Last month, as you’ve probably heard, a closely divided Supreme Court
ruled that corporations with religious owners cannot be required to pay
for insurance coverage of contraception. The so-called Hobby Lobby
decision, named for the chain of craft stores that brought the case, has
been both praised and condemned for expanding religious rights and
constraining Obamacare.
But beneath the political implications, the
ruling has significant economic undertones. It expands the right of
corporations to be treated like people, part of a trend that may be
contributing to the rise of economic inequality.
The
notion that corporations are people is ridiculous on its face, but
often true. Although Mitt Romney was mocked for saying it on the
campaign trail a few summers ago, the U.S. Code, our national rule book,
defines corporations as people in its very first sentence.
And since
the 19th century, the Supreme Court has ruled that corporations are
entitled to a wide range of constitutional protections. This was a
business decision, and it was a good one. Incorporation encourages
risk-taking: Investors are far more likely to put money into a business
that can outlast its creators; managers, for their part, are more likely
to take risks themselves because they owe nothing to the investors if
they fail.
The
rise of corporations, which developed more fully in the United States
than in other industrializing nations, helped to make it the richest
nation on earth. And economic historians have found that states where
businesses could incorporate more easily tended to grow more quickly,
aiding New York’s rise as a banking center and helping Pennsylvania’s
coal industry to outstrip Virginia’s.
The notion of corporate personhood
still sounds weird, but we rely upon it constantly in our everyday
lives. The corporation that published this column, for instance, is
exercising its constitutional right to speak freely and to make
contracts, taking money from some of you and giving a little to me.
Note EU-Digest: the above should
be a clear warning to the EU not to sign any major trade agreement with
the US wich has laws in place which gives profit based and not
democratically run corporations the same legal rights and status as
human beings.
Read more: What the Hobby Lobby Ruling Means for America - NYTimes.com
