Ant3150 - Corporations Can Have Morals?

Cheyenne S Chavis

Eu5422

ANT 3150

“Corporations can have morals?”

     A corporation having human-like morals sounds a little bizarre when one first hears this statement. When one thinks of a corporation it is perceived as an inanimate object, even though it is composed of individuals. What most people are not aware of is corporations are in fact considered people by the United States government. Corporations were granted personhood through the fourteenth amendment of the constitution. The fourteenth amendment states that:

“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside, no State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws” (http://legal-dictionary.thefreedictionary.com/fourteenth+amendment).

There are many suspicions as to what the original purpose of this amendment was, but primarily this amendment was intended to define personhood in the United States, since the thirteenth amendment had just previously freed African American slaves. The fourteenth amendment opened the door for corporate personhood to take shape whether or not it was intended for that. This amendment was later interpreted to legally give corporations the same rights as people in the court case Louisville, Cincinnati, and Charleston Railroad v. Letson (1844). In this case, the Supreme Court ruled that corporations were citizens of the state that they were incorporated in (Park). This citizenship was later reconfirmed in the court case Santa Clara v Southern Pacific Railroad Co. (1886). In this court case, California put a specific tax on the Southern Pacific Railroad. The railroad proceeded to sue the county, claiming that the new tax infringed on the company’s equal protection rights of the fourteenth amendment. The court eventually sided with the railroad, declaring that corporations were indeed people with rights (Park). Corporations were not given all of the same rights as people, though. The fifth amendment of protection from self incrimination does not apply to corporations, found by Justice Henry Billings Brown in 1906 (Park). Coming full circle, since corporations are legally considered people, should they be held to the same standards and responsibilities of people?

     Corporate social responsibility is the corporation’s version of morals. This is a socially constructed term, therefore it is hard to say the exact definition without debate. From reading Alexander Dahlsrud’s article, my proposed definition is that Corporate social responsibility is a concept where corporations voluntarily incorporate social and environmental concerns in their business operations. Legally, corporations are bound to serve the stockholders. Therefore the goal of corporations is to create profit, to pay back shareholders. Creating profit while being ethical, and protecting the environment is very difficult. In my opinion, Corporations will always choose stockholder’s over ethical and environmental concerns. Being environmentally friendly can be very expensive at first, having to switch your systems over to running on clean energy, paying a service to come recycle your millions of wasted paper, etc. If a Corporation needs to pay the stockholders while money is tight, these things can be the first to get written off because they are not legally necessary. The same applies in ethical situations. A corporation can fund copious amounts of money into a project, and launch the project, regardless of any deemed “minor” defects, simply to try to pay back the money spent on the project, gain a profit, or meet a deadline. A personal example of ethical corporate social responsibility that I have experienced was when I purchased a collaborative eye shadow palette the high end makeup brand Becca Cosmetics. Becca collaborated with a famous makeup artist, Jaclyn Hill, to produce a limited edition collection featuring this eye shadow palette. Becca is famous for their American made, highly pigmentated, smooth eyeshadows. When the deadline of this highly anticipated release crept closer, Becca outsourced to China to cheaply create the volume of palettes they needed to meet the demand in time for the deadline. This, in turn, made a large batch of poorly performing palettes, with a chunky, hard texture. Customers received these palettes and were outraged they paid the high end price tag for a product cheaply made in China. As a result, Becca pulled the palette from shelves, issued refunds, and publicly apologized via their social media portals. While this example is rather frivolous because it is just makeup, it still provides an argument that Corporations will do what they deem necessary to create product at a cheaper cost for them, or at a quicker pace to meet deadlines.

     An example from Bakan on the struggle between social responsibility and meeting stockholder financial demands, is pharmaceutical company’s. Bakan discusses they have the power, money, and scientists to develop medicine to treat diseases such as tuberculosis and save millions of lives a year in poorer countries. Bakan states that the cost to develop these drugs would outweigh the “benefits” that included eliminating these diseases. In the year 2000, the drug companies were developing drugs to treat erectile dysfunction, baldness, and personality disorder in pets, since these drugs can be sold for profit and had no drugs being developed to treat tuberculosis.

     Some corporations though, do incorporate social responsibility into their operations. Aldi for example, makes the environment a huge priority in their business. Since their opening in 2001 Aldi has never offered free single use plastic shopping bags. Instead, in the case of my local Aldi, they set out the boxes that food was shipped in to let customers reuse them to pack their purchases in, and they offer fabric shopping bags for a low price. They have also recently eliminated artificial dyes in their products, and have also joined the Environmental Protection Agency’s GreenChill program. GreenChill works with supermarkets to reduce refrigerant emissions and decrease their environmental impact on the ozone layer. According to the EPA, a typical supermarket leaks about 1,000 pounds of harmful refrigerator gasses into the atmosphere every year. GreenChill partners have lowered their emissions to less than 50% of the national average (https://blog.aldi.us/aldi-commits-to-green-refrigeration/).

     How corporations affect the environment amongst other things is another topic of discussion called externalities. An externality is an effect of a transaction between two individuals on a third party individual who did not consent to or played any role in the transaction. For example, if two people are engaging in a pie fight, and a third person gets hit with a pie who was not involved, that third person is an externality (Bakan). Corporations have many external effects on everything around them. Pollution from corporate factories creates a negative effect on the environment, the atmosphere and humans as well, whether it is immediate or sometime in the future. Corporations do have to follow some guidelines set by the government so they cannot just pollute whenever they want but many still try to get away with it, or just have accidents. For example, in spring of 2010 when a BP oil drilling rig off the coast of Louisiana exploded, it created the biggest oil spill in the petroleum industry and claimed some lives of people on the rig, and damaged the ocean, the wildlife, and the environment around the beaches. BP did not intend for this to happen, but it still did. They were charged with millions of fines, but BP is still a successful corporation today even after all the damage to our Earth. Corporations make billions and billions of dollars, so a fine of a few million is not going to damage them in any way, therefore if a corporation really has to or even accidently caused some sort of environmental pollution to make a reasonable profit they will. Corporations are legally bound to do anything to meet their bottom line to pay off investors first, and to worry about everything else later (The Corporation). This could open the door for many abuses of rights, just simply to meet their bottom line. A topic that relates to externalities is the topic of limited liability. For example if a person was to fall asleep smoking a cigarette, and burn down their apartment complex, all the person’s neighbors and the people who own the complex can sue the person who burned down the complex for everything the person has. If a corporation burns down an apartment complex on accident somehow and the corporation has limited liability, this means that the corporation can be sued for next to nothing; Also that a shareholder is not liable for any debts that the corporation may have other than the amount that was originally invested in the corporation. This concept of limited liability is a gray area of confusion because people themselves do not have limited liability, but corporations are considered people and they get to have the protection of limited liability. In my opinion, the leaders/high level managers in the corporation should be responsible for any externalities the corporation causes, since most stockholders are not directly involved in calling the shots in the company and neither are low level employees following orders.