Thought for the week ahead
Submitted by James on Sun, 08/26/2007 - 8:55pm
Many of the left-right conflicts facing our country today rest on some basic assumptions about the rights of corporations. This is of increasing interest to me because it fuels the passion of free-market fundamentalists and their all out assault on democracy.
Over the weeks and months ahead, I hope to be educating myself (and you) about the insidious takeover of all aspects of our culture and government by global corporations. In the meantime, I hope you'll read this excellent piece by Thom Hartmann.
An internet search on the phrase “corporate personhood” will find thousands of sites discussing or devoted to the topic, and models of legislation to remedy the error of 1886.
But the first step, as always, is awakening people to the root cause of the problems we face - the use of corporate personhood by a handful of the world’s largest enterprises to insinuate themselves into governments and seize control of legislative and regulatory agendas. As enough voters learn the history and realize the consequences of this, the solution - ending corporate personhood - will become more and more possible, and Paine’s and Jefferson’s original idea of democracy representing “we, the people” will come back to life.
Ironically, any careful study of John Locke's very own philosophies would find them at cross-purposed with the free market fanaticism of his so-called followers today.
you're firing missiles...
...into a target-rich environment.
i'm looking forward to seeing what you hit.
"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965
a quick idea..
...and admittidly not well thought through yet, but...
to me one problem here is a rights vs. responsibilities issue.
biological persons have to report for jury duty, might end up in jail, all that sort of stuff that corporations can just ignore.
corporate persons, as a result, get the rights (free speech, political association, etc.) but not the responsibilities or constraints on behavior that affect biological persons.
but what if we changed the form that corporations could assume?
imagine a world with three "classes" of corporate existence...
...municipal corporations, who would remain unchanged from the form we know today..
all others who form corporations would voluntarily choose between:
-- a new "business-only" class of corporation that would only be allowed to own property, enter into contracts, and issue stock.
the board and shareholders would be financially protected in the manner customary today.
the fiduciary duty would be to the stockholders.
current corporate tax structure would apply.
this class of corporation would not have all of the constitutional privileges or protections of a biological person-for example, i would restrict the ability to engage in politics (in the same manner a church is restricted today) and other 1st amendment protections, 4th amendment protections would be reduced, and i might remove the 5th amendment protection in criminal cases.
--a new "social responsibility" class of corporation that would have a constitutional status the equal of a biological person, in return for the imposition of direct responsibility on the owners.
the fiduciary duty would be to operate in a manner which takes into account the good of society "generally".
tax rates would be equal to tax rates paid by median income individuals (median income = half of all persons make more, half of all persons make less).
in the event of a failure to operate in accordance with law, or fiduciary duty, or bankruptcy, personal financial responsibility would be imposed on the board, corporate officers, and shareholders without limitation.
this should create a incentive for all the financial stakeholders in this type of corporation to act in a legal manner.
as i say, all this is just an unfinished thought, but maybe you can find a way to incorporate some of the "class" thinking into a deeper proposal?
"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965
Interesting stuff, Fake.
I'll mull this over as I delve into the topic, but my initial instinct is more draconian. I favor genocide of the race of corporate persons.
That is, I believe corporations should have virtually no "personhood" status.
My thinking is early, but at the heart of the argument is the notion that corporations often exist to shield owners and investors from liability. Corporations often do things that most people would find outrageous and dangerous. Indeed, the term "limited liability corporation (LLC)" heralds that reality in its very name.
One of the main liabilities owners and investors are shielded from is taxation. For example, the tools and tricks available to companies to avoid and defer taxation are legendary. The entire tax account industry exists to help owners move money between their personal accounts and their corporate accounts in different countries - often with the sole purpose of tax avoidance. Under my view, corporations would pay no taxes (because they would have no personhood), while their owners, shareholders and boards would have full and personal responsibility for paying taxes on every penny they earn.
(I've spoken with many economists on this issue of corporate taxation, and have yet to find one who believes that corporations themselves should pay taxes. Without exception they argue that the liability for tax payments should accrue to individual human beings. I'm sure there are those who disagree, but even still, the folks I'm talking about are long-standing liberal academics.)
Of all the things you said, this one rings the bell for me:
I realize that getting from where we are to where I want to go is a long and winding (and very difficult) road. What I hope to identify are the baby steps that could move us in that direction.
For example, what would happen if North Carolina eliminated taxation of North Carolina corporations, while simultaneously imposing a commensurate (and progressive) increase in personal tax rates? My goal would be a net increase in overall tax revenues.
(Note: Delaware has some interesting laws regarding corporations that, at first blush, seem aligned with what I'm talking about. But at second blush, they are actually quite the opposite. More on that later.)
Do good. Be nice. Have fun.
the thing is...
...there are valid reasons for the llc concept.
consider the example pf partners that want to pass their interest in a business to future generations.
you're more or less required to create and distribute stock, as there is no other handy way to distribute co-owned assets without liquidation and asset distribution.
so for me the question then becomes how do you induce a greater degree of socially responsible behavior in corporations?
that's how i came to this sugggestion.
when thinking of all this, note the linkage between fiduciary duty, the treatment of liability, and the constitutional protections.
for example, in return for better tax treatment a "shareholder duty" corporation would have a highly restricted ability to object to things like OSHA inspections or EPA sanctions, and would not be allowed to employ lobbyists, or donate to candidates, or engage in political speech of almost any kind..
a "public duty" corporation would be allowed to lobby, and would be eligible for the same due process rights as biological persons, but as we discussed earlier, this class of corporation would have a "death penalty" associated wioth the greater freedom, and would pay taxes at higher rates.
"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965
Suggested reading
Hartmann rocks. I highly recommend his book: Screwed, The Undeclared War Against the Middle Class. Also Kevin Phillips - Wealth and Democracy. I'm just starting to read Hostile Takeover by David Sirota.
Thanks, Anglico, for keeping economic liberty and defense against the dark arts - sorry - corporatism in focus.