APPLIED NATURAL LAW: Dealing with the Problem of Corporations

As it is currently structured, the corporation is a threat to liberty.  I understand that there are many people who will disagree with this statement.  Never the less, it is absolutely true.  As it is currently structured, the corporation is a threat the liberty and the rule of law.  This is because the current structure of the corporation is a violation of Natural Law.  If you disagree with, or even if you question this assertion, please allow me to make my case before you make your final conclusion on this matter.

First, let me explain why I say the corporation is a violation of Natural Law.  Under Natural Law, only individuals have rights.  Along with those rights come duties and responsibilities: to both other individuals and Society.  And, under Natural Law, individuals are held personally accountable for their actions.  Now, as it is currently structured, the corporation is legally recognized as a person.  It is given rights and held accountable for its actions as though it were an individual.  The purpose of this is to insulate those who own and operate the corporation from responsibility for their actions.  This is a clear violation of Natural Law. It is a violation of Natural Law because it separates actual people from their responsibility for their actions by holding an artificial entity responsible in their place.  So long as this is allowed to continue, the corporation will be a threat to individual rights and liberty and, if allowed to continue, the corporation will eventually destroy liberty and the rule of law.

The next thing we need to understand is that the corporation has nothing to do with the free market and free trade.  In fact, Capitalism has nothing to do with the free market or free trade.  The free market is part of Natural Law, but Capitalism and the corporation are not.  This is because they are both artificial creations.  So let me explain what I mean buy ‘artificial creation.’

An artificial creation is something that people, through mutual agreement, agree to create and treat as though it were real.  In the case of the corporation, people have agreed to treat them as though they were people, themselves.  It has been agreed that the corporation will be given equal or nearly equal status as real individuals, to include the right to own property and claim protections of its rights as though it were equal with a real person before the law.  In the case of Capitalism, we have agreed that it is the same thing as the free market.  In both cases, we are dealing with things that do not exist outside of the human mind.  The corporation is merely a law that gives people the excuse to treat a business as a person, but that business is not a person.  In the case of Capitalism, we have agreed to treat it as the free market, but it is not.  In fact, Capitalism does not exist without the corporation, at least, not as we understand it today (because there would be no way to accumulate capital as we do it today).  Yet, the free market existed before we invented the term, ‘Capitalism,’ and if the corporation were eliminated from the world, the free market would still exist.  This is because the free market is nothing but the operation of the Social Contract, whereas the corporation and Capitalism are violations of that contract because they are violations of Natural Law.

Now that I have explained that the corporation is an artificial creation that violates Natural Law, let me demonstrate why it is a threat to individual rights and liberty.  First, remember that the primary purpose for the corporation is to allow the accumulation of massive wealth and power while insulating the people who control that wealth and power from responsibility for their actions.  This allows the corporation to break laws without placing the people who directed those crimes in jeopardy.  Instead of actual people going to jail, the corporation pays a fine, and usually to the government.  In most cases, victims aren’t even compensated, the government is.  Corporations also use their wealth to influence laws that protect them from competition.  For example: if a corporation wants to buy and do some work on a piece of water front property, they may use their wealth to influence a law or ordinance that says a person must either pay for a special permit costing $1 million or, if they build without obtaining this permit, they must pay a fine of $2 million.  The average person or small business cannot afford this amount simply to pull a permit, and certainly not to pay a fine, but this is not a problem for the corporation.  It simply buys the property, pays the fine and passes the whole cost off to its customers — the very people who created the corporation through an act of legislation. [Note: this example is real.  It has actually happened in the State of Florida, and it is only one example of how large corporations use the wealth the people make possible to benefit themselves at the cost of those who made its existence possible.]

It is for this and many similar reasons that our Founders did not like corporations.  In fact, the Founders tended to make corporations illegal.  They preferred to us the system of a charter, instead.  The difference is that the charter specified a specific area where a company would function and stipulated a limited amount of time for that company.  After that period, the charter either had to be renewed or it would be dissolved, as would the company.  Furthermore, the people who owned the charter company were held personally responsible for everything the charter company did.  In other words, the charter did not insulate the people who operated it.  All the charter did was allow multiple people to create something similar to a corporation for a specific purpose and a set period of time in return for the opportunity to benefit financially from the operation of that chartered company.  Furthermore, these charter companies were generally created for public projects, such as the construction of a canal.  Otherwise, individuals were responsible for creating and running their own businesses, and remained personally responsible for the operations of that business.

So, where does all this leave us?  Well, if we actually understood the principles of Natural Law, it would give us the answer to many problems currently destroying our Republic.  First, we would understand that the corporation cannot be allowed to continue as it is currently structured.  It needs to be changed back to something closer to what the Founders used.  We can agree to allow the creation of cooperative businesses, and the ownership of stock int hat company, but we must insure that individuals are held personally accountable for the actions of that corporation/charter company. At a minimum, stock holders should personally be responsible for making whole anyone who suffers damages from the business, not the business, itself.  In other words, damages should come directly out of the pockets of the people who own the company.  They should not come out of the company’s account.  Furthermore, if the company violates a law that would normally require jail time, the board and all company executives and employees directly involved with the execution of that action should serve the jail time equally.  In other words, if a corporation dumps toxic waste improperly and the laws say there is a ten year sentence for this action, then the entire board, the supervisors and the employees who dumped that waster should all spend ten years in jail.  This would all be in agreement with Natural Law because it does not insulate individuals from their responsibility for their actions.

Furthermore, corporations should not be afforded rights.  Since they cannot vote, they have no ‘right’ to free speech.  This means they should not be allowed to donate to any political activity or campaign.  Neither should they be allowed to spend funds advocating for social change.  All of this is because the corporation is not a person and, therefore, has no right to free speech.   But it is also because, as a creation of the People, to allow a corporation to make such donations is to place those citizens who disagree with the corporation’s position at war with themselves.  In principle, this is no different that allowing the government to play political favorites.  It is considered a violation of Natural Law when government favors one person, company or group over another because it places citizens at war with their own government.  Likewise, allowing a creation of their own will to oppose their will by letting corporations participate in political activity is a violation of Natural Law.

Finally, a corporation or charter does not need to be and shouldn’t be granted to just anyone who applies.  These structures should be granted only to those ventures that benefit the whole of society, such as a utility.  After all, if society is responsible for creating it, then it should be something that benefits society in return.  Additionally, a company should be forced to apply for regular renewal of their charter or license.  It should not be an automatic act.  If a corporation or charter company were thought to be acting in a way that is harmful to the society that created it, then that corporation or charter company should be dissolved.  Likewise if that corporation of charter company commits something that would be considered a first degree felony if an individual committed that act.  If a company breaks a law to such a degree, it should be dissolved and replaced by an entirely new corporation or charter company with completely new ownership.  The point is that the corporation is a creation of public policy and, therefore, is rightfully subject to public control.  And if a corporation is not going to serve the society which allows it to exist, then it has no right to exist at all.  The creation and existence of a corporation or charter company is entirely at the will of the society that allows it to exist and operate, and it should be allowed to exist and operate only so long as it serves that society and does so according to the principles of Natural Law.

The rest of the economy should be left to private businesses, partnerships and cooperatives.  These structures are all within the realm of Natural Law as they all connect the business directly to the people who own and operate it.  They do not require an act of law outside those laws that allow real estate to be treated as private property.  And, in many cases, a business may not even involve the use of real estate, in which case it is truly private and entirely outside of the rightful control of society and the Social Contract.  This is the real free market: the interaction of private citizens without any need for government permission or government-created artificial entities.  WHat’s more, our modern world can operate under this structure.  The only thing that would really change is that people would not be able to become billionaires without actually having to do something more than trade in stocks or manipulating public law, or both.