Benjamin C. Waterhouse is an associate professor of history at the University of North Carolina at Chapel Hill.
In a recent class on American business history, I asked my students what they thought a corporation was. A hand in the front row quickly shot up, and a woman answered, “Not people!” Although we eventually got around to a more formal definition — an entity with a legal existence that is distinct from the people who own or control it — the students’ top concern was political. At the heart of the matter about corporate identity is a question of power: What role should private businesses play in public life?
In his new book, “We the Corporations: How American Businesses Won Their Civil Rights,” Adam Winkler puts corporate power center stage. Beginning with the story of how corporations — legal creations of governments — came to be seen as consummately “private” economic actors in the first place, he methodically charts how they gained political privileges that today mirror those held by flesh-and-blood citizens.
“Corporations are not people” has become the mantra of Occupy Wall Street, the Bernie Sanders campaign and any number of progressive organizations. This belief, an obvious rejoinder to Mitt Romney’s famous declaration to the contrary in 2011, extends far beyond the question of how the tax burden gets passed along (which was what Romney was talking about). Opponents of what they call “corporate personhood” argue that corporations simply should not enjoy the political rights of citizens — such as freedom of speech or religion, or political participation — because their wealth and power distort popular democracy. In a moment of gigantic corporate mergers, unabashed corruption and legislative dysfunction, the call to rein in corporate political power is as loud as ever.
For most Americans, the current debate stems from the Supreme Court’s Citizens United decision. In January 2010, a 5-to-4 majority invalidated provisions of the Bipartisan Campaign Reform (McCain-Feingold) Act of 2002 that prohibited certain types of “electioneering communications” (basically ads) by corporations and unions, on the grounds that those groups represented, in Justice Samuel Alito’s words, “associations of citizens” who enjoyed the right to free speech. (The idea that spending money on campaigns was an exercise of speech came from a 1976 decision, Buckley v. Valeo. )
As Winkler recounts, the 2010 Supreme Court ruling sent shock waves through American politics. In an unusual public rebuke, President Barack Obama called out the justices to their faces during his State of the Union address, accusing them of upending “a century of law” that regulated corporate political activity. Just as unusual was Alito’s response, conspicuously shaking his head and mouthing “not true” at the president.
Quickly, a groundswell of activism pushed back. Groups like MoveToAmend.org proposed amending the Constitution to clarify that human beings, not corporations, are the only legitimate bearers of political rights. In 2014, political scientists Martin Gilens and Benjamin Page escaped the confines of academia to puncture the progressive consciousness with a well-circulated report that said economic elites and business interests wielded outsize influence on policymaking. The report was usually summarized as: “America Is No Longer a Democracy.”
Virtually unrestricted corporate campaign giving has exacerbated the hyperpartisanship that defines national politics. As Sen. Lindsey Graham (R-S.C.) admitted during last fall’s tax bill vote, policymakers must please their donor bases to secure reelection. And even though Hillary Clinton and Donald Trump spent less on their campaigns than Obama and Romney had in 2012, the flood of campaign cash created the structural conditions that allowed Trump to win the Republican primary contest. With deeper pockets than in years past, a long list of Republican candidates stayed in the race far longer than they otherwise would have, dividing the roughly 65 percent of GOP primary voters who did not support Trump.
For activists, the implication was clear. The country had lost its way and had allowed a misguided notion of corporate personhood to take over. We had to return to our democratic values and a less corrupt time, when concentrated wealth did not subvert democracy.
Winkler’s book, however, shows that this fixation on corporate personhood gets it precisely backward. Yes, American corporations have steadily gained “the same rights as individuals under the Constitution,” he shows. But the key to their success lies not in the embrace of corporate personhood but in its rejection.
Winkler, a professor of law at UCLA, roots his history of corporate civil rights in the two competing concepts of the corporation that have structured jurisprudence since the early 19th century. “Corporate personhood” is the more limited of the two. This view conceives of corporations as legal persons that have specific but limited rights, such as owning property or suing in court. Historically, opponents of corporate power used this notion to deny corporate entities more expansive rights, such as voting, speaking or religious liberty.
The flip side sees the corporation not as a legal person but rather as a voluntary association of the human beings who compose it. Lawyers and jurists refer to this blurring of the distinction between a corporate entity and its shareholders as “piercing the corporate veil.” And this, Winkler maintains, is the error that Alito made in viewing limitations on corporate behavior as restrictions on the actions of actual humans.
Yet “We the Corporations” is far more than a clear liberal critique of Citizens United. Winkler’s deeply engaging legal history, authoritative but accessible to non-lawyers, takes readers inside courtrooms, judges’ chambers and corporate offices as he reconstructs 200 years of case law. The book offers new takes on familiar stories — including all-star attorney Daniel Webster’s famous defense of Dartmouth College in 1819 and Justice Lewis Powell’s pro-business memo to the Chamber of Commerce in 1971 — as well as fascinating insights from largely forgotten moments. Throughout, Winkler overlays the pursuit of corporate civil rights onto American history, from the English corporate colonies to the Bank Wars, from trust-busters and New Dealers to Ralph Nader, Robert Bork and Hobby Lobby.
This meticulous, educational and thoroughly enjoyable retelling of our nation’s past leads to Winkler’s argument: Citizens United, however wrongly reasoned, was not an aberration in American law. Rather, it marked the culmination of a 200-year campaign, waged by well-funded corporate elites, to bend the law in their favor. In the decades after the Constitution took effect, corporations hired lawyers like Webster to defend their basic legal rights. By the late 19th century, they had manipulated the 14th Amendment to acquire property rights but not political rights; corporate campaign giving, for example, was highly restricted by the Tillman Act in 1907. Yet by the mid-20th century, justices had increasingly pierced the corporate veil to award liberty rights, including freedom of the press and, eventually, free speech and religious liberty.
Winkler ends with cautious optimism that the tide may turn against “the remarkably successful corporate rights movement.” But the lessons for democracy are sobering. The legal history shows that corporate political rights are not an aberration in America but a constituent part of it. Yes, there are some progressive heroes, such as anti-monopoly jurist Louis Brandeis (although the anti-corporate cause was just as often headed by detestable elements like the racist Chief Justice Roger Taney, who wrote the Dred Scott decision). But the long arc of history is clear: Those who stood athwart the corporate juggernaut are the long-term losers, trampled by well-funded and powerful business elites.
The past is no place for progressives. Those who seek justice, equality and a more inclusive democracy should stop looking to an imagined past for heroes and models. Rather than yearn for something we used to be, people who bristle at the power of concentrated wealth in public life must create something that has never been. For conservatives, however, the historical reservoir of argument is vast. Those who wish to hoard privilege and concentrate wealth have a deep well of tradition, precedent and legal theory on their side. “We the Corporations” leaves no doubt: America has been pro-corporate and elitist from the beginning.
By Adam Winkler
Liveright. 471 pp. $28.95