| Great discussion on some of the reasoning surrounding Citizen's United, which reinforced the concept of "corporate personhood," and promises to unleash corporations on political campaigns.
James Fallows points out this statement from Chief Justice John Roberts, challenging the notion that corporations engaging in elections causes harm to shareholders:
"Roberts sharply challenged this line of argument. 'Isn't it extraordinarily paternalistic,' he asked, 'for the government to take the position that shareholders are too stupid to keep track of what their corporations are doing and can't sell their shares or object in the corporate context if they don't like it? ... ' "We the government have to protect you naive shareholders." '
As Solicitor General Elena Kagan pointed out, most folks own stock through mutual funds and retirement funds, and have little or no influence over corporate action or even knowledge of what the corporations are doing. Fallows:
Of course Kagan's response is the practical and real-world one. Virtually all such "wealth" as my wife and I hold, apart from our house, is in low-cost indexed mutual retirement funds. I literally have no idea which specific companies I might have bigger or smaller positions in. By the prevailing wisdom of the day, I'm behaving rationally for a non-expert prudent investor. By Roberts' standard, I am "too stupid to keep track" of what every one of these companies is doing and shifting my positions day by day in response. Or maybe just too lazy.
Felix Salmon chips in:
As long ago as 2003, Roberts owned no fewer than 46 different common stocks, on top of 31 different mutual funds, one ETF, and a REIT. I very much doubt that he was keeping track of what all of the corporations he owned were doing, and selling his shares or objecting in the corporate context if he didn't like it. And I don't think that he believed that his mutual-fund managers were doing that either. Maybe he assumed that the magical qualities of the efficient market hypothesis meant that he didn't need to do that, and that some other group of shareholders would do it for him....
As Justin Fox noted in a 2006 column, it's been some time since boards of directors have actually performed their function, "that of vigilant monitors of CEO pay and performance," having long since been taken over by the managers they were supposed to watch. Roberts' notion that corporations answer to any kind of populist shareholder pressure can't be characterized as merely quaint, but instead as dangerously oblivous.
Glenn Greenwald, on the other hand, defended the court's decision, arguing that it did strike down campaign finance laws that were overly burdensome especially to nonprofit organizations and that it won't give over more power to corporations because, essentially, they already control the body politic. Here's the main basis of his argument:
I tend to take a more absolutist view of the First Amendment than many people, but laws which prohibit organized groups of people -- which is what corporations are -- from expressing political views goes right to the heart of free speech guarantees no matter how the First Amendment is understood. Does anyone doubt that the facts that gave rise to this case -- namely, the government's banning the release of a critical film about Hillary Clinton by Citizens United -- is exactly what the First Amendment was designed to avoid? And does anyone doubt that the First Amendment bars the government from restricting the speech of organizations composed of like-minded citizens who band together in corporate form to work for a particular cause?
But, as Fallows, Fox, and Salmon point out, corporations aren't "like-minded citizens" who "band together" to "work for a particular cause." Unlike most non-profits I know, corporations are a mass of shareholders oblivious and captive to the irrational or biased political beliefs of a small group of executive managers. Ironically, that's what Justin Fox argues violates Milton Friedman's demand that corporate executives shouldn't "impose their own notions of social responsibility on corporations that were owned by others."
The individuals who make up the electorate in the United States are, as Friedman described, beings of many facets - their actions and their views shaped by pecuniary self interest but also by values, beliefs, and loyalties that might conflict with that self interest. The ideal for-profit corporation, on the other hand, is out to do nothing but make as much money as it can "within the rules of the game." It is supposed to behave in a fashion that for an individual would probably be described as psychopathic. And if corporations are allowed to play a decisive role in shaping the "rules of the game," we have effectively put the inmates in control of the asylum.
This feels like a pretty compelling justification for treating corporations differently from individuals in the political process. |
