Welcome to the Plutocracy

Conservatives have long believed that the power of the courts to “legislate from the bench” was a great and anti-democratic evil which could only be remedied by strict interpretation of the Constitution combined with sensitivity to the “original intent” of the founders and deference to the legislative branch. And they had good reason to believe this, since it is unlikely that the founders would have approved of many pieces of court legislation. Abortion, for example, could not be part of the original intent, and the same is true for many other bits of judicial legislation. Indeed, many prominent features of American life are, for better or worse, not products of our democracy but of our judicial system.

Alas, when conservatives themselves gain control of the court, it seems they are no better at exercising judicial restraint than are their liberal counterparts. Indeed, the “conservative court” has on several occasions completely changed the political landscape of the United States. This happened, for example, in Bush v. Gore, when the election was decided by five members of the court. And it happened again this last Thursday in Citizens United v. Federal Election Commission.

The case concerns a movie entitled “Hilary” (as in “Clinton”) put out by a non-profit corporation, “Citizens United,” whose president is Floyd Brown, a long time political activist who is credited, among other dubious achievements, with the Willie Horton ads. "When we're through,” Brown remarked, “people are going to think that Willie Horton is Michael Dukakis's nephew." Brown came up with a clever way around the campaign finance laws which banned political ads from corporations or unions 30 days prior to an election. He would run ads for the movie, and since he was just advertising a movie, it wasn't political advertising at all. Never mind that the movie, and the ads, were derogatory at best. The Federal Election Committee refused to go along with the ruse, and CU sued.

All CU wanted was for the court to bless their end-run around the campaign laws. Corporate contributions were not an issue in the case, and not part of the relief that plaintiffs were seeking. But for some unknown reasons, the court decided to re-hear the case on grounds that had nothing to do with the plaintiffs plea. The rehearing was peculiar, not only in widening the grounds of the case beyond the issues that were placed before it, but in ordering the rehearing for September 9th, a full month before the court's session normally began. This seems to indicate some undue haste in deciding so pivotal an issue. One is tempted to think that the majority wanted this issue decided in time to dismantle the current laws in advance of the coming congressional elections. One is permitted to ask here whether the court's agenda is judicial or political.

In ruling on the issues presented to it, the court upheld the FEC against CU. But on the issues that were no part of the original case, they voluntarily threw out restrictions against corporate funding of campaigns, restrictions that date back to 1907 and have been upheld by every court since then, in test after test. They have, at a stroke, undone 100 years of legislation and judicial precedent. This is not evolution, but revolution, and a revolution predicated on some very peculiar grounds.

The majority of the court treated this as a “free speech” case. Yet, this is somewhat perplexing. As far as I know, CEOs have always had the right to say whatever they liked, to support whatever candidate they wanted, to go to whatever rallies they wished, and to write letters to the editor whenever they felt the need. That is, they enjoyed all the rights of free speech that every other citizen has. As far as I can recall, there are very few corporate executives in prison for expressing their opinions. The court, however, was not interested in the rights of the executives, but in the rights of the corporations as “legal persons” endowed with all the rights of natural persons. This is a rather peculiar doctrine that originated in another example of legislating from the bench, Santa Clara County v. Southern Pacific (1886), which granted “personhood” to corporations. This rule was a complete overturning not only of the court's previous rulings, but of the long history of corporation law dating back to the Middle Ages.

The Founding Fathers of our Republic were very suspicious of corporations, since the royally-chartered companies had been used as instruments of oppression against the colonies. The Navigation Acts, for example, gave them exclusive shipping rights to the colonies, much to the detriment of American entrepreneurs. And it was East India Company tea that the colonists used to color the waters of Boston harbor in the original tea party. For a jurisprudence that pretends to be interested in “original intent,” the colonial attitude towards corporate power cannot be overlooked.

Corporations prior to Santa Clara were creatures of the state that had no “rights” save those that were granted by their charters, charters that always excluded their participation in politics. Santa Clara extended the protections of the 14th Amendment (no state shall “deprive any person of life, liberty, or property, without due process of law”) to the corporations. The Amendment was originally designed to protect the freed slaves, but since Santa Clara it has been used mainly as a tool to protect big business.

The new ruling allows corporate executives to use the company treasury, the money that rightly belongs to the investors and the workers, to influence political contests. Since corporate executives command resources measured in the trillions of dollars, this means that there will be an inexhaustible source of funds with which to command the political powers. But this money is supposed to be invested to increase the profits of the corporation. And it will be. Politics are treated like any other investment and expected to get a return, a return in the form of subsidies and favorable tax treatment. And as David Brooks noted, corporations also want rules which protect them from smaller and more nimble competitors. As the Independent Business Alliance noted in its amicus brief,

[P]recisely because a corporation enjoys significant state-created economic advantages designed for the narrow purpose of furthering wealth-accumulation, corporate participation in candidate campaigns promotes market entrenchment and corrupts the political marketplace in a fundamentally undemocratic manner.

Somewhat ironically, the ruling may actually lower the cost of political participation for the corporations. The mere threat of spending an unlimited amount of money in any politician's district may be sufficient to obtain compliance. Blackmail is all that is necessary to ensure the docility of the legislative and executive branches. As of last Thursday, the corporations are formally in charge of the government of the United States, and all of its constituent political subdivisions. But corporations are not capable of running a country, save for running it into the ground. Indeed, they can barely run their own enterprises without support from the public purse. With this ruling, the line between the corporate treasury and the public purse—already stretched very thin—will completely dissolve. America will be formally a plutocracy and substantially a kleptocracy.

Yet for all that, there is some justification for the court's attack on the campaign finance laws. Indeed, they are only recognizing what is practically an already established fact. Money will always find its way to power, and where there are large concentrations of wealth, they will come to own the political powers; they will become the state. The current miserable situation in campaign financing is the result of the last abysmal reform, with attempted to correct the problems of the previous reform, and so on back to the Tillman Act of 1907.

So what's to be done? Well, if you can't beat 'em, join 'em. Recognize the reality that power follows property, as Daniel Webster noted. Allow the corporations to give as much as they like. However require that all donations to any cause or candidate be instantly posted on the group's website, which any one may examine. At least we would know the truth of the situation, and while the truth in this case may not set us free, it will at least let us know where we stand.

But we can go further in this truth-telling to include truth-in-labeling. Each congressman will be required to wear those NASCAR suits which prominently display the names of the corporate sponsors. So the typical congressthing might have Big Pharma on his chest and Exxon on his ass, with the big banks running up and down his arms. Each politician would be required to begin and end each speech with the statement “This message brought to you by ...” and list the names of his three top contributors. And each bill will be required to bear the logos of its corporate sponsors. This won't make politics any more democratic, but it will make it a lot more fun. And a lot more honest. We can dispense with the fictions of “liberal” and “conservative” and go directly to the real issues: “I favor the big banks” or “I favor the manufacturers,” and such like.

With the Citizens United ruling, the court revealed the depth of its contempt for judicial restraint, original intent, and deference to the legislature. The ruling is nothing short of a coup, a fundamental change in the structure of the America polity. It will work not only to the defeat of democracy, but to the destruction of what's left of the small businessman. From this day forward, no one will hold office who does not have the approval of the corporations, no small business will exist save by their sufferance.

But it will not last. Greed consumes everything, until it finally consumes itself. The bankruptcy of this country is already far advanced, and the process will be accelerated by making it an open kleptocracy. So, welcome to the plutocracy; enjoy while it lasts, which will not be long.


Debra Murphy Saturday, January 23, 2010 at 1:20:00 PM CST  

John, this is the most intelligent thing I've read about this stunning ruling. I'm flabbergasted that conservative Catholics, like the NC Register, are lining up in favor of this, ostensibly on the grounds that it will permit freer ground for pro-life activism. (Big Pharma and the AMA might have a chuckle over that one.)

My question: If legal precedent means so little, why hasn't this "pro-life" Court been able to overturn Roe v. Wade?

John Médaille Saturday, January 23, 2010 at 1:32:00 PM CST  

Thanks, Debra. Why haven't they overturned Roe? Because they don't want to. Roe was passed with six Republican judges, and before Roe, the first legalized abortion laws were signed by Governors Reagan and Rockefeller. The laws were considered "right-wing," part of the "get the gov't out of the bedroom" rhetoric.

Reagan "got religion" when he say the power of this issue, but on the other hand it is an issue they don't want to go away, since it is capable of keeping the Catholics in line, without every having to deliver any real results.

Clever, no?

Steven P. Cornett,  Saturday, January 23, 2010 at 10:00:00 PM CST  

Re: John,

The one flaw in your analysis is that, even by having to act in accordance with the Constitution's "Original intent" they will make changes in the landscape by striking down laws that should never have been passed to begin with. McCain-Feingold, with it's ban on ads, is one such case; it itself is a study in what's wrong with government from top to bottom.

The whole thing was a misguided attempt to "Limit influence" by stripping the ability to raise and use money for campaigns. The money still found its way, the pull was still made, and all the law did was prevent issue ads that might have informed someone from being aired.

You are right about the Supreme Court's treatment of Bush v. Gore (2000). In that situation, the court stuck its nose in on the issue of "equal protection" in the recount process (what race is a vote? Or a hanging chad?). Only Chief Justice Rehnquist pointed out that the Florida legislature had the ultimate authority to decide whose electors Florida would send to elect the President.

The only good thing was that the Constitutional result was performed in the end, if by the wrong process. Handing the matter back to the Florida Supreme Court would have made the matter worse because they were treating Floridian election law in the was the Supreme handles the US Constitution - any way it pleased, essentially saying that law was only what they said it was.

The problem is that, in part due to the judges, the whole power structure intended from the start has been inverted. The Federal government was supposed to borrow authority from the states; it's now the states that act as if all authority flows from the Federal level down.

Mr. Piccolo,  Sunday, January 24, 2010 at 1:31:00 AM CST  

Prof. Medaille,

Great post.

I have some questions, though. What do you think the chances are that small businesses or worker co-ops can emulate the model of Emilia-Romagna and still be successful in a hostile environment without having to sacrifice social justice (for example, without having to resort to very low wages in order to compete with big firms)? Emilia-Romagna manages to have both small-scale business and high-wages, which I find very attractive.

In some ways, the situation of once underdeveloped Emilia-Romagna seems to be similar to that of our own country, where the people were failed by big institutions. But in Emilia-Romagna, people got together and made their own way. I think this could be a way for us to move forward despite the problem of corporate power in our society.

Or do you think America lacks a "solidarity culture" such as the one that exists in Emilia-Romagna, so it is unlikely that something similar will occur Stateside?

Thank you.
PS: Sorry to be off topic!

Tom Degan Sunday, January 24, 2010 at 7:14:00 AM CST  

Are corporations really persons?

Do corporations think?

Do corporations grieve when a loved one dies as a result of a lack of adequate health care?

If a corporation ever committed an unspeakable crime against the American people, could IT be sent to federal prison? (Note the operative word here: "It")

Has a corporation ever given its life for its country?

Has a corporation ever been killed in an accident as the result of a design flaw in the automobile it was driving?

Has a corporation ever written a novel that inspired millions?

Has a corporation ever risked its life by climbing a ladder to save a child from a burning house?

Has a corporation ever won an Oscar? Or an Emmy? Or the Nobel Peace Prize? Or the Pulitzer Prize in Biography?

Has a corporation ever been shot and killed by someone who was using an illegal and unregistered gun?

Has a corporation ever paused to reflect upon the simple beauty of an autumn sunset or a brilliant winter moon rising on the horizon?

If a tree falls in the forest, does it make a noise if there are no corporations there to hear it?

Should corporations kiss on the first date?

Our lives - yours and mine - have more worth than any corporation. To say that the Supreme Court made a awful decision on Thursday is an understatement. Not only is it an obscene ruling - it's an insult to our humanity.


Tom Degan
Goshen, NY

Sarsfield,  Sunday, January 24, 2010 at 9:49:00 AM CST  

I agree that the Santa Clara decision was possibly the most far-reaching power grab in American history (and one that was made with zero discussion or argument!) Corporate "personhood" and subsequent dominance were, arguably, the true, and truly tragic, legacy of the Union victory in the Civil War. But hasn't corporate wealth pretty much owned politics since then anyway, and, if so, what practical change will be made by this week's unfortunate extension of the premise of Santa Clara? In other words, I'm hearing how corporations will NOW start buying elections, but I keep asking myself well, what have they been doing for the past hundred years?

As an aside, I find it mind boggling that Catholic commenters on other blogs are hailing this decision as some sort of triumph of the "Catholic majority" on the Court. Of course, this so-called "Catholic" bloc has not (and likely will not) touch Roe v. Wade in any meaningful way. Do they not realize that Justice Kennedy (in the name of precedent, something he brushed aside this week) is the primary reason Roe was upheld in 1993? Exxon, Inc. may be a person to Kennedy, but the child in the womb? Not so lucky.

Septeus7,  Sunday, January 24, 2010 at 3:52:00 PM CST  

What a strangely optimistic article and I welcome it.

The only question now that the propertied class have been given unlimited dictatorial power over this country is how long will it take for them to destroy themselves in this post-republic in this neo-feudal/fascist state and whether the union will survive or break up during the fall.

So how long do you folks think this dictatorship will last? I'm betting on about 15 years.

John Médaille Sunday, January 24, 2010 at 4:46:00 PM CST  

Sept, I think 15 years would be extremely optimistic, given that the country is already on the verge of bankruptcy, and has been running on empty for at least 15 years. There is no economy for Obama--God bless 'em--to revive.

Obama will fail, and by summer we will be in the second down leg of the recession. The GOP will win the November beauty contest (especially since there are no limits on corporate donations) and the 2012 Presidential election. But president Palin (or Cheney, or Jindal or Scott or whoever) will be just as clueless, or more so.

Look for a period of military dictatorship. After that, good knows.

John Médaille Sunday, January 24, 2010 at 4:49:00 PM CST  

Sarsfield, 70% of the judges were appointed by Republicans. Six of the seven judges that voted for Roe were Republicans. The only two governors to sign abortion on demand bills before Roe were Reagan and Rockefeller.

The Republicans have no intention of letting this issue go away. It is interesting that all the supposedly "pro-life" groups supported the pro-choice Scott Brown. Interesting, but hardly surprising.

Viking Monday, January 25, 2010 at 12:01:00 AM CST  

John, I'm not sure about your legal history. It was the ruling in 1819's "Dartmouth College v. Woodward" that established corporations as artificial persons, however much "Santa Clara" may have increased the scope. And it was a now Ivy League college that was the corporation in question, not what we tend to think of when we hear that term. Furthermore, our cities are "municipal corporations", as one might well guess from the terms "incorporated" vs. "unincorporated" used in their descriptions.

This may well seem like nitpicking and to no genuine effect, but I beg a question of you all: would Distributism do things that differently? I can't see how it could. Distributist enterprises would still need to enter into the contracts that are the basis of corporate law, after all, whatever kind of corporation. If the word "person" is objectionable in this context, it could be changed, to "legal entity", say, although the semantics strike me as unimportant.

Something that DOES seem quite substantial is how any of you would solve the problem of campaign financing. It's quite easy to criticize the current system, or the one this decision will create, but what's YOUR plan?

Finally, labor unions were also exempted from financing limitations. Why no hand-wringing over their presumably increased influence?


John Médaille Monday, January 25, 2010 at 8:00:00 AM CST  

Viking, Dartmouth dealt with the contract clause, and how far a state could go in appropriating a charter. The case concerned New Hamphsire's attmepted takeover of Dartmouth. Corporations were not persons (an absurd notion) and had only such rights as were granted in their charters.

There is some legal question about how and whether the ruling applies to unions. But in any case, Unions are no longer the force they were, and there power is no confined to some limited sections of the economy. Corporations, otoh, command trillions.

Chris Campbell Monday, January 25, 2010 at 8:38:00 AM CST  

John, good points in Republicans, judge and the Pro-life charade....as a fromer state head of the Constitution Party, it is rather sickening to see Catholics slavishly line up for the GOP time after time....tell a lie long enough, people will beleive it or at least, vote out of fear....my parents both voted in the primary for Ron Paul and then turned around to vote in election for McCain.....Churck Baldwin on the other hand got little support....

You had an article in which you stated rightly that we must get out of the 2 Party system, but I agree with you, the nation is largely gone, 5 yrs for me is optimistic.....and unlikely.....we will all be distributists in time, whether we like it(I do of course) or not...learn now to shoot, grow food and can....most importantly, of course, pray very hard....sacrements, sacrements...

Anonymous,  Monday, January 25, 2010 at 5:08:00 PM CST  

This article is so far off-base and one-sided as to be laughable. No one wants to live in a plutocracy, but let's get back to some basics.

First, if you don't like the "special interests" in politics, then get rid of government's ability to give out goodies and regulate with impunity. If Mr. Medaille is so interested in "original intent," how about the original intent of a government of limited and enumerated powers?
Corporations "speak" and "lobby" simply because it is in their own self-interest to do so. Corporate political participation in industries that are not heavily regulated is actually low. On the flip side, corporations often lobby because government has the ability to grant them favors and protection.

But you don't limit fundamental rights simply because they are abused.

Second, the answer to "harmful" speech is more speech, not less. This ruling guarantees there will be more speech in the marketplace of ideas.

Third, corporations (or unions, remember them!) are simply associations of people and do not speak with one voice. They are for-profit and non-profit; big and small. Citizens United was a non-profit association.

For instance, Wal-Mart can support health-care "reform" and Whole Foods can "oppose" it because they believe their corporate plan is better. That's relevant info the public should know about.

Fourth, the First Amendment does not allow us to infringe the speech of certain speakers because their speech may be more effective than others. That's plain common sense. How could it be otherwise?

Fifth, the decision's rationale to some extent relies on the fact that it's up to a responsible citizenry to be the ultimate judge of the messages it hears. It's not the guardians at the FEC who limit the quantity of speech to ensure it's so-called quality and that people have the most "useful" information to help them make decisions. This is paternalism at its most extreme, and should be anathema to any distributist.

Sixth, the whole bit about corporate personhood is a total blind alley. People form/use all sorts of legal mechanisms to advance and secure their interests and goals. Trade unions and guilds could apply here. But this case comes down to a basic question: should the speech of these entities be regulated simply because they have lots of money vis-a-vis other groups and that their speech will be effective? (Of course, effective speech in a democracy requires money to communicate it!).

Again, personhood is not even a relevant issue in the case, which is why it was not even addressed in the majority opinion. The answer is whether groups with lots of resources should be limited in their ability to speak. You could apply the same logic to a future guild or trade union, the latter of which fell under this regulation.

If the law at issue was upheld, there was no reason why Congress could not under the same logic also have banned books, like the campaign biographies that are released every cycle. Do we really ban books in America?

Citizens United is good news, folks. And I'm no pawn of the plutocracy. But don't take my word for it; use your common sense and skip over the voodoo logic and polemics of Medaille who simply cribbed from the dissent.

Anonymous,  Monday, January 25, 2010 at 5:09:00 PM CST  

One further point. I agree that pro-life people have tied their fortunes way too closely to Republicans, and that it is a crapshoot at best whether once we get the mythical fifth vote, Roe will really be overturned. (Which, even then, would not necessarily save one life unless abortion was banned in all 50 states).

Still, Chief Justice Roberts's concurring opinion discussing stare decisis is a blue print for the eventual overturning of Roe. It's main defenders will argue that under stare decisis, it is binding precedent and cannot be touched. Roberts's opinion destroys that argument. I do think he was looking down the road at Roe, which was incredibly encouraging.

Anonymous,  Monday, January 25, 2010 at 5:14:00 PM CST  

Also, the court needs an actual case to overturn Roe, it cannot do so sua sponte.

John Médaille Monday, January 25, 2010 at 8:16:00 PM CST  

Anon, one-sided it may be; unfair it is not. I think it is a poor strategy to try to get rid of gov't favors by increasing the political power of those who want the favors. And you're right; the majority did not address personhood; they just spoke of the corporation and the person as if there were no valid distinctions; as if the terms were interchangeable. IOW, they were not only legally absurd, they were intellectually dishonest. The minority did address the issue, in a much more convincing fashion, imo.

What does it mean that a corporation "speaks"? Of course it doesn't mean anything, because such a thing doesn't happen. Corporations do not speak, corporate executives do. But who do they speak for? If I join the NRA, I presume they will speak for me on matters related to gun control. But when I buy a share of stock, am I asking them to get bigger subsidies? To evade taxes? To represent me on HR 2416 or SB 909? I don't think so. If I want them to speak for me on these issues, I can joint their PAC.

And who is a member of the corporation? Just the owners? The workers? The customers? The public that charters them or subsidizes them? Do the corporate executives have the right to speak for all of these groups? Where did they get this right? Did they poll the workers, ask the customers, query the suppliers? No. Yet they are using the money supplied by all these to speak for a few, namely themselves, for what the managerial class for is the managerial class itself, and no one else.

And let them do, but let them do it with there own funds, and not the funds of all these others.

Howard Monday, January 25, 2010 at 8:46:00 PM CST  

Ugly as it was, the 2000 election was not decided by the Supreme Court. Trying to guess who voted probably intended to vote for Gore but actually voted for somebody else is a pretty stupid, and dangerous, exercise for any government to follow, and it really has nothing to do with Distributism.

As for the ruling, it makes no difference, unless you make the (alas, all too probable) assumption that the American people are stupid sheep who will vote for whomever they see on TV most often. If that is the case, though, democracy is doomed anyhow. Democracy is pointless unless the voters are making rational decisions for the common good. Sadly, it looks to me as though most voters today make irrational decisions intended to advance only their own private interests.

Steven Luotto Monday, January 25, 2010 at 8:53:00 PM CST  

Ya know, thanks to technology, the cost of spreading ideas has plunged. Tweets, Facebooks, blogs, youtubes, etc. In theory, politicians should be requiring LESS money. Except they're not spreading ideas, they're marketing.

"Hello, I'm Scott Brown and I drive this truck!"
("Hi, I'm Thomas Jefferson and I use this fishing rod").

It's amazing that people don't admit the corruptive power of moolah or the Terminator-like single purpose of Corporations.

Anyhow... I figure about 10 grand a head and modern technology is all the politicos really need if they're honest. But then again, without big money collectors who will win the embassadorships?

"Money talks, BS walks"

At this point, the State should allow corporations to buy votes on ebay. If they can buy politicians, why not voters? It's dirty, but undoubtedly better for the economy... and the ballot box can still be secret. It would be easier for me to admit the personhood of Big Retailer Inc. if "he" slipped me some cash. I'm ready to be lobbied!

John Médaille Monday, January 25, 2010 at 8:56:00 PM CST  

Mr. Futz, I very much like the idea of buying votes on eBay; let's cut out the middleman.

Anonymous,  Monday, January 25, 2010 at 10:17:00 PM CST  


I share your skepticism about for-profit corporations in general. The bifurcation of management from ownership has been detrimental to business and society.

That said, you make too much of an issue of the corporate form itself in the context of this case. It's one thing to dilute the corporate form; it's another thing altogether to say that an organization or association cannot speak about issues, particularly those that affect its interests.

Those are separate issues. The solution is to limit government not limit speech.

Your problem seems to be with the First Amendment itself and that it applies to the states.

The Court supplied a faithful application of the First Amendment, as I pointed out above. We can have reasoned discussions about whether the First Amendment is flawed or the problems with the fact that it applies to the states. But again, that question is a horse of a different color.

The First Amendment is premised on the marketplace of ideas. The relevant question for the Court was whether the First Amendment allows government to equalize the power of speakers by limiting the speech of some speakers. It said no, and that ruling applies to all sorts of corporations, as well as trade unions, and even unincorporated associations.

This ruling is not just about corporations but a rejection of the antidistortion principle in First Amendment jurisprudence. That's the big take-away.

Two more things worth mentioning:

1. First, check out the front page NY Times story today about corruption stemming from corporate participation in politics. It notes that many states do not place any limitations on corporate expenditures during state races, and that there is no evidence that public confidence in politics is less or corruption is greater in these states.

2. As to your points about corporations, they speak as entities. Sure, management makes the decisions, but they are done so with the viability of the entity in mind. The workers, supplies, customers, and others associated may not have any direct say, but it is in their interest that the company survive and thrive. Division of labor dictates management probably knows best. And certainly management in many cases will take the views of these others into account before acting, lest it create internal trouble for itself.

In short, things are more complex than you paint them.

John Médaille Monday, January 25, 2010 at 11:17:00 PM CST  

Anon, if you truly believe that "management knows best," then you just haven't been reading the business pages. Or the front pages.

The question is not about "equalizing" the voices, but about not allowing some to appropriate both money and the prestige of an institution. If the corporate managers wish to speak, let them do it with their own funds. The idea that they fairly represent the consumers, or the workers, or the investors, or anybody but themselves is absurd.

And the article misses the point. It is not about corruption, something that happens despite of law, but of legalizing a corrupt practice.

But like so much in "libertarianism," this ends up as an argument for more corporate power. I don't wish to be rude, but the plain historical and material fact is that the right-wing libertarians allows end up as the fellow travelers and useful idiots of corporate power. Things are, as you observe, more complex than they appear.

Steven Luotto Tuesday, January 26, 2010 at 5:06:00 AM CST  

Dear Prof. John,

With one in seven Americans on food stamps (one in four children) and 100 trillion dollar debt - in the land of big corporations, nationwide franchises, where one's favorite pizzeria also sells car insurance, solar panels and gasoline, you'd think people would begin to understand that the LOVE of money is the root of all evil.

Instead they empower the LOVE of money even more... meaning not wealth, but debt... and kids without mamas being brought up on TV... and have a nice day impersonality.

I live in Italy and try to imagine Starbucks replacing my café / bar. It really is the difference between a system and a culture, a hotel and a home.

There's such great talk of freedom, but real freedom is born of virtue. When I came here decades ago, kids could buy whiskey, because the country was virtuous about drinking. Now that the multinational entertainment industry has debased culture, there's binge drinking and balloon tests galore. Lots more law, regulation... Yes, as you say, rightwing Libertarians with their love of nothing-left-to-lose freedom are the stooges of the servile state, the huge governments they pretend to despise.

It becomes freedom for the few and at best multiple choices for the rest of us.

Starbucks offers 100 different beans, but only one type of barman, generally a student who's working his way towards a "real" job. His attitude and reactions, just like the decor and fare of the place are all decided by experts in some distant skyscraper.

The other day, Giuseppina overheated the cappuccino. I guess in a free country I could have started a class action suit and won a million dollars... instead all I got was a good laugh with Giuseppina, including some talk on my end that might have gotten me arrested for harassment in a "freer" country. I accused her of being in love and demanded to know who the lucky man was!

Today she will be preparing her very special Tiramisù... not a new experimental beta-tested line introduced nationwide via TV commercials... just hers, Giuseppina's.

I'm a simpleton, but that to me is freedom. It's home, not hotel, culture and not system, real person and not corporate personhood. Small is beautiful, because small is real, closer to the soul to the fullness of life, to sociality.

Oh well, as if you didn't know!

Please keep up the good work, I'm a huge fan.

the stupid Chris,  Tuesday, January 26, 2010 at 6:02:00 AM CST  

Great post, John.

Anonymous,  Tuesday, January 26, 2010 at 8:14:00 AM CST  


There's only more corporate "power" if people choose to listen to what the corporations have to say. If you think people are lemmings and that corporate "speech" will drown out other voices and prevent the people from making good choices, then just say so. You are then arguing for paternalism, pure and simple.

On the other side of the coin, if you think corporate speech will breed corruption by allowing corporations to ingratiate themselves with politicians, then just come out and say it. But the implication of that argument is that democratic political participation, particularly express advocacy, is inherently corrupting and corrupt. Is the democratic process, which is inherently based on the need for money to effectively communicate, corrupt? Is that your position?

Finally, apart from your attacks on corporations, would you have upheld the restrictions at issue in Citizens United? And if so, what would the principled argument be against then banning books, too? What about corporate media companies? Should the press be monitored and regulated as well? GE does own NBC.

It's astounding that anyone would argue that any organization would have to set up a separate PAC if it wants to participate in politics. Any organization should have the autonomy to defend itself and its interests, and do so with its own funds.

Corporations are not democracies (they perhaps should be, but that is a different question). Who else would make decisions about corporate expenditures than management? Of course, management can take into account the views of other stakeholders, but that is not an argument that they should be censored altogether? If you don't like the activities of a corporation, don't buy its products, don't work there, and don't be one of its vendors. The disclosure requirements upheld by the court allow consumers and others to make those judgments.

Again, there are lots of ways of attacking the problem of corporations, but censorship is not one of them. If you've spent anytime with FEC regulations, you know that it is a very slippery slope to regulating all kinds of political activity. Restrictions on grassroots lobbying are the first thing that comes to mind.

To close this exchange, let me again say, "If you don't like the money in politics, then limit the government's regulatory powers and its ability to dole out goodies to favored industries."

Chris Campbell Wednesday, January 27, 2010 at 8:44:00 AM CST  

On a good note, Paul Craig Roberts may be seeing the light too, in an article:


he states:

It turns one’s stomach to watch libertarians and “free market economists” defend bureaucratized impersonal health care as “free market medicine.” There is no free market present. Corporate lobbies and campaign contributions use government power to create bureaucratized monopolies that destroy medicine for the practitioner and the patient. Wall Street pushes for greater shareholder earnings, which are achieved by denying care.

Just as independent businesses have been destroyed by corporate chains from Wal-Mart to auto parts to fast food, medicine is being destroyed by monopoly capital. The risks of starting a private business today are many times higher than they were a half century ago. Chains have turned Americans who once were independent business men and women into employees.

Dave,  Friday, February 5, 2010 at 12:10:00 PM CST  


A brilliant but very disturbing article. I totally agree with you, and of course Tom Degan, that the root of the problem of corporate privilege is the legal fiction of corporate personaliity, but I hadn't realised that that was a judicial invention. Do you have no form of appeal against such faulty legal process? If the Supreme Court is as biassed as the judge, what about the legislature changing the law in a way which makes the ruling inapplicable? I write this having just listened to a debate in Parliament in Britain, where the government moved very quickly to overturn a ruling on asbestosis which laid all the responsibility for justifying a claim for compensation on the person dying in agony from it. Isn't that what corporate managerial irresponsibility is doing, killing not only the U.S. but for civil society generally?

Anon seems to be honest only in openly hiding behind his pen-name. There are two ways of preventing the truth from being democratically discussed: one is to buy up the public information channels and the other (his) is to bury it in a haystack of illogic, half-truth and fillibustering waffle.

Viking Saturday, February 6, 2010 at 6:17:00 PM CST  

Dave, just what are the "illogic, half-truth and fillibustering waffle" for which you indict Anon? Please be specific, as right now it seems to me to be you who is throwing out accusations unsupported by any evidence or reasoning.


Viking Sunday, February 7, 2010 at 12:35:00 AM CST  

John, I've found some things that bear on this debate. I'd like to share them with everyone.

In Wikipedia, under "Corporation personhood debate", it's stated that the idea of corporations as artificial persons didn't start with Dartmouth, much less Santa Clara, but in England as early as the 16th century. It seems that lawyers for corporations (remember, that's a very inclusive term) were arguing that the laws didn't apply to their clients, since said statutes typically started out "No person shall", and the corporations weren't persons. The 16th century courts decided to handle this by declaring the corporations to be artificial persons. So it was the judiciary ruling in a way very much to the corporations' displeasure that got us this notion.

When our limited liability corporations came into vogue, the same idea of artificial personhood was necessary to prevent claims against them from being thrown out unjustly, as no natural person among their stockholders was responsible. Again, it was the corporations that were against the idea, the courts that insisted on it. Given these facts, it's rather disconcerting to hear the concept spoken of so disparagingly on this blog, and by people without much apparent knowledge on the matter.

To get back to the present: John, neither you nor anyone else have answered two of the questions posed in my first post on this thread. (1) How would a distributist state handle the issue of organizations and their dealings with the public? That is, if you don't like the idea of legal personhood, what would you prefer? (2) What ideas does anyone have here to finance campaigns if corporations and (presumably) unions are such bad news?


Viking Sunday, February 7, 2010 at 12:43:00 AM CST  

Sorry, that should be "corporate personhood debate" for Wiki, not "corporation" as the first word, as I erroneously stated above.


John Médaille Sunday, February 7, 2010 at 11:18:00 AM CST  

Viking, I thought I had answered your question, namely, a corporation had the rights its charter granted, and no more. There were "persons" only in regard to the stated rights. That is, if the corporation had the right to acquire land, then a land contract with a corporation was the same as with a person. But they did not have any "natural" rights beyond that. In Southern Pacific the court overturned its own ruling of only a dozen years before.

Corporations were granted charters for the public convenience and necessity, and it usually involved ventures that were high risk with high capital requirements, such as long-range trade (The Moscovy Company, the East India Company, the West Africa Company, etc.) or public improvements such as canals. Adam Smith is extremely suspisious of corporations, and limits their use only to a few cases, such as the one's mentioned above and insurance companies.

And stockholders were liable for the debts of the corporation. In fact, this is one of the areas where a corporation is suddenly not a natural person but an unnatural one. Both Sir Walter Scott and Mark Twain got wiped out by the "unlimited liability" of corporations, to name just two.

As far as financing, there doesn't seem to be a problem. Unions and corporations can solicit funds for their PACS, which they do, and rather freely.

Viking Monday, February 8, 2010 at 1:12:00 AM CST  

My apologies, John, I guess you DID answer the questions. But I'm not sure they'll quite suffice for the Distributist order we hope is coming. Let me somewhat ungraciously dissect them.

Let's start with the second you listed, campaign financing. There are two issues here. Unlike you, I'm less concerned about a plutocracy taking over than I am about special interests doing great harm to the res publica. You mentioned the National Rifle Assn. in your article. Now, they're probably the best example of a special interest group that imposes its will on the public sphere, and yet it has no really major corporate sponsorship of which I'm aware. That can be done with PACs, in countless ways on countless issues, which is why I conclude that there has to be a better way.

The second reason I'm unconvinced by your answer is that I don't believe that corporations would do that much campaign financing outside their areas of interest. Our large companies want to appeal to everyone, or at least to the great majority. Why risk alienating so many by taking a position on the abortion debate, say? It's just not in a company's best interests to do so. I agree that they will try to influence tax policy, trade policy, etc, but they already do so. It might get a little worse because of this ruling, but I doubt that it will deteriorate all that much. And how can you or anyone else say that it's not in the best interests of the stockholders for them to do so? There's the rub indeed, but it's unaddressed by continuing to count on PACs.

Those last two sentences somewhat presage my concerns about the first part of your answer, restricting corporations to only charter-granted rights. Easier said than done, I think. Giving them the duty to look out for the interests of their stockholders (whether they are investors, workers, or both) will inevitably make it quite difficult to distinguish between legitimate defense of same and illegitimate ways of so defending. I insist that much more needs to be said on the matter.


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