How Businesses Became People – The New York Times

How Businesses Became People – The New York Times

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Adam Maida

WE THE CORPORATIONS
How American Businesses Won Their Civil Rights
By Adam Winkler
Illustrated. 472 pp. Liveright Publishing. $28.95.

Around 300 B.C., the Romans invented a new way for a group of people to buy property and enter into contracts. Instead of making deals with a partner or set of partners, people could use a legal fiction that they were an entity, a societas publicanorum. This new institution was owned and controlled by investors, but legally separate from them. The privilege to act as a societas publicanorum was rare, and required a decree by the Roman Senate or the emperor.

Nearly 2,000 years later, versions of this legal innovation came to be used by English businesses, churches, guilds and cities, and by the investors behind the Virginia Company in colonial America. They were known as corporations. Like the societas publicanorum, corporations required a special charter from the king, giving its owners powerful but limited rights: the right to collectively hold property, form contracts and have access to the courts. Corporations were quasi-public, and each corporate charter was unique, comprising highly detailed rules including how much the corporation could charge for its products. Eventually, corporate investors gained a special prize: the privilege of limited liability, which allowed them to avoid personal legal responsibility for the corporation’s actions.

These corporations did not merely come to America; according to Adam Winkler, a law professor at the University of California, Los Angeles, arguably they founded it. From 1607, when the Virginia Company established the Jamestown colony, corporations have been inextricably embedded in American life, Winkler maintains in his excellent and timely new book, “We the Corporations.” The corporation of the British East India Company inspired the colonists in a different way. The bailout of the company by England — including the Tea Act of 1773, which lowered the price of tea in the colonies while preserving the tax colonists paid on it — infringed the colonial charters and led to the protests that were instrumental in sparking the Revolutionary War.

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Winkler’s chief contribution is to show how corporations have been some of the most important innovators in American law, shaping it for good and often ill. Since the early days of the Republic, corporations have invested substantial capital in some of the country’s most talented and charismatic lawyers, pushed risky lawsuits and been on the “cutting edge” of rights-making. They have not been passive recipients of legal change but, rather, among its most significant architects.

Winkler frames this history provocatively, as an ongoing “civil rights” movement for corporations, which “have pursued a longstanding, strategic effort to establish and expand” their rights in American constitutional law. He proves his thesis by recounting two dozen critical moments when corporations pushed the limits of existing law and mostly won new rights. While the corporation of early America was an “artificial person” — Blackstone’s term — for purposes of property ownership, contracts and lawsuits alone, Winkler shows how “today corporations have nearly all the same rights as individuals: freedom of speech, freedom of the press, religious liberty, due process, equal protection, freedom from unreasonable searches and seizures, the right to counsel, the right against double jeopardy and the right to trial by jury.”

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