What Hath "the Supremes" Wrought?
The January 21 'Citizens United' ruling on corporate funding of political campaigns strikes raw nerve(s)

Amazingly, what should have been a routine narrowly construed remedy to a violation of a nonprofit conservative group's (Citizens United's) freedom to show a documentary about Hillary Clinton seems to have opened a floodgate for corporate money and power into the campaign process. But on the bright side, The People are beginning to question the incestuous relationship between the corporate power and the state power... and the moral legitimacy of both. — bw

On Thursday, January 21, 2010, the US Supreme Court, overruling two important precedents about the First Amendment rights of corporations, in a case that could have been judged narrowly, ruled broadly that the government may not ban political spending by corporations in candidate elections.

And the Shinola hit the rotating blades of Left, Right, and Middle.

Big-government leftists were apoplectic that the balance of political power would tip from Democratic public-employee organizations and labor unions to Republican fat-cat business machinery, while big-government rightists cheered the ruling because, well, fat cats deserve government welfare as much as those bums in the inner city.

Libertarians are divided, even sharply...

The “corporation”-friendly (or less concerned) libertarians look at the ruling as a partial victory for free speech—the case was a conservative nonprofit corporation Citizens United (CU) suing the Federal Elections Commission (FEC) for prohibiting CU from showing a documentary called “Hillary: The Movie.” It's hard to make a proliberty argument that CU shouldn't be able to skewer Hillary... or, on the other side, that a (noncompulsory) labor union should be prohibited from dumping on McCain-Palin.

My exposure to the rift has been from a vantage point as Webmaster of the Libertarian Party of Michigan (LPM)... where both sides have emerged. In Lansing, a group of LPM members led by Will White issued a news release on January 22:

“…Calling the recent Supreme Court decision to allow unlimited corporate funding of electioneering “another serious violation of the Constitution,” some Michigan Libertarians have begun a movement to impeach Justice Kennedy, the chief author of the opinion and the only sitting justice who also sided with the majority in the 2005 Kelo vs. New London, CT decision on eminent domain.  That decision gave government the power to seize private property and give it to corporations promising higher tax revenues.  These decisions show the court, and Kennedy in particular, has forsaken the rights of the individual in deference to big business….”

The entire text of Will's news release I've posted in this PDF file. (And I recommend reading it, because it articulates well the studied views of, well, a 'large number' of libertarians.) Others in the LPM Executive Committee (LEC) disagreed with the Lansing group, and the following release on the LPM Website was issued on January 23:

The Libertarian Party of Michigan applauds the recent Supreme Court decision in the Citizens United case that strikes down certain campaign finance laws outlawing political activity by corporations or unions. Libertarians believe campaign finance laws are restrictions on free speech and should be repealed.  They recognize that individual rights to political speech also pertain to groups of individuals however they may be associated.  "Besides," as Libertarian Party of Michigan State Chair Emily Salvette noted, "campaign finance laws are just symptoms of 'Big Government' disease." Her suggestion: "Shrink government back to its Constitutional limits so it isn't interfering in the economy. Then business and unions won't bother buying politicians’ support with campaign spending."

As a consequence of the brouhaha among my LPM pals—and because I sensed a lot of my friends still hanging back in Leftist World thought the sky had fallen—I wrote a small story on the CU vs. FEC case for the Michigan Libertarian newsletter. Trying to be journalistically objective, my research included the following references:

• the New York Times article describing the decision
• an Institute for Justice column endorsing the ruling
• a brief history of the corporate law in America [1]
• a middle-of-the-road analysis from Glenn Greenwald in Salon.

In that brief Michigan LP column, I ended:

Whatever develops in the freedom movement as a consequence of last Thursday’s Supreme Court decision, I think most of us will agree it’s good that the big issues about the proper relationship between the state and “the corporation” are aired out and hammered flat. The discussion has been put off for far too long. [My guess is many of the older guard LP types who hail from the Ayn Rand era look at corporations as not unwarrantedly privileged at all. The chief philosophical apologia for the "corporate way" is probably Rand-insider Robert Hessen's book, In Defense of the Corporation (1979). <--this bracketed note not in Michigan LP article.]

The CU ruling does not appear to reign in the FEC or help eliminate the burden of the onerous campaign finance laws upon the disenfranchised political parties. The FEC remains nothing but a series of hoops that third parties have to jump through… designed to maintain the two-party monolith. Duh. Did the ruling add a hoop, remove one, or do nothing much at all hoopwise?

Then I referred readers here, to my editorial on the subject. The additional back and forth is interesting, too, among all the people in the LPM leadership and on the periphery. Much of that conversation I'm sure is representative of libertarian thinking nationwide, and even of general public thinking. The table below summarizes the argument that occurred within the Libertarian Party of Michigan leadership, from top to bottom in time:

And that's where yours truly came in. I suggested to the LPM chair that she not post that news release on our Website. This issue was a hot one in the general public, causing 60s-antiwar-level outrage at the government.

As freedom persons who are supposedly outraged at the government on principle, why would we side with government-bozo/Supreme-Court-Scumbags, when 99/100 they're not right? Talk about shooting ourselves in the foot!

Moreover, a cursory reading of the material presented by White, even the New York Times description of the ruling, indicates what the Supremes did just might be an egregious, overbroad case of judicial activism. Did not this ruling, in fact, put a nail in the coffin of government run by "the people" (as opposed to powerful financial interests who suck at the government bosoombah)?

"CU vs. FEC" sure ain't about free speech...

Indeed, quite the opposite. It does represent a grand sellout to the special interests. Yet to be candid, as Glenn Greenwald's column in Salon sagely opines, it's hard to sell us out any more than we've already been sold out:

"I'm also quite skeptical of the apocalyptic claims about how this decision will radically transform and subvert our democracy by empowering corporate control over the political process.  My skepticism is due to one principal fact:  I really don't see how things can get much worse in that regard.  The reality is that our political institutions are already completely beholden to and controlled by large corporate interests (Dick Durbin:  "banks own" the Congress).  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.  Does anyone believe that the ability of corporations to influence our political process was meaningfully limited before yesterday's issuance of this ruling?"

So to all my handwringing leftist friends: Lighten up! The cookie jar was given away years ago. This decision does very little except to make the giveaway more explicit... with a polite window-dressing to some small-potato corporations who now may document misdeeds of the Great Hillary without arbitrary restriction... just like the big boys, but still with all kinds of government barriers.

Do you really think the FEC is losing power here? Au contraire.

What I want to do now, as a contextual wrapup, is to publish Will White's final response to the LPM leadership. From what I've read over the years, a lot of it recently[2], I've reached essentially the same conclusions regarding the corporate power as Mr. White has.[3]

Will White's 'Final Answer'

Will expresses the popular libertarian argument quite elegantly, IMHO:

Sent: Sunday, January 24, 2010 5:20 PM
Subject: Re: the Supreme Court decision on corporate political spending

With all due respect to your collective opinions, I think a closer examination and evaluation of the decision may illuminate some errors in logic.  Please read Justice Stevens' dissent in its entirety and perhaps you will understand the true significance of this terrible decision to the health of the Republic. 

Perhaps you have all missed the collective outrage from across the country by voters of all stripes and persuasions.  This is a very important issue to most voters who find the decision abominable (or should I say Obama-nable)!  This is not a bit of "trivia" as Keith says, and I am well aware that many corporations are small (I have two myself).  This is about big money and power brokers corrupting government and the electoral process. 

The main problem is that the Supreme Court decision failed to address the important distinctions between non-profit and for-profit corporations.

The constitutional promise of equal rights quickly evaporates when immensely wealthy corporations compete against individuals.

If Libertarianism is about anything, it is about the rights of the individual and the role of government to protect those rights.  Can anyone explain to me how this decision protects my individual rights in any way, shape, or form?

The idea that voters will be able to "shrink government back to its Constitutionally proscribed limits so it isn't interfering in the economy" as Emily suggests for a press release, is pie-in-the-sky wishful thinking that puts Libertarians solidly within the fringe element.  "If" government wasn't so interfering and "if" the government wasn't for sale" are pretty big IFs.  That seems like an admission that government is for sale, which it is, and guess who is buying it?  Not individuals (except as pawns, couriers and lobbyists for the multinationals).[4]

And as you know Bill, free speech has limits—you cannot yell "fire" in a crowded theatre for example, unless there is actually a fire.  Likewise, advertising (and use) of tobacco and liquor is limited because of their harmful effects (and although I disagree with that, they are nonetheless laws well respected by the great majority of citizens).  Nor can you publish lies about someone, although that has not stopped a lot of politicians and political action committees.  This ruling will exacerbate that problem.

Giving free reign to multinationals whose budgets are bigger than many states is giving them control of the debate in the political arena.  To paraphrase an old saying—you cannot argue with someone who runs a printing press and buys ink by the barrel just by printing a few posters.  Likewise, you cannot argue in the political debate unless you have millions to buy air time (except now it's in the billions).

Campaign finance laws in general are definitely a convoluted, unconstitutional mess though, especially the BCRA (Bipartisan Campaign Reform Act of 2002).  A better system might be to forbid any and all political ads the last month before elections and instead require that all media outlets provide equal time to all competing views and candidates.  This would level the playing field and allow all opinions (especially independents) to be heard.

The constitutional promise of equal rights quickly evaporates when immensely wealthy corporations compete against individuals.

To reiterate, CORPORATIONS ARE NOT INDIVIDUALS.  THEY DO NOT HAVE ANY RIGHTS UNDER THE CONSTITUTION.  That is why they are heavily regulated in the political arena.  They cannot vote or run for office.  THEIR PURPOSE IS TO LIMIT INDIVIDUAL LIABILITY, RAISE CAPITAL, AND MAKE A PROFIT.  The profit motive will always trump a "do the right thing" motive when given a chance.

I agree corporations are vastly over-regulated in commerce, and as a confirmed laissez-faire capitalist, abhor the restrictive rules of commerce.  This decision is not about commerce though. 

This is about representative government and the principle of one-man-one-vote.  The effect of this ruling basically LEGITIMIZES CORPORATE CONTROL OF GOVERNMENT.  Not only domestic corporations, but corporations with substantial FOREIGN ownership now have an open door to control the political arena.  I am sure this decision was roundly applauded by Rupert Murdoch, Kim Jong II, Hugo Chavez, Hu Jintao, the Saudi sheiks and their ilk.

On the domestic side, General Motors and several major financial institutions are currently owned in large part by "We the People," but effectively controlled by government regulators.  When these "citizen owned" corporations lobby and expend campaign funds, the individual stockholders (and unions) have almost no voice in their political actions.  The government is using our tax dollars to lobby on its own behalf (not to mention Wall Street's behalf)!  Seems a little incestuous to me.

In my opinion, political parties and non-profit groups (which are obviously treated differently than for-profit corporations) should be the only legitimate means for individual citizens to form associations to promote candidates and influence elections.

If we think it is hard for third parties now, this ruling will make it next to impossible.

Please consider these points, read the entire decision, and then think about what it really means for the immediate future.

Will

P.S. - As a supporter of the Institute for Justice for many years, whose mission and actions I agree with 100% (until now), I was dismayed at their stance on this issue and have told them so.  Even top notch attorneys make mistakes once in a while.

P.S. - Just to clarify, while I agree campaign finance laws in general are mostly unconstitutional and a big mess, this ruling just makes them worse.  They should have just scrapped the BCRA altogether and told Congress to start over.

So that leaves a few final comments from yer humble CC proprietor.

The Bart Simpson Solution

First, when you look at the history of "the corporation," through references [a] or [b] or some others, you discover that they were established quite apart from the normal and absolute rights of men to engage in production and trade in all manner of voluntary associations or relationships. Nossir, the corporation was chartered by the state—initially by the Crown—for a specific purpose and given special privileges in return for specific duties. In post-Revolution America, the following characteristics were typical:

• Limited Land Holdings: Many states imposed limitations on the amount of land a corporation could own. Most often the amount of land was limited to that required for the factory or mill site.
• Limited Capital Holdings: Once again many states limited the amount of money or financial assets a corporation could own. Some states banned corporations from owning other corporations or stock in them. Once a corporation exceeded the limit, it had to be either dissolved or split.
• Specific Purpose Charters: This was perhaps the most common of all restrictions in the early years of this country. Corporations were chartered only for a specific purpose such as the building of a canal or road. Once the stated purpose was completed the corporation was dissolved. Now charters are issued that enable a corporation to engage in any type of business.
• No Limitations on Liability: Directors, managers and shareholders were held to be fully liable for any debts or damages. In some cases the lender or injured party was entitled to double or triple the damages. Other states imposed extremely high interest rates until the debt was fully paid.
• Restrictive Shareholder Rights: The internal governance of corporations was much more restrictive than today. Shareholders had more rights. In case of mergers some states required a unanimous vote of shareholders.
• Restrictions on Pricing: Some states maintained the right to set prices on corporate products. Wisconsin for one gave the state legislature the power to set prices on products after reviewing the corporation's expenses.
• Revocable Charters: States maintained the right to revoke or change a charter at the will of the legislature. Almost all of the states adopted this clause after 1820.

The idea was the state (as the repository of the popular power) controlled the corporation, not the other way around. In other words, the people were in charge, through their legislatures, of any special capital-raising organizations, which were shortlived, had no human rights... certainly no personhood. Unfortunately, as we have seen, the corporate genie escaped the bottle, became a monster, and now defies human wishes.

It's a long argument to make that we humans must determinedly put the corporate genie back in the bottle. So let's not make that argument in this column. Let's simply consider how to remove corporate power—and pseudo-corporate power, e.g. unions, banks, regulatory loose cannons like the IRS, etc.—from the electoral process... and from economic spoils of political power.

On a ride to a golf and poker outing a few years ago, an engineering friend of mine—possessing, incidentally, the best natural engineering mind I've ever encountered (in my admittedly brief career in that profession)—and I were discussing the campaign finance laws. As a Libertarian, I was explaining to him that the system was "fixed" against the new and liberating ideas our party represented. I won't give his name (because he's the kind to worry if the authorities are rounding up libertarians, they'll nab anyone the libertarians mention, next). But he's an avid Simpsons fan, so I'll call him Bart... and his slap-your-forehead idea I'll call the Simpson Solution:

The Simpson Solution

To eliminate undue corporate influence on who is elected and on who receives the spoils of office, implement the simple rule that only natural, individual human beings may provide financial support to political candidates.

It took a minute to sink in, I said, "Bart, well, the reason you can't do that is... " And I couldn't think of any reason! I was stunned. I said, "Bart, wow, that's so simple it's brilliant! Like cutting the Gordian Knot, extracting all the baloney stuff." He, of course, didn't need to be told what a good idea it was, he had plenty of confidence in his analytic abilities: "If you remove corporate funding from campaigns, the person elected won't be in the pocket of the special interests. How could he be? Plus, there's more chance the person will represent the real people in the area." Bart Simpson rules!

So no need for government election commissions... or bureaucracies forcing you to run your campaign this way or that... or, that great bugaboo of the Big Government Left, tax funding of elections. Problem solved. Refund due. Next.

By removing corporations from the election cycle, we prepare for the next great stage of human evolution—the end of corporations as privileged political entities entirely. Plenty of fine minds are prepared for working out the details on that one. And in ten years we'll look back on CU vs. FEC as a time-consuming distraction: "How could we have been so silly?"

"I hope we shall take warning from the example of England and crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our Government to trial, and bid defiance to the laws of our country" — Thomas Jefferson

[1] Note this particular reference is so rife with grammatical errors, I had to ingest a huge module of salt to accept any of the substantive conclusions. Nonetheless, his background information is important and mostly corroborated by others with better credentials and good English, e.g. Thom Hartmann's Unequal Protection: The rise of corporate dominance and the theft of human rights.

[2] Ditto: Thom Hartmann's Unequal Protection: The rise of corporate dominance and the theft of human rights

[3] In my admittedly unique worldview, the corporate power was the meta-tool employed by the Kleptocons to reestablish oligarchic control following their nearly fatal loss of power as a consequence of the American War for Independence.

[4] I want to put a plug in here for my lovely ex, Rose, who, in this CU vs. FEC conversation on corporate privilege and others, brings up the need to unrepeal the Glass-Steagall Act. As I understand it, Glass-Steagall prohibits banks from being investment firms and vice versa. Kind of an anti-Fat Cat law that might have prevented a lot of the recent looting of the common man by the central government and its crony capitalists.

###

2010 February 01
Copyright © Brian Wright | The Coffee Coaster™
Corporate Power | Citizens United vs. FEC | Election Laws | Supreme Court

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