It is difficult to know how to respond to Stewart Gardner’s critique of the United States Supreme Court’s Citizens United case and what it says about the state of American democracy. Gardner’s essay is about more than just the supposed extension of “speech rights” or “human rights” to corporations; it is about the rise of the corporation as means of organizing economic activity and the rise of what might rightly be called “corporate government” or Progressivism itself as the means of effecting something like “corporate will.” However these might be problems, Prof. Gardner’s argument is filled with a tragic sense of “what-can-we-do-about-it-anyway” or a melancholy resignation in the face of worldly powers that are indeed beyond the control of any one man (presuming he is virtuous) or any government. If it is a problem, Prof. Gardner implies, it may be a problem without a solution (at least anymore).
TBR Blog is a space for commentary, opinion and reports on research in progress.
We should start, however, asking ourselves the question of whether the extension of “speech rights” to corporations is itself a problem. Corporations are indeed formed to organize economic activity (Prof. Gardner calls this profit seeking) and laws of incorporation are indeed constructs of civil government. Yet I think that this is where Prof. Gardner commits his first error. Read Stewart Gardner’s original post here. Laws of incorporation are much like laws establishing police: they are meant to effectuate natural rights. Police are there to protect life and property—two important natural rights prominent in the Declaration of Independence. Laws of incorporation effectuate the right human beings have to associate—or to form themselves into a body with a common purpose. In this (and only this) way, we can find an analogy between laws of incorporation and laws of marriage, where a man and a woman join together to make one.
I am sure that Prof. Gardner knows that rights of association (prominent in the First Amendment) are a civil and civilizing version of the natural right to contract, so that cannot be his real complaint against the idea of “corporate humanity.” He must disapprove of the common purpose of this particular breed of association—associations formed for “profit-making” or (as I say) conducting common activity including economic activity. Consider Citizens United itself, which was an organization of citizens who opposed the election of Hillary Clinton during the 2008 primary campaign. They made an anti-Hillary movie and sought to air it during the run up to the Wisconsin primary; this violated the McCain-Feingold law (Bipartisan Campaign Reform Act), which enjoined political expenditures by corporations and unions in the time running up to elections.
Citizens United was simply an organization trying to affect elections by making an argument about the relative merits or demerits of a particular candidate. That was the common purpose of the corporation. Michael Moore’s film company, the Democratic Party, the Sierra Club—all of them are corporations—that is, citizens exercising their rights to associate with their fellow citizens for a common purpose. No one, I suppose, would argue against the right of the Sierra Club or Michael Moore or the Democratic National Committee to exercise their First Amendment rights. If not, then I fail to see why Citizens United (a group organized for common action, i.e., a corporation) should be denied the same rights as other organizations.
Perhaps Prof. Gardner has a back up position here. Citizens, he suggests, are capable of abstracting themselves from their interests narrowly conceived and thinking about the public good, while corporations lack this capacity for deliberation and choice and can only conceive of their interests narrowly. The acknowledgement of “corporate humanity,” in this regard, erases the distinction between those who are capable of self-government (i.e., citizens) and those incapable of such thoughts about the public good (i.e., corporations). “The court now considers speech as abstracted from speakers,” Prof. Gardner writes, and because the state has a role in creating corporations, Prof. Gardner concludes that the state endows them “with speech rights and thus the lawful power to influence their own regulation.”
This back up position, however, reflects the same errors as the original position. Associations of individuals speak as associations—consider the New York Times Co. v. Sullivan case, which clarified standards for libel or, again, the Democratic National Committee. Those organizations are surely capable of seeing their actions and activities in light of the public good. The same thing holds for economic entities participating in interstate commerce. Those engaging in commerce are interested in commerce and promoting their products, to be sure; such associations are also interested in the nature of the public good and they are staffed with people broadly capable of self-government. I fail to see how individuals are capable of self-government, but associations of individuals are not. One of the very purposes of civil government is to protect our natural rights to contract and associate with our fellow citizens—and perhaps people should have a right to speak about their associations and interests as well.
All of this is to say that Citizens United falls well within natural rights theory as originally conceived. But is natural rights theory good? Should it be the standard by which we judge these matters? On these questions, Prof. Gardner wants to represent the old tradition of the Declaration, while reflecting a point of view that rejects the Declaration and the tradition of limited government with which it is connected. Prof. Gardner presents himself as the true conservative—in America’s best tradition, he implies—but really masks an argument grounded in Progressive principles.
We must dispel certain misperceptions. Corporations are bodies (corpore is Latin for body) that are, in principle “immortal.” We must recognize that they die, however. Ask Blockbuster or American Motors or Woolworth’s how it feels to be immortal and they will let you know that it is overrated. Their “immortality” really refers to the fact that they do not rely on the continuing existence of any single individual.
Corporations have limited liability, of course, but the assets of the corporation, including the assets of stockholders, are subject to civil and criminal seizure. A death through negligence or maliciousness is punishable—the person responsible can be held criminally responsible and the corporation civilly responsible. Just ask the tobacco companies of today, or the railroads of yesteryear. The corporation does not exist outside of law in having limited liability, but its liabilities cannot go beyond what the stockholders have invested in the company.
It is important to acknowledge—for defenders of corporations and for their critics—that the advent of the modern LLC has brought about vast changes in the American economy. These changes have had effects, perhaps profound effects, on the American economy and the American experiment in self-government (though not the ones suggested by Prof. Gardner). There can be no doubt that the corporation brought with it amazing, incredible, unprecedented efficiencies in the economy. It brought about greater productivity, more possibility for invention, reduced costs for consumers. For those well versed in Adam Smith, it should suffice to say that corporations allow for the advancement of the division of labor and the increase of the size in the markets—and these are the principal causes of the wealth of nations.
The corporation is not, however, strictly or solely an economic phenomenon. The most important branch of economics is political economy. The existence of LLCs as the principal organizer of the American economy means that, as Robert Higgs, a strenuous advocate for corporations concedes, “fewer people are self-employed and more are wage earners; firms are larger, more impersonal, and more bureaucratic; [and] even political power may come to rest with those in control of large corporations” (Higgs). Each of these implicates America at a fundamental level of political economy and requires us to think about how to adapt America’s first principles to today’s messy reality. I applaud Prof. Gardner’s attempt to revivify the debate over how corporations fit into the American regime; I agree that this is a problem and that we can only give two cheers for the corporation. Citizens United is not the “problem of the corporation.”
The problem is that the corporate way of organizing the economy has gone hand in hand with the growth of the state; the corporation has given us Progressivism, and all concerned with the fate of self-government in the modern world must think through that relationship and all the problems it causes.
The views and opinions expressed here are those of the writer and do not necessarily reflect those of Boise State University or the School of Public Service.