The Supreme Court’s majority opinion in the “Hobby Lobby”case, announced earlier today, is another decisive step in a process that had the potential to fatally undermine our democratic civil society. If you haven’t read the opinion, or Justice Ruth Bader Ginsburg’s powerful dissent, you can find them here and here. In a nutshell, the Court ruled that Hobby Lobby could deny coverage for birth control for its female employees because as a “closely held” corporation, it possesses the right to freedom of religion. And since contraception is against Hobby Lobby’s “religious beliefs,” the company doesn’t have to play by the rules of the Affordable Care Act when it comes to covering birth control on employees’ health insurance plans. Now, it probably sounds weird– perhaps disconcerting–to read the above paragraph’s continued references to Hobby Lobby in the personal singular, as if I was discussing my friend Bob or something. Hobby Lobby is a corporation, an entity made up of many people, right? Well, therein lies the rub, as they say. At law, as Mitt Romney famously declared, “corporations are people, my friend.” The Supreme Court has built a formidable body of decisions that have granted corporations the status of persons, with all the rights and privileges thereto appertaining. Take the Citizens United decision: no campaign contribution limits for corporations, because they have “freedom of speech.” For Hobby Lobby, “freedom of religion” means it doesn’t have to cover birth control.* This is what the founding fathers laid it on the line for, right? Freedom! AMERICA.
As a History professor, I have both a moral imperative and contractual obligation to call bullshit on this line of reasoning. When the legal maneuver of incorporation was first employed in the US, during the early nineteenth century, it was done to prevent individual shareholders from being on the hook if the collective enterprise failed. To “incorporate” literally means to acquire a body– that is, take on the status of an official citizen for certain legal purposes-and protections. “Aha!” Mitt Romney triumphantly yawps, “I was right!”
Well, sort of, but not really. These early corporations were formed to undertake projects that were massive, capital-intensive endeavors by the standards of the time– canals, turnpikes, insurance, banks, railroads. The common denominator here was that these were the sinews of the Market Revolution, the precursor to the industrial revolution of the latter part of the century. These early corporations built the country’s commercial and transportation infrastructure. And that’s probably why skeptical state legislatures finally allowed corporate charters to become fact–the common weal needed such an innovation to see its fulfillment. In the early republic, concentrations of economic power like this were viewed with great suspicion in many quarters (there was a history of British corporate malfeasance leading up to the Revolution, after all. Bostonians had a tea party about it; you might have heard). So there needed to be damn good reasons for incorporation. And for many political leaders, “internal improvements” met that criterion. It’s important to note, though, that corporations had significant restrictions placed upon them by the state legislatures who issued those corporate charters: in particular, if the corporation engaged in criminal behavior or other malfeasance, the charter could be revoked. The corporation could only use its funds and legal privileges for the purposes for which it was chartered (e.g., building a road or canal, as opposed to political lobbying). And corporations could not own property not germane to their purposes, nor could they invest funds in other corporations. So the early nineteenth-century corporation was a much more closely-circumscribed “person” than its modern counterpart. And those privileges (limited liability, shielding of shareholders from individual risk) came with the implied caveat that the corporations were engaged in work necessary to the public good. The key takeaway here is reciprocal obligation: in return for the privilege of incorporating, the corporation undertook work that was necessary for the public good. Responsibilities lay on both sides.
So what happened? This all was great in theory, but in practice, we’ve seen something else entirely. Long story short: the Civil War and Reconstruction eras saw a massive infusion of wealth and capital into America’s burgeoning industrial sector, and an increasingly business-friendly attitude on the part of the ruling Republican party. Corporations acquired unprecedented amounts of wealth and power, which did not go unchallenged. But in the court system of the late nineteenth century, there arose a “new and improved” version of corporate personhood, this time based on the Fourteenth Amendment’s expansive grant of rights.**
And so we arrive at today, where the Hobby Lobby’s rights are scrupulously defined and protected–because it is a person, according to a century-plus’s worth of legal fiction–while the actual living-and- breathing people that work there have their rights abrogated and ignored. This has become a depressingly familiar refrain under the Roberts court. Since the early nineteenth century, the sphere of corporate privilege has expanded exponentially. But the original emphasis on clearly-defined limits to corporate power, accountability for any malfeasance, and an understanding that corporations were to promote the common good even as they sought profits– well, all that is gone, and it’s been gone since the Gilded Age. So it’s all rights, and no responsibilities. Factor in that corporate income tax revenues are at a decades-long low, and it looks an awful lot like the corporation behaves as a parasite, drawing sustenance from its host without contributing anything in return. That lack of reciprocity is fatal to a democratic society. And the Supreme Court’s insistence that this state of affairs is not only OK, but somehow in accord with our highest legal principles, is a radical departure from the original intent of incorporation (I’m looking at you, Scalia.). That’s one big reason why the Hobby Lobby case matters so much. It’s another link in a jurisprudential chain that promises to fasten our democracy to the jailhouse wall. In a democracy, privilege must be accompanied by responsibility and accountability. But the Supreme Court has sundered that link, allowing the most privileged entities among us to abdicate their obligations.
*Apparently, Hobby Lobby’s owner only has three children. I would have expected more.
**Yes, it’s very ironic that the amendment which was supposed to ensure the rights of African Americans, many of whom were recently enslaved, did little in this regard. Racism allowed segregation and disfranchisement to create what basically amounted to apartheid, especially in the South. Challenges to this injustice on Fourteenth Amendment grounds fell on deaf ears in the courts, which were busy instead applying those same principles to protect the rights of corporations-those delicate little snowflakes. So the amendment meant to protect the least among us was instead used to further enhance the power of the greatest. It’s one of the central tragedies of this country’s history.
Want to know more? There’s a huge literature on this subject, but start with Morton Horwitz’s The Transformation of American Law, 1780-1860. (Amazon link) Also, John Lauritz Larson’s Internal Improvement: National Public Works and the Promise of Popular Government in the Early United States is masterful, and engages deeply with the issues raised here. (Amazon link)