Corporate Ethics

Civil society activists refer to these data in arguing that the grant of corporate personhood poses many risks and a distinct danger. (1) What are these risks and what is this danger? (2) How does the combination of economic influence and political power pose a near insurmountable challenge for the regulation of large multinational corporations? (3) What are some other ways to conceive of corporate power? (4) What role does corporate power play in the exercise of corporate social responsibility, particularly in transitional or emerging economies?

1) Over the past 150 years, federal court rulings have gradually granted corporations protections under the constitutional amendments contained in the Bill of Rights. Those rulings have granted corporations the 1st Amendment right to freedom of speech, 4th Amendment protection against unreasonable search and seizure, 5th Amendment protection from self-incrimination, and 14th Amendment rights to equal protection under the law. Corporations have used their 1st Amendment freedom of speech right to contribute to political campaigns, speak at public forums, and to maintain silence about their environmental practices. They have used their 4th Amendment right to protect their facilities from being searched. They can use the 5th Amendment to protect them from producing internal communications. Corporations have used the 14th Amendment more times than those seeking the racial equality it was written to provide.

These "special advantages" include the ability to amass "large treasuries" and "immense aggregations of wealth." What is wrong with immense aggregations of wealth? Isn't that the American way: rags to riches? The problem is that in the corporate world those who hold the wealth (stockholders) do little to create it, while those who actually do the work, the employees of these corporations, get less and less for their labors. (Recall Enron.)

In her book, The Divine Right of Capital, Marjorie Kelly asks: "Why have the rich gotten richer while employee income has stagnated? Because that's the way the corporation is designed." Kelly asserts that stockholders today reserve for themselves (and deny to employees) the same privilege claimed by the French aristocracy before the French Revolution: rights to endless streams of income detached from productive contributions.

Equally as important, if not more so, is the fact, according to Kelly, that "[c]orporate capitalism embraces a predemocratic concept of liberty reserved for property holders, which thrives by restricting the liberty of employees and the community."

If we take Kelly's statement as accurate, it should be clear that granting corporations personhood subverts and endangers democracy. In the early American republic, corporations existed only by special state grant to promote the public good. Corporations today are no longer subject to such restrictions. They now function like a secular aristocracy that rules over a slave class. In light of the immense wealth and power held by corporations, granting them equivalent rights as individuals is irrational and dangerous.

The consequences of corporate personhood are not trivial. Jerry Mander writes in his book In the Absence of the Sacred: "Not being human, not having feelings, corporations do not have morals or altruistic goals." A nonhuman entity that cannot possess morals is certainly not fit to be granted equal standing with a person. Indeed, granting amoral entities so-called equal rights with persons, which because of corporations' great wealth and power become greater rights, is so irrational it ought to be considered a kind of insanity.

Finally is the effect of corporations' growth imperative on our world. This effect, according to Mander, is "now clearly visible, as the world's few remaining pristine places are sacrificed to corporate production." Granting personhood to a mechanism for destruction of our environment cannot be sound policy if the human race is to survive and thrive.

Allowing an entity to usurp individual civil rights and harm the environment is bad enough. But corporate personhood does yet more.

Activist William Meyers writes that corporate personhood "changes the relationship between people and corporations, between corporations and the government, and even between the government and the people. The effects of these changes in relationships range from loss of liberty and income for citizens to the destruction and poisoning of the earth and the corruption of the U.S. government."

Meyers concludes: "Corporate personhood allows the wealthiest citizens to use corporations to control the government and use it as an intermediary to impose their will upon the people."

Thus, corporate personhood is not just a kind of "free radical" unleashed into an otherwise organized, healthy system. It is something that actively destroys that healthy system. In other words, corporate personhood corrupts and destroys democratic government.

Corporate power plays a significant role in the exercise of corporate social responsibility. Arden supporters of free markets, such as Milton Friedman, have long argued that companies should not be diverted from their puruit of profit; it ultimately harms a free society if enititues

rdent supporters of free markets, such as Milton Friedman, have long argued that companies should not be diverted from their pursuit of profit; it ultimately harms a free society if entities such as companies try to act for a wider good other than its own self-interest, because it is hard to know what the wider good is, and damages the primary goal of companies: responsibility to shareholders.

In his book, Capitalism and Freedom, Friedman argues that “there is one and only one social responsibility of businessвЂ"to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”

His theories are appealing, though unfortunately in the real world, many companies, larger ones in particular are often involved in exploitative practices of some sort, knowingly