corporations — VOICES for REASON

In choosing a successor to retiring Justice John Paul Stevens, President Obama is preoccupied with the Court’s recent decision in Citizens United v. Federal Election Commission. That’s the case upholding a corporation’s right to spend its own money speaking out during political campaigns.

Obama has made no secret of his disdain for that decision. Justice Stevens authored the dissent in that case—the dissent that Obama wishes had been the majority decision. Stevens argued at length for sustaining the power of campaign finance regulators to throttle corporate speech.

Speaking in the Rose Garden recently, Obama said he’s searching for “someone who, like Justice Stevens, knows that in a democracy, powerful interests must not be allowed to drown out the voices of ordinary citizens.” In short, Obama wants Citizens United to be overturned, and he’s looking for a new Justice who will be as steadfast as Stevens was in opposing corporations’ rights. Read the rest of this entry »

In Citizens United v. FEC, the recent campaign finance case I discussed here and here, the Supreme Court noted that one of the arguments for restricting corporate speech is that “[s]tate law grants corporations certain advantages–such as limited liability, perpetual life, and favorable treatment of the accumulation and distribution of assets.” According to this line of argument, corporations are “creatures of the state” and they give up any claim to First Amendment rights in exchange for special state-granted favors.

In answer to this argument, the Court quoted a dissent by Scalia from a previous decision: “It is rudimentary that the State cannot exact as the price of those special advantages the forfeiture of First Amendment rights.”

The Court, which admirably upheld the free speech rights of corporations, took it for granted that corporations wouldn’t exist save for special favors from the state. It’s a common view of corporations. But it’s one that must be questioned.

There’s reason to think that all of a corporation’s essential features–”corporate personhood,” perpetual life, and limited liability–could arise by voluntary agreement among individuals on a free market, without a single government favor. Consider what many regard as one of the most controversial features of a corporation, limited liability. Read the rest of this entry »

Commentators are aghast at the defense mounted by Intel, the leading manufacturer of computer chips, against the $1.45 billion fine levied by the European Union earlier this year for antitrust violations. The New York Times scoffed at Intel’s “bid … to raise sympathy among American antitrust regulators for a poor, abused American near-monopoly,” and one industry commentator sneered at “Intel’s ridiculous antitrust defense,” calling it a “novel—and frankly outrageous—stratagem.”

What is this legal strategy of Intel’s that is attracting such scorn? It is the assertion that Intel, a corporation, has a right to the same due process of law that individuals have. Intel’s argument, as summarized by the Times, is that corporations “are entitled to the due process rights that European human rights law grants in criminal cases to ensure that the accused—usually powerless individuals—are not steamrollered by the overwhelming power of the state.” Those due process rights were violated, Intel alleges, by the European Commission, which “unfairly plays the role of prosecutor, judge, and jury.” Read the rest of this entry »