Of all the staggering revelations to come out of the Republican leadership race — like Sarah Palin’s alleged drug use and Rick Perry’s rather confusing stance on the Middle East — one of the more amazing was former Massachusettes Governor Mitt Romney’s remarks on corporations several weeks ago.
His claim that “corporations are people” might be worrying, but is echoed in the U.S. Constitution itself. The Fourteenth Amendment legally enshrines corporations as human beings, eligible to the same rights and protections as citizens.
So-called “corporate personhood” protects corporations on the grounds that “no State can deprive any person of life, liberty, or property without due process of law.” It was originally introduced to protect African-Americans after the Civil War, but generations of corporate lawyers have flipped the coin.
Standing knee-up on a hay bale like John Wayne, cast as a Goldman Sachs trader, Romney was responding to hecklers’ demands to increase progressive taxation on the rich, at the Iowa State Fair in Des Moines. But he was also regurgitating over a century of legal history. “Corporations are people, my friend,” he said. “Everything corporations earn ultimately goes to people. Where do you think it goes?”
The logic that leads Romney to this conclusion is far from polished. Hypothetically speaking, if my shoe made money and that revenue came back to me, would that make my shoe a person? This is what Romney appears to be arguing. If a shoe is a person, then is a government a person too?
Perhaps Romney is portraying corporations as squeaky-clean arbiters in by-the-people, for-the-people exchanges of power and finance? Wrong again. Corporations are legally accountable to their stockholders, not the public.
It is estimated that offshore corporate tax havens cost the U.S. at least $100 billion every year. Citizens for Tax Justice (CTJ) has also demonstrated how 12 of the U.S.’s largest companies engage in tax fraud. And it’s the taxpayer that suffers. In a list including Dupont, General Electric, Boeing, and Verizon Communications, Exxon Mobil paid the highest tax at 14.2% - 20.8% below the statutory tax rate.
If these corporations were people, they would be criminals.
What Romney should have said was: “Corporations are abstract 'persons' according to constitutional law, my friend. Everything corporations earn, bamboozle, and conceal ultimately goes to a minority of very rich people. Where do you think it should go?” It doesn’t quite have the same ring to it.
When Romney says he believes in America, he’s not wrong. The governor is simply legitimising a century-old constitutional loophole on the campaign trail. Romney is a product of an age where politicians are businessmen first, and statesmen second — or third.
Recently, a trader from Goldman Sachs chillingly told BBC News: “Governments don’t rule the world. Goldman Sachs rules the world.” And yesterday, it was revealed over half of the UK Conservative Party’s post-election bankrolls come from the City (Britain's Wall Street), the largest percentage from hedge funds.
It is one thing to pretend a corporation is human, but another to portray it as a good, honest human. The fallout from the 2008 Great Recession was proof enough of what corporatism is capable of. We should be making the right reforms to make sure it will never happen again.
Photo Credit: Gage Skidmore