The Management Empowerment Decision
“Money On My Mind” is a monthly column by Jay Mandle. The views expressed here are those of the author, (not necessarily those of Democracy Matters or Common Cause), and are meant to stimulate discussion.
February 2010
By Jay Mandle
When pressed, defenders of political inequality invariably resort to the free speech gambit. The claim is that any attempt to regulate the political process impairs First Amendment’s guarantees. This is the gist of the Supreme Court’s decision in Citizens United v. Federal Election Commission. The Court has now permitted unlimited corporate spending on political advertising. In his majority opinion, Justice Anthony Kennedy wrote that limiting corporate expenditures “prevents their voices and viewpoints from reaching the public….”
This is very strange. At the level of intellectual sophistication at which the Supreme Court operates, it would not seem to be necessary to remind it, as Justice Stevens’ dissent did, that “corporations are different from human beings…” and that when the framers “constitutionalized the right to free speech in the First Amendment, it was the free speech of individual Americans that they had in mind.”
Furthermore what does it mean to say corporations speak? If they do, whose voice is it? In specifically addressing that question, Justice Stevens wrote that the voice “presumably…is not the customers or employees who typically have no say in such matters [and] it cannot realistically be said to be the shareholders who tend to be far removed from the day-to-day decisions of the firm.” What that means is that the “viewpoint of the firm” is that of management. But in that case managers are using corporate wealth to advance their own political agendas. Their voices are augmented using somebody else’s money.
As if this bias against political equality is not bad enough, the Court decision as well limits the meaning of political corruption. In its original decision validating campaign finance regulation, Buckley v. Valeo, the Supreme Court permitted limiting campaign contributions because such payments were either corrupting or provided the appearance of corruption. In the majority opinion in the Citizens United case however, Justice Kennedy was explicit in declaring that the appearance of corruption did not provide a sufficient basis for disallowing corporate expenditures. Now there has to be a “quid pro quo” for regulation to be justified. But the fact is that only very rarely can a direct exchange of money for a vote be demonstrated. As Justice Stevens wrote, “it would have been quite remarkable if Congress had created a record detailing such behavior by its own Members.”
In short, the Citizens United ruling represents a long step backward. On the one hand corporate wealth will be unleashed in ways that have not been legal since the passage of the Tillman Act in 1907. On the other hand it will be almost impossible to limit such expenditures because the burden of proving corruption will be so daunting.
This decision reflects the same kind of hostility to government regulation that gave rise to our current economic crisis. The argument with regard to the economy was that regulation was bad and though in its absence inequality might increase, the country would be better off if wealthy people were permitted to do as they pleased. In the Supreme Court the same attitude prevails. A laissez-faire stance towards the political process empowers corporate management more than the rest of us. But the Court implies that that influence will be benign and the country will be the beneficiary of increased corporate political power.
As we now know, that argument was wrong with regard to the economy and it is certainly wrong with regard to politics. Corporate managers should no more be entrusted with disproportionate influence over policy-making than hedge funders operators should have been allowed to dominate the economy.
Obviously it is going to take a lot of hard work to reverse the trend towards political inequality that this decision will unleash. Corporate wealth will be used to influence the policy options that are presented to the American people. It is a certainty that they will not advocate increased control over corporate political spending. What is needed in this regard is a voluntary system of public funding of political campaigns.
Precisely because the need for political regulation of wealth corresponds so closely to the need for economic regulation, there is reason to believe that a reversal can be achieved. Miniaturized government does not work either in the economy or in politics. And because this is so, there is the potential for building a strong coalition among economic and political reformers. A modern market economy requires the kind of regulation that can be constructed only if the political process functions on the basis of equality, with special interests tamed. Democracy too requires the regulation of those who would use their wealth to exercise disproportionate influence. With each sphere dependent on the other, reformers will be well positioned to find unaccustomed allies and to build the kind of movement necessary for progressive change.