Denaturalize the Corporation
Given how much time we spend working for and interacting with corporations every day, it’s unsurprising that we tend to see them as a natural part of our social fabric. But it’s important to remember that what happens at work and what corporations do in the political system can matter as much for individual freedom and representative politics as our rights against the government.
Corporations, of course, are not naturally occurring entities. They are the product of state laws, and they have been reshaped regularly throughout American history by courts and legislatures in order to respond to changing societal needs.
In a piece Demos published yesterday titled What is a Corporation?, I tried to describe how the corporation has changed over time and how, more recently, conservative jurists have transformed the corporation into a less democratic, less accountable entity.
By seeing corporations as natural, “private” entities with rights, we risk missing the potential that the corporate form and corporate governance could have in expanding the freedoms of the majority of our lives. Rather than conferring corporations with First Amendment rights that shield them from democratic accountability as conservative members of the Supreme Court have recently done, we should see corporate law as one of the most direct and effective ways to address societal problems.
As recently as 1990, a majority of the Supreme Court explicitly acknowledged that corporations received serious economic advantages from the State and could therefore be regulated to prevent those state-conferred advantages from disrupting the political process:
State law grants corporations special advantages — such as limited liability, perpetual life, and favorable treatment of the accumulation and distribution of assets — that enhance their ability to attract capital and to deploy their resources in ways that maximize the return on their shareholders' investments.These state-created advantages not only allow corporations to play a dominant role in the Nation's economy, but also permit them to use "resources amassed in the economic marketplace" to obtain "an unfair advantage in the political marketplace." Austin v. Michigan Chamber of Commerce, 494 U.S. 652, 658-59 (1990).
It is only by returning to a more historically rooted understanding of corporations—as a changeable, democratically accountable product of state laws—that their progressive potential can be unlocked and democratic supremacy restored. Until then, the there’s good reason to expect that corporate rights will continue to enlarge the freedom of the powerful to ignore the freedoms of everyone else.