Mitt Romney: 'Corporations Are People' - Is He Right? The Legal Background

By Jeremy B. White: Subscribe to Jeremy's

August 11, 2011 4:35 PM EDT

In what will likely become an endlessly replayed gaffe, Republican presidential candidate Mitt Romney on Thursday defended his pledge to not raise taxes by telling an audience at an Iowa state fair that, "corporations are people, my friend."

Share This Story

The remark gave sound bite-ready ammunition to Romney's opponents, with the Democratic National Committee sending out an e-mail response almost immediately. But while Romney was essentially endorsing the old Republican tenet that corporations are made up of people whose wealth then spreads to everyone else, he unwittingly touched on something else entirely: the ongoing legal debate over what rights we should give to people who aren't human -- from corporations to fetuses to, perhaps someday soon, machines.

The Corporation As Person

What is a person is not just an abstract concept for philosophers to ponder. It is has been a central question in deciding what constitutes a legal actor, someone (or something) who the law can protect or prosecute. One interpretation informed the Citizens United v Federal Election Commission 2010 U.S. Supreme Court ruling, which determined that corporations have the same free speech rights as people and can therefore spend as much as they like on campaigns.

But the idea is not new. From contentious 18th century debates about the legal status of slaves to the contemporary furor over corporate speech and abortion rights, being labeled a person has profound implications.

Follow us

Of course, no one is claiming that a multinational corporation or an in utero fetus should get the same set of rights as a 30-year-old person who pays taxes and votes; legal personhood falls on a spectrum. There are gradations, and non-human being persons gradually accumulate legal rights and responsibilities that are explicitly granted to them by Congress or the courts. Legally, it is more accurate to think of a "person" as a metaphor used to designate a certain type of object of the law.

"Legal personhood is basically shorthand for saying the law recognizes this actor as a legal actor," said Daniel Greenwood, a law professor at Hofstra University. "So, for example in admiralty law boats are legal persons. In international law only sovereigns were considered legal persons until the second World War."

But the metaphor is a potent one, and it can give rise to a problematic tendency to try to equate legal personhood with humanity. The decision of whether or not to afford an entity constitutional rights is to a certain extent a value judgment. It affects real, indisputably human people: giving corporations more rights means they can better defend themselves against lawsuits by individual people; abortion laws force states to strike a careful balance between the health of the mother and the health of a human (but not yet person) fetus.

An anonymous Harvard Law Review paper sums it up succinctly: "this metaphor reflects and communicates who 'counts' as a legal person and, to some extent, as a human being." When Citizens United established corporate spending as an inviolable tenet of free speech, critics charged that things had gotten out of control.

"In the case of corporations it's a metaphor that's wrong," Greenwood said. "It's wildly inappropriate. There's never a reason to imagine that an organization is going to work the same way as a human being."

A good starting point for examining societal values through the lens of personhood would be antebellum America, where a fluid, sometimes contradictory understanding of whether slaves were legally persons reflected the moral contortions of a debate that would later tear the country asunder. Slaves were not persons in the sense that they were chattel, or property, that could not vote or protest being shackled and traded. But they were persons in the sense that they could be prosecuted for crimes.

Paradoxically, the passage of the 14th Amendment ensured that slaves could no longer be deprived of their rightful legal status as human beings, but it was also invoked in a series of landmark cases that conferred a host of rights on corporations. An amendment meant to ensure equality would bolster the outsize influence of corporations, which critics say has come at the expense of people.

A Key 1818 U.S. Supreme Court Decision

An 1818 U.S. Supreme Court decision was the first to recognize a corporation's ability to own property and to enjoy the constellation of rights that go along with it, defining a corporation as an "artificial being, invisible, intangible, and existing only in contemplation of law." But the 1886 case Santa Clara County v. Southern Pacific Railroad took things a step further when the court affirmed that the 14th Amendment guarantee of equal protection covered a railroad company fighting against tax discrimination.

This article is copyrighted by International Business Times, the business news leader
Sponsor Link:
Join the Conversation
IBTimes TV

Existing Home Sales Jump, World Banks Lowers China Forecast, Euro Prepares for Greek Exit

World
Women Vote For The First Time In Egypt