Does money have the constitutional right to talk?

This has been a hot topic in American legal discourse recently thanks to the U.S. Supreme Court’s decision in Citizens United vs. Federal Election Commission, which upheld the notion that corporations have the right to free speech — in this case, the freedom to spend money to defame Hillary Clinton during the Democratic primaries, which was previously banned for corporations under election finance statutes. You can read the whole opinion here (PDF), but it is long, and filled with discussion of the historical concepts of corporations, going back to when the Constitution was written.

The idea of corporations having constitutional human rights seems alien to many American observers and probably bizarre to many Japanese people. So far, the best concise analysis of the subject I have found (in the context of the American case) is this piece by law professor Usha Rodrigues at my favorite “blawg,” The Conglomerate. She points out that even the justices of the Supreme Court did a good job of conflating various types of “corporation,” when in reality a corporation can be a home-office business, a completely non-profit organization or even a type of governmental entity. (Justice John Paul Stevens, who led the left-wing dissent, even brought Tokyo Rose into the argument.)

From this perspective, it becomes more clear that corporate status is not a very good dividing line. It captures Goldman Sachs and the big oil and pharmaceutical companies, but it also captures the Sierra Club, the NRA and all sorts of organizations that *do* have a valuable role in consolidating a force of popular opinion that might not otherwise be expressed.

The real problem for populists, I think, is the fact that political donations are treated as a form of speech. There’s a way to get around this: amend the Constitution. Good luck doing that without a lot of money to run a campaign.

Since this is mostly a Japan blog, I should add that Japan’s Supreme Court ruled similarly, albeit more tersely, on a similar case in 1970 — the Yawata Steel case, outlined in Japanese here. This case was originally brought by a lawyer who held Yawata Steel stock and wanted to stop the company from making political donations. The court’s ruling, which is still law in Japan, was that Japanese corporations have the full array of constitutional human rights “to the extent possible given their nature” (性質上可能な限り). Some extracts from their opinion (available here in Japanese), followed by my English paraphrase:

Companies are formed for the purpose of performing a particular business, but this does not mean that they can only act in direct furtherance of the purposes listed in their articles of incorporation. Companies, like individuals, are part of the state, their localities and their regional societies, and have responsibilities toward those entities. Even if a certain type of act is beyond the purposes of the company as provided in its articles of incorporation, such an act should still be allowed to the extent that it is expected and demanded of the company in the course of its social relations.

Such acts are not necessarily limited to not-for-profit acts. A company may also (directly or indirectly) find value toward its own development as an enterprise through disaster relief, services to society, funding social welfare projects and other peripheral acts. Appropriate expenses by a company toward these social duties are naturally to be allowed and do not violate shareholder rights or harm shareholder profit.

The above reasoning also applies to corporate gifts to political parties. The constitution does not expressly mention political parties nor grant them any special status, but implicitly assumes their necessary existence through its general structuring of the representative democracy system. Political parties are the most powerful constituent body of the people’s government, and to participate in their development is naturally to be expected as a social act even by a company. Political donations are a normal component of the cooperation between citizens and their government.

7 thoughts on “Does money have the constitutional right to talk?”

  1. Here’s one for the lawyers. If corporations have all the rights of ordinary individuals, and their registration in a particular nation is tantamount to citizenship, why can’t they vote. For that matter, why can’t they be placed in prison, whatever that might mean? It seems to me that a directive to cease trading is not the equivalent of the latter, as real individuals can be forced to cease trading without being placed in prison as well.

    This decision, like all law that regards corporations as legal persons, is bullshit, but I wonder how much it matters. I’ve done a fair amount of reading on comparative campaign finance systems, and it is not at all clear that money is as large a factor in deciding elections as is often assumed in a lot of cases. However, with representatives voting across party lines and often on the basis of local interests, this may not be the case in the United States.

  2. I believe the US is the only country regarded as a democracy that does not regulate spending during elections, again thanks to the Supreme Court. That means that you can have ridiculous levels of spending, and at some point it does have an effect.

    For example, in New York City, where I live, the Mayor has spent at least $70 million (actually much more) in each of his three election campaigns. Since New York’s population is about eight million, this means that he could have just mailed every person living in New York $8 to vote for him. But given the city’s large transient and immigrant population, the actual electorate is actually much smaller, under a million. Anyway, the point of the exercise is that without regulation of spending, its theoretically possible for a billionaire to get elected in a small enough jurisdiction just by bribing enough voters. And no, this guy’s opponents haven’t come anywhere near this level of spending, in fact no one has who was not running for president.

    Not regulating spending means that you can spend money to get yourself elected to an office up two two years before the election, which means really long electoral campaigns. In turn this means you have to quit your job to run for office, which most people can’t do. This aspect of the US system is usually ignored, but it hugely restricts the number of potential candidates and explains why US politicians often seem so lacking in real world qualifications or experience.

    The corporations being a person is almost self-evident bs, in other words the concept collapses if you think about it for more than a couple minutes and your not a lawyer. But I would argue that if you don’t regulate election spending, your democracy turns into a sham. I agree with regulating election contributions is actually not that important. Spending at a sufficient level really can crowd out the debate, and of course only certain types of politicians with certain types of ideas are going be able to raise that kind of money.

  3. “Since New York’s population is about eight million, this means that he could have just mailed every person living in New York $8 to vote for him.”

    And he would have been a mug. Some charity sent me a dime the other day. Their loss.

  4. Bryce first:

    If corporations have all the rights of ordinary individuals, and their registration in a particular nation is tantamount to citizenship, why can’t they vote.

    They don’t have all the rights of individuals, a point which is a bit more clearly enunciated in the Japanese opinion. Voting is a good example of this. It wouldn’t make sense to allow ordinary corporations to vote because a person could essentially give themselves infinite votes by registering dummy corporations.

    Speech is a different case, though, because the presence of a corporate shell does not inherently distort the purpose of the discourse in the way that the presence of corporate voting would distort the purpose of voting.

    For that matter, why can’t they be placed in prison, whatever that might mean? It seems to me that a directive to cease trading is not the equivalent of the latter, as real individuals can be forced to cease trading without being placed in prison as well.

    There is such a thing as a corporate death penalty — liquidation in bankruptcy. All the government has to do is sock a fine on the company which forces it to go bust.

    Ed: I’m not sure how extensively you have studied foreign political systems, but once you read well enough into them, most democracies are a sham whether or not they regulate election spending. Japan is a good example of this. To paraphrase Jeff Goldblum, “money always finds a way.” That said, nobody has really postulated a viable and acceptable alternative, so for now we are stuck with the flaws of the best system we can think of.

  5. I must admit that I am fairly ambivalent about this decision, and in fact Glenn Greenwald has written the best explanation that I have seen for being ambivalent about it, particularly for someone with more “left” political leanings.

    I like to say that I am an absolutist supporter of the First Amendment, which I personally consider to be the single most important part of the US Constitution, but still find the idea of treating corporations (which interestingly are described as “legal persons” in Chinese/Japanese) as actually having innate rights of there own, rather than merely treating the corporation as a proxy for its owners or members, as bizarre.

    What strikes me as the best solution to this problem, of those I have seen proposed, is enacting some sort of “corporate democracy” regulation, where a publicly held company is not given a blanket restriction on spending money, but is required to put all political expenditures to a shareholder vote, so that the political speech of corporations is, at least to some degree, attributable to actual persons and not a fictional entity.

  6. Requiring a shareholder vote makes no sense in any scenario. In large for-profit corporations, the vast majority of shareholders are other corporations; most individual investment in the market nowadays is through a mutual fund, hedge fund, pension fund or similar vehicle. In smaller corporations, the shareholder usually either runs the corporation or directly chooses the people who do. In the case heard by the Supreme Court, the corporation was expressly set up to distribute the Hillary-bashing movie.

  7. That is a good point. Shares are held so indirectly that it doesn’t actually make any practical sense, even though it sounds good in theory. Which I think is actually good justification for the argument that corporate speech does not need to be protected at a high standard.

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