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we're speaking today with eric ortz a
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professor of legal studies and business
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ethics at wharton
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about his new book released in september
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here
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uh titled business persons a legal
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theory of the firm
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thanks for joining us today eric you're
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welcome i'm happy to be here
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um a book covers a lot of ground but i
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think today
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i'd like to focus on a couple of
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specific ideas in the book that
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were very interesting one has to do with
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executive compensation
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and the second has to do with the
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citizens united supreme court case which
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uh gave corporations the right to spend
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i think unlimited amounts in
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on political groups and campaigns and
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candidates and that kind of thing
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um so based on the citizen
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united decision um corporations are
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people too
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right or or are they well that's one of
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the uh that's one of the
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main questions that i try to answer in
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the book or at least
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lucidate so the title of the book is
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called business persons
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and what i mainly argue in much of the
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book is that
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corporations are persons but that
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doesn't mean that they're people
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and therefore as the majority of the
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supreme court said
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they have all of the rights apparently
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that people do persons not people
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yeah so now it's interesting because
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actually people are persons in legal
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terms as well and so we don't treat all
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people equally either so infants are
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treated differently than adults
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aliens are treated differently than
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citizens
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slavery was a big issue for many years
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until
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rights were accorded to uh to every
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person
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without without any discrimination so
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so the idea of legal persons is quite a
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deep
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and difficult idea in the law in general
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and what i try to talk about in the book
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is how businesses are persons and really
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it wouldn't make any sense
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to think of them not as persons or it
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would cause a radical revolution in how
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we
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how we act every day so businesses own
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property and they have rights to protect
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that property businesses
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are constructed and have legal rights to
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of standing to uh protect those who are
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working in the business so in that sense
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uh businesses can be said to represent
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people and people represent businesses
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uh there's some things they can't do
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right they can't they can't vote
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that's correct there's some there are
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some rights that we clear
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that clearly corporations do not have uh
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it's not possible to put a business in
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jail though it's possible to put people
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who are acting on behalf of businesses
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in jail
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and there's a debate in the law about
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whether companies uh
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and other businesses should be
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criminally uh
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criminally culpable so some countries
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say it doesn't make any sense to put it
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to say a company could be uh committing
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a crime
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the united states that's different and
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we uh currently have the sac capital
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case
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or the sac company uh uh case where uh
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your uh that rate that cut that that
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issue is being raised
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so uh so yeah the so there are many
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different kinds of questions and with
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respect
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to the citizens united case what i argue
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is
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uh that the court really both sides of
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the opinion
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both both sides of the supreme court uh
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decision
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in citizens united i think do not go
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deeply enough into the question of what
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does it mean
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to say that corporations are persons and
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then once you start thinking about that
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you might come to a better answer than
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either yes they do have all these rights
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or no they don't have any rights
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so you disagree with the supreme court's
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decision
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and um actually i disagree with both
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both the majority decision and the
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minority decision so i'm
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sure we have popular a popular argument
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let's start with the majority decision
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um they went too far they gave away too
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many rights to i think the majority
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decision
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basically doesn't go into the question
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very carefully by saying
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well look here are all these cases in
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which we have found corporations to have
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rights
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as persons therefore they have rights
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for political speech
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now it might make sense to give
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corporations rights for political speech
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in some
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some context but on the other hand it
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might not and so
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uh there are questions that are raised
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in the descent for example that for many
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years
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have been a question of if companies get
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too involved in politics
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isn't there going to be a corruption
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problem where companies are only going
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to be supporting
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issues and candidates that are going to
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benefit them
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is that really is the public interest
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really going to result in the best laws
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that way
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restrictions is that because they would
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have an outsized amount
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of um money to well it's partly
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that's another argument another argument
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is that uh and justice stevens and
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dissent raises this
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argument as well is that there will be
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too much influence if you allow
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companies into politics
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the other argument though is a
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corruption argument and that is
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it's clear that there are some
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limitations so almost everyone agrees
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that bribery should not be allowed you
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shouldn't be allowed to go to congress
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and say hey i'll give you this much
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money
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if you vote in this way that's clearly
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illegal
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what's not so clear is what about these
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grayer areas where
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you have campaign financing and other
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and campaigns in general where you have
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to various organizations active in
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trying to inform public opinion
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and what is the legitimate role of
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business
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in that process my god my my feeling is
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that there's probably a gray area
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where sometimes you want to have the
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public informed about issues that
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business is going to be closest at
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knowing about and they should have a
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right to be talking about those issues
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on the other hand when it's sliding over
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into a question of potential corruption
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or potential
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uh distortion of the process then i
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think justice stevens has a good
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argument
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now on the other hand i think the
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dissent goes too far by saying
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corporations are not people therefore
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they're not persons therefore we can do
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any kind of regulation whatsoever
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if we follow that argument to its
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logical extreme we'd have a lot of
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problems also for example
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can a company protect its own property
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that a lot of property in the united
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states and the western world in general
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is uh is in corporations is technically
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and legally owned by those corporations
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so this is so to say that they would
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have no constitutional right of property
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uh or to protect that their property
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would seem to override all the
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individual people's interests in that
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property i mean do you think that's what
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the dissent was suggesting or you're
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simply saying that's the logic well i
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think that's the logic of the dissent
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doesn't really
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uh parse where you're going to draw a
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line here
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and i think that that was a weakness of
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the dissenting opinion so you're going
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to see this issue i think it's not going
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to be disappearing after citizens united
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you're going to continue to have this
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kind of question raised
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so there's a lot of um i mean
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you could imagine a lot of different
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kinds of cases that would that would be
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in the middle is there any sort of
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practical
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way to think about this what makes sense
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what doesn't just as a you know
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an average person looking at what seems
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fair um
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well one suggestion i make in the book
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is that maybe both sides can come to
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what
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president gutman has called a spirit of
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compromise and
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uh her recent book she talks about there
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are cases that people remember cases
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where democrats and republicans actually
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agree on things in past legislation
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president guttmann being
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the president of the university of
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diversity right but i but i argue that
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one
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example here should be although it isn't
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presently that
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everyone should i think agree that if
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companies are contributing money uh to
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political campaigns or
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uh or or making political advertisement
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advertisements
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it should be disclosed that that's
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happening now some people's
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uh there are there are people who argue
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against that but i think that would be
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uh
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at least one step in the right direction
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of having some transparency in the
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process and there are privately
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there are some groups that are arguing
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for political accountability
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there are shareholder groups who are
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trying to get companies to do this many
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companies do this on their own
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and many companies actually have decided
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just to opt out of this whole process so
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just because the supreme court says
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companies have a right to be involved in
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politics a lot of companies don't
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decide not to get involved in politics
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because you might just
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get everyone angry at you and that's no
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way to sell your products
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requiring companies to disclose how much
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they're giving
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and who they're giving it to seems like
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a reasonable thing but that's actually
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not required
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under the current law what what are the
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arguments against that
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well i think someone who takes a very
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strong view that corporations have
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political rights
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and they're the same as any individual
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adult
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might say well individual adults don't
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have to
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have to disclose this sort of thing so
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you can vote in its secret for example
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but i think that the reasons that we
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allow that sort of nondisclosure for
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example
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secret balloting don't apply when you're
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when you are talking about
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problems of potential corruption or
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distortion of the political process i
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think at the end of the day
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most political scientists or others who
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look at what democracy is about
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would say that mainly it's voters that
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should decide and that means individual
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human beings no one is arguing that
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corporations have a right to vote for
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example
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stevens makes a lot of that in his
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dissent so clearly we have to
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some kinds of restrictions are obviously
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appropriate and this seems to me to be
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one that might start to
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put the put the put some balance into
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the system
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you
