A Corporation is not A Person, A Home is not An Investment – Carl Peter Klapper

The Popular Capitalist View

There is a lot of confusion in our business world about what is or is not personal which seems, to this observer, designed to misplace our sympathies.  A deliberate legal fiction that a corporation be treated like a person, so that it gain some benefit thereby, has been accepted as fact. Glib sales talk, intended to make a high price for a house more palatable, is taken as the gospel truth.  But beyond the initial trickery is the molding of our minds and hearts to endorse, in the same breath, compassion for the dear, old corporation in dire straits who may be left out in the proverbial cold without a few, small billions of dollars and callous disregard for real people who will be left out in the real cold because their home is in a house for which some investments have soured.

To be sure, the patent absurdity of both situations becomes briefly apparent to even the talking heads on television.  But then the corporation and the home dweller are colored in the tones of hero and villain, respectively, so that the public compassion, which believes everything it sees and hears on television, can continue to be misplaced.  The corporation is an industrial giant with millions of employees who will lose their jobs and, it is assumed, all chance for future income if it fails.  Or the corporation is a financial conglomerate which will lose the pensions of millions of widows and orphans if their investments sour, of course through no fault of their own.  These true-blue American multinational conglomerates are neighbors in need of our help.  At the other end of the melodramatic chasm lies the evil homeowner who has greedily bought a million dollar home, which we assume is more spacious and luxurious than a two bedroom condo.  This sinister foreigner, whose family illegally entered the country in 1848, does not have the income to support his extravagant lifestyle.  Certainly, he has misrepresented his finances and fabricated documents to support his perjury because the loan officer would not have otherwise extended a mortgage to someone so manifestly unqualified.  So our beloved television news, minions to the financial-political complex, breathe a sigh of relief as trillions of tax dollars are given to personified companies while dehumanized people are victimized by those same companies.

These things ought not to be.  More hopefully, we can make sure that they no longer happen by striking at their hearts with the stake of truth.  Both falsehoods should be stricken down, but I have already addressed the second in a previous article somewhat by advocating Adjustable Equity Mortgages so that the purchase of a house to serve as a home does not become a tool of speculation.  For the rest we will focus on the first fiction.

A corporation is a government, not a person.  Consider the operation of a corporation compared to that of a government on one hand and a person on the other.  A corporation has laws, which they call “bylaws”.  A government has laws, but a person does not.  A corporation is owned by stockholders who vote on various matters and sometimes for leaders, such as board members.  A government is owned by its citizens who vote on various matters and sometimes for leaders, such as members of a legislative council.  Persons are just themselves and if they have to take a vote to decide matters we admit them to a psychiatric hospital.  A corporation has paid servants, who are called “employees” who do the business of the corporation.  A government has civil servants who do the business of government.  A person may hire a domestic, if they are wealthy enough, but the domestic is doing the other stuff that gets in the way of the person doing their business.  A corporation can continue well beyond the life of any one officer, stockholder or employee.  A government can continue well beyond the life of any one officer, citizen or civil servant.  A person continues just as far as their life, no more, no less.  It should be fairly clear from the foregoing that a corporation is indeed a government and not a person.

Since a corporation is a government, it is necessarily in conflict with other governments, both other corporations as well as the governments of the people.  As Adam Smith pointed out in “The Wealth of Nations”, companies should be in conflict with each other:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

— Adam Smith, “The Wealth of Nations”, Book I, Chapter X

However, as a corporation grows in size it engages in such conversations regularly within itself.  And as it grows in scope beyond that of a public government, it is able to implement those conspiracies with impunity.  It must be pointed out that the nature of contrivances is a bit broader than Smith described.  The goal, after all, is profits and the price of the product sold is only half of the equation.  The other half is the price of the resources used to manufacture that product.  It is that other half that has been used by large corporations whose scope extends beyond the jurisdiction of public governments to eliminate competing companies with more limited scope.  For example, cheap labor in another state or another country can be used to drive out local competition with prices that would leave no profit for any company using only local labor.  Because the multi-state company is not under the jurisdiction of a single state, it is able to play one state off of another in offering employment and income to its people and thus become a government more powerful than the governments elected by the people.  As such, they pose a threat to the people and their liberty and power much greater than that posed by their state government.  The popular capitalist, in seeking power to the people first and then, as necessary, to smaller, local governments more under their control, opposes these multi-state corporations as a usurpation of power.

Many have pointed out a similar problem with multinational corporations and have railed against them for decades.  However, their attempts to curb those greater powers have been in vain.  It seems clear to me that their failure is in attempting to control multinational governments with national governments.  Similarly, attempts to control multi-state governments with state governments will come to naught.  The best tactic is not to control them, but to exclude them.  Rather than placing regulations on all companies doing business in the state or require certain benefits or impose additional taxes to ensure that the multi-state corporations are “good citizens” — and thus fall into the personification trap – we should only allow corporations which are registered in the state to operate within the state.  If the products of an out-of-state corporation are so superior or so inexpensive to produce, they will remain so as imports, but they will not be assured of a lack of competition in the state.  And with respect to retailers, whom we used  to call “merchants”, we have no use for out-of-state corporations.  Many a capitalist entrepreneur has started as a merchant who saw an opportunity in a new idea or product.  That is the type of capitalist we would like every citizen to become or ally themselves with as a capitalist investing in their new venture.  Not from the national big-box, but from the local corner store comes the popular capitalists.

3 thoughts on “A Corporation is not A Person, A Home is not An Investment – Carl Peter Klapper

  1. THANK YOU for taking up the issue of corporate personhood, a doctrine that needs to be repealed immediately if we’re going to have any kind of business reform that is meaningful.

  2. I find most disturbing, now that corporations are people, the rising willingness of citizens to punish corporations through the action of government. Since corporations are people, when we punish corporations without any distinction between the two, we also apply these punishments to ourselves. Corporate tax hikes will just mean plain old tax hikes, etc etc, because we can simply apply them to all people assuming that corporations will not be exempt; which of course we all know, is utter nonsense. Of course they will be exempt, by proclaiming something along the lines of “since we are composed of people and are a person though not a natural person, taxing the corporation AND its members is a redundant or double tax.” Who do you think will be found exempt in such a scenario? The corporation or its members?

  3. The answer to pretty much any question about preferential treatment is “the national or international corporation” because, as I noted in the article, they can cross jurisdictional lines with impunity. Also, they can pay for the better lawyers, generally speaking.

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