Citizens United v. FEC

"I hope we shall... crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country."

-- Thomas Jefferson, Dead Racist

The US Supreme Court recently struck down certain provisions in the McCain-Feingold Act pertaining to “electioneering communications.” The decision involved the extent to which corporations may lay claim to free speech rights, and since the ruling, debates have been cropping up all over the internets regarding its legitimacy. I would now like to offer my most humble opinion on the matter.

The first thing worth noting is the relatively small impact this case will have on upcoming elections. The Supreme Court did not doom us all to an inevitable corporate-apocalypse, at least with this ruling anyway. As Politico’s Jeanne Cummings writes, summarizing the opinion of several experts, the main effect of the Court’s decision will be “a shifting of cash that’s already in the system away from so-called 527 groups… For decades, [corporations have] expressed their views through trade associations that can shield the involvement of their members because they don’t disclose membership lists.” Making the same point, Salon columnist Glenn Greenwald comments:

“Corporations find endless ways to circumvent current restrictions -- their armies of PACs, lobbyists, media control, and revolving-door rewards flood Washington and currently ensure their stranglehold -- and while this decision will make things marginally worse, I can't imagine how it could worsen fundamentally.  All of the hand-wringing sounds to me like someone expressing serious worry that a new law in North Korea will make the country more tyrannical. There's not much room for our corporatist political system to get more corporatist.”

Any claim that this ruling will fundamentally alter the already-rotten establishment culture is just silly. That said, however, this case is still important. Although the campaign finance rules on the books were relatively weak, the Supreme Court has now effectively prevented stronger regulations from being passed in the future. In addition, and perhaps more importantly, the Court has maintained its long-standing jurisprudence that declares corporations to have the same rights as people.

Indeed, the fact that some believe corporations to be merely “organized groups of people” (and therefore entitled to a person’s rights), is one of the most coherent arguments of the majority’s supporters. But this argument ignores two important features of modern corporations: 1) legal mandates to maximize shareholder profit, and 2) limited liability.

A person, as one typically thinks of her, has many motivations. Sometimes she is hungry, sometimes she is sleepy, sometimes she wants to be with loved ones, sometimes she wants to watch a ballgame, etc. As a result of these numerous and complex motives, in some circumstances she may only care about herself, and sometimes she may put others’ needs before her own. A corporation, on the other hand, can have only one possible motive: shareholder profit (i.e. self-interest). This does not necessarily have anything to do with the motives of the people involved in the corporation; it is merely a result of the system of incentives and disincentives that we have allowed our governments to create. As former corporate securities attorney Robert Hinkley noted back in 2002:

“It dawned on me that the law, in its current form, actually inhibits executives and corporations from being socially responsible… Many activists cast the fundamental issue as one of corporate greed, but that’s off the mark. Corporations are incapable of a human emotion like greed. They are artificial beings created by law. The real question is why corporations behave as if they are greedy. The answer is the design of corporate law.”

So what is this design? The specifics vary somewhat by jurisdiction, but a virtual constant is that the profiteering-interests of shareholders are said to be identical to the interest of the corporation. Commenting on this feature, Hinkley says that “the people who run corporations have a legal duty to shareholders, and that duty is to make money. Failing this duty can leave directors and officers open to being sued by shareholders.” Does this even remotely sound like any person or group of people that you have ever known? Of course not. In fact, psychologists have a descriptive term for a person that only focuses on her own self-interest: psychopathy.

The second important distinction between corporations and people involves the notion of limited liability. Because corporations are given this privileged status by governments, an investor who gives financial capital to a corporation can only be held liable for that specific investment, not the debts of the company itself. The monetary benefits of this state-created privilege are enormous. As Dean Baker, Co-Director of the Center for Economic and Policy Research explains:

“Because of limited liability, the individuals that own a corporation can poison our water, sell dangerous products to our kids or cripple their workers and not pay for the damage they have caused because the government limits their liability to the value of the stock they own.”

To those who claim that corporations are merely “groups of people,” how many groups of friends do you know that can brazenly violate the law without facing strong penalties? When consequences are removed from a group’s actions, calling it just "a bunch of people" (with the evocation of traditional, human motivations and desires) is plainly misleading. Ambrose Bierce famously defines a corporation as “An ingenious device for obtaining individual profit without individual responsibility.” Indeed.

The extreme and constant self-interest required of modern corporations, coupled with the removal of the already-meager financial consequences for attempted cost-externalization, creates a system that rewards behaviors not typically associated with normal groups of people. And these two features, combined with corporations’ immortality and capacity for gargantuan levels of wealth and power (“Of the world's largest 150 economic entities, 95 are corporations.”), make it clear that they should not be treated in the same fashion as real human beings. To undo the stranglehold that these corporations have on American democracy, we should support measures to level the playing field. First, we should support public financing of all elections to negate corporations' financial relevance. And second, we should work to pass a constitutional amendment clarifying that the 1st Amendment only applies to real people.