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The Economist has written a fascinating article on how far corporate personality should extend.

http://www.economist.com/node/18437755?story_id=18437755?fsrc=nlw|mgt|03-30-11|management_thinking

Here’s a topic I’ve blogged about in the past – how far should corporate personality extend? I jokingly blogged about giving corporations marriage rights, and I discussed the Citizens United case and why giving corporations free speech rights makes little to no sense doctrinally. Essentially, the argument boils down to corporations obtaining their legal personality, their powers and rights from legislation. Therefore, their rights, including political rights can be terminated by legislation. It makes a mockery of the law to say that Congress can pass a law to ban corporations but it cannot pass a law to stop those same corporations from ‘speaking’ (by which I mean donating money to politicians and lobby groups).

Naturally, the Economist does a better job in terms of content and eloquence. But, I think the article fails to make a distinction between political rights and constitutional rights. I have no doubt that corporations play a valuable part in our democracy and should be given certain free speech rights in terms of arguing for business regulation, making submissions to Congressional hearings on a range of issues outside of business. After all, ‘corporations’ include unions, trade associations, and all other incorporated lobby groups.

But these rights should be granted by legislation so they can be amended by a carefully considered Congress rather than having a majority of Justices reinterpreting the Constitution on a post hoc basis without careful consideration of the consequences. Congress may take evidence of the real world consequences of creating such rights, whereas the Court can only make intuitive guesses as to these consequences. The Court is unable (because of separation of powers) to make the political judgments necessary to ensure the right balance is maintained. In other words, the Court is institutionally impaired in terms of making the right decision.

I’m not sure if this column was written by an American, but often those writing from other countries (including myself) misunderstand the American way of thinking about Constitutional law. The Economist has a particular disadvantage, as it comes from the UK which doesn’t have any form of constitutional rights as exist in the US and even Australia.

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2 Comments

  1. The UK definitely has a body of constitutional law. Are there no rights protected within that body?

  2. My point was that UK constitutional rights are fundamentally different from American constitutional rights. So different, in fact, that their constitutional rights are essentially the same as what I termed as ‘political rights’ in the above blog.

    My understanding of UK constitutional law is limited. However, when the British study constitutional law, its akin to what we study in administrative law -> limits on executive government set in place by Parliament (and not the Constitution). Do you remember the case of Evans v NSW (affirming the ancient case of Potter v Minham) which declared that laws should be interpreted in accordance with fundamental principles, such as freedom of speech? That’s as close as you get to ‘constitutional’ rights. Parliament may abrogate free speech, but only by express intention (or by necessary intendment, defined narrowly).

    The position is vastly changed now that EU Human Rights law is beginning to be incorporated into UK law, so what I have said is becoming out of date. In particular, the EU Human Rights Court has (I think) the power to strike down certain British laws.


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