Is it Possible for a Corporation to be Patriotic?

What makes a Canadian company Canadian? What is it that makes an American company definitively all-American? Is it a matter of where the company is legally registered? Where it earns the bulk of its profits? Who its CEO is? Who owns its shares? And what about companies that have offices in multiple countries? Should companies have to swear allegiance to one flag or another?

The question of corporate nationality has arisen recently, in relation to the matter of corporate “inversions,” or “transactions in which American corporations [for example] move their tax residency abroad by being ‘bought’ by smaller foreign firms, in order to reduce their [for example] American corporate tax bills.” Not surprisingly, perhaps, such inversions are controversial. The notion of an American company (and so far all the controversy I’ve seen has been about US companies) abandoning the homeland to put down roots in a foreign land offends more than a few. For some, the act in itself amounts to a kind of treachery. For others, it has to do with the fact that because inversions allow a reduction in taxes paid, they might (or might not) imply big losses to particular national treasuries.

Naturally, rhetoric on the topic is in full bloom. US Treasury Secretary Jacob J. Lew has apparently said that inversions do violence to what he refers to as “economic patriotism.” And US President Barack Obama has waded into the debate, referring to inverting firms as “corporate deserters.”

On the other hand, the practice has its defenders. If the US corporate tax rate weren’t so high, US companies wouldn’t feel the need to find creative (and ostensibly disloyal) solutions. And inversion is perfectly legal, explicitly allowed for example but the U.S. tax code. Not that legality settles the ethical issue, but it’s odd to call something unpatriotic — disloyal to your country — if your country’s law explicitly allows your behaviour.

To me, rhetoric laced with words like “patriotism” and “deserters” seems hopelessly parochial in a global economy. It rings of jingoism. People want free markets — and the free flow of goods and services across borders — but they don’t want to be told that other places are better places to do business, and they don’t like the idea that another nation might grab a bigger share of corporate tax revenues.

But there’s also a point to be made here about corporate personhood. As I’ve pointed out before, corporate personhood, properly understood, is absolutely essential to modern economies and hence to modern societies. Personhood simply consists in the fact that courts identify corporations as having bundles of rights and responsibilities separate from the people who in some sense make up the corporation. That’s what lets corporations sign contracts and own property and honour warrantees and be sued. Without personhood: no corporation.

Despite this fact, many people claim to be opposed to the very notion of corporate personhood. But that leads to a problem with regard to inversions. If you think you’re opposed to the notion of corporate personhood, and additionally find inversion distasteful, you need to ask yourself: just who is being unpatriotic when corporate inversion happens? Because if you are skeptical about personhood, then it can’t be the corporation that is deserting its country. Is the Board being unpatriotic? Even if their decision is consistent with their legal duty and arguably their ethical duty to do what’s best for the corporation?

As one commentator put it, “Corporations aren’t people, so it’s a lot to ask for them to be patriotic, especially when they operate all over the world.” No, they’re certainly not people, but they are persons. As long as you accept that fact, you can then talk seriously about just what bundle of rights and responsibilities corporations ought to have — that is, what form their personhood should take.

If a corporation is a person in this sense, is it then a thing that is capable of having a nationality? Can it have duties of citizenship, as Lew and Obama seem to imply? This isn’t a metaphysical question, but a practical one. Are the duties of citizenship duties that it would make sense to attribute to a corporation? Would that be conducive to important human ends? And if so, are the humans whose interests matter just the ones who happen to liver where you do?

1 comment so far

  1. L brody on

    Full Definition of PATRIOTISM
    : love for or devotion to one’s country

    The last time I heard of patriotism in the United States was during World War 2, when teen agers were enlisting in military service to show their love of country. I would extend the definition to love of country and government.
    Can you be patriotic to a country without being patriotic to government?
    In the United States in the early 1940’s the US was coming out of the Great Depression, or maybe it wasn’t there yet. So government provided relatively little. The New Deal didn’t really work and Social Security had just come in, but affected very few. The country did not provide many entitlements or welfare. Nevertheless, there was respect for government and country. Men were willing to give their lives to protect government and the country. Women also left the home for industrial employment. The country accepted rationing.
    Now the question: Is it Possible for a Corporation to be Patriotic?

    I say No. people can be patriotic not corporations. Patriotism implies sacrifice to a cause and country. This is something only an individual can do. Can you see patriotism from the Military-Industrial Complex? Probably not. Can you see patriotism from the retail industry? Probably not, unless they give away free flags.
    People have the right, so far, to pursue liberty, freedom and happiness. In the past in the USA, one could move from New York to California to pursue opportunity without being unpatriotic. Now people and corporations leave California for non-state taxable states; they are not being unpatriotic they just don’t want Taxation without Representation.
    If government is taking from you, why not move. Is confiscation by government ethical? So any discussion of patriotism must include the concept of country AND government. And as we know, governments can change methods and motives.

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