February 10, 2008
Laws and Men
In another review of Jack Beatty's Age of Betrayal: The Triumph of Money in America, 1865-1900, Alan Wolfe summarises the circumstances in which the U.S. Supreme Court created that dangerous absurdity, corporate personhood:
Abe Lincoln rose to power on the basis of the idea of free labor; slavery was wrong because it prevented workers from gaining the rightful rewards from their efforts, and, for the same reason, workers ought to be able, by the dint of their labor, to end their dependency on others by rising up through the ranks to middle-class status. Emancipation and the Homestead Act represented the crowning achievements of Lincoln's Republicanism. Both would be abandoned by the political party that Lincoln helped to establish.That the Amendment was perverted to serve this function at least ensured that it had any function at all.
To chart how this took place, Beatty takes the reader on a long, and worthwhile, tour of American jurisprudence. It begins in New Orleans in 1869 with a man named John A. Campbell. The city's filthy and unsafe slaughterhouses had been the subject of extensive negative publicity in the papers. In response, the city passed what it called "An Act to Protect the Health of the City of New Orleans and to Locate the Stock Landings and Slaughter Houses." The act gave a private company the right to rent space to the city's butchers, who had previously been scattered throughout the city and, completely unregulated, had practiced their trade with little regard for the public's health.
The displaced butchers sued. Campbell, an embittered former Confederate who had once served on the U.S. Supreme Court (and wrote a concurring opinion in Dred Scott, the infamous decision that treated slaves as property rather than as citizens), rallied to their defense. One might think that a Southern conservative would have attacked the Civil War amendments for their ringing defense of equality. But Campbell had a better idea. Weren't the butchers being enslaved because they were forbidden to practice their livelihood as they best saw it, he wondered? If no person shall be deprived of their rights without due process of law, weren't those same butchers the subject of unequal treatment? Campbell embraced the Fourteenth Amendment in order to crush it. Once businessmen could claim that economic regulation deprived them of their property without due process of law, the result would be the perpetuation of economic inequality rather than the promised equality between the races.
Campbell also played an important role in the development of substantive due process: the idea that the courts could judge a legislative act not only on the basis of whether it met the test of fair procedure (such as treating everyone equally), but also whether its substance was worthy of judicial approval. Since the Constitution itself is mostly about procedures, to judge on substance means to compare a particular law to some extra-constitutional standard which the Constitution is then stretched to embody. Conservatives of the period had no doubt what such a standard should be. The right to own private property, and to dispose of it as one sees fit, they believed, is inherent in nature and endowed by God. "Things regulate themselves.., which means, of course, that God regulates them," the economist Francis Bowen argued. If that was true, then all social legislation could be held unconstitutional on substantive grounds; Bowen's Harvard colleague, J. Laurence Laughlin, objected to the very use of the word social, as if there were no such thing as a common good capable of trumping the economic rights of those who owned property.
Once substantive due process entered into judicial reasoning, it was only a matter of time before corporations came to be considered persons and thus brought under the protection of the Fourteenth Amendment. The way this occurred forms one of Beatty's most fascinating vignettes. This revolutionary doctrine, it turns out, owes its construction not to any elected politician, nor even to any judge who, however protected from public scrutiny by life tenure, was at least originally appointed by a president elected by the people. The culprit was a Supreme Court reporter named John Chandler Davis. The court reporter summarizes legal opinions in the form of headnotes. In one such headnote, Santa Clara County v. South Pacific Railroad Co., which dealt with the issue of whether the state of California could tax property owned by the railroads, Davis summarily proclaimed the new doctrine: corporations can be treated as persons under the terms of the Fourteenth Amendment. "Thus without argument or opinion on the point," Justice William O. Douglas would write much later, "the Santa Clara case becomes one of the most momentous of all our decisions ... Corporations are now armed with constitutional prerogatives."