, I'm not going to accept that there's "a whole complex body of jurisprudence" on any point just on your say so. I'm a lawyer. You're not gonna confuse me.

Hippopotamus roundabout New Orleans happenstance Tabasco sauce! (Makes warding gestures.)
posted by JHarris at 3:27 PM on May 14, 2012


I'm pretty sure valkyryn is using "law" to mean the sorts of things that are written into bills and passed by legislatures, plus the precedents set by court proceedings. What's preventing the people behind Goldman Sachs from going to jail isn't anything that happened in any court, because those guys never went to court. You've got to find someone with the will and means to sue them properly, and most of the people who have the means are in the same industry as the Goldman Sachs-es.
posted by LogicalDash at 6:14 PM on May 14, 2012


You've got to find someone with the will and means to sue them properly, and most of the people who have the means are in the same industry as the Goldman Sachs-es.

There may be crimes that they could be prosecuted for, but there's no political will to do so - and I understand that the regulatory authorities are largely directed by the people who might be prosecuted, and their colleagues.
posted by Joe in Australia at 9:18 PM on May 14, 2012


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