Dr. John Young                                                                                                    January 14, 2007

Unitarian Universalist Church of Jacksonville


Corporate ‘Person’ and Corporate Responsibility


            We, Unitarian Universalists, are a spiritual tradition which focuses upon the worth and dignity of the individual person. A corporation is not a person; it is a mistaken perversion of American law and public practice that corporations are offered the rights and privileges of personhood without being held to the standards or responsibilities of individual public duties. This cancer is tragically undermining justice equity, and responsibility, all central UUA principles.  We need to live up to our second UUA tradition and systematically confront in both our private understanding and public policies the tremendous structures and powers of evil which have grown out of these misuses of law and public practice and are destroying America’s harmony and interdependence through inordinate corporate power and wealth.


            Many of us work for corporations; some of us own or manage businesses; most of us own stock in or otherwise benefit from the many advantages of American capitalism, significantly involving successful corporations. This sermon is not an attack upon responsible corporate behavior, business enterprise, individual hard work or entrepreneurial initiative. I applaud and support all of these important aspects of our society. However, the pervasive abuses enabled and empowered by treating and considering the corporation as a person, like the systematic and growing excesses of corporate power and influence, the disproportionate and unjust concentration of wealth and power in a smaller and smaller percentage of individuals in economic and often in political and social terms must be reversed soon, or the future of democracy, equity, justice, and meaningful individual dignity and power will be in question.


            The word ‘corporation’ does not appear in the U.S. Constitution. In 1819, [in Dartmouth College v. Woodward] the Supreme Court justices “found” the corporation in the Constitution and ruled that a corporate charter was a contract and could not be altered by a government. This ruling gave the corporation ‘Constitutional standing.’ In 1868, [in Paul v. Virginia], the Supreme Court ruled that “corporations are not citizens under Article 4, Section 2 of the Constitution, and in 1877 [in Munn v. Illinois], they ruled that the 14th Amendment cannot be used to protect corporations from state law. However, in a series of railroad cases in the 1880s, the court did begin to apply the 14th amendment to corporations, most famously in Santa Clara County v. Southern Pacific Railroad saying that they would not hear the case because “we are all of the opinion that the equal protection clause of the 14th amendment applies to corporations.” Although the 14th amendment was added to the Constitution to protect African-Americans as free individuals, between 1890 and 1910, only 19 cases dealt with African-Americans while 288 cases dealt with corporations.


In the 20th century, corporate freedoms were expanded to include:  search and seizure protection [Hale v. Henkel, 1906], prohibiting higher state taxes on chain stores, a law passed by the citizens of Florida [Louis Liggett Co. v. Lee, 1933], free speech greatly weakening unions [Taft-Hartley Act, 1947], considering corporate political money as a form of free speech [Buckley v. Valeo, 1976], identifying advertising as free speech [Virginia Board of Pharmacy vs. Virginia Consumer Council, 1976], control of the political process [First National Bank of Boston v. Bellotti, 1977], and even controls on labeling [International Dairy Foods Association v. Amestoy, 1996]. Many observers now believe that most political and social power, as well as economic power, is in the hands of the most powerful corporations and their CEOs and major stockholders. These corporate ‘persons’ are calling most of the shots in America without election and without accepting or being held to normal standards of individual responsible behavior in America.


The situation today is stark. Bob Herbert in the New York Times of January 8, 2007, says that in recent years the once strong link between productivity gains and real wage increases has been destroyed. Between 2000 and 2006, labor productivity in the non-farm sector of the economy rose by an impressive 18%, while the inflation-adjusted weekly wages of workers in those sectors rose by an inflation-adjusted 1%. At the same time, the top 1000 of the highest-paid managers at the top five Wall Street investment banking companies were paid bonuses alone in one year that were greater than that entire six year increase for the majority of workers. The Times-Union of December 21, 2006, summarized that the: bottom 90% of American householders have an inflation-adjusted total increase in income between 1990 and 2004 of 2%, while the top 1% is up 57%, the top 1/10 of 1% is up 85%, and the top 1/100th of 1% is up 112%. The Times-Union article goes on to say that it is increasingly a battle between the haves against the have-mores, with the vast majority of Americans simply out of the race. 3/4s of Americans think the divide is a “serious problem” and that “fair play has been violated in the present economy.” I agree with these conclusions of our most important national and local newspapers, and with the vast majority of America’s citizens.


It is no news to anyone that the Bush tax-cuts have been seriously biased in favor of the richest Americans. According to the Congressional Budget Office [when the Republicans were in control], tax rates for the middle-income earners actually edged up in 2004, while the top 1% of Americans, with an average annual income of $1.25 million saw their tax rate drop to the lowest level since the 1920s, with an average tax cut of $58,000, which itself is more than the total annual income of more than 60% of American families. The wealthiest have so much money that raising money through corporations is often becoming unnecessary, and groups of private investors are retreating beyond even corporate scrutinizes into private firms, where the CEOs and the investors end up making most of their money by selling the companies off or taking them public again. Much of the money is not being made by creating products or doing services but simply by manipulating investments in ways where thousands or millions of people lose while 10s or 100s gain a great deal. This is a recipe for eventual chaos and disaster for most of us.


Many successful corporations pay no corporate income taxes at all, and most corporations do not pay their fair share of our public costs. Compared to most other advanced nations, the wealthiest Americans are still terribly under taxed. There is little evidence that entrepreneurial zeal or economic ambitions are limited when taxes go much higher. There is massive evidence that the lack of public capital because of low taxes means that basic services that should be available to all our citizens are not available to many and sometimes to most of us. This needs to be rectified by systematically recognizing that neither any corporation nor private company has the rights of an individual citizen. Governments need to regulate and tax businesses so that they can protect the public from their excesses.


            Let businesses and corporations concentrate on doing their business and making profits for their investors, but hold them accountable, require them to be responsible proportionately to the massive and disproportionate benefits they receive from the rest of us and from all levels of government, and do the same with individuals who profit disproportionately to their effort. No one deserves to receive thousands of times more the financial benefits of the average diligent worker. Our system believes in liberty not anarchy. Our system is of the people, by the people, and for the people, not of the wealthiest, by the biggest corporations, and for the few investors who can trickily manipulate the rest of us.


I believe in corporate social responsibility or CSR. Enterprises should be obliged to make decisions based not only on financial/economic factors [profits, dividends, capital gains] but also on social, environmental and other consequences of their activities. Corporations and other businesses need to be required to proceed with a triple bottom line, not only economically, but also in socially and environmentally sustainable ways. Corporate Social Responsibility means more than simply charitable donations and good works. It needs to balance the need to make a profit and reward shareholders with the needs of all stakeholders. Corporations and other businesses need to learn to do well by doing good. The magazine Business Ethics has devised a list of the 100 Best Corporate Citizens for the last several years. They are all highly successful corporations in economic terms, but they are also held to high and varied standards of: employee relations, community efforts, corporate governance, diversity, human rights, environmental support, product reliability and relevance. In the most recent year, Green Mountain Coffee Roasters had the highest score, Hewlett-Packard was second and Advanced Micro Devices was third, and Motorola was fourth. I urge you to find Business Ethics on the web and look at their article on the top 100 corporations. Corporations can be responsible, and Americans and their governments need to see that they are held to high standards of responsibility. There is even a new Boston-based non-profit organization, named Responsible Wealth, which is convincing many affluent Americans to work against inequality at its source, which is unfair laws and policies, by using their positions of privilege and power to contest the unfair concentrations of wealth and power.


As patriotic and proud Americans, I urge us to overcome the corruptions of our private ideologies and public policies that have perverted our liberated individuality by giving corporations and other business entities personhood. They are not persons; they should be held responsible; they should be taxed, regulated, and controlled to curb their excesses and to limit their inordinate power and influence. Corporations are often extremely useful organizations, but their enterprise is certainly not free of systematic responsibility for all the results of their enterprise. As Americans, we expect our individual citizens to be fully responsible, and we certainly need to begin holding corporations and other successful business enterprises to at least as high standards. This will require us to, in the words of our second UUA tradition, live up to our spiritual ancestors and “challenge and confront the powers and structures of evil with justice.” Let’s save our compassion and love for people and organizations that truly earn our trust and approbation, not because they can manipulate the rest of us into allowing them to make a killing.