The recent Supreme Court ruling (Citizens United v. Federal Election Commission) on corporations’ freedom of speech was an amazing ruling. As you know this case made it legal for corporations to run ads for favored candidates. Whether or not we agree with the role of corporations in elections, I believe the ruling was correct in upholding the First Amendment and free speech.
I’ve heard and read many comments on it, mostly negative. For example, David Brooks, a “conservative” said that corporations usually only engage in politics when they want something from government. He’s half right.
President Obama said it was “a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.” He sound populist to me.
Much of the commentary on this case centered around the fact that a corporation is not really a “person” as Justice Kennedy ruled. True, but that misses the point. The question is: should the rights of the Constitution be extended to entities created by law. Most comments miss or ignore the history and jurisprudence of corporate law.
A corporation is a group of people who do business together. That’s it. A legal fiction was created that says the shareholders, the directors and executives can’t be sued for corporate debts (there are many exceptions to this rule). Other than this protective shell, they are people. By denying a group of people in business together the right to support or oppose a candidate is a denial of the right of free speech. Political speech is speech.
The government has the power to affect the rights of a group of people doing business as a corporation. Government can regulate their business behavior, take their profits through taxation, level criminal and civil penalties against them, and sometimes incarcerate their executives or directors. In some cases their businesses are nationalized.
This group of people doing business as a corporation needs to protect their rights. If they see candidates that, for example, wish to nationalize their business and steal their assets, they need to have the right to express their opposition to these candidates.
I disagree with Mr. Brooks. It is true that groups of people doing business as corporations seek and obtain favors from government. This is wrong. But so are the politicians who take their money and sell their votes. If we give government the power to hand out favors, we can expect such behavior.
But there is another reason groups of people doing business as corporations come to Washington and that is to lobby against bills harmful to their interests. Right now banks and financial institutions are working the lobbies of Congress to ameliorate the harmful effects of Obama’s proposed new financial regulations on them. Is it fair that these groups of people doing business as corporations should just roll over and let it happen to them? No. They need to protect the interests of people called shareholders that have invested in them.
It’s not a very pure system. As Mario Rizzo put it (and I highly recommend his thoughtful post):
So the decision the majority handed down has its costs. The decision the dissenters would have handed down also would have had its costs. Both are very high. And they are the result of the size and scope of the modern American state. There is no good solution, except to cut down the size of the state in a very substantial way.