The controversial Supreme Court decision in Citizens United v. Federal Election Commission has inspired debate ever since it was handed down. The court held that corporations have the same political speech rights as individuals under the First Amendment. Several organizations are working to change the effects of the ruling, even if that means a Constitutional amendment. And there are signs that Americans are not sold on the idea, to say the least. Mitt Romney, notably, was called out by a New Hampshire crowd when he stated corporations are citizens.
Much of the debate revolves around the effects of the ruling whereby corporations acquire a novel form of citizenship status, which allows them to contribute vast sums to political campaigns. This is seen as unfairly tipping the scales in favor of corporations, with their deep pockets, on the assumption that more money leads to electoral success. And, there is a good deal of wrangling over the legal reasoning applied by the court.
There is another way to approach this issue, one that begins with the fundamental principles of citizenship. The formation of our republic has origins in a belief in individuals giving up some of their natural freedom to empower government – the essential idea of active consent of the governed. So, let’s analyze this foundation and see where it takes us.
Natural Law and the Social Contract
In our tradition, all political power and authority derives from the people, who give up some of their natural freedom to have order, and give structure to society. Hobbes famously set out this view in Leviathan, in 1651, during the bloody English Civil War. He described how individuals, born into a natural state of freedom and fearing for their safety, give up some of that freedom to form governments. To keep people from harm, a powerful state must be created, deriving its power from the consent of the governed (to mitigate their “solitary, poor, nasty, brutish and short” lives).
Locke, so influential for Jefferson, expanded this principle (and softened Hobbes’s pessimism) by adding that, since governments were a creation of individuals out of their natural rights, a state that did not serve the needs of citizens could be removed. The state was the servant of the citizens, who had consented to the creation of the state and who could withdraw their support. Citizenship was thus the result of active consent and a creative act by citizens who desired order and structure.
It is then up to the state – in our case a republic – to provide good government and institute the necessary structural and legal edifice to achieve this goal. One creation of the state in establishing necessary structure to society was the corporation. Therefore, corporations are a mere manifestation of this bargain between the governed and the government, not an originator. Corporations did not, and could not, participate in the genesis of republican government, since they could only exist after that government had been created out of natural persons’ consent.
Another way to look at it: corporations are created by the state to limit liability and to help provide a legal framework for commerce. Citizens, by their active consent to give up some natural freedom, create the state out of their natural rights. Then, the state establishes the necessary structure for the society to function. Ergo, the citizens precede the state which then creates the corporation. The creation cannot be equal to its creator.
Faction in our Republic
We are fortunate to have the Federalist Papers to consult for guidance on the founders’ principles and rationale in creating the Constitution, and Federalist 10 and 51 are among the most important. Our founding fathers, including Madison and Hamilton, recognized the threat of faction to the new republic. Rather than try to eliminate faction, they created a structure where “ambition would counteract ambition” and competing interests would blunt the tendency toward majority tyranny. Thus, Madison envisioned citizens with competing interests coexisting in balanced, natural competition within the constitutional structure. However, this assumed equality of bargaining power among individual natural persons. Corporations with individual rights making unlimited contributions to election campaigns, alter and even upset the balance the founders set up to deal with faction.
Public Good versus Private Economic Interests
Then there is the issue of commonweal, the public good. Certain matters are good for the public as a whole, and are therefore the province of government and its public officials. What happens when an issue that is good for the general public conflicts with investor goals? Health insurance, oil well drilling, banking reform – we have many recent examples where private interests could be in conflict with overall benefit to the general public.
In these cases and others, corporations would presumably have an obligation via their charter to oppose (or try to mitigate) the greater good. Here, the corporation, acting as a citizen under Citizens United, would exert a corrosive influence on the public good wherever the latter conflicts with narrower investor interests. Civic/public virtue essential to the citizenry could be compromised for the benefit of shareholders’ economic interest the corporation was bound to prioritize.
Law of the Land
A citizen in a republic must be an autonomous actor based on natural rights. Any position contrary to this view runs counter to the original and most essential principle on which our republic is founded. A corporation cannot be autonomous as it is wholly dependent on the state for its existence.
At this point, the legal authority of Citizens United stands solidly on the Supreme Court’s 2010 ruling. Perhaps it may be changed only by a constitutional amendment. In the meantime, it would be prudent to recall what John Marshall, our greatest Chief Justice, wrote about corporations: “A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence” – Dartmouth College v. Woodward (1819)
In our highly charged political climate, it may be difficult to have a discussion such as that proposed above. The principles drawn from our liberal tradition are foundational to our republic, and should be the starting point for any assessment of this thorny issue.