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How a Corporation Is Like a Person

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This is the VOA Special English Economics Report, from http://voaspecialenglish.comRecently the United States Supreme Court decided a big
case about political speech. Political speech is considered
the most protected form of free speech under the Constitution.
The case was Citizens United versus the Federal Election Commission.
The question was this:
With political speech,do corporations have the
same rights as people?
By a vote of five to four,
the conservative majority on
the court decided yes. Companies, labor unions and other organizations may now spend as they wish on independent efforts to elect
or defeat candidates.
The ruling is based on the idea
in the United States and many
other countries that a corporation is a legal person.
Historian Jeff Sklansky says a slow shift to personhood for American companies began with a Supreme Court ruling in eighteen nineteen.
It said states cannot interfere
with private contracts creating corporations. In the ruling,
Chief Justice John Marshall described a corporation as an "artificial being" that is a "creature of the law."
The ruling was unpopular.
It came as Americans resisted big corporations like the First Bank
of the United States, chartered
by Congress. Some states passed
laws permitting themselves to change or even cancel corporate charters.
After the Civil War in the eighteen sixties, the Fourteenth Amendment was added to the Constitution.
It provides that no state may "deprive any person of life,
liberty or property, without due process of law ... "
If a corporation is legallya person, then states cannot
limit corporate rights without
due process of law either.
At first, corporations were not fully recognized as persons.
But Jeff Sklansky at Oregon State University says that changed.
He said the general direction of
the Supreme Court and the federal courts was to recognize corporations as persons with the same Fourteenth Amendment rights as individuals.
Yet corporations have a right
that real people do not:
limited liability.
For example, a corporation can
face civil or criminal fines
and individual lawbreakers can
go to jail. But limited liability meansthe actions of a corporation are not the responsibility of
its shareholders.
Jeff Sklansky says the nineteenth century development of limited liability helped shape the
modern corporation.
And that's the VOA Special
English Economics Report.
Next week, more on corporations
and the law.

(Adapted from a radio program broadcast 05Mar2010)
Category
Education
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