Corporations Are People? How This Will Influence the Election

Corporations Are People? How This Will Influence the Election

There's a mind-boggling amount of money flowing into the election this year.

It's not because of the Tea Party, Occupy Wall Street, Stephen Colbert or any other popular political movement.

The culprit is a 2010 Supreme Court ruling that, in effect, is allowing corporations and their owners to donate unlimited amounts to political groups. Previously, corporations could only donate a limited amount of money for elections.

Just why did the Supreme Court's ruling (in a case called Citizens United v. Federal Election Commission) change things? The logic went like this: People have the right to free speech; corporations are like people under the law; and so corporations should also have the right to all free speech, including political speech. And "political speech" translates to donations.

Wait, what? Corporations are people?

Yes, it's true. In fact, corporations have been considered persons since the late 19th century. They cannot get married (that would be weird), vote or even plead the fifth. But they are considered persons for the purpose of commercial transactions and other ways that are necessary to a smoothly functioning economy.

The 2010 Supreme Court decision just expanded the definition of personhood, and in the process threw out the law that limited how and how much they could donate to influence elections. That ruling is sparking a movement to toss out corporate personhood altogether (such as in Vermont), but treating a corporation as a person in certain situations is actually a key function of our modern capitalist society.

So in what other ways do corporations function as people? The uses of this legal fiction might surprise you:

Corporations Have Free Speech

The most notorious way in which corporations get to act like individual citizens is that they are afforded the protection of the First Amendment. They get to advertise, hold press conferences and, yes, give to political action committees. On the flip side, their First Amendment protection prohibits the government from banning books that are published by corporations, such as Scholastic, or censoring corporations such as The New York Times.

They Can Own Property and Enter Into Contracts

If a corporation wasn't considered a person, how could it own a building or buy property? It would have to be put under an individual's name, which is rather unwieldy. Can you imagine each chief executive officer having to sell the corporation's building to the next CEO every time management changed?

This is also important for the purpose of contracts. Instead of putting the contract under one individual's name, the contract applies to the entire company at large. That makes it possible for you to enter into a contract with a large company, which is fine when you're taking out a mortgage, but not so fun when you're puzzling through a 20-page document in legalese.

Their Shareholders' Rights Are Protected

If you own stock in a corporation, you should like this feature.

As a "person," a corporation has assets that are considered completely separate from those of the owners. For example, if you incorporate a business and are the sole owner, but then the business goes bankrupt, the debtors can only go after the business to settle the debts, not you. You get to keep your house, savings account and other assets.

In corporations that are publicly traded, the shareholders are considered the owners. If there were no such thing as corporate personhood and you invested $100 in Company X and it went bankrupt, debtors could go after you personally in order to make back their money. But as it stands now, you would only lose the original $100 you invested, and nothing more.

Employees Are Also Safeguarded

This protection extends to people working for the company. For example, BP is responsible for paying out money to those hurt physically and financially by the oil spill, but not every single employee will have to pay up. Employees are only responsible for their own individual illegal actions. This is beneficial in that the janitor shouldn't have to lose everything he owns because of what the company does. The downside of this is that the CEOs of Enron are still living the high life in their 13,000-square foot-mansions after decimating the retirement accounts of thousands of innocents.

Corporations Can Sue and Be Sued

Calling a corporation a person means that If it puts out a faulty product and you get burned (figuratively or literally), you can drag it to court just like you could a person. Corporations can also go after each other for stealing patents, infringing on copyright and a myriad of other offenses.

The system isn't perfect--corporations have a reputation for bullying the little guy in court--but treating a corporation as a single person is essential to keep corporations accountable for their actions ... at least some of the time.

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