The Corporate Body:
Liber 118 U.S. 394
by Paco Xander Nathan
I’d like to tell you an almost-completely-true story. Back in 1886, a
strange thing occurred: an entirely new species came into being.
A thing not entirely human was declared to hold practically all the
rights of a human, or at least all the legal rights of personhood.
Something relatively novel… something… fictional. Nonetheless,
something capable of human qualities, such as the ability to speak,
ownership of property, protection from racial discrimination,
participation in the selection of candidates for political office, etc.
Humans hardly acknowledge those qualities among species as
intelligent as dolphins or gorillas, so this new species gained loads of
respect early in its existence.
Now, if you check with the average lawyer on the street, or at least the
ones in the luxury SUVs driving down your street, they’ve probably
never heard of what happened in 1886. Law schools in the US
generally don’t delve into that sort of thing, since it’s not terribly
important in practice. Even so, the case of 118 U.S. 394, pitting the
County of Santa Clara against the Southern Pacific Railroad, set
precedents which notable legal theorists consider to be the greatest
th
legal achievement of the 19 century.
Once upon a time,
Not long after the Civil War ended, a greedy railroad company pissed
corporations in the US
off a small local government while in the process of expanding control
were not granted
over the local economy. The two parties slammed into conflict – not
personhood and they altogether unlike gunfighters in the Wild Wild West. However, in the
had to exist under a case of Santa Clara County v. Southern Pacific Railroad (118 U.S.
constant threat of 394), the railroad company pulled a few strings and pushed their
punishments — grievances into federal court. There the justices ruled in favor of the
specifically death and railroad, rendering an astonishingly bizarre judgment: that a
taxes — if they did not corporation must be regarded as a legal person, since it represents
obey the laws of the the property of natural persons and acts on their behalf. Voilá! A new
land. species was created, by order of the government of the United States,
science fiction publisher extraordinaire.
Click here for a bigger image.
This twisted legal judgment, in the sheep’s clothing of a mere
semantic slight of hand, granted constitutional rights to all
corporations based in the US, as means for their legal protection. The
heyday of corporate trusts ensued, leading to J.P. Morgan, Standard
Oil, and a whole lot more. Unfortunately, along with those rights came
none of the typical obligations. For example, just about any person
I’ve ever met must live with two inevitabilities: death and taxes. Yet
corporations do not necessarily ever "die" and, in many cases, they
avoid paying taxes. In another example, when a person takes a life or
a large sum of money while committing a crime, they generally face
indictment, conviction, imprisonment, parole, or even execution. Since
a corporation lacks any physical body, it cannot be placed in prison;
this was, in fact, one of the original reasons for creating corporate
charters.
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Nevertheless, corporate bodies frequently make strategic business
decisions that cost lives but render profit. The infamous "Ivey Report"
at General Motors stands as one of the most dramatic recent
examples of intentional manslaughter-for-profit. In that 1973 report, a
GM engineer calculated that human casualties from fuel-fed fires cost
the firm a mere $2.40 per vehicle, based on the cost of potential
lawsuits. GM executives deemed this acceptable, as part of a
cost-cutting initiative, then kept the report secret for 25 years, until
they were caught lying about it in front of a federal judge.
Rarely do these acts result in criminal charges. Some might argue that
antitrust actions seem similar to "capital punishment" for offending
corporations, but the rules of antitrust are murky at best, and rarely
invoked. Instead, most white-collar crime gets pursued through civil
actions, i.e. punished through fines, not convictions. Moreover,
consider how the FBI makes a point to track precise crime statistics
throughout the US. Their annual reports create media headlines, but
strangely enough, corporate crimes are specifically not reported.
Let’s take that point a step further. Based on a three strikes rule, some
th
"inner city youth" (see below: 14 Amendment) face serious prison
time after subsequent convictions for possession of marijuana worth
less than a good steak dinner for our friends driving the luxury SUVs.
You can read about those stats in a CNN factoid. However, a
corporate body can select a business strategy, knowing it will kill
hundreds (in the case of GM with Ivey) or even thousands (in the case
When a person takes of Union Carbide in Bhopal) of innocent people, earn immense profits
a life or a large sum of by employing that strategy, and yet never face a single criminal
money, they face charge. You might find a few token examples reported in the press,
indictment, conviction, particularly the most blatant ones, but you won’t find statistics about
imprisonment, parole, these crimes. Even the simple academic pursuit of studying corporate
or even execution. crime appears to be one way for a young professor to be denied
Since a corporation tenure, or worse.
lacks any physical
Once upon a time, corporations in the US were not granted
body, it cannot be
personhood and better yet they had to exist under a constant threat of
placed in prison...
punishments – specifically death and taxes – if they did not obey the
Nevertheless,
laws of the land. The United States Constitution of 1789 did not
corporate bodies mention the word "corporation" within its text, and federal corporate
frequently make law simply did not exist. Ostensibly, corporations were hated things in
strategic business those days, having been the organizational structure for British
decisions that cost colonies, and so they provided a "whipping boy" during the American
lives but render profit. Revolution. One senses an air of protest against corporations in
post-revolutionary America – against them gaining political power in
Click here for a bigger
particular. State legislatures held rigid control over the life and death
image.
(and taxes) of corporate ventures, and they flexed that control under
the direct guidance of the populace.
However, methinks the Lady Liberty doth protest too much.
Consider the story of an English physician named John Locke, whose
political theories had profound influences on the American Revolution.
Dr Locke argued that corporate bodies represent the political will of
their members, and are therefore a fairer and more dynamic structure
in the long run than political systems run by hereditary nobility. Some
might argue that American colonists were perhaps less upset about
their overlords’ corporate practices than they were about not sharing
in profits. The leader of the new US government was even called a
president, a term previously used not in government, per se, but rather
to honor regional executives of the East India Company, the very first
th
corporation "born" in London, England on the last day of the 16
century.
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By the third decade of the US Constitution, President Jefferson’s
spending habits had pulled his young nation into severe crises.
Corporate interests reemerged in New England states – where they
had previously been disdained – justified around the time of the War of
1812 as necessary means for feeding and clothing the populace.
Within a few years, the US Supreme Court rendered its 1819 landmark
decision in Dartmouth College v. Woodward (17 U.S. 518), citing the
"contract obligation clause" of the US Constitution – and you can bet
that those SOBs in their luxury SUVs will have heard about it! That
decision placed charters of existing corporations outside the
jurisdiction of states which had chartered them, establishing the first
federal corporate law, and effectively nullifying the states’ rights to
keep corporate powers in check. So much for death and taxes…
Arguably, the point of even having a legislature was pretty well toast by
1819, as far as providing any real "checks and balances" to contest
the will of corporate interests.
The story becomes even more tangled. One outcome of 17 U.S. 518
was an inter-regional political dispute that became known as "States
Rights." Northern political interests distrusted the Southern economic
model as not being able to provide sufficient expansion for their
corporate endeavors. Southern political interests distrusted the
Northern influence on federal courts for determining how to enforce
corporate law – which sounds surprisingly like grassroots arguments
against the WTO today. Conflict ensued, popularly known as the US
Civil War, and popularly regarded as having been fought over the issue
of slavery.
Not to wax conspiratorial, but one should not believe the history books
issued in public schools (i.e., those produced and subsidized by
Nothing is corporate publishers) without asking a few questions. For instance,
omnipotent, unless what did the US President at the time actually say about slavery and
you believe so. civil warfare? What you might not have read, without digging deeply
into archives, was that Abraham Lincoln remarked bitterly during the
Click here for a bigger close of the Civil War about how the conflict had been fought primarily
image.
on behalf of corporations. It can be argued that after 1865, the
executive branch of the US government retained almost no further
means for contesting the will of corporate interests.
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One immediate outcome of the war was passage of the 14
Amendment. On the surface it appeared to provide "equal protection
under the law," effectively outlawing practices such as slavery.
However, "equal protection" (a.k.a. "civil rights") for African Americans
th
did not even begin to emerge until nearly a century after the 14
Amendment was passed. According to Supreme Court Justice Hugo
th
Black, in the fifty years following the 14 Amendment, less than 0.5%
of the case law related to that amendment sought to protect the rights
of African Americans, while over 50% sought to extend the rights of
corporations. That’s a 100:1 ratio… not good odds, unless your
ancestors had bylaws instead of DNA.
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Another ironic point, which the history textbooks might fail to elaborate,
was that Justice Black made his observations not long after the US
was about to engage in a second civil war. Socialists, communists, and
populists of many flavors rose up in pockets of armed resistance
against corporate interests during the Great Depression. The US
Supreme Court averted civil warfare through a questionable move in
1937. In that decision, now called "The Switch In Time That Saved
Nine," corporations adopted enough tenets of socialism to avoid civil
war: allegedly, they gave employees the right to a 40-hour work week
along with some other bennies, and then invented a new tradition
called "corporate culture." Though it would take another sixty years to
prove, in return we lost the right to a judiciary that can successfully
contest the will of corporate interests, except in a few showcase
incidents.
I could go on about the political and legal fallout of 118 U.S. 394, right
up to another landmark year of 1995, but you can read about that
elsewhere. Something strange happened in 1886 – something pivotal
that rejected a century of major events in US history which had
contested the corporate form, and projected ahead into a century of
governmental drift until almost no human collective could, through
government alone, contradict these new and different beings.
***
Setting differences aside for a moment, consider how might a biologist
describe this new species? As luck would have it, some legal theorists
who analyze corporate law actually have applied techniques borrowed
from biology. Gunther Teubner, in particular, built on work by social
Not to wax theorist Niklaus Luhmann to apply autopoiesis – a biological theory
conspiratorial, but used to describe how a system self-organizes. Dr Luhmann suggested
one should not that a group of persons tends to exhibit a "group individual" or
believe the history zeitgeist, which then perpetuates on behalf of that group, to an extent.
books issued in public Dr Teubner also examined how some corporate law develops for no
schools (i.e., those observable reason other than to perpetuate more corporate law (and
produced and by the way, he’s quite a fan of 118 U.S. 394)… in short, observing the
subsidized by zeitgeist at work.
corporate publishers)
Luhmann’s "group individual" corresponds closely to the "legal person"
without asking a few
defined for a corporation. Either notion provides a clear example of
questions.
what is esoterically described as evocation, or in other words, the
process of summoning a spirit. Zeitgeist, spirit, demon, djinn, golem,
Click here for a bigger
image. servitor, tulpa – take your pick, depending on the root culture. Each
term describes suprahuman sapience and immortal powers (read:
freed from either death or taxes) followed by cautionary tales scattered
throughout human cultural mythos. Perhaps we could learn a thing or
two from the wisdom of the ages.
Actually, the notion of evocation runs quite true to the original cast of
corporate form. Alchemical advisors to the British Crown during the
th
16 century appear to have set the stage for creating the first
corporations. Their esoteric work focused on a place called the Royal
Exchange of London, with the intent of establishing (read: evoking) a
contemporary fiction called the "Brytish Impire." Much to the contrary,
as of the 1560s the Brits were perpetually broke, let alone anywhere
near to becoming an "empire." Nonetheless, certain royal advisors
needed cash to be able to keep buying lots of occult books, among
other things. Up popped a new belief based on the glory of England,
rallying ’round their Virgin Queen, a new hope based upon a fiction –
the "Brytish Impire" – printed in manuscripts that were adorned with
engravings of the Empress surrounded by alchemical symbols.
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Keep in mind that the intelligentsia of the time – in their post-Catholic,
pre-Scientific mezzanine – held quite a lot of regard for bodies: the
body politic, a body of law, the body of the church, celestial bodies,
etc. Artwork of that time focused on the glory of the human body, even
when depicting gods. In another example, most of the better-known
astronomers of the Renaissance earned their living as physicians, not
much unlike our dear Dr Locke a few generations later. Cut a patient
open to examine the placement of bodily organs, in microcosm, then
project that to behold – in macrocosm – the placement of celestial
bodies. Quod est superius est secut quod est inferius: as above, so
below.
Much of the intelligentsia of the time (e.g., in Britain at the Royal
Society) held considerable regard for a worldview known as
Hermeticism, a Hellenistic Egyptian syncretism which is just about the
same as alchemy. Envision a fading echo of wisdom nurtured in the
library at Alexandria, prior to when Christians burnt it down and
murdered the head librarian.
Corporations may
behave like sentients, Lost throughout the Dark Ages (at least, lost from anywhere north of
Tangiers and west of Istanbul), the literary body of Hermeticism
but at about the
resurfaced in Europe through the efforts of the infamous deMedici
sentience level of a
family, the dynasty immortalized by Machiavelli. In their quest for
spoiled brat. And, as
power, the deMedici family funded translations of classical works, and
anyone who’s ever
they sought esoteric secrets from imperial power-mongers of the
served time as a classical world. Revisiting classical texts, which the Roman Catholic
sibling likely knows, Church had tried to obliterate, seemed like a fairly good strategy.
knocking down an
obnoxious, spoiled This actually worked. Arguably, the translation efforts helped spark
brat can feel quite much of the Renaissance itself. Looking back to the stories of
satisfying and yet lead classical times caused a few notable Italian thinkers to ponder a bit
to huge "judicial" differently about their present, thereby manifesting a vastly renewed
problems; but they look at the future: tail wagging the dog, the rest of Europe followed.
can be caused to fall Those texts and subsequent esoteric philosophy also informed the
down nonetheless. establishment of the British Empire, whose military-industrial complex,
with power based on corporate organization, successfully contested
Click here for a bigger image. the Roman Catholic Church and its allies.
There is a pop culture notion of alchemy that seems to convey some
Disney Corp cartoon scene of costumed mice attempting in vain to
transmute lead into gold. In contrast, the more esoteric focus of
Hermeticism (with texts circulated in Latin, of course) placed
considerable emphasis on embodying spiritual essence, manifesting it
into flesh… rather akin to evocation, mind you. Building things simply
brought one "closer to god," joining in a process of Creation.
1•2•3•4•5•6•7•8
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Now if you take a look at the twenty-three or so canonical operations
from Renaissance-era alchemy – transmuting being only one – you’ll
find incorporatus (Latin for "embodiment", and the root for
"incorporation") as a practice for aggregating component parts into a
corpus (Latin for "body"). What a no-brainer there. I could go into
detail, but one can read about that elsewhere. We were talking about
biology, not demonology…
***
I first stumbled on the phrase corporate metabolism in reference to
Swiss management consultants trying to describe how corporations
adapt to new flows of information. Their obvious analogy equates
information flows inside a corporate structure with energy flows inside
living cells – muddied, problematic thinking, given a more realistic
view of "information," but a potentially useful analogy. If one considers
how corporate form can be compared with a biological system, what
do both share in common?
Consider how the most basic tenet of corporate strategy, creating a
"barrier to entry" to block competition, parallels what a cell wall
provides for the most primitive critters, the single-cell protozoa.
Three necessary conditions for corporate organization – (1) chartered
company, (2) limited liability, and (3) joint stock – provide means for
externalizing risk while perpetuating wealth for shareholders. That’s a
mouthful, but it renders the corporate form valuable. Risk is the big,
hairy problem in business; it generates cost. Risk in the biological
realm has much to do with entropy, i.e., death and extinction.
Strangely enough, one contemporary approach in physics, the study
of dissipative structures, addresses how complex, open systems can
Consider how the FBI dissipate or externalize entropy in some cases. In other words, it
makes a point to track addresses how evolution in physical systems can be modeled.
Biologists find this rather useful. So do corporate bodies; the study of
precise crime statistics
throughout the US. autopoiesis in law focuses on such complex, open systems. Math and
Their annual reports computer simulations used for researching evolutionary biology may
create media become quite useful for modeling how the corporate form develops
headlines, but and responds to particular conditions.
strangely enough,
Early protozoa eventually aggregated together into primitive multi-cell
corporate crimes are
parazoa, such as sponges… which biologists call "colonial
specifically not
organisms." The process of incorporating under a charter similarly
reported. aggregates business resources into an initial structure that resembles
a sponge. In an odd twist of semantics, the first three or four hundred
Click here for a bigger image.
years of corporate endeavor focused precisely on colonial activities,
much like Nike and others still do today.
Management consultants use taxonomy to categorize the complexity
of corporate structures. So an H-form describes a "holding company,"
like the early days of East India Company, and akin to a sponge. A
more complex U-form describes a "top-down" structure, like Standard
Oil before antitrust, and also akin to an invertebrate. An even more
complex M-form describes the modern "transnational," such as Ford
or Exxon – akin to a spoiled brat.
The applicable analogies go on: metastasis, i.e. cancer, parallels the
dynamics of franchising… corporate self-defense reflexes occur
through a process of sublation… allometric scaling, or multi-
dimensional encoding, parallels how global firms operate in multi-
dimensional spaces simultaneously… bacteriophage as a means for
asexual genetic transfer parallels how corporations exchange their
"genetic" material: contracts, bylaws, patents, etc.
1•2•3•4•5•6•7•8

A detailed list would be far too long. One of the few artifacts to defy
known biology concerns how corporations can share vital
components, but that is a bionic fairy tale for another day. In short, a
qualitative (and perhaps quantitative) biological model emerges for
describing the corporate form. I call this species/model Ceteri.
***
Most all of this story is true, except the part about corporations
becoming another sentient species. There’s no way that could
possibly be true, unless one happens to believe in demons… Authors
of the precursory corporate business plans seemed to have pegged
their hopes and dreams on summoning a helpful spirit or two. The
venerable US Supreme Court gave credence to this belief in a ruling
that was declared without debate and has never since been
challenged. Contemporary legal theory revisits this numinous theme,
in hauntingly familiar echoes of old mythos. As far as the "science" of
corporations-as-species goes, they present a relatively new sentience
which is not quite artificial intelligence, per se, but more like unnatural
intelligence.
In a perverse way, it warms the heart to think of all those happy,
suburban, god-fearing Americans rushing into their two-hour
commute, SUVs jamming metro freeways as they race toward
corporate office complexes, then toiling away for hours of grief in
cubicle hell… in service of the likes of seductive Belial, powerful
Asmodai, mighty Furfur, or even the curiously-named Gäap.
Frankly, I’m kinda fond of demons. Cute little buggers. Who could
resist a name like "Furfur"? I’d much rather learn to work with such a
fiction, since the manipulation of corporate interests almost demands
that kind of belief. It is perhaps more effective, more operative, taken
People must live with
with a large grain of salt, than assuming an uninformed disbelief – à la
two inevitabilities:
Locke, who helped get us into this political nightmare, or his
death and taxes. Yet intellectual heirs, who spew a curiously agnostic milieu of corporate
corporations do not socialism with religious fervor through the likes of corporately-
necessarily ever "die" endowed NPR, PBS, etc.
and, in many cases,
they avoid paying On the other hand, protesting in the streets, or in the legislatures,
taxes. does little to slow a demon, and actually tends to feed their ephemeral
maws; something called abulia forms a big part of corporate
Click here for a bigger image. metabolism. Fortunately, more subtle means exist for bridling such
beings: old fictions and religions inform us about conceits which the
new fictions and religions belie.
Corporations, like the demons of their simile, may behave like
sentients, perhaps, but at about the sentience level of a spoiled brat.
And, as anyone who’s ever served time as a sibling likely knows,
knocking down an obnoxious, spoiled brat can feel quite satisfying
and yet lead to huge "judicial" problems; but they can be caused to fall
down nonetheless.
Nothing is omnipotent, unless you believe so. But that’s an almost-
completely-true story for another day.
Many heartfelt thanks to Ann Walther for help with editing the draft.
For more info and refs to many other excellent resources online, like
rat haus and POCLAD, see the reviews on PXN’s website:
http://famous.aspect.to/study/ceteri/
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1•2•3•4•5•6•7•8
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