Money Is Speech: Why the Citizens United v. FEC Ruling Is Bad for Politics and the Market

IN LATE January, a bare majority of the Supreme Court ruled that the First Amendment bars most restrictions on corporate expenditures to influence political elections. The decision, which turned the First Amendment on its head, was based on a simple syllogism: Corporate spending is speech; restricting speech is censorship; therefore, restricting corporate spending to influence elections is censorship and is banned by the First Amendment.

The syllogism is powerful—so powerful, in fact, that five members of the Court felt it justified overruling two major Supreme Court precedents and overturning (or, at least, threatening to overturn) a century of legislation. However, the syllogism’s power relies on a rhetorical illusion. Corporations are not individual human beings “endowed by their Creator with certain unalienable rights”. Instead, they are organizations, and organizations never are simple representatives of citizens.

Citizens make difficult political decisions, balancing the claims of justice, ethics, equality, family, and loyalty in order to decide how to structure our collective lives and the spaces in which we build our communities. Business organizations, on the other hand, are designed to avoid these debates. They are controlled by fiduciaries—the employees and directors who make the firm’s decisions—and corporate law obligates fiduciaries to set aside their own views and values as citizens and instead act in the interests of the firm. Thus, if corporate managers are doing their jobs and obeying the law, they will use corporate funds to promote whatever they view as corporate interests—not only if the corporation’s interests conflict with their own, but even if they believe that the corporation’s interests conflict with the requirements of patriotism, national interest, morality, justice, decency, or even ecological sustainability.

If the First Amendment were only about the freedom of individuals to act according to their consciences, this would be disturbing enough. The “freedom” of the corporation means the loss of freedom for the individuals associated with the firm: the managers and directors who set aside their own values—but also the employees, consumers, and suppliers who are the source of corporate funds in the first place and the PR professionals who must pretend they believe the words they are saying for the corporation.

But the problem is actually quite a bit worse. Our capitalist system depends on law to regulate markets. The law sets the ground rules within which competition takes place; it defines the lines between fair competition and illegal fraud and deception, monopoly, restraint of trade, breach of contract, discrimination, destructive pollution, simple theft, and other socially unacceptable behavior. These rules, in turn, assure that the price system works to allocate goods to those who are willing and able to pay for them.

Corporate money in politics threatens these rules of the game. Money matters in politics (if it didn’t, there’d be no First Amendment issue here). If economic incumbents—those who were successful in the past—are able to use their current wealth to influence elections and indirectly buy laws that will assure them future wealth, the market will fail just as surely as democracy would fail if political incumbents were permitted to use their offices to control elections. Lord Acton’s dictum applies to economic power just as much as it does to the political variety.

Most corporate decision makers are likely to view their legal duty as increasing the corporation’s profits—and therefore part of their obligation is to promote law, whenever it’s profitable, that is destructive of our free market system. Why try to convince consumers that genetically modified food is safe if you can simply prevent them from knowing that you are using it? Why pay to reduce pollution or garbage or accidents if you can make someone else pay to clean it up? Why innovate if you can get the government to force potential competitors to pay you royalties? Why produce efficiently if you can get a subsidy instead? And why compete on a level playing field if it is cheaper to buy a tilted one?

Majoritarian speech values suggest that we shouldn’t allow corporations to lobby, let alone electioneer. The point of a mixed democratic-market system is that markets are highly powerful tools that can be used for good or ill. Deciding how to use them, how to guide them, and when to reject their results is the heart of democratic politics. The same characteristics that make our business corporations highly effective in their intended tasks of creating jobs and supplying useful products and services—centralized managers answerable only to dispersed financial markets intent on enforcing a single minded focus on economic profit—make them highly suspect participants in the debates and political campaigns that help shape our laws.

If we allow markets to control the political process, we lose democracy. Moreover, we will lose our markets—since successful corporations will simply use money from their past success to buy legislation to guarantee them still more market power.

Daniel J.H. Greenwood is Professor of Law at Hofstra University School of Law. Professor Greenwood co-authored an amicus brief in the Citizens United case on behalf of American Independent Business Alliance, available on his website. This essay reflects his own views.



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