Citizens United, Thoroughly Debunked
Citizens United, Thoroughly Debunked
I admit I haven’t paid too much attention to debates over Citizens United, since I regard the direction taken by regulation, control over who may contribute to political campaigns and how much they can put up, to be misguided. I would like to see comprehensive control over how much money can be spent on behalf of candidates, period. (I would also like to see a mandate that all such contributions be funneled through an intermediary, like a public political finance fund, that keeps the identities of donors hidden from recipients.) While CU has been yet another blow to democracy, the demand that plutocrats use one vehicle to flood the system rather than another is second best.
That said, I was struck by this new critique of CU. Its authors, Jonathan Macey and Leo Strine, base their analysis on a point I was familiar with in the context of economic debates over the Jensenian shareholder rights theory of the firm, but its application to CU is obvious once you think about it. The article ranges over a number of topics, but here’s the core, taken from the abstract:
In this Article we show that Citizens United v. FEC, arguably the most important First Amendment case of the new millennium, is predicated on a fundamental misconception about the nature of the corporation. Specifically, Citizens United v. FEC, which prohibited the government from restricting independent expenditures for corporate communications, and held that corporations enjoy the same free speech rights to engage in political spending as human citizens, is grounded on the erroneous theory that corporations are “associations of citizens” rather than what they actually are: independent legal entities distinct from those who own their stock…..[C]orporations do not have owners, they have investors who have contract-based, financial interests in the firms and limited management rights.
The best ideas often seem obvious once they are put forward, but the trick is to see them in the first place.
The paper Peter references is a must read. Alas we have found some wannabe lawyer (let’s make that troll) named LetUsHavePeace who clearly has not read this paper but he keeps writing his weak defenses of Citizens United. I had a follow-up post specifically asking LetUsHavePeace take into account the economics in this excellent paper. He hasn’t but he keeps trolling.
The obvious point has been made many times.
The corporation signs effective non-disclosures upon entering the limited limited contract with government. It was a voluntary.
First, when and if the US rebounds from its current predicament of moribund labor union density, then, unions — broadly representing the majority’s economic and political interests — will provide as much money as billionaires to buy federal and local officials and have most all the votes too.
For how to rebound from critical econ and pol condition, read here:
While waiting (impatiently I hope) for America’s safe and sane organized labor future: Congress can provide campaign matching funds today: match every political contribution dollar with government supplied dollars: watch incumbents flee from donors.
Corporations are government chartered collectives. Until the late 19th century, they were tightly regulated and limited in their powers. For example, a banking company couldn’t own a railroad. Since then corporations have been granted more and more rights and powers and less and less has been required of them. A good book to read on this would be Berle & Means ‘The Modern Corporation and Private Property’. It’s as relevant today as it was back in the 1930s.
The idea that the corporation has rights would make the Founders roll over in their graves. It’s a creature of the state, Whatever Constitutiuonal protection given to the corporation must be seen as derivative of the rights of the people using the corporate form. But a corporation organized as an economic enterprise cannot be seen as representing any political opinions of anyone not directly related to advancing the interests of the enterprise.
The obvious exception is corporations that are formed for the purpose of expressing the political opinions of its members. The corporate form is a mere convenience allowed for taxation and liabilityreasons. But there, too, rights accorded to the corporation can only be considred derivative of its memebership.