orgtheory.net

how corporations got rights

This week the Supreme Court considered whether corporations ought to have constitutional rights of religious freedom, as given to human individuals, in Sebelius v. Hobby Lobby Stores Inc. For many people, the idea that companies ought to be given all of the rights of humans is absurd. But in recent years, this idea has become more and more of a reality, thanks to game-changing cases such as Citizens United vs. FEC. How did we get to this place?

In an article on Slate, Naomi Lamoreaux and William Novak briefly go over the history of how corporations evolved from artificial persons to real persons with human rights. They emphasize that this change was a slow descent that still seemed unthinkable to justices as late as the Rehnquist court.

The court’s move toward extending liberty rights to corporations is even more recent. In 1978, the court held in First National Bank of Boston v. Bellotti that citizens had the right to hear corporate political speech, effectively granting corporations First Amendment speech rights to spend money to influence the political process. But even then, the decision was contentious. Chief Justice William H. Rehnquist, in dissent, reminded the court of its own history: Though it had determined in Santa Clara that corporations had 14th Amendment property protections, it soon after ruled that the liberty of the due-process clause was “the liberty of natural, not artificial persons.”

If you find this piece interesting then I would encourage you to read Lamoreaux’s collaboration with Ruth Bloch, “Corporations and the Fourteenth Amendment,” a much more detailed look at this history. One interesting point that emerges from this paper is that our general understanding of how rights became ascribed to corporations is historically inaccurate. Bloch and Lamoreaux assert that although the Court in Santa Clara v. Southern Pacific Railroad  likened corporations to individuals and asserted that they might have some protected rights, they were careful to distinguish between corporate and human civil rights.

During the late nineteenth and early twentieth centuries, the Supreme Court drew careful distinctions among the various clauses of the Fourteenth Amendment. Some parts it applied to corporations, in particular the phrases involving property rights; but other parts, such as the privileges and immunities clause and the due -
process protections for liberty, it emphatically did not. Although this parsing might seem strange to us today, it derived from a remarkably coherent theory of federalism in which the Court positioned itself both as the enforcer of state regulatory authority over corporations and as the guardian of individual (but not corporate) liberty against state intrusion. To the extent that the Court extended constitutional protections to corporations, it did so to protect the interests of the human persons who made them up.

Read the whole paper. It’s fascinating!

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Written by brayden king

March 28, 2014 at 3:15 pm

3 Responses

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  1. “To the extent that the Court extended constitutional protections to corporations, it did so to protect the interests of the human persons who made them up.”
    As opposed to what?

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    Wonks Anonymous

    March 28, 2014 at 5:57 pm

  2. Also remember a good treatment of subject in Roy’s Socializing Capital. Great book in general

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    Scott Dolan

    March 28, 2014 at 10:06 pm

  3. […] Here is a good refresher on how corporations got rights, along with references if you want to learn more @OrgTheory […]

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