Corporations and the Social Contract

Vox Day makes an interesting observation concerning the application of Constitutional provisions to private companies:

The self-appointed defenders of capitalism very much want you to ignore the fact that every single corporation is a government creation. And as such, not only should they not enjoy the Constitutional protections of the rights possessed by individuals who are posterity of the Founders, they should be subject to the same limits that are imposed on the government.

Put another way, corporations exist because government charters them. Accordingly, corporations cannot behave in ways that government is not permitted to behave.

I rather like Day’s point, although I have only just begun to think about it. Perhaps there is an error I haven’t yet recognized.

23 thoughts on “Corporations and the Social Contract

  1. I disagree with the premise.

    Corporations exist because people pool their resources to take on tasks they could not accomplish alone. The government’s legitimate function is limited to enforcing the contracts between the investors. Charters are issued unnecessarily in order for government to gain control over those private resources and to ensure that government gets its piece of the action.

    The rights and obligations of a corporation are those of its investors, not those of a separate entity. Government’s legitimate interests in the corporation could be replaced with a good binding arbitration process.

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      1. Valid point,

        I’m not sure it’s a good thing. Absent that protection, investors would insist their corporations carry adequate insurance to meet its obligations.

        But it is a difficult issue.

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        1. …” investors would insist their corporations carry adequate insurance to meet its obligations.”

          I think that happens already, doesn’t it? A corporation would be foolish not to insure the interests of its owners and shareholders.

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          1. “Not always, a lot of start-ups use bankruptcy as their insurance.”

            Which is one of the main points of government-sanctioned corporate “persons.” Kimited personal liability. Bankruptcy does not work as “insurance” for sole proprietors or partnerships.

            Liked by 1 person

          2. Individuals can file under Chapter 7(liquidation of assets and dismissal of debts) or Chapter 13(assets are retained and debts are partially written off and partially repaid)

            Businesses use Chapter 11, which serves both functions for a business.

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  2. RE: “Corporations exist because people pool their resources to take on tasks they could not accomplish alone.”

    Yes. A corporation is a type of partnership. It is unique, however, in that the “partners” are legally exempt from personal liability for injury and damages the business may cause. This legal exemption is a charter of sorts, granted by the government which enforces the law.

    The question then becomes, How does a government which grants the legal exemption from personal liability also grant powers (e.g., censorship) to the corporation which the government itself does not possess? That is, What is the mechanism in law that makes both grants automatic with the forming of a corporation?

    Day seems to think there isn’t one.

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    1. Let’s assume that the 1st Amendment abolishes the government’s right to practice censorship. How does the government which has no right of censorship give the right of censorship to corporations? Put another way, Where does the censorship right of corporations come from?

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      1. “Let’s assume that the 1st Amendment abolishes the government’s right to practice censorship.”

        To begin with, it DOES. It is NOT an assumption. Such is the nature of the discussion concerning Twitter and collusion with the government.

        There is, IMO, an inalienable right to censor information BY a corporation just as there is a right for me to censor what is said about me on any platform. If corporations are people, as defined by Vox Day and SCOTUS in the Citizen’s Untied decision, the right to protect or censor information is in place.

        Outside of fraudulent statements that can endanger or mislead the public, the right to censor is not granted by the government, but is protected by the laws. – IMHLMO (humble layman’s opinion.)

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        1. If you censor speech by a corporation, you are censoring the speech of the people that make it up.

          The NRA, Sierra Club, and Exxon are all corporations, if you can censor one of them, you can censor any of them.

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      2. RE: “If corporations are people, as defined by Vox Day and SCOTUS in the Citizen’s Untied decision…”

        Day adamantly opposes the legal fiction that corporations are people, but that’s not really the point here.

        RE: “the right to censor is not granted by the government, but is protected by the laws. ”

        So, which laws protect the right to censor? Surely it is illogical to argue that a person’s right of free speech includes the right to censor.

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        1. “The self-appointed defenders of capitalism very much want you to ignore the fact that every single corporation is a government creation. And as such, not only should they not enjoy the Constitutional protections of the rights possessed by individuals “…

          “Day adamantly opposes the legal fiction that corporations are people”…

          It does not appear that he does. One of you is contradicting himself.

          It is MORE illogical to argues that it doesn’t.

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          1. Fair enough. He may be saying that. SCOTUS ruled otherwise, as we all know.

            Which raises another question for you: Do you ARGEE with the SCOTUS decision? That may help you to figure out if you are missing or not recognizing an error.

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          2. RE: “Do you ARGEE with the SCOTUS decision?”

            Yes, as it happens. But I note that Citizens United did not address the issue of “corporate personhood” (Wikipedia).

            The quote from Vox Day draws attention to “rights possessed by individuals who are posterity of the Founders.” Those rights are established in law and protected by the Constitution. Importantly, they are passed down through the generations as if by inheritance. Nowhere is there a right to commit censorship.

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          3. “But I note that Citizens United did not address the issue of “corporate personhood”

            Yet it granted the same kind of rights that individuals have to corporations, with regards to speech in the form of campaign donations.

            “Nowhere is there a right to commit censorship.”

            Censorship by individuals is an inherent right. Nowhere is it taken away from individuals.

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