"He's a snake in the grass, I tell ya guys; he may look dumb but that's just a disguise; he's a mastermind in the ways of espionage." Charlie Daniels, "Uneasy Rider" Supreme Court, others confused about "speech" because they ignore (1) that corporations are not themselves persons, but creatures of the state - TT's Lost in Tokyo

Supreme Court, others confused about "speech" because they ignore (1) that corporations are not themselves persons, but creatures of the state

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:

Leo Mrvin: I haven’t given this much thought, but is it really inconceivable that if the First Amendment didn’t protect corporations, individuals who wanted to pool resources in mass media vehicles for political speech would do so without the benefit of limited liability?

Dilan EsperYou can make this argument, but it begs the question, because then the issue is simply re-stated as “can the government condition limited liability on individuals giving up their associational speech rights?”. 

In this case the question conflates the states which approve corporate status with the federal government, but why would such a question prove difficult? The federal government provides tax exemptions to religious and other groups on the express condition that they refrain from political speech.

It doesn‘t take much digging to see how profoundly the grant of limited liability to corporate shareholders has snowballed into the massive struggles for favor and regulation that we see today. Confused decisions that corporations (as opposed to those who own and staff them) have Constitutional rights has greatly contributed to this [- even as these decisions constantly acted to shift power from citizens and the states to the federal government] . (Likewise, the federal income tax has also perversely entangled the state in religious organizations and political speech.)

TokyoTom says:

If Congress can Constitutionally limit the speech of people who choose to associate as non-profit churches etc., why cannot it likewise limit the speech who choose to accept the favor of a state grant of limited liability?

 

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.

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].

Published Wed, Feb 3 2010 11:17 AM by TokyoTom

Comments

# Free speech 2: Finally, someone else - Larry Lessig - gets it on state-created corporations and speech!

Tuesday, February 2, 2010 11:41 PM by TT`s Lost in Tokyo

Further to my preceding post on speech and corporations , I highly recommend Lawrence Lessig `s insightful

# Free speech 3 - Nice skewer: "Personal Corporatehood: Coping With the Reason Divided of Citizens United"

Wednesday, February 3, 2010 12:46 AM by TT`s Lost in Tokyo

Further to my preceding posts on corporations and free speech , I invite others to read a semi-serious