Capitalisn’t: Why Corporations Always Win at the Supreme Court

Episode Transcript

Adam Winkler: I think the right way to go about this problem is to say corporations are people under the Constitution, and they should have those rights that are appropriate for that type of person. For example, we say that minors are people under the Constitution, but they don't have the full panoply of rights that everyone else has. They have the rights that are appropriate for minors. We say that foreign citizens who are resident in the country on a green card have constitutional rights, but not the full panoply of rights. Same thing with undocumented immigrants. They have some rights under the Constitution, but not the full panoply of rights. I think we should do something like that for corporations.

Bethany McLean: Everyone is familiar with the seemingly strange idea that corporations are legally treated as people, but few people know the story behind how that actually came to be or why this bizarre, not really legal loophole of sorts, but legal theory is shaping everything from the products we buy to the elections we vote in.

Luigi Zingales: The history behind this legal fiction is crazier than most people know. After the Civil War, the 14th Amendment was written to guarantee equal protection for formerly enslaved people. Almost immediately, corporations began hijacking the amendment to challenge government regulation. In fact, one of the statistics that he has is that most of the legal suits concerning the 14th Amendment were not to protect formerly enslaved people, but to protect corporations.

Bethany: When Luigi refers to his argument, he means our today's guest on Capitalisn't, who is Adam Winkler, a UCLA law professor and the author of a wonderful book called We the Corporations. He points out a pretty glaring fact. The Constitution literally begins with "We the People," not "We the Corporations. There is no hint that the founders ever intended to extend these protections to businesses.

Luigi: What makes Adam's thinking so compelling is that he resists the cartoonish corporations-bad-individual-good narrative, but he does outline a clear, undeniable trend. For most of American history, and especially under the current Roberts Court, the Supreme Court has been decidedly favorable to business.

Bethany: Here is why this matters to anyone listening right now. Have you ever noticed how corporations seem to get all of the perks of being legally considered a person without any of the actual responsibilities that you or I have?

Luigi: It's an incredible trick. They assert their existence as separate legal entities when it suits them, meaning shareholders are not responsible if the company goes bankrupt or does something illegal. They aggressively assert the right of real people when they want to influence politics or avoid regulations.

Bethany: I don't know, Luigi. It seems to me that corporations have achieved economists' ultimate dream, infinite life expectancy, limited liability, and absolutely no biological needs or real responsibility.

Luigi: You forgot the most important part. They cannot go to jail. They cannot suffer any form of physical punishment. They have other forms of punishment, but they don't have capital punishment. Yes, they can be dissolved. I think it's more painful for an individual to die than for a corporation to be dissolved. They cannot be put in jail. As a result, they are more difficult to discipline.

Bethany: The joke is on us because expanding these corporate rights directly limits the democratic power of actual living citizens. This isn't just a historical debate. It's an urgent question for our future. As we approach the new frontier of artificial intelligence, it becomes entirely possible to imagine courts eventually asking whether advanced AI systems might possess legal personhood too. If responsibility shifts onto an AI, it could paradoxically shield giant tech companies from accountability, expanding corporate power over our daily lives even further.

To start out, just from the 10,000-foot view, why should we care if corporations are considered people in the eyes of the law? Why does this matter to ordinary people?

Adam: We often think in America about the stories of women or minorities, people who were left out of the original constitutional design, and their battles to gain constitutional protection have been central to how we understand America. There's also been a 200-year history by business corporations to win the rights of people. We should care about this because by giving corporations rights, we give them the power to defeat regulations that are adopted by We the People to limit corporations, to limit corporate power, and to protect consumers or workers or general society.

Luigi: If I understood your book correctly, there is a tension in the American constitutional law between the view of corporations as a separate legal person with rights and obligations or as an association of people capable of asserting the rights of their members. Ironically, at least from my ignorant point of view, the second interpretation is the one that gives corporations more power than the first. Am I right? Can you explain this idea?

Adam: It's really interesting that since Citizens United was decided in 2010, there's been a real backlash against the idea that corporations are people under the Constitution. It turns out, what I found in my research was that corporate personhood has played only a minor role in the expansion of constitutional rights, and in Citizens United in particular. Justice Kennedy's majority opinion never says that corporations are people, and nothing in the opinion turns on the idea that corporations are people. Instead, the argument he makes is that corporations are associations of people, and that the reason why we need to protect the rights of business corporations is because they're preserving the rights of the people who are associated within the corporation. Obviously, if you think about the rights of the corporation are just a function of the rights of the people who form the corporation, well, of course, corporations are going to have all the same rights as people.

In business law, however, we generally say corporations are artificial persons. As a person, they have certain rights, but those rights are distinct from the rights and responsibilities of the people who form the corporation. In the few cases where the Supreme Court has taken seriously the idea of corporate personhood as it's understood in corporate law as a marker of separation between the rights of the people who associate within the corporation and the rights of the entity itself, we've often seen the court limit the rights of corporations. We've had this unusual dynamic where people generally think corporate personhood's the problem, but it may be that corporate personhood is the answer.

Bethany: Huh. That's really interesting. Am I right to think that in the way the case law has been decided thus far that corporations have been able to have their cake and eat it too? They've been able to be people when it serves them to be people, and they've been able to not be people when it serves them not to be people?

Adam: I think the best example of this is the Hobby Lobby case decided by the Supreme Court a few years ago. The Hobby Lobby Company, a chain of craft store across the country, sued to challenge an Obamacare regulation that required them to cover birth control as part of employee health plans as a big corporation. The Green family, which owns the Hobby Lobby Corporation, argued that this was a violation of Hobby Lobby's religious freedom. The Supreme Court ultimately agreed, but interestingly, that the logic really isn't taking seriously corporate personhood.

If someone were to slip and fall in a Hobby Lobby store tomorrow and sue the Green family saying you're responsible, the Green family would be the first ones to go to court and say, hey, you can't sue us. You need to sue the entity, Hobby Lobby, the corporation. There's a strict separation in the law between the rights and responsibilities of Hobby Lobby on the one hand and the Green family on the other hand. This is a perfect example of where the Green family wants the benefits of corporate personhood, that separation between the entity and the owners for purposes of liability, but wants to collapse that distinction when it comes to something like religious liberty when indeed Hobby Lobby, the corporation, doesn't have any religious elements to it. It's not a church or a religious institution or a religious corporation. It's just a sheer business corporation.

Luigi: Actually, let me challenge you on this because if we are a small corporation, five of us are devout Christians, and we want the shop to close down on Sunday, I think is completely in the realm of legitimate things for the corporation to do so. Now, if you go to the next step and you say, imagine there are four out of five, isn't that the right for the four majority or the one majority and should be in the complete right to close down the shop on Sunday? No?

Adam: I completely agree with that idea. Of course, there's no laws out there saying you have to be open on Sunday, that corporations can choose to be open any day of the week or no days of the week. That's up to them. They don't even need religious freedom to get there. I do think that there's a distinction between deciding to close on a particular day of the week and, like in Hobby Lobby, refusing to provide birth control. Or in a case like a Masterpiece Cakeshop or these other cases where wedding suppliers refuse to provide services for same-sex couples despite state laws that say you can't discriminate on the basis of sexual orientation, I think that's far more problematic.

Indeed, in the civil rights era, the Supreme Court was clear that corporations did not have the right to discriminate on the basis of race simply because the owners had a freedom of association and should be able to associate with the people they want to associate with and do business who they want to do business with. I think the Supreme Court's lost sight of that in recent years by extending religious protections to corporations in a way that are much more profound and serious on their impact on workers or the local community than simply like Chick-fil-A deciding for religious reasons we're not going to open on a particular day of the week.

Bethany: Is part of the problem that the law can be a blunt instrument for all that we try to make it a nuanced one and that the law simply doesn't provide for distinctions between of the sort Luigi was getting at, staying open on Sundays or not, arguably of no harm to anybody and a decision that should be within the rights of the company, maybe, and something that really impacts workers or a community that could also be couched as a religious issue but one that could do enormous damage to people?

Adam: Absolutely. I think one of the surprising things I found in my research for We the Corporations was despite over 200 years of Supreme Court cases extending our most fundamental rights to business corporations, there's been very little theorizing about the nature of the corporation or whose rights are really at issue here. I say the court has really never thought deeply about who are the members of a corporation. Is it the shareholders? Is it the board of directors? Is it the employees? Is it the broader community of stakeholders that might include local communities of interest or consumers who purchase the products?

When the Supreme Court says, for instance, corporations have an unlimited right to spend money on election campaigns because they're an association of people, the court never asks the hard questions of who are those people, number one, and whether those people want their money being spent on electoral politics. Presumably, the businesses that are freed to spend money on electoral politics now, if they're, for instance, a publicly held corporation, include Republicans and Democrats who don't want to see their money spent on politics that oppose their own right to vote and their own voting behavior.

I think actually that one of the problems even in the reform movement is there's been a proposal for a constitutional amendment that would say corporations are not people and have no rights under the Constitution. I think that's also too blunderbuss. We need more nuance in how we think about that. I think the right way to go about this problem is to say corporations are people under the Constitution, and they should have those rights that are appropriate for that type of person. For example, we say that minors are people under the Constitution, but they don't have the full panoply of rights that everyone else has. They have the rights that are appropriate for minors. We say that foreign citizens who are resident in the country on a green card have constitutional rights, but not the full panoply of rights. Same thing with undocumented immigrants. They have some rights under the Constitution, but not the full panoply of rights.

I think we should do something like that for corporations and say, you know what? Corporations need some constitutional rights. The New York Times and CNN need a constitutional right. Otherwise, they'll be censored. At the same time, some corporations should have religious freedom rights. We might expect religious organizations. Lots of churches are formed as corporations. They should have religious freedom. That's what they're formed for. Maybe we want to distinguish between closely held corporations and public corporations. The Supreme Court has really just never approached these issues with that kind of nuance.

Luigi: Let me push you a little bit farther on this because there seemed to be a fundamental contradiction between the view, especially in Delaware, we have of the way corporations should be run and the way the Supreme Court sees corporations because it's clearly unprofitable for Hobby Lobby to close on Sunday. If a corporation has a duty, and this is open to debate, but has a duty to maximize shareholder value, they should be open on Sunday against the preferences of the majority of their shareholders. All the two, either corporation are association of individuals and should behave like association of individuals, where we have a discussion about what the objectives are, or are predetermined with a single objective to maximize shareholder value. Then they shouldn't have certain rights because it's dangerous that they have certain rights.

Adam: One of the landmark cases I talk about in my book, which is not a corporate rights case, but an important in addressing this exact question, deals with the famous visionary carmaker, Henry Ford, who brought the automobile to the masses and created the assembly line production process. In 1916, Ford and his company were sued by two business partners, the Dodge brothers, who owned 10% of Ford Motor Company stock. They were unhappy that Ford refused to maximize profits even more, even though they were making tons of money. Ford announced that he would begin paying workers $5 a day, double their previous wages, even though job applicants were plentiful. Ford announced that they were going to lower the price of cars, even as significant improvements were introduced and inventory sold out. The Dodge brothers ended up winning that case in the Michigan Supreme Court against Ford's public-spirited view of the corporation. There is this line of cases that say that corporations really just exist to make profit for the stockholders and not serve the interests of any other stakeholders.

In recent years, we've seen Delaware law and other corporate law loosen this idea by saying that we're just going to defer basically to management when it makes these decisions. The court has no real ability to second-guess the right policies to maximize shareholder wealth maximization. One of the arguments that's been made in the wake of Citizens United that I think is an interesting one to think about is instead of regulating the rights of corporations with a constitutional amendment that says corporations have no constitutional rights, which I think just goes too far, we've seen proposals, for instance, that maybe we should change this by changing corporate law. Having a regulation that requires corporations of a certain size to have elements of code determination. By having labor representation, for instance, or communities of interest represented on boards of directors. That way, if you're going to get a corporation that strays from the profit maximization principle in favor of, say, the interests of the stakeholders, that stakeholders other than shareholders have a voice in pursuing what that corporation does.

It's also worth recognizing, I think, that when a corporation asserts, for instance, the political speech rights and takes out political expenditures, it may be, as the Supreme Court says in some instances, that they're just doing that to serve the interest of shareholders. There is a troubling trend that we see over the course of the last 150 years or so of corporations spending the money of shareholders to push for laws that immunize management from shareholder oversight, protecting them, managers and directors, from liability, from being pushed to respond to shareholders. Sometimes the discretion that we provide to business corporation management, while done in the name of the interests of shareholders, is sometimes used by corporations against the interests of shareholders, not just to profit maximize, but even to hold management accountable for misdeeds or waste of corporate resources.

Bethany: Perhaps I think about the law in the wrong way. Perhaps I think about it as more fundamental, more built on fundamental truths or precepts than it actually is. How can it be that the Supreme Court can have made so many of these decisions over the centuries on behalf of businesses without ever wrestling with some of these fundamental questions? Like, what are we talking about here?

Adam: It's certainly not for a lack of opportunity. The very first Supreme Court case to ask the question, are business corporations protected by the Constitution, was decided all the way back in 1809. The first Supreme Court case on the rights of African Americans was decided in 1857, the notorious Dred Scott case. The first Supreme Court case on the rights of women, Bradwell v. Illinois, was decided in 1873. A half century before those landmark cases, the Supreme Court was addressing the question of whether corporations had rights under the Constitution.

One thing that's odd to notice is that in the Dred Scott case, the Supreme Court said that African Americans could not be citizens under Article III of the Constitution. That was a provision that provides you access to federal court if you're in a lawsuit between citizens of different states. Ironically, sadly, or tragically perhaps, in the 1809 case, the Supreme Court held that the Bank of the United States, the richest and most powerful corporation at the time, did have a right to sue in federal court and could be considered effectively a citizen when it sued someone in a different state. It's certainly been a long history of corporate rights cases that could have offered that kind of thoughtful exposition about the nature of a corporation and what kind of rights it should have. We just haven't seen it happen.

Luigi: Honestly, reading your book, one becomes very cynical about the law because it seems, at the end of the day, that the law is very malleable, is very much shaped by the most powerful people, and in this particular case, by powerful corporations. Sometimes they use one theory, sometimes they use the other theory. They don't even have the obligation to be consistent across cases. To some extent, the court tries to be consistent, but the people bringing suit in the name of corporations can pick and choose whatever fits the best. At the end of the day, the entire 250 years history seems to be a drift in the interest of business versus a normal human being. Can you give us a bit of hope that that's not the case?

Adam: No.

[laughter]

Adam: It's not. I think the cynicism runs really deep and more than just the inconsistency of the law over time. One of the most remarkable stories in the history of American constitutional law, I think, is the story of how the Southern Pacific Railroad sought protection under the 14th Amendment to the Constitution in the wake of the Civil War. The 14th Amendment was adopted after the Civil War to provide equal protection of the laws for African Americans. The Southern Pacific Railroad, one of the most powerful corporations in the West at the time, devised a groundbreaking series of test cases seeking to gain the right of equal protection of the law so that they could fight taxes such as a California tax that was a special tax imposed on railroads.

The lawyer for the Southern Pacific Railroad was Roscoe Conkling, who was a very notable lawyer at the time. He had been nominated and confirmed to sit on the Supreme Court himself, a position he turned down because he was making too much money as a lawyer for the railroads and couldn't afford to be a justice. He went and told the justices that the 14th Amendment was rewritten by its drafters specifically to embrace artificial persons like corporations. It was an audacious argument, but Conkling was uniquely situated to make it. As a young congressman, he had been on the committee that had drafted the 14th Amendment, so he was speaking about his own personal experience.

Luigi: You use the term audacious for the claim that Conkling made in front of the Supreme Court. I didn't get fully from your book. Did you mean he lied?

Adam: I think that there is no question that Roscoe Conkling lied to the Supreme Court, that Roscoe Conkling even produced a journal which he said supported his argument, never before been published, the debates of the drafting committee of the 14th Amendment. He said, "A close look at this journal will show that we were intending to protect business corporations." We now know that the journal was a real journal of the drafting committee of the 14th Amendment, but nowhere in it does it say that they changed the wording as Conkling claimed, that they were designing the 14th Amendment to protect business corporations. Indeed, even if they had that intent, there is no discussion in any of the public debate over the ratification of the 14th Amendment by We the People, that discussed corporations or businesses being able to use this provisions.

I think that there's no doubt that it was a lie and that he was playing fast and loose with the facts. I even think, although I'm not 100% certain about this because there's no record of it, I think actually the Supreme Court realized this. Conkling's case on behalf of the Southern Pacific Railroad was held off, the court didn't reach a decision on it for three years, just refused to issue a ruling on it. I think it's because they discovered his forgery on this, but yet the justices themselves were very much in favor of expansive rights for corporations.

When another Southern Pacific Railroad case comes to the Supreme Court a couple of years later, Conkling's not involved and no one talks about the drafting committee and the intent behind the 14th Amendment. They don't use his drafting committee journal that he had claimed supported his argument. I think that the Supreme Court really just discovered his fraud.

At the end of the day, it didn't matter to the justices, though, because remember at the time, if we go back to that time, it's really interesting to read biographies of justices from the late 1800s. What was considered a compliment to the justice is how they took the law and changed it and used their creative force to make the law a better tool for a society that's looking to improve itself. The idea of a living constitution was not an anathema to justices or the legal community at the time. That was a compliment at the time.

It turns out that the justices in the late 1800s were very much in favor of expansive rights to corporations. This is really the very beginning of the Lochner era, which was roughly 1890s to 1934, 1937, right around there. That Lochner era was known as being one where the Supreme Court was very expansive in its protection of business interests and very hostile to business regulation. It's worth noting, by the way, that even the Lochner era court, though, drew some limits on the rights of corporations. For instance, saying that corporations don't have the right to political speech and courts upheld campaign finance laws that restricted corporate spending on elections. Cases that the Supreme Court today has really lost sight of and expanded the rights of corporations to spend for political reasons.

Bethany: Is it fair to say that even in this history of the Supreme Court being pro-business, that today's Supreme Court is the most pro-business of all? I was actually also wondering as you were talking, it's perhaps an unanswerable philosophical question. I wonder if the fact that so many Supreme Court justices have tended to come from a few very elite institutions that maybe baked into their belief system somewhere is just that America depends on its businesses and that corporations have to be nurtured and be allowed to thrive at all costs because as businesses go, so goes the country. I wonder if there's this underlying, unspoken, and perhaps not even conscious mindset that has created some of this.

Adam: We think of the Supreme Court as a protector of the rights of the minorities. Those years of the Warren Court were pretty limited, and that the Supreme Court has traditionally been a protector of the interests of the wealthy and the elites, and that the minority that the Court has been most protective of is the moneyed minority. The 1%, if you will, and the corporations that represent those same business interests. There is some data. Some political scientists like Lee Epstein have gone through and actually tried to come up with some empirical metrics to determine how business-friendly the Supreme Court is. This Supreme Court rates as the most business-friendly of the last century.

Bethany: If the Supreme Court now consists of originalists or constitutionalists, I'm not sure I understand the difference between those two ideas, but the idea being that everything is supposed to be rooted in what the Constitution actually said, but the Constitution makes no mention of corporations or corporate rights, how then do we have a Supreme Court that is now at least half originalists or constitutionalists that does all these rulings in favor of corporations when there's nothing about this in the Constitution?

Adam: Yes, I think it's a real dilemma for the originalist justices that make up the majority of the Supreme Court today. There's absolutely no evidence that the framers intended the Constitution to protect business corporations and no evidence, despite the arguments of Roscoe Conkling in the Southern Pacific Railroad cases, that the 14th Amendment was designed to protect the rights of business corporations.

In fact, we know that the founding generation harbored a certain hostility to business corporations, with Jefferson condemning what he called the aristocracy of our moneyed corporations. I think this is a problem that the Supreme Court has long ignored the original understanding of the Constitution when it came to corporate rights and expansively read the Constitution to protect them. To the extent that we have a living constitution, a constitution that evolves to keep up with changes in societies, I don't think it's a stretch to say that corporations have been among the primary beneficiaries of that living constitutionalism, but yet we've seen virtually no effort by the originalist justices to really provide an originalist grounding for rights of corporations.

Luigi: Now, I was very intrigued by one case that you mentioned, which is Marsh v. Alabama, where corporations are bound to respect the constitutional rights of others. You mentioned that also Berle supported this idea that corporations should be subject to constitutional limitations, as is the state itself. Now, why is this theory not more popular today? I can see it as a remedy to monopoly case like Google. Not every corporation should be subject to this. But once we establish, as the judge established, that Google is a monopoly, now the judge is afraid to break up Google, but why not impose some constitutional duty to Google?

Adam: It's a great question. We really revere the founders in America and talk about their brilliance and how much they understood and could predict the future and regulate or set up the Constitution in ways that responded, but in the framers view, there was basically government and there was people. The Constitution is written to set up and set limitations on the government vis-à-vis the people and ordinary people. Indeed, there were very significant corporate law cases, corporate rights cases brought within the earliest decades of America showing that this had been something that they had overlooked, what to do about business corporations.

Well, you might imagine a world in which business corporations were deemed to be like governments and that we need a Constitution that protects individual rights as against both government overreach and corporate overreach. You mentioned Marsh v. Alabama. Marsh v. Alabama is a unique, unusual case decided in the mid-20th century dealing with a company town and the Supreme Court in one unusual case said that a corporation that ran this company town had to respect the constitutional rights of the people who lived within that town. The Constitution was thus a limitation on the corporation, treating the corporation as if it were the government, like we said, as one possible way of thinking about constitutional rights and corporations.

For the vast majority of American history and continuing to this day, corporations have really been defined by the Supreme Court as being on the individual side of that ledger. The Constitution protects individuals and corporations from overreaching government and doesn't protect individuals from the overreaching acts of corporations at all. We see things like corporations that don't want to provide birth control, even though federal law requires that they do so, or we see corporations in some unusual circumstances firing employees for exercising their political speech rights or opposing the politics that the corporation itself has. We see a long history of, in big corporations, of management being dinged by the directors to support corporate PACs. Even if they don't necessarily want to, they're told that that's the expectation, that they're going to give money to the corporate PAC, and that corporate PAC will spend that money on politics to help the business corporation.

We can imagine a world in which it was a very different setup, that corporations were limited by the Constitution. The Supreme Court's really, with one exception, that was the exception that proved the rule, has really not gone there.

Bethany: Before we run out of time, we have to lurch back to Blackstone in 1757. You talked about earlier how he described corporations as artificial persons. What's the line between that and AI today? Could AI and should it eventually receive some form of legal personhood? Does that inevitably expand corporate power? You've noted, I think, that if AI itself becomes responsible for mistakes, that could shield corporations from liability. Or could it actually extend individual liberties? You could say, "I'm not responsible, my AI told me to kill him," or is it just a complete and total mess?

Adam: I think it is a bit of a mess, in part because it is under-theorized. Now we have this new possibility of a new type of person being created that could have some legal responsibility. How do we think about that legal responsibility? I drove to work today in a car, a Tesla that had self-driving capability. It's a really interesting question. If that car, under self-driving, gets into a car accident, who's responsible? Am I responsible? I wasn't even driving the car. Why would I be responsible? Is Tesla responsible? Maybe, but maybe Tesla would say, "It's not us responsible." Maybe it's the contractor that built the software that made its bad decision in that particular case. Maybe the software engineer says, "Well, it wasn't even me. It's an AI platform that's a large language model that is figuring out what to do in these situations. You can't blame me. You have to blame the actual artificial entity entirely."

I think it's a brave new world in personhood. What do we mean by personhood? What kinds of rights and responsibilities come with that idea of being a legal person? I certainly hope that if AI becomes a person, it becomes a more accurate person than it currently is. I recently typed some things in there, and it gave me the absolute wrong answer that I knew was the wrong answer. It was absolutely insistent that it was right. I figured that it'll become better as time comes on.

Bethany: I don't know about that. At least you're still capable of knowing that it was wrong. [laughs]

Luigi: Does it make a difference which view of the corporation you espouse? If you take corporation as association of individuals, then clearly, an LLM is not a person and does not have this characteristic. If you think about a separate personhood, maybe it does. In that sense, it's more dangerous to espouse the view of legal personhood.

Adam: Yes, very possibly. I think one of the things we have to ask is, why were corporations recognized to be legal persons? It was because there was this problem that we wanted to solve all the way back into ancient Rome 300 years before Christ, which was, how do you create an entity that can lock in capital and survive despite changes in the underlying membership of the organization? How do you devise an entity that can own property? It has to be a person to own property. My mug is a thing, but it doesn't own property. It's not a person. My table is not a person. It can't own property. It can't sue and be sued in its own name or enter into contracts.

We created this idea of corporate personhood so that we would have this artificial being that could do certain things that we thought were socially useful. Does AI need that kind of personhood right? Do we want AI to be able to own property or to enter into contracts or to sue and be sued in its own name? Do we want it to have rights like rights of free speech or rights of religion? I think those are the questions we have to answer. Without answers to those questions, we shouldn't be just extending property rights to anyone or anything that kind of looks like a person. It talks to me like a person, so it's a person. Personhood is about accomplishing certain kinds of goals in society.

I think the Supreme Court would do a better job if it thought critically about corporations and whether they should be persons and how they should be persons and what that would mean in particular cases. I certainly hope that if we move into something like AI personhood, that we have that discussion and try to figure out what would be most socially useful for We the People. At the end of the day, it's about We the People and what's good for our larger society.

Bethany: I was actually wondering if you were talking, if that is part of the problem here, that we lost sight of that idea that a corporation was supposed to be socially useful and that we seem to have completely gotten away from that idea.

Adam: Well, they were supposed to be socially useful. I think you're right, and we have gotten away from that idea. Note that they were always a big danger as well. One of the things that the early Roman corporations were used was for creating mining entities, mining enterprises in Spain and other places. Interestingly enough, scientists have been studying ice core samples from that same period and have discovered in these ice core samples that 300 years before Christ, worldwide pollution spiked as a result of these mining corporations formed by the Roman Empire. From the earliest days of the corporate entity, it was designed for socially useful goals, but it always had this secondary or incidental impact that was potentially dangerous and potentially devastating for the society that it was designed to help.

Bethany: I think I had never understood the extent to which corporations over time have been able to turn the Constitution into a tool that more and more enables them to do what they want. I tend to think of legal powers being a very modern phenomenon, that it is rich companies and rich people who have access to really great lawyers that then enables them to shape the rules in a certain way. It's interesting that that's always been the way it's worked, and that's, in effect, why all of this has happened.

Luigi: The book is really clever, substantial, and sophisticated. I strongly recommend everybody to read. Now, my favorite chapter, as you can imagine, is a chapter about the Bellotti decision and Lewis Powell and how he manipulated everybody on the court to deliver what he wanted. In the Bellotti decision, Lewis Powell used the Virginia pharmacy decision that was a product of Ralph Nader and his activists, and he used that to do the opposite of what Ralph Nader wanted. Remember that when we interviewed Ralph Nader, despite his being 93, he immediately connected to the Virginia. He didn't miss a step, and he said, "Ah, that was a big mistake."

Bethany: I do think two things we did maybe shed a little more light on. One is this idea that the Supreme Court has never really tackled these issues. Well, actually three things, that the court has never really actually tackled these issues. They've never really defined. personhood and defined what it is that they're talking about here despite how incredibly important all this rulemaking has been to America. I just find that astounding and jaw-droppng that in something that's supposed to be as foundational as law, that a lot of this rests upon questions that haven't really been answered.

I also have really liked Adam's points about how ironic that this court is probably the most pro-business ever, and yet this court is also the most heavily originalist or constitutionalist ever. If you really are an originalist or a constitutionalist, given that none of this was in the Constitution, it's actually incredibly ironic that they could be as pro-business as they are. I think some of his thinking about where this might go with the advent of AI is also really interesting, and that obviously wasn't a topic when he wrote his book.

Luigi: I also think that, if I may, he wasn't too responsive to my challenge on the relation between the corporate law and constitutional law, because I do think that there's a fundamental contradiction between the two, and I do think it's something we want to tackle. The problem is that corporate lawyers don't want to, or legal scholars don't want to change their own system, and constitutional lawyers are bound by the Supreme Court. It is a tug of war, and nobody really wants to investigate this further.

Bethany: Also, if you think about it, corporate lawyers make a lot of money from ambiguities in the law, right? It's within everybody's interest to have it be somewhat ambiguous rather than to define these things in a way that may stop some cases from being brought. Clarity is not really in the interest of the powers that be.

Luigi: When you look at his book after having read the book by Katharina Pistor, you really think that she's right to some extent, because she could have just cited this book and said, look, this is Exhibit A, or the fact that doesn't matter. Sometimes you use the personhood, sometimes use the idea that you are an association of individuals. The only thing that is constant is that business always wins.

Bethany: Yes, I do think we're more and more touching on this theme that business always wins, and maybe we should try to think about how that might sometimes be a good thing. I suspect that if there is a defense of it, is this idea that if business is prosperous, then the rest of us are prosperous. That can be true, but it is based in this outmoded version of a 1950s economy where a successful company did need the people who bought its products to also be successful and to have money to buy its products. Somehow that has separated in recent decades, and there are too many corporations where it is possible for them to thrive even if the society and the citizens don't thrive. Maybe that's really the key problem, is that our formulation of how the world works hasn't yet caught up to how corporations are shaped today.

I think the most compelling number in this is the share of corporate profits that are going to shareholders versus labor. I guess you can argue shareholders are all of us to some extent, except they aren't. That's the most compelling evidence to me that something is going wrong in that equation. I think we haven't fully come to terms with what that is. That was a lot. I'm not sure I was very coherent. Did it make sense to you?

Luigi: I think you are very coherent, but you only look at the perspective of the tension between workers and capitalists, if you want, and you are ignoring the externality issue, which is gigantic. Eliminating every environmental regulation is good for business. By the way, this is what [unintelligible 00:43:50] obtaining under Trump. Little detail makes the environment unlivable, kills us all in young age, and this is not for the good of the country.

Bethany: One thing we didn't really talk about, but is this idea of the counterfactual. How would it be different? How would our world look different if the Supreme Court had made a different set of decisions, and if corporations had been relegated to the position in American society that they operated at the start, where they were limited life, chartered expressly for a certain purpose, and meant to be beneficial to society? Would the world look different and better if we had kept corporations in that box?

Luigi: I think I will distinguish between a hypothesis of saying, oh, if that particular decision went in a different way, what would have happened, versus if corporations couldn't fight back. Because what I learned from his book is basically, no matter what, corporations went. When I ask him, can you give us a hope that that's not the case, he had the most straightforward answer possible, no. He was very honest in saying there is no hope. Even when they did not, I try to remember, I think it's the Santa Clara decision, in which they do not say that they give civil right to the corporation, that particular decision. Then there is the transcriber that wrongly summarized the decision, and everybody cites the transcription, so that the interpreter has gone the other way. That's the proof that even if the judges decides in a different way, the world is going ahead in the interest of our corporation, no matter what.

Bethany: Well, I think that is a convenient rhetorical way of getting around answering the question, because the broader question would be, what if the court recorder hadn't gone the other way? What if we just lived in a different world where corporations had never achieved the status? That was a very clever duck. I appreciate it.