Who cares if corporations are people? Campaign Finance and Transcendental Nonsense

-- By DanielKetani - 16 Feb 2012

What are corporations?

“Corporations are people, my friend”. Through this statement of prima facie absurdity, Mitt Romney managed to bring pop culture relevance to the debate of the role of corporations in modern society. This statement is, of course, empirically ridiculous, as corporations are not beings of flesh and blood, do not have feelings, nor possess any of the other attributes one typically ascribes to the human experience. The relevance of this statement, though, is particularly timely as it was made during the first presidential election since the Supreme Court decision in Citizens United, which enshrouded and expanded the free speech rights of corporations.

If corporations are not people, what are they? Felix Cohen would almost certainly reply to this, transcendental nonsense. Who cares which legal form an association uses? If one type of association is understood to have free speech rights, what distinguishes another type of association? People use different forms of associations in our society for various purposes. In order to say a corporation should receive different treatment from these others, using the functionalist approach, it is not enough to look at what they are, but also what they do.

Does it matter what type of corporation it is?

What might be said to be different about a for-profit corporation, in the American interpretations, is that they have a duty to make money. A board of directors has a good faith duty to act in the best interests of shareholders. While it is conceivably possible the best interest of the shareholders may be something other than profit, this is unlikely and generally untrue. The idea of an entity entirely devoted to profit is somewhat unique and functionally has somewhat different implications than other entities. Namely, political speech risks being in the form of rent-seeking, since the only incentives a for-profit corporation have in participating in the political process is attempting to alter laws to better enhance its profits. Hence, in the case of for-profit corporations, there is a strong case that this sort of association should be regulated, rights or not.

There is no reason to prevent a natural person from "participating" in the political process in order to become richer, either. And free speech is not only about participating in the political process. And the First Amendment protects commercial speech. This whole analysis appears confused.

The case is more complicated though in the case of non-profit corporations like Citizens United, or media corporations. The opinion in Citizens United suggests that it is impossible to distinguish media and non-media corporations. Even though this reasoning is based in formalism suggesting that all corporations are the same, even functionally it may difficult to draw a line. Take NBC Universal, which for years was owned by GE. Previous to Citizens United, why did all the largest corporations not set up media arms to promote rent-seeking behavior? The reason most likely is that it would be inefficient. Rent-seeking, it seems, was more efficiently done through lobbying. In that sense, it seems there is some value in distinguishing media companies from non-media companies, as absurd as it might be. Of course, media companies will still engage in rent-seeking for themselves, but this is a separate issue that could be dealt with.

Again, what has this to do with anything? Corporations are persons with respect to section 1 of the Fourteenth Amendment at least since the decision of Santa Clara County v. Southern Pacific Railroad Co, 118 U.S. 394 (1886). The First Amendment is incorporated in the due process clause of section 1 of the Fourteenth Amendment since at least Gitlow v. New York, 268 U.S. 652 (1925). What are you arguing about and why?

Are all associations the same?

So what about nonprofit corporations? In this category, one might as well throw all forms of associations that do not gain profit. The Supreme Court in Citizens United seemed to acknowledge this conception of association, as their decision indicates that if citizens may give free speech through associations, why not through all associations? Here, we have an interesting line between formalism and transcendental nonsense. The court dismisses differences between different types of associations as formalism, rightfully so, but then decides that because speech is protected for some of them, it should be protected for all of them. But this completely ignores the question of why speech is being limited in these circumstances in the first place.

What? This is completely unclear to me.

Free Speech and Democracy

The arguments in Citizens United focused on the specific nature of corporations, but this seems silly. The larger problem is the ability of some citizens and entities to have access to more speech than others. The concept of the First Amendment is that everyone has a right to disseminate their own ideas to others, but this original understanding of the First Amendment did not in any way imagine the forms of mass media we have today. What is the value of free speech if no one can hear you because some people can yell louder than you can? In theory the solution to this problem is to better help citizens organize themselves to solve collective action problems, but this ignores the incredibly unequal wealth distribution in this country. Over $1 billion was spent on the 2008 presidential election, but what significance is that if someone with $20 billion decided to back a candidate or run? There may be diminishing returns, but how do we have a functional democracy when such amounts of money are needed to be competitive?

One possible solution I would propose, constitutional issues aside, is trying to reduce the amount of “electioneering” altogether. Of course, calling activities electioneering is more transcendental nonsense in the sense that all sorts of activities could be considered political. If a TV station had shown reruns of “24” before the 2008 election, would that be political in nature? McCain? supporters might argue that it is because one of its heroes is a black president; Obama supporters might argue it emphasizes national security issues. Fundamentally, when is speech not political? To say speech is political or not is transcendental nonsense, since forms expression promote certain values and ideas that influence the political process.

So how can we fix our political process? There are certain things I think most people would agree that we would want. We want more candidates. We want these candidates to have an even amount of media coverage. And we want to have unlimited unbiased information about these candidates in this media coverage. Free speech is only important so far as it promotes democracy. To use free speech rights as an excuse to harm democracy is transcendental nonsense, using formality and ignoring the results. The question remains, what system would better achieve these results?

I don't understand this draft. It doesn't seem to be in touch with the law it purports to be discussing, and I don't understand the political analysis either. What is the central point of the essay? Let's put that out first, clearly, show how whatever your point is relates to the constitutional law of the United States as it actually exists, if that's relevant, and then explore whatever the implications of the idea are for current political reform efforts, if any.