April 12, 2004

I buried my truffle

Blog readers, like judges, should not be like pigs, hunting for truffles buried in posts (briefs). United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991).

Readers shouldn't have to hunt for the truffles in a post because most blog readers don't make very good pigs.

I apologize for burying my truffle. Yesterday I posted about corporate obligations. Will Baude noted this response from "Ben," who blogs at That's News to Me. While his post is full of interesting ideas and viewpoints, Ben hasn't rooted up the point of my argument. I apologize for this; my key paragraph should have been at the top of my post, instead of buried in the middle. I'll highlight it here:

What I want to say is that the corporate organization in its current incarnation as a fictive legal entity with rights of speech, ownership, and due process, dangerously obscures the responsibility of the human beings who make decisions in its name.

This proposition is not at all obvious. It is very contestible. That's why I hope that Ben will, if he disagrees with it, produce some arguments against this claim instead of against claims he thinks I've made, but haven't.

For example, Ben writes: "I'd like to know who would volunteer to run a corporation under the Carey-rule of liability for "honest mistakes." I never proposed any "rule of liability." What I said is that the directors of a corporation ought, like all other human beings, to be held accountable for their honest mistakes, and that the corporate structure, like other large organizational structures, often makes this difficult.

There are many ways to hold someone accountable besides exposing them to "massive liability," as Ben seems to have misunderstood me to say. Ben is correct that it would be absurd to hold governmental officials "liable" for every mistake they make; this demonstrates his misunderstanding of my comparison between corporations and government.

Most advocates of accountability in government, including myself, don't advocate for holding public officials liable for honest mistakes. Rather, the usual argument that advocates of accountability make is that the connection between the decision and the person responsible for it should not be obscured. Openness and visibility is itself an effective way of holding people accountable, which is why Dick Cheney-style secret government is a bad thing. But accountability requires more than mere openness. In the case of government, it requires an active electorate who will take note of the behavior of officials and respond to mistakes and misdeeds in whichever way they think is most appropriate. This response can vary from simply noting the mistake and filing it away in memory, to writing a letter expressing disapproval, to voting against an elected official in the next election, to starting an impeachment drive or a campaign to have an appointed official fired. Obviously, the range of responses to misdeeds can be nuanced. Why Ben should think that the only way to hold someone accountable is to expose them to "massive liability" is mystifying.

So I hope Ben will continue the debate. Nothing I actually said is necessarily correct, and some of it might even be silly. But I wish Ben would respond to my actual arguments instead of what he imagines I may have said. Now that I've tried to clarify things a bit, I'm hoping Ben won't have to go hunting for the truffles.

(For more comments on my claims, I refer readers to Anthony Rickey's comment on my original post, and to Heidi Bond's discussion of these issues on her blog.)

Apart from his misunderstanding of what I said, Ben makes an intriguing suggestion:

The interesting question, I think, which Carey takes as a given, is Bainbridge's #3, which insists that directors "act within the law." Frankly, I don't see why they should have to. I think that if society wants to control the corporation's activities, it should do so through the obligation to maximize wealth, not by creating new constituencies (i.e. duties to the community).

Ben promises that more will follow, and I'm looking forward to it. How would social control solely through the obligation to maximize wealth work in practice? This demands further explanation. Most hard-core libertarians wouldn't make this argument, because it's ridiculous. I anxiously look forward to reading what limits Ben would place on this lawless maximization of wealth.

Posted by Carey at April 12, 2004 10:12 PM

You mentioned me on your blog!

Posted by: Heidi at April 12, 2004 10:16 PM

That's 6! (Only 18 or 19 more to go...)

Posted by: Carey at April 12, 2004 10:45 PM

I think you are correct in saying "the corporate organization in its current incarnation as a fictive legal entity with rights of speech, ownership, and due process, dangerously obscures the responsibility of the human beings who make decisions in its name." But I think the more important issue, or at least of equal importance, is the doctrine of corporate personhood. This idea, dating back at least to the Supreme Court case of Santa Clara County v. Southern Pacific Railroad (1886), grants corporations the same rights as a person (free speech, due process, etc.), but without the same responsibilities that people are required to assume in our society. Granting corporations the status of legal "persons" effectively rewrites the Constitution to serve corporate interests as though they were the interests of the people. Corporations are a legal creation, with privledges we give it, not a thing with inherent rights. The doctrine of corporate personhood grants a thing illegitimate privilege and power that undermines our freedom and authority as citizens. Anyway, just a thought...

Posted by: Kyle at April 13, 2004 12:38 PM