Money and politics

I’m sure I’ve read only a tiny fraction of what has been written in the blogosphere since last Friday regarding the Supreme Court’s decision in Citizens United v. Federal Election Commission. But I’ve been thinking about it a lot. Much of the argument over the decision deal with the nature of corporations and whether they are persons deserving protections guaranteed in the Bill of Rights. Other arguments speculate as to the possible outcome of allowing corporations to spend billions of dollars to influence elections.

The two questions are separate issues, I think, and should not be conflated. One can believe that corporations have the right to free speech but worry about the possible outcome of letting them exercise that right. One can believe that corporations are mere legal fictions with no inherent rights, yet believe that letting them get involved in political campaigns will not corrupt the democratic process (more than it already is, anyway).

At least on WorldMagBlog, the opponents of the SCOTUS decision seem to view corporations in a very negative light. They worry about how safety regulations will be dismantled, workers will be maltreated, and only the wealthy stockholders will profit. I find myself arguing on the side of corporations, because both from my experience (I have worked for seven different corporations, mostly large ones) and my studies for my MBA, I see corporations playing a positive role in society.

We probably all have read about the horrible working conditions before worker safety laws were enacted, and how bitterly companies opposed reforms. I remember reading The Jungle by Upton Sinclair in eighth grade, and I was appalled at the awful conditions people lived and worked in. There is a need for some level of regulation. But that doesn’t mean that if we allow corporations greater latitude, that they will push to return to those “bad old days.”

In business school (at Rider University), we learned that, in the long run, businesses benefit from working for the interests of all their stakeholders, not just their stockholders. They may gain short term profits from actions that hurt workers, the environment, the community, or even their trading partners (suppliers and customers), but in the long run they profit more by maintaining the good will of all those stakeholders.

Corporations are run by people, however, and people may be lazy or greedy. Some corporations fall far shorter of the idea “corporate citizen” than others. Either I have been fortunate, or I have chosen my employers wisely, because for the most part I have found them to be good examples of what we were taught in business school. (The one that was disappointing in that regard was a privately held corporation, owned primarily by a man who would have been better suited to politics than running a business – plus his family members.) My husband’s experiences have been somewhat less positive.

But whether individual corporations are generally good or poor citizens says nothing about the principle of whether they should be treated as “persons” when it comes to the Bill of Rights. Clearly they have to be able to do some of the things actual human beings do, such as enter into contracts, and act as litigants in court. Just as clearly (to me), it would be a farce to suggest that they should be able to do other things that actual human beings do, such as hold office or get married.

As an abstract principle, I find myself inclined toward defining their “personhood” in as limited a manner as possible. There are good reasons for them to exist – to limit the liability of investors, thus encouraging investment by those unwilling to put their personal property at stake (which is what mom-and-pop businesses typically have to do). They need to be able to own property, hire employees, enter into contracts, buy and sell, pay taxes, and when necessary sue or be sued. But it is not intrinsic to their function that they be able to take part in the political process.

I have read arguments that, because corporations pay taxes, they should have a voice in the process (“no taxation without representation”). It’s not being taxed that gives one a right to be heard, however. I don’t know whether it’s possible for someone in this country to pay no taxes at all (no income tax, sales tax, property tax, or any other), but if it were, would that mean such a person would have no right to take part in the political process?

I do think that a great deal is said about corporations that is negative, and policy should not be made based only on those messages. I have read a number of comments about the recent SCOTUS decision “levelling the playing field” that had been biased against corporations (by blocking their involvement but permitting it to unions and other groups whose interests run counter to those of corporations). But while the goal of allowing messages friendly to business interests to be heard is a reasonable one, that does not necessarily justify either assigning personhood to corporations nor giving them the ability to spend unlimited amounts on political campaigns.

I do think that the influence of money on the political process is a huge problem. SteveG at WorldMagBlog pointed me to an essay by Lawrence Lessig on why we need a constitutional amendment to protect democracy. I had never heard of Lessig before, but I can certainly agree with some things he says.

Reagan Republicans have yet to see the size of government shrink, or the tax code simplified — because Congress has no interest in smaller government or simpler taxes, since both would make it harder to raise campaign funds …

… even without the freedom of corporations to spend money on political speech during the last days of a election, the campaigns of Republicans and Democrats alike had become dependent upon the money that the corporations, unions and other special interests could supply. Whether through PACs, or large contributions bundled by lobbyists, already these special interests have a powerful control over how Washington works.

The one time I ever contributed money to an organization with political interests, it was to a group committed to following through on the recommendations of The Grace Commission. Aside from the obvious benefits of eliminating waste and inefficiency, it would also further the goal of a smaller federal government. A bloated bureaucracy breeds corruption, as people fight to protect their jobs rather than to do what is best for the people they presumably serve. Perhaps reducing the pot of money available would simply increase the competition to get a piece of it, but at some point the cost of pursuing it would not be worth the possible benefits.

So I read with interest what Lessig said about an amendment that would remove lobbyists from the picture.

Members in Congress must be, and must seem to Americans to be, free of any dependency upon lobbyists, or fundraisers, and instead be dependent simply “upon the People.” We need an amendment that gives Congress the power to secure this independence.

But I searched in vain to find the text of such an amendment on the Change Congress website. Without knowing the actual wording, I had no idea whether I could support it. There have been many, many laws passed that had noble goals but either failed to bring those about, or had unpleasant side effects, due “the law of unintended consequences.”

This morning I found a website that lists several proposed amendments, one of which may be what Lessig has in mind. Some of these relate to the concept of corporate “personhood,” and two have to do with campaign financing. None, as far as I can see, would do all that much to remove the influence of lobbyists. Lessig speaks in his essay of needing to do more than just reverse the effect of last Friday’s decision. (Any of the corporate “personhood” amendments would do that.) But the amendments regarding campaign financing simply secure the authority of Congress to regular such spending, including that by corporate entities.

But that leaves the matter in the hands of the people who have already been overly influenced by moneyed interests. What motivation do they have to craft legislation that will take away much of the backing they count on for reelection? Personally I am much less concerned about big money buying advertising right before elections, than I am about what the lobbyists are doing all year long. It is possible to at least attempt to counter the messages in advertisements; how do you counter what you know must be going on but you never see?

Lessig is promoting the Fair Elections Now Act:

Under this legislation, congressional candidates who raise a threshold number of small-dollar donations would qualify for a chunk of funding—several hundred thousand dollars for House, millions for many Senate races. If they accept this funding, they can’t raise big-dollar donations. But they can raise contributions up to $100, which would be matched four to one by a central fund. Reduced fees for TV airtime is also an element of this bill. This would create an incentive for politicians to opt into this system and run people-powered campaigns.

That sounds like an improvement over what we have now – but where money is involved, people will find ways to work around whatever rules are put in place. And often, those ways are worse because they have to be sneaky. The only way I see to reduce the influence of big money on government is to reduce the potential benefits that those with big money can gain by influencing those in government.

That would be such a huge undertaking that I hardly know where one would start. It would be a major change in our economy, since the government currently occupies such a large sector of the economy and influences so much more of it. It would require a major change of mindset for many people, as we are so used to looking to government to deal with such a wide array of issues and problems. Any change is unpleasant, and if the immediate results did not seem positive there might not be the will to continue.

Whether to allow corporations to “speak” in the political process is a small thing, in comparison. And I guess my view is that some kind of limits would be reasonable, because I do not consider corporations – or other organizations – “people” with the same kind of right to free speech that actual human beings have. I do think that people should be able to pool resources to make their voices heard more widely, and that ability should not depend on the type of speech they want to make. Any organization, whether for-profit or non-profit, is in the end merely a group of people coming together in an organized fashion for a common purpose. Make one set of rules they all have to play by.


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