SCOTUS says corporations are jes folks like us? Good, then let’s lay some justice on them. From a post over here, discussing “Housebreaking the Corporations:”
The core difficulty is simple enough to describe. Corporations, under the laws of the United States and most other nations, are legal persons; they have many, though not all, of the same rights that “natural persons” – that is, you and me – have under the law. Still, the most obvious difference between corporate persons and natural persons these days is that the corporate kind are noticeably more antisocial. They pursue their purposes – primarily, making money – with a single-mindedness and a lack of concern for consequences that, in natural persons, would be accurately labeled psychopathic; they’ve proven themselves consistently willing to lie, cheat, steal, and kill whenever the likely return on these acts outweighs the risk of punishment.
… we’ve actually got a tolerably effective way of responding to antisocial behavior; we just don’t apply it to corporate persons the way we do to natural persons.
A glance back into the history of law may help clarify the matter. I’m not sure how many people these days know that the earliest version of English common law, from which our American legal system descends, operated entirely on the basis of fines. The principle of wergild, as it was called, gave each person a cash value; if a murder took place, the murderer had to pay the family of the victim that cash value as wergild for the death.
From this perspective, the problem with corporate persons is simple enough: the only risk they run in breaking the law is that they have to pay wergild, and that doesn’t constrain antisocial behavior any more effectively now than it did in Anglo-Saxon times.
My more perceptive readers may be wondering at this point whether I’m seriously proposing that corporations should be thrown in jail or put to death. Yes, that’s what I’m proposing, with the adjustments needed to account for the differences between corporate persons and natural persons. What’s the essential nature of imprisonment for a crime, after all? The criminal ceases to be a free person; for a specified period of time, he is a chattel of society, and society has the right to profit from his labor during that period. And capital punishment? The criminal, having proven that he isn’t willing to abide by even the most minimal standards of social existence, ceases to exist by act of society. Both of these can be applied to corporations easily enough.
Imagine, then, that a corporation – we’ll call it the Shyster Company – has just been caught selling worthless securities to widows and orphans. The district attorney files charges of felony fraud and theft. The trial date arrives, the lawyers bicker, the jury finds the defendant guilty as charged and the judge sentences the corporation to the equivalent of ten years in the slammer. The judge appoints a trustee, who takes control of Shysterco and all its assets. For the following ten years, Shysterco is a wholly owned subsidiary of the state government. Its stock pays no dividends and has no voting rights, its directors have to find something else to do with their time, and if the trustee decides that the CEO and other overpaid office fauna get to find new jobs, they get to find new jobs – assuming that they’re not doing time themselves, as they probably should be. All profits earned by Shysterco during its period of imprisonment go to the state government, subject to set-asides that pay restitution to the victims of the crime.
Meanwhile another conglomerate – we’ll call this one Dirty Rotten Scoundrel Inc. – has been caught knowingly selling food products tainted with deadly bacteria, and a dozen people have died. This time the district attorney files charges of aggravated first degree murder. The trial date arrives, the media has a field day, the lawyers bicker, the jury returns a verdict of guilty as charged, the judge sentences DRSI to death and the appeals court upholds the sentence. On the scheduled date of execution, DRSI ceases to exist. Its stock becomes worthless, its assets are sold off in an auction in which no former shareholder is allowed to bid, its name and trademarks can never again be used by anybody under penalty of law, and its creditors get whatever scraps are left once the victims’ families receive their settlements.
It’s crucial that the stockholders in both cases, and the creditors in the latter case, suffer for the behavior of the corporation. The stockholders of a corporation are its owners, in fact and law; they profit from its activities, and therefore should pay for its crimes.