"[T]he limited liability corporation is the greatest single discovery of modern times [and that] even steam and electricity are far less important … and they would be reduced to comparative impotence without it … It makes possible huge economy in production and in trading … it means the only possible engine for carrying on international trade on a scale commensurate with modern needs and opportunities."
-- Nicholas Murray Butler, President of Columbia University (1911)
Though corporations in some form were around since ancient times, the modern corporation truly arose as a result of and to carry forth the industrial revolution. This is not to say that the public was totally comfortable about the idea, as suggested by the fact that early corporations tended to have limited purposes, a license to opportunity for set periods of time, and were established one by one by special legislation or royal sanction.
Furthermore, concern for entities given special privileges by the state, was so strong that many wanted to include bars against monopolies in the Constitution. The idea that a corporation was a sort of "artificial person" might have been firmly in place by the mid-1850s (even as blacks and women had trouble getting the same privilege), but as late as the 1870s, the Supreme Court barely (5-4) upheld the right of Louisiana to supply a monopoly to one corporation for the purpose of running a slaughterhouse.
Though it is unlikely the Supreme Court in the Slaughterhouse Cases quite meant it to be, the decision in effect can be said to be the beginning of the Age of the Corporation. They grew in power and size; their "personhood" not just a limited right to sue, but one that gave them a slew of rights as well.* The "limited liability" corporation might have had various problems, but it was quite useful as business device. Incorporation became a largely pro forma enterprise, surely as compared to the strict limits of the past, and the privileges of corporations were vast.
No wonder the Supreme Court held that a tax on a corporation was a legitimate excise (use tax), even in the days when a similar tax on an individual was deemed an illegitimate income tax (prior to the Sixteenth Amendment). Perhaps, this should be noted when corporate income taxes are criticized as a form of "double taxation."
The value of a corporation, including non-profits, need not be ignored for us to worry about the height the entity has reached. As with all good things, there is a dark side that must be faced. Take a look at the sort of creature this artificial person, the for profit corporation, truly is. One that is only concerned with profit, has a sort of eternal life, and a helluva lot of power.
An ordinary person and a corporate person might both have certain rights and the ability to sue in court, but only one tends inherently to have a certain moral sense, a set limited life span, and deemed by our very founding document and moral traditions to have certain inalienable rights. A corporation on the other hand might be deemed a sort of psychopath (or sociopath, perhaps), not concerned with the needs of others, except perhaps as they affect its own needs. And, unlike most psychopaths, we actually see this as a good thing, helping them along the way.
Such is a major message of a new documentary that should not be lost among the fervor brought forth by Fahrenheit 9/11, especially since Michael Moore is a part of each, simply entitled The Corporation. The movie provides a brief history of the institution, but is mostly concerned about examining the nature of the modern corporation – what makes it tick, what guides it, what makes it so troubling, and are their actual alternatives to its current form?
The movie has a clear agenda, but has a more restrained tone than Moore’s film, and therefore in some ways is more successful. The use of interviews from some in the business also provides a more balanced account, though it surely is not meant to be a balanced account of its subject. It also is a tad long (I did a double take when I first saw the running time!) – over two hours, but keeps up interest throughout.
There are various fascinating sequences. One is an examination of modern advertising and branding, including a quite enthusiastic account by a woman discussing how the “nagging factor” was studied to determine on how to reach that important current and future consumer base, children. Since such a movie is not quite complete without it, FOX News gets theirs, via an examination of how a story threatening a major advertiser was squelched, even though it involved the corruption of the milk supply.
The true reach of modern corporations is suggested by the requirement by international creditors that Bolivia privatize the collection of water, which included rainwater by the indigenous population. A troubling 1980s Supreme Court decision (one done against the wishes of the U.S. Patent Office) involving the ability to patent life forms was also discussed. And, the role of IBM in processing concentration camp internees.
I would say The Corporation is probably a must see for those who are concerned about keeping the control of society truly in the people’s hands.
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* Personhood was early on split in the case of corporations – "privileges and immunities" (see Article IV of the Constitution) were not held to apply, but "due process" rights were. This early on provided them a right to sue in federal courts, a right refused to even free blacks in the Dred Scott Case. Speech rights are protected as well, which is particularly useful for many ideologically based nonprofits. On the other hand, a corporation does not have a Fourth Amendment right of privacy or Fifth Amendment right to remain silent.