The fundamental premise of the Court's decision in Citizens United v. FEC is that a corporation should have the same First Amendment rights to engage in political speech as any citizen, because a corporation is simply an "association of citizens" in the "corporate form." I think this is going to lead to the politicization of everyday economic life.
The Court's reasoning that corporate speech is simply the collective speech of individual citizens does ring true for certain non-profit, ideologically-oriented corporations, especially when they are membership-driven. When the NRA or the Sierra Club takes members' dues and uses that money to speak on political issues, they in a rough way are simply amplifying the voices of their members, even if an individual member disagrees with one policy or another advocated by the group. That person can always quit.
BUT I don't think that most stockholders in for-profit corporations think that those corporations represent the stockholders' political views. We expect that corporation to be an economic actor, to be interested in making money, and to be generally agnostic with regard to political matters. They are the subjects of government regulation, not the makers of government regulation. Yes, we understand that our bank probably has a lobbyist that advocates a position with regard to banking regulation, but they aren't representing us in any but the most attenuated way. I suppose there's a sense in which we expect the bank to favor regulation that allows them to make money in the long run, but that could lead them to either support or oppose any particular proposal, depending on their political ideology, and I doubt that many people choose their bank based on its political ideology and attitude towards regulation.
So we tend to think of our market decisions and our political advocacy in different ways. We buy the best or the cheapest pizza without regard to whether the founder of the company and its top executives ardently oppose abortion. Â We buy stocks of promising corporations without regard to whether its board of directors believes that global warming is a hoax.
This is of course a false barrier, and always has been. And it has already been breaking down. Recently several companies resigned from the Chamber of Commerce because of its strong political stance in opposition to legislation aimed at climate change. In the last election cycle there were websites rating companies as "blue' or "red" based on the proportion of employee contributions given to one party or the other. Readers were encouraged to support those companies that reflected the readers' political allegiances.
SO NOW the Supreme Court has exposed the connection between our political and economic commitments, and cognitive dissonance is no longer sustainable. The Court is telling us that Wal-Mart's speech is our speech when it works to oppose fair pay rules. That the Teamsters' speech is our speech when it opposes trade agreements. That Citibank speaks for us when it fights against banking regulation.
I don't see how I can now avoid making political calculations with regard to my investments and purchases. No, I won't be able to be pure in my judgments, and yes my decisions surely will be incomplete and inconsistent. Â But the Court's decision challenges those who disagree with certain aspects of free market ideology to step out of it. It tells us that our corporate associations are not only economic but political. It's on.
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Your two closing paragraphs are certainly provocative, Brant. My first reaction to the ruling was one of alternating defeatism and bewilderment, but then I wondered if there might just be some unintended consequences. Maybe it will work out for the people. Eh, probably not.
Is the right wing complaining about judicial activism this time?
Funny but a decision falling on the side of free speech just doesn't feel like judicial activism, Chris.
Thanks for the interesting post, Professor. But why would shareholders only now, after this decision, suddenly become focused on the political orientation of the corporations in which they invest?
As your post admits, corporations, and their owners and managers, have always had political agendas. These agendas have been expressed in various ways. Some corporations make charitable contributions to Planned Parenthood. Others do not. It is not a secret that the founder of a certain national pizza chain is pro-life. Investors have been able to learn of this, if they wanted to take the time to learn.
One might just as easily draw the conclusion that the Court's decision is good for shareholders. Campaign finance limitations such as "McCain-Feingold" often only drive the funding of political speech into the shadows. Now the poilitical speech of corporations will, it is to be hoped, be more open. Is not full disclosure the primary goal of corporate regulation?
How many consumers made such determinations before selecting a GE appliance or a Disney toy? Those two corparations previously were exempt from the regulations at issue in the Citizens United case because they were deemed to be "media companies". Why will the consumer calculus change just because it's Dow, Apple, P&G, Marathon, or any other corporate entity advocating a position aligned with, opposed to or tangential to that espoused by MSNBC, ABC, etc.?
Additionally, how many corporations, particularly those dealing in consumer goods, are going to be willing to risk alienating vast swaths of their potential customer bases by advocating strongly for an individual candidate or issue? It would have to be a very important issue, indeed, to merit the taking of such a high financial risk.
Thus, I think that far too much is being read into this case, particularly by those who like the exemptions that "old media" received under McCain-Feingold.
The language is simple:
… THE Conventions of a number of the States, having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best ensure the beneficent starts of its institution.
…
Congress shall make no law … abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
Seems to me that when they wanted to, the founders (and those who followed) could draft both clauses directed at individuals as well as clauses having broader applicability, specifically, one that totally and completely prohibits Congress from acting in an area like abridging (i.e., cutting off) speech.
I'm in total agreement that most people currently don't pay much attention, which is precisely my point. We've compartmentalized those decisions and decided that they don't have moral consequences that we need to be concerned with. It's just the market.
I'm suggesting that things might change. The internet will make information about corporate political activities much easier to find. (Has already–see Lynn Lenart's helpful post.)
Well, the four above comments just show that very few people spend as much time as you and I do watching corporate behavior. And I know you support(ed?) President Obama, but I think his administration is emblematic of a corporatocracy – and that's before the Supreme Court decided Citizens United. I don't want to even think about what's going to happen to politics now.
Here's my plan: make my own clothes, grow my own food, and invest my money in local banks or credit unions. If the corporations are going to monopolize politics, then I am going to respond with hyperlocalism. It's the only thing I can control at the moment.
Corporate behavior such as producing goods and services for the masses or do you mean employing American workers, donating time and money to poverty-stricken nations and building new hospital wings for dying children?
I'm guess Disney is definitely going to be Pro-Life.
I do also agree that corporations may anticipate consumer backlash and try to stay out of politics, at least in any ways that can be easily traced. That will get harder and harder, as Congress is likely at the very least to increase disclosure requirements.
Disney, pro-life? You mean the pro-homosexual agenda, Gay-Day-at-Disneyworld, owner of ABC's Ellen Degeneres Show Disney?
Or maybe you meant the wholesome, Chronicles of (Christian allegory) Narnia-producing, Main Street icon bearing Disney. It's hard to tell these days.
If you don't make purchasing decisions based upon your beliefs, you might not be the last ones left. But you are certainly behind the curve.
The unions have been telling their members to avoid Wal-Mart, Sam's Club, etc. for years.
I won't buy anything from GE. My reasoning includes the sham television networks campaigning for President Obama, and the unnecessary (and unwanted by the Air Force) F35 engine pork project they have been rewarded with.
GE will survive without me purchasing a $650 washing machine, in part to the $560 million contract noted above. But I have to tell you it makes me feel better.
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