Welcome to the Plutocracy

by John Médaille on January 25, 2010 · 50 comments <span>Print this article</span> Print this article

in Economics & Empire,Politics & Power

corporate


Irving, TX Conservatives have long believed that the power of the courts to “legislate from the bench” was a great and anti-democratic evil which could only be remedied by strict interpretation of the Constitution combined with sensitivity to the “original intent” of the founders and deference to the legislative branch. And they had good reason to believe this, since it is unlikely that the founders would have approved of many pieces of court legislation. Abortion, for example, could not be part of the original intent, and such a “right” is neither in the Constitution nor in its “penumbra” (to use Justice’s Douglas’s rather inventive term.) Indeed, many prominent features of American life are, for better or worse, not products of our democracy, but of our judicial system.

Alas, when conservatives themselves gain control of the court, it seems they are no better at exercising judicial restraint than are their liberal counterparts. Indeed, the “conservative court” has on several occasions completely changed the political landscape of the United States. This happened, for example, in Bush v. Gore, when the election was decided by five members of the court. And it happened again this last Thursday in Citizens United v. Federal Election Commission.

The case concerns a movie entitled “Hillary” (as in “Clinton”) put out by a non-profit corporation, “Citizens United,” whose president is Floyd Brown, a long time political activist who is credited, among other dubious achievements, with the Willie Horton ads. “When we’re through,” Brown remarked, “people are going to think that Willie Horton is Michael Dukakis’s nephew.” Brown came up with a clever way around the campaign finance laws which banned political ads from corporations or unions 30 days prior to an election. He would run ads for the movie, and since he was just advertising a movie, it wasn’t political advertising at all. Never mind that the movie, and the ads, were derogatory at best. The Federal Election Committee refused to go along with the ruse, and CU sued.

All CU wanted was for the court to bless their end-run around the campaign laws. Corporate contributions were not an issue in the case, and not part of the relief that plaintiffs were seeking. But for some unknown reasons, the court decided to re-hear the case on grounds that had nothing to do with the plaintiffs plea. The rehearing was peculiar, not only in widening the grounds of the case beyond the issues that were placed before it, but in ordering the rehearing for September 9th, a full month before the court’s session normally began. This seems to indicate some undue haste in deciding so pivotal an issue. One is tempted to think that the majority wanted this issue decided in time to dismantle the current laws in advance of the coming congressional elections. One is permitted to ask here whether the court’s agenda is judicial or political.

In ruling on the issues presented to it, the court upheld the FEC against CU. But on the issues that were no part of the original case, they voluntarily threw out restrictions against corporate funding of campaigns, restrictions that date back to 1907 and have been upheld by every court since then, in test after test. They have, at a stroke, undone 100 years of legislation and judicial precedent. This is not evolution, but revolution, and a revolution predicated on some very peculiar grounds.

The majority of the court treated this as a “free speech” case. Yet, this is somewhat perplexing. As far as I know, CEOs have always had the right to say whatever they liked, to support whatever candidate they wanted, to go to whatever rallies they wished, and to write letters to the editor whenever they felt the need. That is, they enjoyed all the rights of free speech that every other citizen has. As far as I can recall, there are very few corporate executives in prison for expressing their opinions. The court, however, was not interested in the rights of the executives, but in the rights of the corporations as “legal persons” endowed with all the rights of natural persons. This is a rather peculiar doctrine that originated in another example of legislating from the bench, Santa Clara County v. Southern Pacific (1886), which granted “personhood” to corporations. This rule was a complete overturning not only of the court’s previous rulings, but of the long history of corporation law dating back to the Middle Ages.

The Founding Fathers of our Republic were very suspicious of corporations, since the royally-chartered companies had been used as instruments of oppression against the colonies. The Navigation Acts, for example, gave them exclusive shipping rights to the colonies, much to the detriment of American entrepreneurs. And it was East India Company tea that the colonists used to color the waters of Boston harbor in the original tea party. For a jurisprudence that pretends to be interested in “original intent,” the colonial attitude towards corporate power cannot be overlooked.

Corporations prior to Santa Clara were creatures of the state that had no “rights” save those that were granted by their charters, charters that always excluded their participation in politics. Santa Clara extended the protections of the 14th Amendment (no state shall “deprive any person of life, liberty, or property, without due process of law”) to the corporations. The Amendment was originally designed to protect the freed slaves, but since Santa Clara it has been used mainly as a tool to protect big business.

The new ruling allows corporate executives to use the company treasury, the money that rightly belongs to the investors and the workers, to influence political contests. Since corporate executives command resources measured in the trillions of dollars, this means that there will be an inexhaustible source of funds with which to command the political powers. But this money is supposed to be invested to increase the profits of the corporation. And it will be. Politics are treated like any other investment and expected to get a return, a return in the form of subsidies and favorable tax treatment. And as David Brooks noted, corporations also want rules which protect them from smaller and more nimble competitors. As the Independent Business Alliance noted in its amicus brief,

[P]recisely because a corporation enjoys significant state-created economic advantages designed for the narrow purpose of furthering wealth-accumulation, corporate participation in candidate campaigns promotes market entrenchment and corrupts the political marketplace in a fundamentally undemocratic manner.

Somewhat ironically, the ruling may actually lower the cost of political participation for the corporations. The mere threat of spending an unlimited amount of money in any politician’s district may be sufficient to obtain compliance. Blackmail will be all that is necessary to ensure the docility of the legislative and executive branches. As of last Thursday, the corporations are formally in charge of the government of the United States, and all of its constituent political subdivisions. But corporations are not capable of running a country, save for running it into the ground. Indeed, they can barely run their own enterprises without support from the public purse. With this ruling, the line between the corporate treasury and the public purse—already stretched very thin—will completely dissolve. America will be formally a plutocracy and substantially a kleptocracy.

Yet for all that, there is some justification for the court’s attack on the campaign finance laws. Indeed, they are only recognizing what is practically an already established fact. Money will always find its way to power, and where there are large concentrations of wealth, they will come to own the political powers; they will become the state. The current miserable situation in campaign financing is the result of the last abysmal reform, with attempted to correct the problems of the previous reform, and so on back to the Tillman Act of 1907. All the law can do is to raise what roadblocks it can, for as long as it can, until the powers that be find a new way around the laws. And then we begin again.

So what’s to be done? Well, if you can’t beat ‘em, join ‘em. Recognize the reality that power follows property, as Daniel Webster noted. Allow the corporations to give as much as they like. However require that all donations to any cause or candidate be instantly posted on the group’s website, which any one may examine. At least we would know the truth of the situation, and while the truth in this case may not set us free, it will at least let us know where we stand.

But we can go further in this truth-telling to include truth-in-labeling. Each congressman will be required to wear those NASCAR suits which prominently display the names of their corporate sponsors. So the typical congressthing might have Big Pharma on his chest, Exxon on his ass, and the big banks running up and down his arms. Each politician would be required to begin and end each speech with the statement “This message brought to you by …” and list the names of his three top contributors. And each bill will be required to bear the logos of its corporate sponsors. This won’t make politics any more democratic, but it will make it a lot more fun. And a lot more honest. We can dispense with the fictions of “liberal” and “conservative” and go directly to the real issues: “I favor the big banks” or “I favor the manufacturers,” and such like. We can debate the size of the subsidy, the magnitude of the tax break, the height of the barrier against competition. These are the real “issues.” Everything else is rhetoric.

With the Citizens United ruling, the court revealed the depth of its contempt for judicial restraint, original intent, and deference to the legislature. The ruling is nothing short of a coup, a fundamental change in the structure of the America polity. It will work not only to the defeat of democracy, but to the destruction of what’s left of the small businessman. From this day forward, no one will hold office who does not have the approval of the corporations, no small business will exist save by their sufferance.

But it will not last. Greed consumes everything, until it finally consumes itself. The bankruptcy of this country is already far advanced, and the process will be accelerated by making it an open kleptocracy. So, welcome to the plutocracy; enjoy while it lasts, which will not be long.

{ 47 comments… read them below or add one }

avatar Bob Cheeks January 25, 2010 at 6:50 am

At the risk of having a phalanx of John’s “cat food” eating acolytes come charging outta of the woodwork allow me to point the recalcitrant regulars at FPR here:

http://www.ordinary-gentlemen.com/2010/01/no-fear-of-citizens/

That “free speech” thing is messy, messy and ‘em dimmycrats is always trying to limit it. However, I do like the idea of our congressional parasites wearing sponsorship blazers!

avatar HappyAcres January 25, 2010 at 6:57 am

“Congress shall make no law … abridging the freedom of speech.”

Not incorporated labor unions, not incorporated television networks, not incorporated activist groups, not incorporated businesses.

No any individual citizen nor any association of citizens.

NO LAW.

Your frustration should be directed at the State.

avatar Empedocles January 25, 2010 at 9:47 am

I guess we need a law or constitutional amendment saying that the rights listed herein only apply to human beings.

avatar Nathan P. Origer January 25, 2010 at 11:11 am

@Empedocles,

Maybe I’m crazy, but it seems intuitive to me that the Founders probably meant that, but didn’t think that soi-disant conservatives on the Supreme Court (Although I’m not sure whether “conservative” or “liberal” justices — or railroad-sympathetic hack-journalists — decided Santa Clara.) would actually suggest that anything other than human beings were deserving of such rights. The Preamble does speak of We the People (for better, or for worse, compared, say, to, “We the States”), not “We the People and Corporate Persons”.

However, what happens when Zombies are counted amongst the populace? http://www.theonion.com/content/video/zombie_reagan_raised_from_grave

Of course, when the Constitution and the Bill of Rights were composed, who knew that the Supreme Court would have judicial review amongst its powers?!

avatar D.W. Sabin January 25, 2010 at 12:19 pm

Empedocles,
there you did it now buster! You went and brought the issue of “human beings” into this discussion. We’re not talking about humanity here fella, we’re talking about the many avenues of employing dramatic hyperbole with the voter. “Human beings”…hhuummph, get yer facts straight. You start down this slippery slope and the next thing you know, we’ll be hearing about those new age wing ding reveries like “all men were created equal” and that other thigh slapper “e pluribus unum” which, in latin means “He Who Hesitates to spend Big is Lost” .

But, in the end, it is all much ado about nothing because the process of voting in this country is a lot like making up reasons after the fact. The essential conduct of Empire is established long before there are any elections with participating “voters”. Elections are our Show Trials. They give the people something to digest while this government goes about doing whatever it feels like doing because it knows how to run a printing press. “Human Beings”, unless were talkin “actionable targets” have very little to do with anything.

There has been few enough epochs in our sordid history where a liar could find such full and steady employment and now they shall have only the best production values available.

avatar rex January 25, 2010 at 12:31 pm

Corporations are not citizens, the are machines for making money. They have as much right to free speech as a printing press.

avatar rex January 25, 2010 at 12:32 pm

Corporations are not citizens, corporations are machines for making money. Corporations have as much right to free speech as a printing press.

avatar Siarlys Jenkins January 25, 2010 at 2:41 pm

The Santa Clara decision needs to be overturned, and the entire line of case law which is built upon it. A corporation is not a person, it is, as was wisely stated above, a creature of the state. Corporations need to be restrained in their exercise of power just as surely as does the government.

That will require a constitutional amendment. I have a draft to offer, which has been kicked around a bit at Alexandria, Crossroads of Civilization (see above web site link). I would love to have John’s critique and helpful suggestions, as well as anyone else’s, in coming up with a final form that makes sense. Free speech is for free citizens, not for “artificial persons.” Like John said, the CEO can exercise his own free speech, individually, for himself, including his personal opinion as an individual citizen about what is good for his company and why we should recognize that as good for the community.

Incorporation is a privilege granted by the sovereign people, by and through their elected representatives, when it shall seem good or expedient to promote the general welfare:

1)Except as provided in this article, nothing in this Constitution shall be construed as extending any right, privilege, or immunity to any corporation; nor shall the terms “person” and “people,” as employed in this Constitution, be construed to encompass corporations.

2)Natural persons who exercise their right peaceably to assemble to petition the government for redress of grievances, to exercise in common any rights, privileges and immunities protected by the First Amendment to this Constitution, or for collective bargaining or advocacy, shall not be impaired in the exercise of those rights because they choose to incorporate, solely for that purpose, nor shall freedom of the press be infringed when exercised by a corporation formed primarily for that purpose.

3)Neither the United States nor any state shall deprive any corporation of property without due process of law; nor deny any corporation the equal protection of laws applicable to other corporations similarly situated.

4) Powers not explicitly granted to a corporation by its charter, or by generally applicable laws governing all corporations similarly situated, are reserved to the states, to the Congress in exercising its enumerated power to regulate commerce, and to the people.

avatar Bruce Smith January 25, 2010 at 2:49 pm

Last weeks ruling of the Supreme Court’s Fascist Five judges should give us pause for thought as to what the purpose of democracy actually is. I would argue that in the first instance it’s to allow and encourage the free flow of ideas and in the second instance to allow a majority (with safeguards for the minority) to make an idea, or ideas, the law of the land the society occupies and have the power of the state and lower human associations, both private and public, to enforce those ideas as law. Anybody who’s been involved in trying to work democratically with others to achieve a project, or manage an enterprise, or institution, knows that encouraging the free flow of ideas makes for a better result or out-turn. Indeed in his book “The Origin of Wealth.” Eric D. Beinhocker makes the point that corporations only average a life expectancy of 40 years and this is primarily because of autocratic management by the CEO’s who don’t encourage a free flow of ideas to enable evolutionary adaption. Most innovation occurs either through government sponsored research often connected to military or space objectives and the creation of new businesses. The famous economist Joseph Schumpeter invented the term “creative destruction” to describe the need for businesses to constantly evolve and adapt and this is no less true of government and voluntary institutions. What a shame though that capitalism seems perpetually doomed to waste opportunities and resources and upset lives because a handful of CEO’s sociopathic in outlook cannot abide working democratically. It not only proves to be inefficient but fatal!

My beef about last week’s Supreme Court ruling is not only that these five judges acted in a sociopathic, or Fascist, manner because an overwhelming majority in the region of 85% of the public would appear not to have wanted these limits on campaign speech altering:-

http://politics.newsvine.com/_question/2010/01/21/3788203-do-you-agree-with-the-supreme-court-ruling-allowing-corporations-and-unions-to-spend-freely-in-political-campaigns-

but it perpetuates the ability of CEO’s of corporations to act undemocratically by drowning out the ideas of others and potentially black-mailing individuals running for election or re-election with the threat of attack ads against character as well as ideas. To pretend that sociopaths don’t exist and don’t act viciously to get their way is naïve but after presiding over many court cases involving the dark side of human nature it is naïve on our part to also think these five judges naïve. They too are sociopathic in their intent. Indeed human beings seem to have a weakness for “saddling” themselves with ideas without thinking too hard about the likely temperament of the individuals they’ll be putting in the “saddle” as a consequence of those ideas. A Supreme Court of unlimited powers seems to be one of those naïve but I think deliberate ideas of wealthy Founding Fathers paranoid about hanging on to and expanding their wealth. Their wealth stems, of course, from the earlier idea of John Locke that fusing labor with land justified private ownership of property provided that there was “enough and as good as” provision of land and resources for others. This was his get-out clause to avoid being in trouble with God and common-sense. This was also all well and good in the context of Locke knowing that the New World contained abundant virgin land to “improve” but naïve in the context of planning for its allocation exhaustion. The Supreme Court ruling should, therefore, be seen as ultimately motivated to resist the idea that now the allocation of nature’s resources should be democratically decided and the dog-eat-dog approach to amassing wealth is the natural order of human society. Anybody with moderate intelligence can see these motivations for what they are; socially obstructive and supportive of sociopathic free-riders.

avatar Empedocles January 25, 2010 at 3:39 pm

Not being people, corps should not have the right to lobby the government as well.

avatar Bruce Smith January 25, 2010 at 3:47 pm

The Mark Thompson Ordinary League of Gentleman argument is naive. What we will witness is behind the scenes black-mailing of politicians to ensure the CEO’s will prevails and those self-same CEO’s using shadowy foreign registered companies to launch attack ads on politicians who refuse to play ball. Media companies are usually clearly identifiable and at least the more serious ones offer the opportunity to disagree by letter, op-ed articles and on-line comments.

avatar Jeff Taylor January 25, 2010 at 4:10 pm

Thank you, John, for your excellent essay.

Siarlys, We’ll probably never agree on Roe v. Wade, but I’m glad we agree on Santa Clara County v. Southern Pacific. You’re right that it will take a constitutional amendment to stop the madness. Unfortunately, that’s not likely to happen.

William Jennings Bryan said this about artificiality in 1899:

“When God made man as the climax of creation he looked upon his work and said that it was good . . . We looked upon his work and said that it was not quite as good as it might be, and so we made a fictitious person called a corporation . . . When God made man he breathed into him a soul and warned him that in the next world he would be held accountable for the deeds done in the flesh, but when we made our man-made man we did not give him a soul, and if he can avoid punishment in this world he need not worry about the hereafter. . . . We are not dealing with the natural man; we are not dealing with natural rights. We are dealing with the man-made man and artificial privileges. . . . Government must protect the God-made man from the man-made man.”

I’m a libertarian in some ways, but my populism recoils against this nonsense. It’s not even a matter of true liberty. Corporate cash has nothing in common with freedom of speech, as understood by Locke, Jefferson, or any other sensible libertarian.

On questions like this, I’m with Jefferson’s friend, Senator John Taylor (DR-VA). Taylor was a statesman and agrarian philosopher who believed that the nation had devolved into minority rule by capitalists: “The minority comprised what Taylor called either a ‘paper aristocracy’ or a capitalistic one. . . . Capitalism, in his mind, was artificial, a creature of government, a result of ‘legal frauds’ such as banking, funding, tariffs, and taxation, by which the wealth of the farms was transferred to the banks.” He opposed the “disciples of corporation, monopoly and orders [monarchy and aristocracy]” who used and served “executive power for the sake of pillaging the people.”

source: Loren Baritz referencing Taylor’s thought and words in An Inquiry Into the Principles and Policy of the Government of the United States (1814, 1969 ed.)

avatar Jon S. January 25, 2010 at 4:39 pm

John misstates the outcome of this case slightly when he writes “But on the issues that were no part of the original case, they voluntarily threw out restrictions against corporate funding of campaigns, restrictions that date back to 1907 and have been upheld by every court since then, in test after test. They have, at a stroke, undone 100 years of legislation and judicial precedent.”

It is still illegal for corporations (and unions for that matter) to contribute to actual candidates. The question is whether corporations have associational rights like other associations (say, Sierra Club or the National Rifle Association) and can rightfully speak out on public affairs. Singling out corporations for restrictions on political speech and the right to petition the government for redress of grievances strikes me as populism of a lower sort, bordering on mere class envy. If I may resort to cliche, free speech is for those with whom we disagree, too. The government’s own lawyer admitted during oral arguments that under the law struck down here, a book or a blog post that included “so don’t (or do) vote for candidate x” could be banned. I don’t want to live in a country where speech is banned because a name or likeness of a candidate is used w/in 30 days of an election.

If you don’t like what corporations do, then I suggest forming and/or joining groups that counter the corporate agenda. Engage in your own speech. Go to meetings, write letter, post on Front Porch Republic, etc. The Court made the right legal decision here, even if the consequences may be a bit invidious.

BTW, John, the Court voted 7-2, not 5-4, in Bush vs. Gore that the Florida recount violated the Constitution, although, yes, only five voted to stop the recount. I would note that the “conservative” justices (Rehnquist, Scalia and Thomas) filed a concurring opinion arguing the case could have been resolved based on federal statute, not on the 14th Amendment, a more “restrained” approach.

avatar John Médaille January 25, 2010 at 5:19 pm

Jon, you cite a distinction without a difference. While it is true that a corporation cannot give a million bucks to Congressman Gutbucket’s campaign, they can run a million bucks worth of ads saying “Vote for Gutbucket.” And I suggest your argument cuts both ways. If CEOs don’t like the direction of things, they can write letters to the editor, post on FPR, and all the other highly effective remedies you suggest. They could even spend their own funds to support these things. But that’s not what they want; they want to spend other people’s money, specifically the company treasury, money that belongs to the investors and the workers.

If I join, say, the NRA, I expect my money to go for certain things. If I invest in IBM, I expect the funds to be used for productive purposes, to make an honest buck. I suspect there are some, perhaps most investors who are happy to see the funds invested instead to get tax breaks, subsidies, and privileges from the government. There are even some who see that as a proper function of gov’t. Nevertheless, there is a question of whom the corporation speaks for when it “speaks.” For the investors who provide the capital? For the workers who create the wealth? I doubt it. They speak for the managerial class.

Corporations a creations of the political entity that creates their charter, without which they wouldn’t exist. In law, they have such rights as their charters grant and corporation law allows. These are not natural rights because they are not natural beings.

Mark Hanna noted that two things were paramount in politics. “The first is money, and I can’t remember what the second thing is.” Indeed. You are pitting associations of citizens of whatever resources those citizens have against managerial collectives commanding trillions of Other People’s Money. You do this in the name of an abstract freedom, but I am always suspicious when the abstraction has such an asymmetric material effect.

avatar JD January 25, 2010 at 5:26 pm

@Nathan P. Origer

The First Amendment is written in terms of speech, not speakers. The Constitution makes no distinction between the types of speakers and it explicitly allows for the freedom of association. The right to speak includes the right to speak in association with other persons.

Free speech is not limited to only speech by individuals but not associations, nor is it limited to only associations organized for this purpose but not that.

If we’re going to deal with problems that may come from corporation and union-originated political speech, we need to find a constitutional way to do so.

avatar JD January 25, 2010 at 5:47 pm

“Nevertheless, there is a question of whom the corporation speaks for when it “speaks.” For the investors who provide the capital? For the workers who create the wealth? I doubt it. They speak for the managerial class.”

There’s the rub. I don’t think the overturned regulations were constitutional limits on speech, but this problem persists.

I don’t think there is any other proper motivation for a corporation to act, but to ensure a profit for the shareholders. It seems like the only proper motivation for a corporation to make political speech would be in order to increase profit for the company and the shareholders through a manipulation of the political process, which seems like a prima facie abuse of the electoral process, whose purpose is to ensure the common good (is that right?), not line the pockets of a particular group. Any other political speech made by the corporation would just be a manager goin’ rogue on his corporate duties and his fiduciary responsibility to the shareholders.

Perhaps there is an avenue through corporate law that would provide a constitutional way to limit corporation speech?

avatar Empedocles January 25, 2010 at 7:16 pm

Someone like Kucinich should just refuse to meet with corporate lobbyists on the grounds that the First amendment only applies to human beings. If they sue maybe we get Santa Clara country overturned.

avatar Siarlys Jenkins January 25, 2010 at 7:45 pm

Jeff, I too appreciate finding grounds for agreement. Incidentally, I spend a good deal of time exchanging views with people I know are pro-life, not because I expect to win them over, but simply because its good to talk respectfully about why and how we disagree and what bits of common ground we can find. We do have to share the planet with each other.

I have sometimes thought about corporate personhood, and for that matter employers in general, in terms of, did God create man so that corporations could have someone to employ? Or did man create corporations because we thought it might serve our human interests? The economy is here to serve us, even if we try to do that in a laissez faire sort of way. We are not here to serve it. I consider this a perfectly libertarian point of view. Libertarian philosophy is pro-corporate ONLY if a corporation is deemed to be a person. This is Kerr-McGee style libertarianism, and I’m not sure Ron Paul is entirely free of it. I view the corporation as a creature of government. Therefore, corporate power, like government power, is to be viewed with healthy skepticism, even though it may not be possible or desirable to do without it,

As for amending the Constitution, it won’t happen if we don’t demand it. It may not happen even if we do. But we must begin.

avatar Roger Bennett January 25, 2010 at 8:38 pm

I’m pretty uncomfortable with last week’s decision, for reasons including distrust of the strategic objectives of some of the dramatis personae,/i>. And I’ve long wondered about the wisdom of treating corporations as possessors of constitutional rights.

But then I start the Socratic dialog (law school style, not genuine Socrates) in my head: “Do corporations have a right to receive just compensation for the taking of their property? May the Army lawfully take over corporate HQ for the housing of troops? Must the NYT and WaPo abandon the corporate form if they want freedom of speech (or press if you prefer)?”

Am I missing something? Are you guys all that far ahead of me in con law and economics? Is my autodidactism sorely lacking in this area? Or has the level of comments at FPR descended several thousand feet since last issue I weighed in?

avatar John Médaille January 25, 2010 at 9:35 pm

JD, excellent point!

Roger, the corporations have a right to receive compensation for takings because they have been granted the right to own property by their charters and by corporate law.

Nathan, “Speech” is a property of humans, not of things. Now, there are those who believe that chimpanzees and dolphins can speak; I am not smart enough to dispute with them. But this I know: A corporation cannot speak, even a corporation of dolphins. Only the officers can speak for the corporation, IF AND ONLY IF they have been authorized by the members of the corporation to utter such speech. So the questions become, “Who authorizes them? Who do they speak for? Who are the members of the corporation?”

If I join the NRA, I presume they will speak for me on matters related to gun control; that is why someone joins. But when I buy a share of stock, am I asking them to get bigger subsidies? To evade taxes? To represent me on HR 2416 or SB 909? I don’t think so. If I want them to speak for me on these issues, I can joint their PAC.

And who is a member of the corporation? Just the owners? The workers? The customers? The public that charters them or subsidizes them? The suppliers who make parts for them? Do the corporate executives have the right to speak for all of these groups? Where did they get this right? Did they poll the workers, ask the customers, query the suppliers? No. Yet they are using the money supplied by all these to speak for a few, namely themselves, for what the managerial class speaks for is the managerial class itself, and no one else.

And let them do so, but let them do it with there own funds, and not the funds of all these others.

avatar rex January 25, 2010 at 11:41 pm

Reversing Santa Clara does nothing. The cat is out of the bag, and corporate personhood is a global meme. Only the Chinese were clever enough to anchor corporations to a nationalistic agenda.

avatar Jon S. January 25, 2010 at 11:41 pm

John,

If I may be so bold, I wonder if you would comment on the arguments of law professor Ilya Somin? See the following links:
http://volokh.com/2010/01/22/should-people-acting-through-corporations-be-denied-constitutional-rights-because-corporations-are-state-created-entities/

http://volokh.com/2010/01/21/people-organized-as-corporations-are-people-too/

The upshot is that a lot of entities are “state created,” not just corporations. Indeed, many economic associations are state created, and many political and media entities are incorporated. Do none of these have first amendment rights? Second, corporations are not “persons,” but they are made up of persons who do have constitutional rights, including the right to associate and the right to speak about politics.

avatar John Médaille January 26, 2010 at 8:35 am

Jon, I don’t think it is a particularly challenging or interesting argument, despite the use of loaded terms. The question is not “people acting through corporations,” but “executives diverting corporate funds to political purposes.” The executives are free to act, just like any other citizen. They just have to use their own money. Let them raise money in a PAC, like everyone else.

avatar D.W. Sabin January 26, 2010 at 10:21 am

ie: “the Court made a right decision here, even if the consequences may be a bit invidious”

Yes, and perhaps at the time, the Three-Fifths Rule made a lot of sense.

The Court seemed to make a devils bargain between opening political “speech” to all “groups of people”, while offsetting the mischief through full disclosure but it has done so within a period of profound dysfunction in our political process. The decision has all the earmarks of an excessively active judiciary…almost a taunt it would seem. Money has already excessively stilted and centralized our political process and held it hostage to jejune imagery on the one hand and outright mis-representation or scare tactics on the other .

I know it is often said that “the Business of America is Business” but if this were so, we would not have the bloated Pharisees in the First Church of Mammon that we have now in our cozy Cosa Nostra on the Potomac. Dead Wood and Debt Fountains such as this are the first to go in any proper Business Model. But then, this assumes American Business is still an efficient force. Small business must be but the big businesses habituated to Government Special Treatment are about as efficient as …well, pick your favorite Bolshevik Collective.

Strike another one up for the Entropic Grandeur of Big Government Wed to Big Business, a Faustian match made so Kafka would have thematic material to work with.

avatar Bruce Smith January 26, 2010 at 12:15 pm

It has clearly escaped the attention of the Supreme Court Fascist Five judges that we are all rapidly becoming Mental Darwinists now in the aftermath of the Financial Crash. We are starting to see that genetic maladapted brain hard-wiring and abusive nurturing creates sociopaths who will do their utmost to prevent challenges to their unfair creation of wealth and unfair share of that wealth. These sociopaths regard attack ad black-mailing, slandering and libeling of opponents who dare to politically challenge their hegemony as par for the course. We are also increasingly beginning to see that the Constitution of a country reveals the pathology of their sociopathic founders of both extreme right and left wing political dispositions. Wealthy originators reflect that grab and protect all you can mentality in the American Constitution with the Supreme Court powers playing an important role in maintaining hegemony. Trying to pretend that stock-holder business corporations have any other interest than the pursuit of wealth and the distribution of that wealth to a minority is laughable. We should be grateful that these five judges have let slip the mask hiding the true face of the state we live under.

avatar Bruce Smith January 26, 2010 at 5:00 pm

There seems to be another argument here in relationship to the Supreme Court judges ruling. Increased concentration of wealth in the hands of sociopaths leads to the breakdown of trust within a society. A successful society relies upon cooperation which in turn relies upon long term trust in relationships. Sociopaths tend to be cheaters who become distrusted. The increased concentration of wealth has occurred on Wall Street and the cheating there led to the Financial Crash. Rather than seeking to rebuild trust in society the five Supreme Court judges have now provided further tools for cheating.

avatar Ryan Davidson January 27, 2010 at 10:36 am

I’m having a hard time seeing this as more than cosmetic, much anti-corporate griping notwithstanding. Though I tend to agree with Professor Médaille’s analysis a lot of the time, I think you’re wrong here, John.

This article contains a good discussion of why, and whether or not corporations are “real people” is completely beside the point.

Corporations can already spend as much on politicking as they want. PACs exist, though the current campaign finance regime means that only the largest corporations can afford one. I’d think striking down that barrier to entry would actually be something the people around here would like. Furthermore, there are rumors of a practice called “lobbying,” by which various interests, corporate and not, are alleged to be able to influence legislators through the use of what I believe is referred to as “money.” The current ruling does not change this at all. Given those two facts, it would seem that Citizens United represents little more than an attempt to make our First Amendment jurisprudence consistent.

“Coup?” “Fundamental change in American polity?” Deep breaths, man. Seems a little odd to yell about opening the barn door when the horse has been gone for decades.

avatar Jon S. January 27, 2010 at 1:42 pm

John,

If corporations are not persons, are they able to be sued? Are they able to engage in contracts and take on and fulfill the responsibilities of those contracts? No one argues that corporations are just like natural persons, but for certain circumstances the law must treat them as legal persons. The question, then, is what rights, privileges and responsibilities do corporate persons have in common with natural persons. Corporate persons are made up of individuals who wish to associate together for certain common purposes. So Citizens United incorporated, Ford Motor Company incorporated, and the small Benedictine monastery where I went as an undergrad is also incorporated. We would not say that the Benedictines gave up their constitutional right to freedom of religion simply because they found in legally convenient to form themselves a legal entity called a corporation. Would we say that Ford Motor Company, because it is not a natural person, has no property rights so the government can confiscate its property with impunity? Or how about the library holdings of said Benedictine university? Can they be confiscated by the government because they are owned by a corporate person, not a natural person? By incorporating company takes on certain duties but also attains certain rights and privileges. It also allows, by the way, the government to actually regulate the corporation since the corporation takes on a legal status which allows for the imposition of duties. Overall, while corporate persons may not have all the rights of natural persons, the right to participate in the political process by engaging in political speech seems reasonable, and indeed necessary for the maintenance of an open society.

avatar John Médaille January 27, 2010 at 2:01 pm

As I said in the article, the law will always play a cat and mouse game, always reforming the reform until the corporations find a new loophole. Where there are concentrations of wealth, there will be concentrations of power, leading to more concentrations of wealth, etc. But this circumstance does not mean that the law should give up. And the courts ruling was not about “we can’t stop it” but “we shouldn’t even try.” That is a completely different thing. Corporatons, being legal rather than natural entities, have whatever rights it is prudent to give them. And the ability to use other people’s money to control the political process is not a prudent right.

But aside from the bad law, this is a case of bad jurisprudence, lacking both juris and prudence. The court ruled on issues not before it, did so with undue haste, and overturned at a stroke 100 years of legislation and judicial precedent. Those who respect the law cannot but be dismayed at the lack of judicial restraint, and the complete hypocrisy of the “conservatives” on the court. I think I am justified in suspecting a political agenda rather than a legal one, and that is the most dangerous thing a court can do, particularly the High Court.

People in a corporation have natural rights; corporations have only legal ones. The CEO may speak with his own funds, not the corporations. The practical effect is that there is now no bar to open raids on the treasury.

Welcome to the plutocracy.

avatar Ryan Davidson January 27, 2010 at 2:51 pm

See, maybe that’s where we disagree. I don’t believe persons have natural rights any more than corporations do, so mucking about with legal rights doesn’t bother me much.

I’ll grant that the handling of the case by SCOTUS was unusual, but seriously, anyone who thinks that courts aren’t political animals 1) should spend more time reading legal history, and 2) hasn’t been paying attention. The rule of law is and always has been a fiction. Rule is by sovereignty, and the courts are an expression of sovereignty.

I guess all the bad things that you think this ruling evidences I either can’t see or don’t care, because they were just as true before this ruling as they are after it. This doesn’t bother me much, because I don’t think there ever really was an alternative.

avatar John Médaille January 27, 2010 at 3:08 pm

Ryan, you make some good points, but it seems to me that they weaken your case rather than strengthen it. If, as you say, no one has any natural rights, than all rights are political. This can only mean that they are doled out prudentially. But it would seem imprudent to dole out such a right to men who command trillions of dollars and whose major interest in politics is getting billions more. What the corporations mainly want from gov’t is more subsidy, more privileges, more protections, more monopoly. Why should we strengthen their hands in getting these things? There is no countervailing force that can command the resources that they do, and the essence of prudence in politics is to look at countervailing forces.

And you may be right that courts are primarily political, and we should drop all pretense of judicial restraint or rule of law and allow them to go whole hog is displacing the other institutions of government. Very well, but then the conservative cries for judicial restraint are revealed as mere hypocrisy.

And quite obviously, the ruling mattered, or there would be no reason either to attack or defend it. Granted the roadblocks to corporate control were weak at best. This seems a poor reason for removing them entirely, but obviously they were strong enough that somebody wanted them removed.

avatar Ryan Davidson January 27, 2010 at 4:17 pm

I guess I think there’s value to ensuring that monied interests are able to make their wishes known, to have some control over the political process. Yeah, sometimes it looks like corruption, but corporations presumably know their interests and act on them. The same can not be said of individuals. Corporations are certainly far more likely to act rationally in a given circumstance than most individuals I know. So I’m not sure prudence cuts more one way than the other there. When it comes to pursuing the Good Life, some individuals are better at this than corporations, but when it comes to making rational, long-range economic choices, I’m going to go with corporations more often than I won’t, recent economic turmoil notwithstanding.

Besides, I think the danger here is less than you think it is. Money is a more attractive goal than political oppression, so I think we need fear little on that score, and the major hits on the federal budget are 1) Social Security, and 2) health care spending, neither one of which corporate interests are all that excited about. Granted, the military-industrial complex is another kettle of fish, but defense spending and related corporations represent a relatively small portion of the national economy, and there are enough non-corporate interests who want their toy soldiers to keep Raytheon et al in business without much spending on its part. Other than defense, the amount we spend on corporate subsidies and tax breaks pales in comparison to the amount we spend keeping cancer-ridden octagenarians alive an extra six or nine months, and US corporations pay a tiny fraction of the federal budget anyways.

And I’m completely okay with arguing that conservative cries for judicial restraint are hypocrisy, because I believe that’s what they are. The arguments for strict construction aren’t hypocritical though, because that would involve some kind of knowing disengenuousness, and I don’t think arguments for strict construction are coherent in the slightest. Still, while ignorance is not the same thing as hypocrisy, but neither is particularly attractive.

My interest here is less to defend the ruling as a good one–though on balance I think it gets the constitutional questions right, like it or not–than to critique the idea that it’s terrible. I’m not convinced it’s that big of a deal either way, and to the extent that it is, I’m not convinced that it’s a bad thing.

avatar Siarlys Jenkins January 27, 2010 at 11:52 pm

John Médaille, thank you for sticking to your position and answering every round of incoming artillery. There is plenty of ground for cynicism, but nothing will dispel that if we simply roll over and play dead. There is a principle worth fighting for, that citizens are the legitimate source of sovereignty, and corporations are a tool we can authorize if it is beneficial to the welfare of the citizenry, not citizens in their own right. We must retract the entire notion of corporate personhood.

avatar Rob G January 28, 2010 at 10:00 am

It would be interesting to see if those conservatives who are currently defending this decision so vigorously would be doing so if it were unions rather than corporations whose activity was in question. Granted, the unions don’t have the clout they once did, but if they did, and the shoe was on the other foot, I doubt you’d hear all this silly ‘freedom of speech’ rhetoric from the Right, so called.

(For the record, I’m no fan of unions, and would prefer not to see either them or the corporations have this sort of influence.)

avatar Albert January 28, 2010 at 11:37 am

Tick. Tock. Tick. Tock.

avatar Siarlys Jenkins January 28, 2010 at 7:07 pm

For the record, I am a fan of unions, but I am perfectly willing to leave union participation in elections to be through the usual COPE (Committee on Pollitical Action). These are funded by voluntary contributions from union members, earnestly solicited, but voluntary. I didn’t contribute, last union I belonged to, because I didn’t know what the national leadership would do with their share of the money. Among other things, they endorsed Hillary Clinton, when everyone in my local was voting for Obama, primary and general election, except one guy who voted for McCain.

avatar Bruce Smith January 28, 2010 at 7:47 pm

At a time when it is generally recognized that the ideology of market fundamentalism has been very bad for society’s health five Supreme Court judges decide as a last ditch stand to strengthen that ideology by increasing the political power of the corporations to resist any change. Here is an article by an economist Richard Werner who makes the case fairly reasonably I think that it was a foolish 1913 American government abdicating its responsibility to control the use of credit creation to a private Federal Reserve body that led to at least 50% of that credit creation being directed into the real estate and gasoline commodity bubbles that produced the recent Financial Crash:-

http://www.qfinance.com/macroeconomic-issues-viewpoints/viewpoint-richard-a-werner

This is not to mention the crash of 1929 and all the bubble generated recessions since 1913. Can a country that has just had a serious economic melt-down continue to allow a Constitutional set-up in which a Supreme Court dominated by five lawyers ( not economists even) deliberately set out to frustrate a country’s efforts to sort out its inept macroeconomic decision making arrangements?

avatar Bruce Smith January 28, 2010 at 8:10 pm

Finally, Richard Werner asks the big taboo question which the Supreme Court judges want the financial corporations to stop the politicians asking and getting backing for change. That question is should credit creation and control be taken out of the hands of private bankers and their private Federal Reserve and returned to the hands of the tax payers through their government? Here is Werner’s article:-

http://www.diis.dk/graphics/Publications/Andet2009/Should_creation_of_money_stay_in_private_hands.%20Richard%20Werner.pdf

avatar Rob G January 29, 2010 at 7:07 am

It seems to be the case that unions have a measure of influence in the current administration out of all proportion to their size. The president of the SEIU (Andy Stearns?) practically lives at the White House, and it’s hard to doubt the clout that the teachers’ unions have in the Democratic party.

avatar Bruce Smith January 30, 2010 at 2:10 pm

You would have thought that the “sound” of the recent Financial Crash would have woken most people in America. It clearly did not wake the five Supreme Court judges who this week ruled in favor of lifting the restrictions on corporations trying to influence the outcome of political elections. They continue in their ideological slumber. Allow me to explain. Adam Smith’s famous quotation that “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.” became I would argue one of the main distorted leitmotifs for the American Constitution. The Financial Crash was a wake-up call to this distortion. The economic guru Alan Greenspan had to admit as much before a House Committee that market fundamentalism was flawed because economic equilibrium can never be reached. Markets are always vulnerable to not clearing because money is rationed. In the case of the Financial Crash bankers made bad decisions to allocate credit for investment in real estate amongst other targets. This credit allocation was not just for the development of new real estate to meet demand which was a rational use of the market but for banks to knowingly, and in some cases unknowingly, inflate the value of existing real estate mainly homes (a great deal of money can be made from speculative bubbles through knowing when to “pump and dump”). Accordingly, this is where morality must meet markets. A good Constitution today would recognize that there will always be a need for the majority to democratically make rules to restrict selfish behavior in markets where reaching equilibrium is not consistently available. For the five Supreme Court judges to strengthen the hand of selfish CEO’s to drown out this message is foolishness in the extreme and if they had commonsense and morality they would call for a re-think of the Constitution to allow rational thinking to have a better chance of prevailing.

avatar Wester January 31, 2010 at 1:14 am

I have been confused a bit by this article which was sent to me by a “libertarian”: Napolitano says “Alito was right”

http://www.foxnews.com/opinion/2010/01/28/andrew-napolitano-obama-state-union-campaign-finance-alito-supreme-court/

I am having a bit of trouble sorting this out. As far as I can tell, the ruling means that any entity – corporation or labor union or group of whoever – can not directly contribute to a political campaign, but can set up a separate satellite ‘campaign’ that orbits outside the existing candidate and buys advertising to support that candidate. Am I reading this correctly?

Furthermore, the Napolitano article states that

“…the president attacked this decision by arguing that the ruling permits foreign nationals and foreign corporations to spend money on American campaigns. ”

Which would technically be correct if the satellite campaign idea is correct.

However the article goes on to say:

” The Supreme Court opinion, which is 183 pages in length, specifically excludes foreign nationals and foreign-owned corporations from its ruling.”

And this would mean that foreigners and foreign-owned corporations can not participate in any satellite campaign organization. Is that correct?

Finally, what constitutes a foreign-owned corporation? Does that mean 100% foreign owned? Or just partially foreign owned – like say News Corp. which is 5.7% owned by Prince Alwaleed bin Talal of Saudi Arabia?

Thanks for your valuable insights and patience.

avatar Bruce Smith January 31, 2010 at 10:01 am

As soon as you set up a Constitution attempting to address rights you are going to have a war over the interpretation of those “rights words” between those of sociopathic and cooperative disposition. You then further compound the problem by setting up a “proxy war body” of a few so called “wise” individuals to rule on the interpretation of these words. The only logical solution is that the final responsibility for the interpretation of rights should rest with the sovereignty of the people articulated through their representative assembly or through participative referenda organized by that assembly. It is then possible to do two things as an individual. Decide whether the majority decision is in the interests of the society’s social cohesion, and if the rights issue became one of political factionalism, which it normally does, which faction you wish to identify with for future action or inaction. Indeed some societies, believe it or not, deliberately avoid having a constitution for the reasons I have outlined. To be arguing over whether the “wise” individuals meant foreign corporations or not is failing to see the wood for the trees.

avatar Bruce Smith January 31, 2010 at 12:17 pm

Here is a more succinct version of my argument. The proxy war that took place in the Supreme Court with regard to election campaign limitations is at heart a war over the degree of dispossession for the purposes of consumption and capital investment a society can tolerate without social cohesion falling apart and violence ensuing. The proper place for the resolution of the amount of dispossession, and by who, is through the People’s use of the mechanisms of representative and participative democracy and not through a body which lacks direct accountability.

avatar Siarlys Jenkins January 31, 2010 at 9:42 pm

If there is one thing worse than leaving interpretation of the words of a constitution in the hands of a life-tenured Supreme Court, it is leaving the definition of individual rights up to a majority vote every time a question arises. Courts can play with ambiguity of meaning, but courts are bound by the letter of constitutional language. E.g., the Supreme Court of California ruled that the state constitution’s guarantee of “equal protection of the laws” required the state to issue marriage licenses to same-sex couples. However, when the constitution was amended, to say otherwise, there was nothing they could to about it. Some outraged litigants on the losing side tried to make a case to overturn the constitutional amendment, but a constitutional amendment is, by definition, constitutional.

avatar Cecelia February 1, 2010 at 1:45 am

I agree it is not clear to me exactly what the Court meant by their exclusion of foreign corporations – what about multi national corporations? Exxon is most assuredly an American corporation yet it’s holdings all over the world do not guarantee that it will exercise this new right by considering the well being of the US.

Foreign or American owned the same problem is apparent – corporations exist to make profit and they will use whatever powers they are given for precisely to pursue that goal.

avatar Bruce Smith February 1, 2010 at 11:49 am

The American Constitution is Pre-Darwinian. Allow me to explain. Today we know that everything is in flux and adapt or die is the order of life and most certainly with market capitalism. Corporations know, for example, that hitting the right quality and price point for their goods and services is vital for survival. It’s vital also for attracting finance for investment and expansion to become, or remain, one of the major players. Corporations are on a treadmill and they will tend to exploit whatever resources they can to remain on that treadmill. These resources can be people, environment, finance or sovereignty to name but the obvious ones and that exploitation as we know can be abusive. Slavery, for example, was abolished less than 150 years ago in this country.

However, with market capitalism we want the benefits without the dis-benefits and certainly don’t want the absurdity of state planned markets where supply and demand equilibria are rarely approached. Turning everything into worker-owned and controlled cooperatives may help but it isn’t going to stop the temptation to abuse since the market remains competitive. Ethics also may improve but desperate situations can produce desperate remedies. Where then can abuse be deterred? It can be deterred by the People acting through their government. This was how slavery was ended. The absurdity of the current American condition of politics is that a great many people through lack of analysis pretend that you can have market capitalism without the counter-check of government. The Financial Crash mess we’re in is largely due to this lack of joined up thinking. The banks of Wall Street were allowed to blow speculative bubbles because of the deregulation they lobbied for and the lack of application of those regulations which remained. They were allowed to make bets on non-GDP productive assets and then had to be bailed out by the taxpayer when the bets went wrong.

Corporations and citizens both want to control their destinies but where else are you going to legitimately resolve a clash of the wills of the Concerned Citizens and the Market other than through the will of the People making law in their Federal and State assemblies? The buck has to stop somewhere! Of course it will be argued that these assemblies are full of politicians corrupted by money but that is a matter of campaign funding and lobbyist reform. The existence of the corruption does, however, also dramatically illustrate another abusive aspect of Market exploitation. Finally, it is also obvious that because of this continuing contest of wills each side will try to put their supporters in any representative body that can have an influence over the law. The Supreme Court is no exception but it is absurd to pretend that over the rules of how those supporters get to be elected to their Federal and State assemblies the Supreme Court can usurp the powers of Congress and especially the most democratically representative body the House of Representatives. Arguments from both the Concerned Citizens and Market should be heard loud and clear and not the arguments of one side drowned out by money. The health of any economy, not least the value of its currency, depends upon trust and to make it more difficult for trust to develop and even reduce it is great foolishness and certainly not wisdom.

avatar Bruce Smith February 5, 2010 at 5:54 pm

The Supreme Court ruling is meddling by government and it can also be argued by the wrong branch of government. Why then have we not heard the Republican Party complaining? In normal circumstances they are usually always quick to condemn any government involvement in citizens affairs! To rephrase Ronald Reagan; “The last thing you ever want to hear is ‘I’m a Supreme Court judge and I’m here to help.’” Doesn’t the GOP’s silence reveal how political the judges decision actually was?

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