If “the real crime is what is legal” then that includes corporations – legal fictions. For-profit corporations are, by definition, psychopaths; in theory, they exist solely to maximize share value. In practice, the interests of top executives play a large role; but shareholder value remains the formal justification for their existence. Workers know this better than most: every year around 5,000 of them die on the job, 50 to 60 thousand die of occupational diseases, and seven million are injured in the workplace. To the corporation, the going price for these inconveniences amounts to around $7000 per death and $3000 per injury. The laws corporations break as they take this human toll are rarely enforced. Fewer than a hundred employers have been criminally prosecuted for workplace fatalities in half a century. 

The pathological quest for share value does not stop there. Every year, US business illegally siphons at least fifty billion dollars of its workers’ wages, of which the US legal system manages to restore about one per cent. The scope of corporate wrongdoing is far wider, but these examples are sufficient to raise the question: if the point of corporations is maximizing of share value, should not legal discipline and restitution focus on those very shares?

Killing or imprisoning convicted corporate bad actors by confiscating their shares could end their impunity, extracting real penalties from entities that have, as John C. Coffee put it in the title of his brilliant 1981 article, “No soul to damn, no body to kick”. Academic literature refers to this corporate death penalty as equity fines, or sometimes equity or share or stock forfeiture.

Serious equity fines could help deter corporate misbehavior, and provide as much revenue as some proposed wealth taxes. A socialist government could retain stock so obtained, or transfer it to socially owned and controlled institutions, or convert corporations into worker co-ops. A populist liberal government might sell most of that stock instead, retaining some veto power over future actions to prevent recidivism. 

Winning a corporate death penalty would depend upon the outcome of other fights. Equity forfeiture is unlikely to gain 60 Senate votes, or pass muster by the current reactionary Supreme Court. Repealing the filibuster and court expansion are preconditions for equity fines, as for most reforms. 

If equity fines passed, implementation would require an administration willing to seek share forfeitures, and fully fund regulators – at minimum.

The US starves regulators of staff and funds. Around 1,800 Occupational Safety And Health Administration inspectors try to police 10.1 million workplacess. 1,000 DOL Wages And Hours Division employees enforce wage laws for 72 million hourly workers. Equity fines aside, full regulatory funding should be a left priority. 

The Political Advantages of a Corporate Death Penalty Campaign

A corporate death penalty campaign can help delegitimize corporate capitalism. It would allow advocates to hammer away repeatedly at concrete examples of corporate wrongdoing. Story after story of corporate crime can signal that corporate capitalism is, itself, criminal.

Delegitimization differs from dislike or hatred. When people believed in the divine right of monarchs and nobles, they often had tremendous hostility towards the nobility and monarchy. That hostility was apparent in pre-Grimm fairy stories where villains, such as ogres, were frequently thinly disguised nobles or royalty. During occasional rebellions, peasants tortured, murdered and sometimes cannibalized nobles, which may have further indicated a certain degree of hostility.

Extreme hostility alone never led to the overthrow of monarchy and blood aristocracy; feudal governance fell when the people no longer saw blood inheritance as a divinely inspired legitimate basis of government. A focus on how nearly all corporations commit serious illegal harms can help undermine faith in the divine right of capital. That delegitimazation through sharing of disparate stories can contribute to and link together various struggles. For example, workplace race amd gender discrimination are corporate crimes, as are many union busting techniques. So is much pollution, including climate pollution. The fight against corporate crime in hospitals, nursing homes and medical clinics could reinforce the Medicare For All movement. The potential list is endless; most evils in the US are tied at least partially to corporate crime. 

All the other struggles would not suddenly rally around equity fines. But corporate death penalty activists could find, within their own issue, a basis for solidarity with most other campaigns and with any broader movement – and a strong incentive to educate, agitate and organize around that solidarity. 

Winning a corporate death penalty would provide political gains beyond those from just campaigning for it. The unlikelihood of winning this any time soon may make discussing the consequences seem like toddler’s fantasy television – something to group with Santa Claus and lollipop trees. But if leftists want to be more than beautiful losers, then working and hoping for victory needs to include thoughts about what such victory might look like. 

Just as campaigning for equity forfeiture helps delegitimatize corporate capitalism, implementing it helps legitimize a strong role for an anti-corporate state. Corporate imprisonment and execution would be the visible arm of the state punishing the “bad guys”, something that Americans (at least) seem to need deeply. Unlike real imprisonment and executions nobody is jailed, nobody is killed. But people can still see executives scream in outrage as equity sentences are imposed, and see that those sentences punish real and terrible crimes. If every day brings a new story of a business facing harsh sentences for horrible actions, that can bring identification with a state that visibly fights for working people.

A corporate death penalty also would provide means to take over corporations provably involved in a future insurrection, which would weaken the material base for reoccurrences. This tool won’t be in place for the almost certain coup attempt that will take place in 2024-25, nor for the possible one after the 2022-23 election. Defeating those requires a movement that pressures the Democratic Party to end the filibuster, pass the two major voting rights acts, and implement court reform. Otherwise the next coup attempt will be legal under state laws and upheld by the federal courts. But a corporate death penalty as a part of an institutional firewall against coup attempts needs long term consideration, as preparation for both the best and the worst.

Unexpected victory without preparation can destroy movements. It is a truism that unexpected success sometimes bankrupts businesses through growth they are unable to handle. That can happen in politics, too. Syriza, in Greece, failed to govern after an election victory. It did not anticipate that a recalcitrant EU might refuse to negotiate in good faith. Just as activists should prepare against reasonably possible catastrophes, they should plan for unexpected victories, and likely counter-reactions to them. Modest consideration of how to survive an unexpected win is not misty-eyed dreaming, but pragmatic caution.

Details in Q & A form. (Warning: Wonkery follows.)

Question: Is share forfeiture the only feature a corporate death penalty law requires?

Answer: No, other provisions are needed.

Such a law should treat multiple corporations as a single company where one corporation owns a controlling interest in another (directly or indirectly), and is also that company’s primary customer. The controlling interest requirement would be waived where a contractor or supplier depended upon business from a single corporate customer for continued existence. In technical terms, this makes the corporate veil easier to pierce in certain corporation to corporation relationships. 

The other provision would lower barriers to proving corporate criminal intent, by adding a three-criteria alternative test. Did corporate policy provide significant internal material incentives for law-breaking? Did the corporation fail to implement significant detection and prevention measures? Did violations occur? Answering “yes” to all three questions should prove corporate intent; other tests allowed by current law, such as “authorized agent”, would remain available.

Question: What about minor corporate violations? Current civil penalties are often too small to deter corporate misbehavior. But share forfeiture would be too severe for petty civil violations. Is there something between equity fines and “12 lashes with a wet noodle”.

Answer: Finland solved that problem for traffic tickets by charging traffic fines as multiples of daily gross income. Under Finnish law, a millionaire was fined $103,000 for a speeding violation. Courts could compute fines for minor corporate civil violations in days of gross revenue. Such substantial penalties would discourage the “oh well, instead of complying I’ll just pay the fine” attitude.

Question: What is a just principle on which to decide the severity of equity fines?

Answer: The nature of human imprisonment offers strong hints, even though imprisonment of living human beings should be ended or greatly reduced. A prison sentence kills part of a person’s life. Prisoners lose time spent in confinement; they also lose two years of lifespan for each year they endure, thanks to harsh prison conditions and mistreatment after release. 

Once free, ex-convicts can recover lost life expectancy by surviving a period equal to 2/3rds of their incarceration, without reimprisonment. However, given average and median time served by released prisoners and recidivism rates, a fair estimate is that at least 11% of ex-convicts return to prison without time to recover lost life expectancy. 

Average US life expectancy is 78.7 years. The population arrested is overwhelmingly male and poor, and disproportionately Black, demographics who tend to die younger than other Americans. Thus, 77 is likely a high lifespan estimate for people likely to face detention. Since most convicts enter prison at 18 or later, 19 is almost certainly a low estimate of the average age at which people begin imprisonment. Thus, a year in prison costs, on average, at least 1.9% of a person’s remaining lifetime, probably more. Multiplying the years of a standard criminal sentence by 1.9% will calculate the ownership share to confiscate from a corporate criminal. 

The exact number is sensitive to assumptions, but that sensitivity may matter little in practice. Most corporate crimes are repeated crimes, often committed hundreds or thousands of times. So long as corporate sentences are required to be consecutive the majority of convictions should result in complete expropriation.

Conclusion

Let’s do this! Equity fines could provide the equivalent of a corporate death penalty and corporate imprisonment. Incorporating share forfeitures into left economic platforms is an opportunity to delegitimatize corporate capitalism and strengthen left movements. If we win the fight, it can help legitimize left economic policy, and even play a minor role in fighting off coups. Winning will require a tough struggle, but that struggle will also increase the chances of victory in other important fights.

Annotated References

AFL-CIO. 2017. Death on the Job: the Toll of Neglect – 26^th Edition. AFL-CIO, April 2017. https://aflcio.org/reports/death-job-toll-neglect-2017 Retrieved 5/15/21.

In a report covering the tail end of the Obama years, 7 million injured annually, 50-60 thousand die of occupational diseases, 5,000 die on the job. Typical fines: $7,000 per death, $3,000 per injury. Fewer than 100 employers have been prosecuted for employee deaths since 1970.

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AFL-CIO. 2021. Death on the Job: The Toll of Neglect, 2021. AFL-CIO, May 4, 2021. https://aflcio.org/reports/death-job-toll-neglect-2021 Retrieved 05/22/2021.

Around 1,800 Occupational Safety And Health Administration inspectors try to police 10.1 million workplaces.

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Alper, Mariel; Matthew R. Durose, and Joshua Markman. 2018. Update on Prisoner Recidivism: A 9-Year Follow-up Period (2005-2014). U.S. Department of Justice, Office of Justice Programs, Bureau of Justice Statistics. May 2018. https://www.bjs.gov/content/pub/pdf/18upr9yfup0514.pdf Retrieved 5/18/21.

Released prisoners have extremely high recidivism rates. However, since the study list arrest rates, not imprisonment rates, we have to guess based on standard ratio of arrests to charges, charges o conviction and conviction to imprisonment.

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Baka, Joel. 2020. ‘New’ corporations are up to the same old tricks.  Globe and Mail: 09/18/2020. https://www.theglobeandmail.com/opinion/article-new-corporations-are-up-to-the-same-old-tricks/ Retrieve 06/11/20.

Summarizes his argument that corporations are psychopaths and refers to both his books on the subject.

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Coffee, John C. Jr. 1981. “No Soul to Damn: No Body to Kick”: An Unscandalized Inquiry into the Problem of Corporate Punishment”. 1981. MICH. L. REV.386. https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=1564&context=faculty_scholarship Retrieved 05/15/2021.

One of the foundational articles on the concept of equity fines. “No sould to damn, no body to kick” is from this.’

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Froissart, Jean. 1391. The Chronicles of Froissart, Lord Berners, tran. Macmillan and Company, London. 1904. https://sourcebooks.fordham.edu/source/froissart2.asp Retrieved 5/27/2021.

Peasants tortured, killed and sometimes cannibalized nobles.

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 Kaeble, Danielle. 2021. Time Served in State Prison, 2018. Bureau of Justice Statistics, March 2021. https://www.bjs.gov/content/pub/pdf/tssp18.pdf Retrieved 5/24/2021.

Half of released prisoners served more than 1.3 years, half 1.3 years or less. Average time served of those releaved is 2.7 years. 

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McNicholas, Celine; Zane Mokhiber and Adam Chaikof. 2017. Two billion dollars in stolen wages were recovered for workers in 2015 and 2016—and that’s just a drop in the bucket. Economic Policy Institute, December 13, 2017, https://www.epi.org/publication/two-billion-dollars-in-stolen-wages-were-recovered-for-workers-in-2015-and-2016-and-thats-just-a-drop-in-the-bucket/ Retrieved 5/15/21

Corporations steal 50 billion every year in the form of wage theft, work off the clock, paid breaks denies among other means. Around 2% of that is recovered.

This is also the source for “1,000 DOL Wages And Hours Division employeeinspectors try to police 10.1 million workplacess enforce wage laws for 72 million hourly workers.”

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Patterson, Evelyn J. 2013. The Dose–Response of Time Served in Prison on Mortality: New York State, 1989–2003. Am J Public Health. 2013 March; 103(3): 523–528. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3673515/ Retrieved 5/16/21.

Prisoners lose 2 years of lifespan for every year they spend in prison. However, they recover that lost lifespan upon release if they survive 2/3rds of the time they served without reimprisonment. 

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Pinsker, Joe. 2015. Finland, Home of the $103,000 Speeding Ticket. The Atlantic, March 12, 2015. https://www.theatlantic.com/business/archive/2015/03/finland-home-of-the-103000-speeding-ticket/387484/ Retrieved 5/15/20.

Finland charges traffic tickets based on daily gross income, so that richer people pay more. 

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Schofield-Georgeson, Eugene. 2019. Equity fines for corporate crime: Why they should be back on the legislative agenda. Alternative Law Journal 45(2). December 10, 2019. https://journals.sagepub.com/doi/abs/10.1177/1037969X19884703 Retrieved 05/27/2021.

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Schriever, Leigh Anne. 2019. Stealing from the Poor and Giving to the Rich in the Workplace. Regulatory Review, January 23, 2019. https://www.theregreview.org/2019/01/23/schriever-stealing-poor-giving-rich/ Retrieved 5/15/21

Wage theft is widespread among large corporations light Microsoft and Walmart. It is not limited to small businesses.

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Xu J.Q., Murphy S.L., Kochanek K.D. and Arias E. 2018. Mortality in the United States. https://www.cdc.gov/nchs/data/databriefs/db355-h.pdf 2018. NCHS Data Brief, no 355. Hyattsville, MD: National Center for Health Statistics. 2020. Retrieved 5/15/21.

USA Life expectancy is 78.7 years.

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