TT's Lost in Tokyo — by TokyoTom

[from a comment at the “we build our society” Facebook group]

[A]s a factual matter, the greatest Industrial Revolution pollution occurred AFTER governments started to create #LimitedLiability corporations whose effect (and aim) was to protect INVESTORS from the downside risks of doing sh*t that hurt OTHER PEOPLE.

Even today, most of our largest social problems flow from risk socialization and lack of accountability, proximately resulting from wonderful LAWS that serve the powerful, while pretending to “protect” the poor and dumped upon.

Fukushima happened because NO ONE had any personal skin in the game. What happened was no “surprise” or “Act of God”, but an expected result where NO ONE was f*cking responsible for the downsides of poor decisions that benefitted themselves or their organizations, favored corporations with monopolies, whose shareholders and lenders are protected from liability, the banks that are protected by government, the executives and regulators who often retire to the regulated company, the mega-construction firms who built the reactors, the legislators who imposed taxes on all users to bribe the local communities into accepting them ….

Where no one is accountable, bad sh*t is no surprise, but more LIKELY to occur. The same story can be written of the BP/Gulf of Mexico disaster, the ongoing oil sands disaster, coal/oil pollution, the god-damned War Machine/Prison/Industry/Drug War complex, and the “unexpected” financial crisis resulting from monetary gaming by the Fed and a gazillion regs that left depositors and shareholders powerless in the face of looting by bankster elite-wolves.

The answer is NOT “more govt!” or “more regulation!”, but SMARTER regulation that RESTORES RESPONSIBILITY and stops the lie of govt “protecting” people. Keep regulating the old/big cos, but LET THE SMALL and ACCOUNTABLE BUSINESSES FREE. Firms run by managers who are members of the communities in which they operate, and whose owners have no government-granted #LimitedLiability be kept in check by their communities and the risk of losing their personal assets, and will, via the process of #CreativeDestruction, supplant the corrupt dinosaurs.

[Here’s the title I preferred but was apparently too long. Dang. “WSJ reveals itself as another stupid MSM #CorpSpeak organ, uninterested in Constitutional or representative government, and perversely, as an ally with Dems in engendering a oppressive, arbitrary, corrupt & broken federal government”]

I’m referring to the remarkably thick-headed, crudely pro-corporate and anti-Democrat opinion piece by the WSJ’s opinion page deputy editor Daniel Henninger on February 11, “The Scalia v. Stevens Smackdown In President Obama’s view, corporations are anathema“.

Henninger is long on how the Supreme Court’s recent 5-4 decision in Citizens United v. Federal Election Commission “sent liberaldom screaming into the streets“, on Scalia’s supposed “smackdown” of the very vehement disagreement by Justice Stevens for the minority, and painting a broad strokes picture of an Obama administration and liberal minority that is profoundly “out of synch” with the “basic world view” of a majority citizens working in the private economy (in which corporations play the central role) and who are close to “a tipping point over the scale and role of government”..

I agree with most of Henninger’s criticisms about the Obama administration, but otherwise his editorial is shockingly uninsightful, uncritical, uninformed and uninterested on a number of key points, e.g.,

– in understanding the real nature of the dispute within the Supreme regarding important issues of Constitutional interpretation (such as the manner in which the “conservative” majority abandoned any pretence of an “originalist” interpretation of the First Amendment),

– in examining the breath-takingly radical and anti-democratic departure made by the majority from prior decisions – including decisions by the not-so-liberal Rehnquist – in overturning a statutory framework established by the legislated branch of the federal government (and state governments) over a period of centuries,

– in examining the many ramifications of this decision on related inalienable First Amendment rights that corporations have been endowed with via this decision, such as rights that other “persons “- us humans – have to speak anonymously, to not speak truthfully, and to run for office;

– in examining key federalism issues, particularly the role and authority of states in establishing corporations and granting them powers, and how the majority has concluded that the First Amendment now dictates that it is the Supreme Court, and not the states, that determine what rights to speak that these creatures of the states, 

– in understanding how profoundly different corporations are different from humans, as well as from more traditional associations, such as partnerships.

– in examining the way that corporations, by virtue of the profoundly un-libertarian grant of limited liability exended by the states to corporate shareholders leads to a shifting of uncompensated damages and risks to third parties, and has fuelled both the vast expansion of the size, scope and powers of corporations, but also the role and size of the opportunisticfederal government, which has continued to aggrandize power to itself at the expense of the states, in significant part on the basis that citizens were demanding that government step in to check the abuses of corporations (and that corporations preferred a central and more easily manipulable legislator/regulator); and

– in examining the political and ideological battle between left and right to control the media corporations and conglomerates that had held a privileged position inseeking to sway voters at election time.

I post in haste, and so will have to revisit this post to flesh out my remarks, but I hope that the reader will  see that, while professing to offer insights, Hennninger and the WSJ have done us all a disservice.

Without delving too far into the decision here, clearly it undermines further the authority of the states, while handicapping the power of Congress to limit corporate spending intended expressly for the purpose of influencing government policy. This can lead only to further rent-seeking by large corporations seeking advance from government rather than relying on their own prowess in the marketplace, and to increasing corruption in a Congress and administrative government that are already broken and, indeed, profoundly mistrusted by us living, breathing “persons”.

Like the Roberts Supreme Court, the WSJ has show itself to be interested not it principle, but in policy. Sadly, a lack of principle goes a long, long, long way.

[For readers who aren’t aware of them, here are my preceding posts on corporate “free speech”]

Lessig doesn’ expressly say it, but we also need to rein in the “self-evident”, “unalienable rights” of all corporations

Actually, the last quip in the title are my words, not Lessig’s.

Last week, I noted Harvard law prof Lawrence Lessig’s earlier rebuttal to Glenn Greenwald regarding the Supreme Court’s decision in Citizens United to overthrow centuries of American law and jurisprudence on the rights of corporations and to enshrine corporations – legal fictions created by states and with powers very severely restricted at the time the Constitution was negotiated and ratified by Americans who had recently rebelled against British company-structured colonies and monopolies – as entitled to “speech” under the Bill of Rights on the same basis as men, and made the following observation:

As an aside, other, non-corporation forms of property that had real human bodies – such as slaves – were clearly NOT afforded Constitutional rights of any sort at the time of the Revolution/Bill of Rights; freed slaves as they became citizens and non-citizen Chinese coolies received Constitutional protection ONLY when the Fourteenth Amendment was expressly adopted to extend “privileges and immunities” to citizens and “due process” and “equal protection” to “persons”.

It was this reference to “persons” that smart/prevaricating lawyers for extremely influential railroad corporations were able to persuade a sympathetic Supreme Court – in unargued dicta by a Justice and recorded in headnotes by a Court’s Reporter who were both former railroad lawyers – to the effect that either (i) the 14th Amendment-adopting states had all intended to mean that it would be the federal government, and not the states creating corporations or giving them permission to do business in-state, who would determine whether domestic or out-of-state corporations received “equal” protection of state laws as did citizens or (ii) that such was the hidden purpose of some railroad-friendly drafters of the Amendment, and that such hidden purpose should govern in interpreting the Amendment.

Is there any surprise that most of the subsequent 14th amendment case law is about how monied corporations vigorously pursued and advanced their interests, while blacks and foreign residents continued to get short shrift (“separate but equal”) from unconcerned federal judges?

Now, the thoughtful and highly regarded  Lawrence Lessig has written a must-read article in The Nation; “How to Get Our Democracy Back; If You Want Change, You Have to Change Congress” (February 3; February 22 print edition).

I won’t reprise the essay here — I have a few comments on what I see as serious shortcomings and blind spots in Lessig’s analysis, but the draft of these grows long (like my aside above) – rent-seeking; corporations; religion; limited liability; Constitution, speech, states, federalism – so I will post them separately.

Lessig’s article is a key starting point and long enough, though I will advise/remind the curious reader of my preceding posts on  corporate “free speech”..

In calling for amendments to the Constitution, Lessig joins others that have come to the same conclusion years ago, such as “whacko”, snivelling local communities/enviro-commie fascists (snark!) seeking to control the impacts of large multinational corporations on local communities and resources, and some state-righters seeking to breathe some meaning back into the Tenth Amendment and the moribound body of federalism. More on this later.

Those who want to get further stirred up might want to give another listen to the new music video Anthem of what our Founding Fathers said to King George:  It’s Too Late to Apologize.

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

—Thomas Jefferson, letter to George Logan, 1816 [note: this may be a spurious quote.]

“Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.”

—Grover Cleveland, 1888

As an aid to readers who want a deeper background on the path that brought us to the latest Supreme Court “free speech” decision that further enthrones corporations over individuals, I’d like to start posting various materials that I’ve  run across. The first is the essay below by Michael P. Byron, a Vietnam-era Navy vet who teaches Political Science at CSU San Marcos, as well as at Palomar, Mira Costa, and Mesa Colleges in San Diego.. He is the author of two books on the dynamics of the collapse of societies and was the Democratic Party’s candidate for the 49th Congressional District in 2002 and 2004. I reprint the essay in full, with Mike`s permission (any bolding or brackets are mine).

Jefferson Was Right 05/24/03

Most Americans don’t know it but Thomas Jefferson, along with James Madison worked assiduously to have an 11th Amendment included into our nation’s original Bill of Rights. This proposed Amendment would have prohibited “monopolies in commerce.” The amendment would have made it illegal for corporations to own other corporations, or to give money to politicians, or to otherwise try to influence elections. Corporations would be chartered by the states for the primary purpose of “serving the public good.” Corporations would possess the legal status not of natural persons but rather of “artificial persons.” This means that they would have only those legal attributes which the state saw fit to grant to them. They would NOT; and indeed could NOT possess the same bundle of rights which actual flesh and blood persons enjoy. Under this proposed amendment neither the 14th Amendment of the US Constitution, nor any provision of that document would protect the artificial entities known of as corporations. Jefferson and Madison were so insistent upon this amendment because the American Revolution was in substantial degree a revolt against the domination of colonial economic and political life by the greatest multinational corporation of its age: the British East India Company. After all who do you think owned the tea which Sam Adams and friends dumped overboard in Boston Harbor? Who was responsible for the taxes on commodities and restrictions on trade by the American colonists? It was the British East India Company, of course. In the end the amendment was not adopted because a majority in the first Congress believed that already existing state laws governing corporations were adequate for constraining corporate power. Jefferson worried about the growing influence of corporate power until his dying day in 1826. Even the more conservative founder John Adams came to harbor deep misgivings about unchecked corporate power. [Such an amendment would have applied only to the federal government; Jefferson was unsuccessful with this proposed item largely because many states already had already enacted very restrictive company laws.] A few years after Jefferson’s unsuccessful attempt to incorporate this amendment into the Bill of Rights, the fourth Chief Justice of the US Supreme Court, John Marshall, unilaterally asserted the Court’s right to judicial review in the seminal case of Marbury v. Madison in 1803. In practice this meant that the Supreme Court would have sole and unchecked power to determine what the Constitution meant. Jefferson was aghast. His fear lay in the knowledge that an unelected branch of government, one which is not subject to the will of the citizens, and is effectively immune from check by the two elected branches of government (Only one Supreme Court Justice has ever been impeached—none have ever been convicted and removed) was now solely responsible for determining the meaning of the Constitution. The meaning of the Constitution, and hence the very nature of our political system, was now in the hands of an un-elected and effectively uncontrollable body. “The Constitution has become a thing of wax to be molded as the Court sees fit” Jefferson lamented. In 1886 Jefferson’s twin Constitutional nightmares collided in a train wreck which has effectively derailed true democracy in this nation and indeed across the globe as other nations have either copied our unfortunate example, or have fallen under the dominion of our multinational corporations—or both.. The precipitating event was the case of Santa Clara County v. Southern Pacific Railroad. This case is cited to the present day as having conferred the status of “natural” as opposed to “artificial” personhood upon American corporations. In fact the Supreme Court declined to rule on the issue. J.C. Bancroft Davis, the Clerk of the Court, an attorney, who curiously was also a former railroad company PRESIDENT, used his position to simply write this conclusion into the head notes which summarized the case. Ever since this fateful event; this sleight-of-hand rewriting of the Constitution, corporations have had the status of “actual” persons whose rights are fully protected by the Constitution. It was a coup against democracy which succeeded because there were no real external checks and balances on the Court, and because the Court itself chose not to act to repudiate Davis’ rewriting of the Constitution. The thing stood. Precedent was established. Jefferson’s “thing of wax” nightmare had come to pass.

[Ed: Allow me to explain briefly the device of the perversion wrought by the Supreme Court, which Byron fails to address. Corporations – which are essentially all creatures of the states, and not the federal government – received Constitutional “personhood” status was through the Equal Protection clause of the Fourteenth Amendment, which Amendment profoundly altered the Constitution. The Constitution and Bill of Rights had restricted the federal government’s authority against states and citizens, but did not regulate the relationship between states and their own citizens (and citizens of other states). But the post-Civil War Fourteenth Amendment, with the purpose of protecting freed slaves, directly limited the authority of state governments over their own citizens via the Privileges and Immunities clause (essentially making the Bill of Rights binding on the states as well); in addition, for the purpose of protecting both citizens and noncitizens (such as the many Chinese in California), the Equal Protection clause mandated that all persons be given the equal protection of each state’s laws. It is this clause that the extremely powerful and wealthy railroad companies – creatures of states – managed to turn into a weapon of the federal government against states, by the proposition that corporations, being recognized as artificial “persons” having a legal status independent of their shareholders, should also be treated as “persons” with Constitutional rights under the the Fourteenth Amendment. The subsequent case history of the Equal Protection clauses show a few cases regarding freed slave and minorities, with federal courts permitting states to treat minorities very shabbily, but a vast majority of cases brought by railroads and other corporations, strictly protecting corporations from unequal treatment..]

Consider the implications: Actual flesh and blood persons are indeed all roughly equal in overall attributes. But a corporation can possess MILLIONS of times greater resources than does any “natural” person, or even a group of such persons. Neither labor unions, nor any other category of “special interest” group possesses this attribute of personhood and so they too are fundamentally and intrinsically unable to compete against corporate “persons.” To make a long and sad story short: The concentrated power of corporate persons has overwhelmed our democratic system. The unsound decisions of our unchecked and unbalanced Supreme Court have handed the “keys to the Kingdom” over to our corporate overlords. An analogy with an AIDS infection is instructive: After 1886, our democratic “immune system” resisted Davis’ corporate personhood infection of our national body politic by deploying the Sherman Anti-Trust Act, the Progressive Movement, the Labor Movement, and the New Deal. All of these bought time. But now, in the era of global mega-corporations, after a long struggle, our “democratic immune system” is finally being overwhelmed. Democracy, rule of, by, and for the people, is dying in America. Contemporary America is a nation almost wholly under the dominion of plutocratically wealthy, corporate quarterly-profit über alles overlords. A seamless web of corporate power connects our multinational corporations with our mass media—now almost wholly owned by a handful of mega-corporations. This military-industrial-media complex largely determines which politicians will and will not get elected. Thus they control the government. They control access to money as well as determine how a candidate will be presented to the viewers. The very policies that our “elected” officials are “allowed” to espouse are rigorously circumscribed: Remember Clinton’s national healthcare proposals? Our media will never tell us that every other developed nation on Earth has universal health care for their citizens. Arguably, our corporate media has seen to it that the average American is as brainwashed as is say, the average citizen of North Korea. Our primary role in this atrocious system is simply to consume. We are consumers, corporate subjects, not citizens. Under this materialistic system our lives are devoid of deep meaning as we are conditioned to work ever harder and go ever deeper in debt to accumulate ever more useless junk as though if we just piled up enough of this crap we would somehow, magically, become happy. What is to be done? Let’s open our eyes and admit that the emperor has no clothes. Let’s admit that our democratic, constitutional, system was derailed more than a century ago. Until we return power to the hands of flesh and blood citizens EXCLUSIVELY, until corporations are summarily striped of “personhood”, until this legal obscenity is abolished, we can have no real freedom, democracy cannot flourish. Furthermore, to ensure that the will of the people is respected and reigns supreme, all members of our federal judiciary must face periodic reelection by the citizens—just as is the case for our judiciary here in California. Until and unless these things come to pass we cannot be a free people. Because we are fundamentally NOT a free people, because our ability to act and to build freely upon our inspirations is constrained by corporate forces beyond our present control, we cannot live up to our full potentials as human beings. Once these goals are accomplished there shall be such an explosion of innovation in economic and political and scientific entrepreneurship as to make Periclean Athens seem timid. It’s up to each of us to act NOW. Freedom itself hangs in the balance.

There’s a nice little music video out – just released by a speciality history curriiculum publishing firm – with a hsitory lesson that really seems to be hitting a chord with the growing chorus of people who are upset with government (including Glenn Reynolds, Moe Lane and some others – I expect the left to catch on as well).

It’s called “Too Late to Apologize: a Declaration“, and stars Thomas Jefferson as lead vocalist/keyboardist, John Hancock, John Adams, Sam Adams, Benjamin Franklin on guitar and King George.

I love it, and I’s sure you’ll like it too.

Maybe some stirred up watchers can suggest some lyric tweaks to bring this up to date for our latest usurpers? There are plenty of good targets, such as:

• our runaway federal government and the politicians who pander to us and distract us with wars & shallow, divisive political drama, while spreading pork and legislative & regulatory largess to favored corporations,
• the powerful corporations (including our corporate “news” conglomerates) that our Founders were determined to oppose – but
  which hijacked the 14th Amendment to trump local/states rights and become “persons” with unalienable rights
  (now even under the Bill of Rights!), and the
  Supreme Court that has arrogated to itself the right to turn the
  Constitution into whatever they say it means, thus aiding both a
  grasping central government and the corporate-tied elites who direct it.

Without further ado, here’s the video! (lyrics below)

[View:http://www.youtube.com/watch?v=uZfRaWAtBVg:650:0]

Lyrics:

Halfway across the globe
And we’re standing on new ground
Screaming ‘cross the waves
You can’t hear a sound
There’s no fair trials, no trade, no liberties
No tea
We’ve colonized America; we won’t stand for tyranny,
Oh king

And it’s too late to apologize
It’s too late
I said it’s too late to apologize
It’s too late

We’ve paid your foolish tax, read the acts
And they just won’t do
We want to make it clear, we believe this much is true
All men were created with certain

Unalienable rights
Among these are life, liberty, and the pursuit
Of happiness

And it’s too late to apologize
It’s too late
I said It’s too late to apologize
It’s too late

It’s too late to apologize
It’s too late
I said it’s too late apologize
It’s too late

I said it’s too late to apologize, yeah
It’s too late
I said it’s too late to apologize, yeah

Halfway across the globe
And we’re standing on new ground

Below is another handy summary of my Constitutional arguments against #CorpSpeak and #politicsInc (Twiter hashtags, for those of you who may be unfamiliar with them), copied from another comment thread at Volokh Conspiracy.

Readers should not forget that it is the state grant of limited liability that – as I have discussed in many posts – lies at the root of our burgeoning fights over government and public distrust (extending even to my quaint pet enviro concerns), Corporations are divorced from their owners, who have been given a grant of limited liability for the risks they shift to society, a cloak of anonymity by which they can behave irresponsibility (with little concerns greater than what provides the largest profits and bonuses) and can seek favors from government, as well as unlimited lives and deep pockets to make persistent efforts to corrupt.

Yes, I may be repeating myself, but core libertarian concerns are at stake. Here are my comments, with a few slight tweaks:

TokyoTom says:

February 4, 2010, 11:45 pm

Further to my four preceding posts, I copy below a further comment that I left on a thread at The Volokh Conspiracy, which I think summarizes the core Constitutional issue:

TokyoTom says:

February 3, 2010, 12:32 pm

Further to my preceding posts on corporations and free speech, I invite others to read this semi-serious piece in Truthout that examines the implications of the United Citizens vs. FEC decision:

“Personal Corporatehood: Coping With the Reason Divided of Citizens United”

The author, Randall Amster suggests that in the wake of the latest Supreme Court case, ALL citizens ought to abandon personal responsibility and liability and incorporate themselves. Amster is a J.D., Ph.D., teaches peace studies at Prescott College, and is executive director of the Peace & Justice Studies
Association.

I quote liberally (emphasis added):

There’s great consternation brewing over the recent Supreme Court
decision that cements and extends the misbegotten logic of “corporate
personhood,” and rightly so. Surely, one of the most farcical and
tortuous doctrines ever established in our system of jurisprudence,
this conflated concept has drawn the ire of (small-d) democrats at
least as far back as Thomas Jefferson, who wrote in 1816, “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.” …

Still, the notion of “corporate personhood” remains
something of a misnomer. In our system, as now expanded by the Supreme
Court, corporations actually enjoy more rights than individuals do in
many ways. To wit: liability shields, rights of transfer, political
access and influence, subsidies, laissez-faire regulation, freedom of
movement, self-determination, self-governance, tax breaks etc. In
particular, when it comes to political speech, corporations are now
essentially unfettered in their freedom, something that we mere mortals
have yet to fully secure. Consider the language of the court’s recent
ruling: “If the First Amendment has any force, it prohibits Congress
from fining or jailing citizens, or associations of citizens, for
simply engaging in political speech.” …

President Obama called the decision “a major victory
for big oil, Wall Street banks, health insurance companies and the
other powerful interests that marshal their power every day in
Washington to drown out the voices of everyday Americans.” What wasn’t
immediately clear is whether he intended this as a lamentation or a
mere observation of political reality. Either way, he was in essence
stating a working fact, namely that whatever shards of democracy and
the “will of the people” had existed up to now, the pretense is all but
gone and corporations will openly run the show. I suppose this has the
virtue, in any event, of being a more honest representation of how
things actually transpire. The question is where things will go now
that this critical threshold has been crossed.

Most likely, this ruling is a harbinger of further
extensions of corporate rights and powers. A broad mandate and a
willing court will impel corporations to take on even more of the
qualities ordinarily associated with individuals, as noted in the
SCOTUS blog’s analysis of the decision: “It is not too much to expect
that lawyers for corporate America may well be looking to explore the
outer possibilities of their clients’ ‘personhood’ and new-found
constitutional equality.”[link added] There previously had existed a founding
principle that “natural persons” and “artificial persons” were separate
and distinct entities under the law, with the former holding historical
priority in our constitutional framework. By now, that distinction has
been blurred to such an extent as to be effectively meaningless, as
evidenced by a 2008 Federal District Court ruling in which it was
proclaimed by the judge that “Blackwater is a person….”

If Blackwater is a person, I want out. Indeed, this
suggests a strategy that “natural persons” might take in embracing the
implications of this unrestricted corporate world. If a corporation can
become a person, then by implication a person can become a corporation.
I am thus advocating a new doctrine of “personal corporatehood,” in
which we should all avail ourselves of the enhanced rights granted to
“artificial persons” in our system. People should begin taking steps to
incorporate themselves immediately. …

Just imagine the benefits. When someone asks you for
a favor, you can off-puttingly reply, “I have to check with my board of
directors at next month’s meeting; someone will get back to you then.”
When you want to meet with your Congressperson on matters you feel
strongly about, the receptionist will announce, “Senator, a corporation
is here to see you,” which will likely get you instant access. If you
go public, you can sell shares in yourself and make a tidy sum (just be
sure to retain a controlling interest). If someone irritates you or has
something you want, you can likely get the Marines sent in to deal with
them. You can avoid having to appear personally at court hearings,
sending your hired-gun attorney instead. And you can’t be thrown in
jail, since a corporation itself cannot be imprisoned. See?

At the end of the day, we “natural persons” can try
and fight city hall on this one, or we can get in the game and embrace
the benefits of artificiality. In a world of surfaces, where
profiteering masks as politics and gerrymandering as justice, this may
well be the best of all strategies for survival.

Amster is pretty much right in his discussion of the now rather superior rights that corporations have over individuals. While we can`t really abandon our individual identities, by incorporating we can shield assets by limiting liability and maybe, even double or triple our vote, if courts follow their logic and acknowledge that voting is simply a form of speech.

Or we could find ways to step back from the Alice in Wonderland nonsense that creeping corporatism and “conservative” Supreme Court justices have led us to.

Further to my preceding post on speech and corporations, I highly recommend Lawrence Lessig`s insightful short piece, “The Principled and Pure Court? A Reply to Glenn Greenwald” (HuffPo, January 27).

For those who haven`t seen it yet, I take the liberty of quoting liberally (emphasis added):

Salon‘s Glenn Greenwald
is just about the most persistent and effective critic of money in
politics today. He is among the least starry-eyed reporters studying
Congress. But his essay defending the Court’s judgment in Citizens United would have been better had he sprinkled a bit of the skepticism he has for Congress on the words penned by the Court….

The First Amendment, Greenwald tells us, is an absolute. It applies
not to “persons”; it “simply bans Congress from making any laws
abridging freedom of speech.” This law plainly banned these entities —
whether persons or not — from a freedom of speech. Ergo, this law is,
and should have been found to be, unconstitutional.

Sounds good. Sounds principled. Sounds refreshingly different from
anything else that happens within the reach of DC (i.e., good and
principled).

But apply that same test to the following (not so hypothetical) free
speech case: A bunch of doctors practice in family planning clinics.
The government issues a rule that says certain doctors in certain
clinics are not allowed to discuss abortion as a method of family
planning. They can talk about abstinence. Or condoms. But they are not
allowed to advise their pregnant patients that they have the liberty to
abort their fetus.

Sounds like — under the First Amendment Greenwald describes — a
simple case. Whether or not doctors are persons (and at least some are
just mere mortals), they should have the freedom to speak. Advising
someone about a legal medical procedure is among the core freedoms one
would expect a Free Speech Clause to serve.

Yet in 1991, in an opinion by Chief Justice Robert’s former boss, Chief Justice Rehnquist, in the case of Rust v. Sullivan,
the Court found no First Amendment problem at all with the government’s
restriction on doctors’ speech. Indeed, it wasn’t even a difficult case
according to the Court (“no question but that the statutory prohibition
contained in § 1008 is constitutional.”)

Why? How? Well the doctors at issue worked in family planning
clinics that had received at least some of their funds from the
government. And in exchange for that benefit, the government was free
to gag the doctors however it wished. The doctors were free of course
to work in a family planning clinic not funded at all by the government
(for of course, there are plenty of those) (that’s a joke). But so long
as the doctors take this benefit from the government, they’ve got to
live by the rules of the government, at least so long as those rules
serve some legitimate state end.

So how is this case related to Citizens United? For the law wasn’t
applying exclusively to entities that had received something from the
government. It was applying to all corporations.

But of course, corporations do receive a gift from the government.
The government limits the legal liability of investors in that
corporation in exchange for their risking their capital to spur
innovation and growth. That benefit is significant. And the First
Amendment question is whether in granting that benefit, the state would
be free to limit the political advocacy that corporations engage in.

It seems astonishing to imagine the state couldn’t. State law has
historically had wide freedoms to condition the corporate form as they
wished. This fact has led some, including my colleague, Sina Kian, to
argue that Citizens United is less than people think. That the decision
notwithstanding, states could build this limit into their corporate
charters. Or that maybe even Congress could induce states to do the
same. The question then would be the reason the government had for
demanding the entity give up this liberty in exchange for the corporate
form. Traditionally, the burden of that question is the easiest for the
government to meet — is there any state interest at all? In Rust, the
interest was that that government didn’t like abortion.

But I agree with Greenwald that there is something unseemly in the
idea that the government could restrict the speech of a class because
it doesn’t like the speech of that class.

Yet this is the most confused part of the commentary (and reaction)
of most to this kind of regulation. If the government’s reason for
silencing corporations is that they don’t like what corporations would
say — if it thinks, for example, that it would be too Republican, or
too pro-business — then that’s got to be a terrible reason for the
regulation, and we all ought to support a decision that strikes a law
so inspired.

That, however, is not the only, or the best, justification behind
the regulations at issue in Citizens United. Those rules not about
suppressing a point of view. They’re about avoiding a kind of
dependency that undermines trust in our government. The concentrated,
and tacitly, coordinated efforts by large and powerful economic
entities — made large and powerful in part because of the gift of
immunity given by the state — could certainly help lead many to
believe “money is buying results” in Congress. Avoiding that belief —
just like avoiding the belief that money bought results on the Supreme
Court — has got to be an important and valid interest of the state.

If the Court really means to say that entities that fund or create
other entities can’t limit the power of those entities to speak — so
the government can’t stop doctors from talking about abortion, or the
IRS can’t stop non-profits from talking about politics — then we
really have crossed a Bladerunner line. For that conclusion really does
mean that these entities were “created with certain unalienable
rights,” even though they were created by a pretty pathetic creator —
the state.

My point is not that the state’s power to condition should be
unlimited. The point instead is that it’s not so simple, or absolute,
as Greenwald would have it. And given the true complexity of these
evolving and complicated doctrines, it is certainly fair to be critical
in the extreme of this decision by the Court, favoring speech that most
believe it naturally likes (unlike abortion-speak), in a decision that
ignores the judgment of Congress about the conditions under which the
integrity of that body, or any election, proceeds.

It seems to me that Lessig doesn`t go far enough, in questioning as I have all of the negative consequences of the state grant of limited liability to the owners of corporations. Surely any libertarian worth his salt should do so.

But Lessig has understated his own case: the government has a valid interest in seeking to prevent not only the appearance that “money is buying results”, but actual corruption and sweet deals as well. Surely the Constitution was not intended to let wealthy individuals to get a leg up on everyone else by laundering their speech through a company and on a tax-deductible basis.

Further, Lessig fails to noted that the Supreme Court could easily have avoided overturning laws and decades of precedents and public understanding – and could have provided much-needed clarity – by concluding that the statements coming from corporations are NOT entitled to protection as First Amendment “speech”, because corporations are legal entities and not themselves actual individuals capable of “speaking” for purposes of the First Amendment. Such a decision would leave all corporate spokesmen and shareholders bearing, like the rest of us do, personal liability and moral sanction for false or offensive speech (though insurance or indemnification by others might of course be be available).

But via the growth of concentrated power enabled by the state establishment of the corporate form, we appear to be rapidly becoming a nation a county “of the corporation, by the corporation and for the corporation”.

Banning corporate political speech (and campaign contributions) would dampen the rent-seeking pressures that have fuelled to the growth of the state; such steps would also invigorate public discourse – and build greater national trust – by making it clear WHO is actually doing the talking (or letting the body politic discount whenever speech is anonymous).

Further, virtually everyone has been ignoring (2) WHY it is that there is so much concern about corporations and their influence on (and vulnerability to) government: namely, states have allowed individuals (and now other corporations) to form separate, limited-liability legal entities that cut off their owners for any responsibility for the damages that such corporations may do to others.

One of the chief direct consequences of the use of the state to create corporations, as I have discussed in many posts (as the Mises` resident radical enviro), has been massive risk-shifting to the public and cycles of public pressure to use government to rein in corporations. In this, the better organized, longer-lived  and deeper pocketed corporations always having a leg up on gaming the drafting and interpretation of laws and regulations, and using government to steal further from/shift risks to the public at large and to hobble competitors. Thus the indirect consequences of the grant of a limited liability corporate personhood include not simply the financial crisis, but the growing distrust of government, corporations, politicians and voters of a different political stripe and the ramp-up in reasons to fight over the wheel.

I think that the Supreme Court decision in Citizens United v. Federal Election Commission is wrong, chiefly because the First Amendment is about HUMAN speech, while corporations – though associations of humans – have a distinct legal identity and very different characteristics.

The decision is also wrong because the Roberts court fails to acknowledge that just as the state can create corporations, so also can it condition their existence on refraining from political speech (making political contributions, etc.), or regulate their speech via excise taxes or the like (just as the federal government so conditions the grant of income tax-free status to religious groups and non-profits on express restrictions on political speech). But far better to attack the problem at the root of incorporation (or at the Constitutional level) than by a host of federal-level laws and regulations – including those remaining on churches and NPOs.

I have commented on these points in a blog thread at the libertarian/right-leaning legal blog, The Volokh Conspiracy.

TokyoTom says:

January 22, 2010, 1:12 am

TokyoTom says:

January 24, 2010, 9:53 pm

John Dewey says:

The discussions about whether corporations have the rights of people and about whether the Founding Fathers could have considered corporations — is any of this relevant?

The First Amendment protects a citizen from a powerful government which would decide what speech the citizen would be allowed to read or hear. It’s not a right granted to a speaker, but a right granted to a listener or reader. As such, it makes no difference whether the speech being protected comes from a single person, a non-profit organization, a union. a church, or a corporation. It is not the speaker but rather the speech — and the right of the citizen to hear it — which is being protected.

January 26, 2010, 5:33 pm

TokyoTom says:

John, I disagree. The First Amendment is about the peoples‘ rights to gather and to speak privately and publicly, including reporting on government.

Corporations are not people — but legal fictions that are creatures of their owners and the State, which protects their owners by giving them a special grant of limited liability. Corporations may parrot the words of particular people with in the firm, but they [corporations], like parrots, are not people and do not “speak” themselves. (Actually, this is unfair to parrots and other animals, which deliberately attempt to convey meaning to others, and not as a sock puppet for another person/animal/entity.)

While I‘m no fan of corporate income taxes, just as the federal government can condition “non-profit” status on a waiver of political speech rights by churches and other forms of legal entities, so states condition the grant of corporate status on the owners‘ acceptance that they cannot use the corporation as a political mouthpiece (such a use could be made expressly ultra vires), and so should states and the federal government be able to limit or tax political speech by corporations.

Not only would this be good law, but in my view entirely good policy by doing much to slow rent-seeking via large corporations, by removing incentives for wealthy investors to influence public officials and public debate. Let the rich (and others) speak for themselves – anonymously if they choose – but we can and should stop the money-laundering of speech through corporations.

The Roberts court showed it didn‘t have the strength of its convictions by upholding the part of McCain-Feingold that mandates disclosure of who is funding speech — in my view, this is incorrect. Anonymous speech very much SHOULD be allowed – but only for individuals and organizations that have not been granted limited liability by the state.

The chief sticky side issue here is the political gagging of churches and NGOs arising from the desire for favorable tax treatment [on this, the solution lies both in ending limited liability and in ending corporate income taxes].

February 2, 2010, 9:48 pm