Congress Shall Make No Law….

by Don Boudreaux on January 21, 2010

in Law, Podcast

By a narrow 5-4 margin, the U.S. Supreme Court just ruled in favor of free speech.

For fascinating background, see this five-plus-minute clip from the Cato Institute.  (HT Caleb Brown)

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  • A. Arthur Miller
    What is really scary about this decision is that there are four Judges who believe the government can censor what is said about politicians.
  • vidyohs
    I will express my unease with the situation like this.

    If it can not walk into a voting booth and pick up the pen and make the marks on the ballot, it should not be extended the privilege of advocating, electioneering, advertising, or promoting candidates for election, especially not in spending money to do those things.

    While the privilege of being a person under our law is extended to corporations, a corporation is still a paper fiction. While it can amass huge fortunes as a paper fiction, it is not a living thing.

    I have a hard time believing that the founding fathers visualized extending the privilege of electioneering, advocating, and promotion of candidates to paper fictions.

    If a man is going to use a corporation to hide his wealth in a way that you and I as living breathing humans, freemen, can not do, then in my own personal opinion that hidden wealth should not be allowed into the debates, or onto the soap box in promotion of candidates or policies.

    The man behind the corporation should be limited to using only his personal wealth he displays to the auditors.

    I told you guys I am not a libertarian, not a socialist, and not a republican.
  • SheetWise
    "If a man is going to use a corporation to hide his wealth in a way that you and I as living breathing humans, freemen, can not do..."

    People do not use corporations to "hide" their wealth -- they use it to protect their wealth. It's simply a method for real, live, living people to either diversify their activity or pool their resources in a way that limits cross liability. The fiction of being a person is simply what limits liability to the corporation. This is generally the most expensive way to do business, and would be avaided if it didn't offer some protection.

    "While the privilege of being a person under our law is extended to corporations, a corporation is still a paper fiction. While it can amass huge fortunes as a paper fiction, it is not a living thing."

    The corporation is, by far, the most transparent method of doing business. If people could not protect their assets by use of corporations -- they would solicit real people to stand in for them and capture the businesses profit through some other mechanism.

    Corporation represent people.
  • Python
    A counter example would be regarding teenagers. They can not vote, but are you going to tell them that they can not put Obama stickers on their skateboards or to volunteer at political rallies?
  • vidyohs
    A reasonable reply but not really a good one, and I don't say that in a mean way.

    Kids do not vote now but they will, hopefully the intelligent ones, make it to voting age. They will be able to enter a voting booth and use the pencil, push the button, pull the lever.....a paper fiction will never be able to do that.

    Let's take your example of a kid putting an Obama sticker on his skate board, many of us here might consider that as grounds for retroactive birth control........LOL, sorrry couldn't resist that.

    Seriously, there is a huge difference between a currently ineligible kid who puts a campaign sticker on his skate board, and the Incorporated Auto Worker's Union, as a corporation, spending many millions of dollars on advocacy in a targeted district in order to wrest that seat from a Republican, or vice versa. It happened here in a local district in 1996 and returned a really dimwitted democrat to the House. So, I ask myself, is it really just a matter of free speech that a Michigan based labor union can inundate the airwaves in Houston with advocacy for a democratic candidate, or is it an abuse of the privileges extended to paper fictions?

    To repeat myself, I am bothered by that.

    To the people in that district did it make any difference that the money came from a Michigan based labor union instead of Amsterdam based Shell Oil? Either way an outside paper fiction bought that election. At least that is the way I see it.

    I repeat I am bothered by that state of affairs. There is something wrong with the process when an outside immense wealth can come into a district where it has no real presence or facilities, and buy an election, putting resources on a candidate whose only function will be to rubber stamp their interests when he gets to congress.

    I am surprised that more people aren't bothered by it.
  • gregworrel
    Sorry, cannot agree with you. Corporations are a group of people associated for a specific purpose. They consist of living, breathing humans who can vote.

    How is an association, PAC, union, political party, or any other group different? No doubt there are legal differences but the basic right to associate should still hold.

    Why should a media conglomerate, which has been free to publish opinions and advocate for candidates and issues, be treated differently from other corporations?

    How is wealth hidden in a corporation? The shareholders are not hidden. Is the value held in shares not part of a person's wealth?
  • vidyohs
    Would you be surprised to learn that I expected disagreement?

    Let's go back to a basic of question of "why incorporate"?

    If there are no financial advantages to incorporation of a business or any entity then why do it? So that a group of people can form free associations? Seems a tad illogical doesn't it, as they can form free associations without the bother.

    I know it isn't, but let's for the sake of your argument and the argument for incorporation, let's give legitimate status to the IRS to collect income tax.

    I incorporate to access deductions available to my corporation that are not available to me as an individual. If I do not incorporate I subject my business to taxation way above and beyond my incorporated competition. As owner of the business I structure my corporation so that it pays me a nominal salary, exposed to IRS taxation, while remaining able to access the profits of the corporation as the CEO, and I write that access off as expenses which further reduces my corporation's bottom line.

    As my post above makes clear I have no problem with the man owning the corporation and using his own IRS exposed wealth to advocate, and I certainly would not prohibit his employees from doing so either, if they use their own money, individually or pooled; but the wealth of a corporation like Microsoft should not allowed into the voting booth because it is a paper fiction.

    We can disagree, which I knew we would. But, I leave you once again with that one main thought, voting was meant for live humans not paper fictions, and if it can't vote, it should not be advocating.

    Take it one step farther, the owners of Shell Oil Co. (Dutch Royal family) can't vote in our elections, should the money of their corporation be allowed to advocate? Notice I said the money of the corporation, not the USA citizens who are employed by Shell.

    You accept the foreign concept of a paper fiction advocating, but not an foreign corporation? I fail to see differences between the two in principle.
  • gregworrel
    As the owner of two small businesses that are incorporated, I am not aware of any deductions that are available to me as a corporation that would not be available to me as a sole proprietorship or partnership.

    The taxation depends on the structure of the corporation but many small businesses are Subchapter S or LLC to avoid DOUBLE taxation.

    Should a corporation be allowed to deduct the cost to print and distribute a pamphlet advocating its views on a political issue when the issue could determine the viability of the business? Politicians run roughshod over businesses and the businesses should not be allowed to get their side of the story out?

    Obama and the members of Congress get millions of dollars worth of free publicity demonizing businesses to advance their pitiful political careers and the businesses should not be allowed to respond?
  • vidyohs
    If you know nothing else about me as a frequent commenter here, then you have to know I am also a small business man, and I am a dedicated capitalist through and through. I am a staunch advocate of liberty, freedom, and natural law; no one is more consistent than I on those points.

    Yet something is wrong when a foreign paper fiction can come in and buy an election through expensive advocacy in a local election.

    How does such a situation jibe with the founders concept of local representation and equal representation at the national level?

    How does telling foreigners that they can't buy your local election become an issue of free speech, you wouldn't hesitate to tell Russian owned Klasnikov Arms Corp to stay out of your district and the issue of free speech would not even occur to you, why does telling George Soros, or MicroSoft, to stay the hell out of your district bother you and become an issue of free speech?

    "As the owner of two small businesses that are incorporated, I am not aware of any deductions that are available to me as a corporation that would not be available to me as a sole proprietorship or partnership."

    Sir, you know this and I know this, it is why my wife and I typically had some sort of properly documented business; but, the vast majority of the unwashed does not. Still.

    For the average Joe that has a no documented business by IRS definitions and interpretations and is employed by Shell Oil as a chemical operator; for him to deduct all the gas he uses going to and from work, the cleaning of all his clothes, the parts and repairs for his automobile, his vacations and short trips, dinners, entertainment, and even the kenneling of his dog, just is not going to fly when the IRS auditor gets into his records.

    Now if he is a business owner, most of those can be deducted with some clever documentation; as a corporation all those things can be corporation expenses and deducted.

    I have done it. All three levels. Maybe myself and the account I used didn't have it right, but my studies since I decided to rebel and go solo at whatever level I can achieve all tell me that this is still true.

    Am I wrong?

    Now, I do not know how denying participation to a paper fiction is limiting free speech, I still skeptical about that.
  • gregworrel
    The constitution is straightforward: "Congress shall make no law . . . abridging the freedom of speech."

    It doesn't say, unless it is speech paid for by a corporation, or unless it is speech from a foreigner.

    I believe that the more speech the better. The more views that are allowed to promulgate the more likely that truth will prevail. ANY suppression of speech is likely to distort the information people may access and increase the likelihood of distorted rather than accurate viewpoints.

    For every voice suppressed because of fears of undue influence in a local election, other competing voices and truthful voices will also be suppressed. I have faith that the truth will out if it is allowed to be heard.

    Consider the current voices that are being heard. We need more diversity in the information being mass produced for the general electorate. Most people do not read Cafe Hayek.
  • failed state
    I'd have to agree. It seems pretty clear a corporation is a type of voluntary association of people and therefore should have the same protections of free speech / advocacy as any other assembly of free people.
  • muirgeo
    Excellent discussion on the issue with BOTH sides well represented.

    http://www.pbs.org/moyers/journal/09042009/prof...

    Really really defines the difference between Libertarian and Liberal to me.
  • true_liberal
    So tell me - what does the word "liberal" mean to you? Have you no appreciation of its etymology? Or is "liberal" your synonym for "progressive"?
  • Sometimes SCOTUS gets it right.
  • muirgeo
    How does this decision help the average Joe Justin?
  • geoih
    Since when did any court decision have anything to do with helping the "average Joe"? If you want to help this "average Joe", whatever that means, then you should go help him, and not expect everybody else in the world to do it simply because you want to, and especially not force everybody else to help with the guns of the government.
  • Guest
    Campaign finance laws only serve to help incumbents to retain office. They are the ones with the time and the name recognition to raise money in small denominations. This ruling should make it much easier for a challenger to unseat an incumbent. Fresh blood may or may not help, but individuals that serve 20+ years in the House or Senate are definitely not making things better.
  • JohnDewey
    Hooray! Samuel Alito has so much more respect for the constitution than did Sandra Day O'Connor.
  • muirgeo
    Where in the constitution are corporations mentioned???

    I word searched Corporation" in the constitution... not found.
  • geoih
    "... or the right of the people peaceably to assemble, and to petition the government for a redress of grievances."
  • muirgeo
    Yes, HOOORAY for the constitution;

    We the Corporations of the United States, in Order to form a more perfect profit model, ......


    "I hope we shall crush in its birth the aristocracy of our moneyed
    corporations, which dare already to challenge our government to a
    trial of strength and bid
    defiance to the laws of our country."
    Thomas Jefferson, 1812
  • Ryan Langrill
    Justice John Paul Stevens said in his dissent, ''The court's ruling threatens to undermine the integrity of elected institutions around the nation.''

    I was unaware there was any left.
  • Lizzaroni
    It's sort of ironic that he dissented at all. In RAV v. St. Paul he wrote that political speech was the mostly highly protected form of speech.
  • ArrowSmith
    My god he is so wrong and idiotic. The SCOTUS' job is to uphold the Constitution, not worry about the "integrity of elected institutions". That shows how perverted the legal profession has become.
  • Curious
    :-) I agree, I wasn't aware of integrity in politics either.
  • mikeikon
    Now at least we'll know who the corporate and union interests want in office, and we can vote against them.
  • Mommsen1625
    "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is im-possible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and jus-tice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary." - Adam Smith
  • tw
    Did you read the quote in the story: "It's the Super Bowl of bad decisions?"

    Is this a mega-mixed-up metaphor or what?
  • SheetWise
    "Is this a mega-mixed-up metaphor or what?"

    Almost as if it were written by Thomas Friedman.
  • Mommsen1625
    Best news I've heard all month.
  • muirgeo
    Is that because you're a Corporate Overlord Wannabe or a Serf Wanabe?
  • Mommsen1625
    Mr. Troll, just keep walking down the road.
  • muirgeo
    No really which is it?
  • Mommsen1625
    Troll, what you are suggesting is known as the fallacy of the excluded middle: http://en.wikipedia.org/wiki/False_dilemma
  • SheetWise
    Now if we can just win Bilski ...
  • David Shaw
    Who's we? I'm not messing with you, but conservatives/libertarians/anarchists stand on all sides of the patent debate, especially for business methods. I personally stand closer to the anarchist end of that spectrum, and I abhor the patent system. So I actually, for the first time I can remember, want the government to "win" Bilski.

    That said, isn't Bilski a terrible case to challenge the government's business method patent stance on? I mean, his method is hedging. Its an easy case of invalidity for S103 obviousness.
  • SheetWise
    People do stand on all sides of the debate -- but I think they often confuse intellectual property with critical information, as in State Street Bank, which I think hangs in the balance with Bilski. I think the spectrum is wider than you state it, but I've never heard anyone seriously defend this broad of an interpretation for patent eligibility other than legal theorists representing opportunists.

    I was thinking "we" the people -- I should have been more clear. Especially after free speech only gets a 5-4 win, there's clearly another side out there.
  • geoih
    "Congress shall make no law ..."

    What is so hard to understand?
  • ArrowSmith
    The lefties are saying corporations shouldn't have legal status to begin with because they aren't people. McCain/Feingold is really part of the overall lefty war against corporations.
  • muirgeo
    Hell yeah!!! It's war against our corporate overlords.


    Anyone who claims money is free speech and corporations are persons is IMO a liberty hating fool and is simply asking to be ruled by an elite minority.

    But again libetarianism IS The Road to Serfdom.
  • gregworrel
    So Muirgeo, do you believe all corporations are bad?

    Or is it like witches--where you can have good witches and bad witches? Maybe corporations like Apple, Google, and Costco are like the Good Witch of the North--using their powers for good to direct us to the Emerald city.

    And then there are the bad corporations, the wicked witches: Exxon-Mobil, Archer Daniels Midland, and WalMart--using their powers for evil and self-aggrandizement, enslaving us munchkins.

    Does that pretty much sum up how you see things?
  • muirgeo
    I think the idea of the state allowing corporations to exist is a great idea. I think allowing corporate personhood is as scary as communism.

    I would strongly encourage you to listen to the Bill Moyers show I linked to. Again both sides are represented.


    From the show;

    "So, we're not talking about political speech by people who care about their country, who are concerned about changes in society, who are dealing fairly with friends and neighbors and all the things that get involved in politics. We're talking about a potential spender here that has a single-minded purpose, which is to make more money, to maximize their value. And I think what we're looking at here is not a First Amendment speech right, because the individuals who head those corporations have that now, their PAC's have it now, their shareholders have it now. We're talking about using the funds that are amassed under the preferential corporate treatment, to go out and seek economic gain, what they call economic rents, through legislation, by electing people who will give the corporation what it wants, whether or not is in the greater good. And I don't think that's the essence of democracy. And I don't think it has been or should be the way the First Amendment is read."

    Trevor Potter
  • Mommsen1625
    Troll, when liberal think tanks, charities, etc. stop taking corporate money liberals can bitch about how corporations spend their money. Liberals are at the height of hypocrisy on this issue; they want corporations to fork over millions of dollars in donations to their favorite charities, while at the same time they want to keep corporations from speaking on regulatory and legal issues that effect them.
  • Why should I listen to the same arguments I've heard over and over and over again. I don't need your appeal to authority, I can think for myself thank you
  • muirgeo
    You can think for yourself??? So where the constitution says, "Congress shall make no law....... prohibiting the free exercise thereof; or abridging the freedom of speech.



    Where they talking about people or corporations.
  • David Shaw
    The fact that you fail to acknowledge (a running theme with you) is that corporations aren't entities that just appear out of the ether. Corporations are owned, operated, financed, etc and are the property of INDIVIDUAL PEOPLE. If these people want to use the wealth they have held in a corporation to finance political speech, how is that NOT free speech by a person or people?
  • muirgeo
    "Corporations are owned, operated, financed, etc and are the property of INDIVIDUAL PEOPLE. "

    And those individual people HAVE the right of free speech. They should NOT be allowed to use the power of a legal fiction which never dies and which is generally jointly owned by thousands of sharolders to over power the democratic process.

    Why should I or any other person allow for corporations to exist if they are government created entities.

    I say get rid of corporations altogether then. They are not mentioned in the constitution so why should we have them if they are going to undermind our constitution.

    They exist because we allow them to exist and thus they follow the rules we make for them. If they don't like the rules they don't need to incorporate.


    It blows me away how you are all OK with Fascism and Corporatism not understanding the conflicts with your supposed ideas of liberty.
  • geoih
    Muirgeo, you haven't answered the question as to why "the press" (which are corporations) should have Constitutional protections while no other corporations do. Then you can try to define what "the press" means and why a PAC or a Union or any corporation that publishes is not "the press".
  • geoih
    Aren't newspapers corporations? Don't they have specific protectons on speech? Why should any other corporation be treated differently than a newspaper? If a PAC or Union or any corporation publishes something, shouldn't it be protected the same as anything published by a newspaper? Explain to me how it is different.
  • Where in the Constitution does it say that Congress can force people to buy insurance?
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