There is nothing wrong with restricting corporations
Most of us feel deeply about our right to free speech. It is a right we are born with, one the government cannot take away. But it took an-out-of-control Supreme Court in the Citizens United case to decide that the right to free speech not only applies to individuals but it also applies to corporations.
Therefore, Congress cannot restrict the ability of corporations to contribute to political campaigns because doing so would be restricting free speech.
The basic problem with the court’s argument is that the government creates corporations. They are not natural occurring entities, like human beings.
The government created corporations in order to promote economic growth. Because the government grants corporations limited liability, it is much easier for corporations to raise capital than it is for individuals acting without corporate status.
As a result of this setup, a corporation can tell people buying its stock they are only risking the money they spend on the stock. So, if I buy 100 shares of a company’s stock, and the firm then falls into bankruptcy because business turns bad or the corporation somehow harms its workers, customers, or neighbors, I don’t have to worry about losing my house and my bank account. I can only lose what I paid for my 100 shares of stock.
This would not be true if I bought into a partnership. In that case, I would be personally responsible for any liabilities incurred by the partnership.
For this reason, corporate status is a great privilege that the government makes available in order to make it easier to raise capital.
Having decided to grant this privilege to corporations, it seems more than a bit absurd to argue, as was done in the Citizens United case, that the government can’t set rules restricting the actions of the corporations it has created.
This was exactly the logic expressed by a famous Supreme Court justice in a similar case in 1978. The famous justice was William Rehnquist, who was initially appointed to the court by Richard Nixon. He was later elevated to Chief Justice by Ronald Reagan.
Rehnquist is almost universally considered a very conservative justice. He didn’t argue against free speech rights for corporations based on radical anti-corporate sentiment. He argued based on common sense. If corporations are restricted in their speech, no person in the world is being prevented from speaking freely.
Of course, corporations have shareholders and also workers, all of whom have the right to say whatever they want and support whatever candidate or political cause they want. The only issue is whether they can use a for-profit corporation to carry out their speech.
Unfortunately, even if Citizens United is overturned, which it should be, restricting corporate speech will not do much to redress the incredible imbalance in our political system, where billionaires’ views matter more than those of everyone else.
No one turns to Mark Cuban or Mark Zuckerberg because they think the businessmen have great ideas about how to run the country. These people are courted by politicians because of their ability to raise money for them.
The rich also have access to the media in a way the rest of us don’t, especially those who own it, like Rupert Murdoch.
Private equity billionaire Peter Peterson has probably done more to keep his deficit obsession in the news that any 50 economists arguing in the opposite direction.
Reversing Citizens United won’t end the disproportionate power that rich have in the political process. That will require measures that amplify the voices of ordinary people, such as public financing that multiplies the impact of small campaign contributions. New York City has led the way down this path.
But it will be an important first step to recognize that corporations were created by the government to increase wealth. They don’t exist to tell us what sort of government we should have. For this reason, reversing Citizen’s United is a step in the right direction.