Is a Corporation a Person?

Who cares?

Yesterday’s Supreme Court ruling is a victory for free speech supporters.  There has never been any sane rationale for limiting political speech in such a way.  Even if corporations are not “citizens,” as Justice Stevens opined in the dissent, the First Amendment bars Congress from making any law abridging freedom of the press.  Claiming that corporations are not citizens is a nonsensical diversion.  Disallowing the speech of an entity that is regulated as an entity is evil.

So why are some people so upset?  Best I can figure, they are afraid of corporations.  You know, those enormous capitalist monstrosities that make more money in a day than most people can write out on a piece of paper.  If you are among that number, let me show you why corporations are the least of your worries.

First, corporations on the whole do vastly more good than harm.  For every one that pollutes (real pollution, not the media-hype kind) there are 10,000 that provide goods for a tiny fraction of the average person’s annual income.  We live better on the whole than a king of a few hundred years ago could have imagined.

Second, corporations get big because we buy things from them–voluntarily.  WalMart, a favorite whipping boy of the disenchanted left, is big because they do what they do better than anyone else.  When Sam Walton started, it was K-Mart that ruled.  Only K-Mart thought small towns were not good locations.  When the denizens of Main Street America found they could buy underwear and toothbrushes cheaper at Wally World, they rewarded Sam Walton with billions.  Mr. Sam is a hero, not a villain.  He earned every penny.

But surely there is something wrong here.  Is it not true that corporation do sleazy things?  Don’t they tempt us into buying things we don’t really need, offer us credit cards that get us into trouble, and talk kids into eating junk?  Baloney.  We buy snowmobiles when we should buy gold.  We fail to plan our debt well.  And we are the ones who are responsible for teaching our kids what to eat.  Blaming corporations for our problems is almost always just one more way to evade self-responsibility.

For all my unreserved support of business honestly done, there is one perfectly good reason to loathe a corporation.  When business entities team with government to squelch competition or receive subsidies, grab your wallet.  In the end, you will pay through higher prices due to lack of competition or higher taxes.

And now for the real solution to the “problem” of corporations.  They need not exist at all, at least not in the form we usually think of them.  When individuals pool their money to capitalize a business, the government’s role should extend only to the enforcement of whatever contracts are drawn up among those individuals.  From the point at which this entity is formed, other individuals or other businesses may choose whether or not to conduct business with that entity.  You don’t like the way it keeps books?  Don’t invest.  You don’t like what it sells?  Don’t buy it.  You are materially harmed by something it does?  Sue.  And don’t try to tell me you can’t win.  The enormous advantage current corporations have is mostly due to their bedmates in office.  Remove government’s ability to game the system and you enable citizens and businesses to hash out their respective boundaries fairly.  No one will get what he/she wants every time, but it sure as hell beats having influence swayed by a bribe.

The few corporations that truly are a menace today are so because the state helps them get that way.  If you and I make business mistakes, we go broke and have to start over.  If GM screws up, it takes money from us to keep offering things no one wants.  Remove that embarrassing feature of today’s economy and we can answer the question of a corporation’s personhood with a resounding, “Who cares?”


Terry not only supports business–he thinks you should have one.  Read his book Empty Nest Egg: Why You Must Start Your Own Business NOW to learn why.

About Terry Noel

I am an Associate Professor of Management and Quantitative Methods at Illinois State University. My specialty is entrepreneurship.
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