Corporate Checks and Balances

by Rick Jurmain

"Checks and balances on government power" is the most fundamental principle of our Constitution. The Framers of the Constitution warned us about another power – concentrations of wealth – that also warrants checks and balances. They stated that a democracy cannot function effectively when its constituent members believe laws are being bought and sold through corruption.

The greatest concentrations of wealth and power in the world today are corporations. That's no accident. Governments design corporations to be rich and powerful. Governments give modern corporations two key superhuman rights to help them concentrate the wealth needed to accomplish great things for the common good.

Superhuman right 1, which gives corporations their financial power, is called "limited liability". An investor can start a corporation with, say, $1000. That corporation might grow and the investor might make a billion dollars. But if the corporation then goes broke and has debts of a billion dollars, the investor will not have to pay the billion dollars. The investor will never lose more than the $1000 he or she originally invested. (With some rare exceptions.)

Superhuman right 2 grants criminal protection called "the corporate veil". The government grants immunity from prosecution to corporate bigwigs for most crimes commited by the corporation, with rare exceptions.

In simple terms, corporations are extremely useful shields for avoiding individual responsibility, both criminal and financial. This is a huge benefit to investors. It can also be a huge benefit for the common good. It enables investors to accumulate the vast wealth and great power to do great things.

Corporations can do great good. They helped make America a superpower. And corporations are a key part of the American dream for most citizens, providing employment, family insurance, and training.

But all power warrants checks and balances. As the original Conservative James Madison warned, "The growing wealth acquired by [corporations] never fails to be a source of abuses." So all governments regulate corporate power. To balance the two superhuman corporate rights, rights not shared by normal citizens or even by the government itself, the US regulated corporate involvement in elections. There are two reasons for this: (1) The power to concentrate wealth equals the power to corrupt elections. Always has. Always will. And (2) Once corporations control the election of representatives, all other checks and balances on corporate power can be removed at the corporate whim. Elections are the key.

For all of American history corporations were subject to checks and balances on this key. Then, in January 2010, they were removed. The Supreme Court ruled that: (1) Corporations have the Constitutionally protected right to participate in elections, and (2) Corporate money is corporate free speech, so corporate money cannot be regulated in elections.

Spending money is clearly an indispensable component of effective political speech. Spending money is also an indispensable component of bribery. The Supreme Court has, with moronic simplicity, eliminated almost all distinction between the two. By making bribery an act of free speech, the Supreme Court has legalized bribery.

The Supreme Court says "There is no such thing as too much free speech." We shall see, because based on that simplistic jingoism they have just created a world in which "There is no such thing as too much corporate power." How long will it take for the voice of a 15 trillion dollar corporate economy to influence the relatively small number of voters needed to swing elections? Not long. Anyone who doubts the power of corporate marketing is unschooled in the science of modern marketing psychology. Marketing is the single largest expense of many major corporations, dwarfing their material, labor, and manufacturing costs. Do you seriously think corporations would spend that much on marketing without proof that it increases their profits?

All politicians know that marketing works. As a result even the mere threat of corporations supporting their opponent will influence many politicians. Likely a few principled candidates will resist this corporate power. Their massively funded electoral defeats will serve as warnings to the rest. From that point on it will cost corporations nearly nothing to get their way. Such is the efficiency of massive power: The threat is enough. By unleashing the full power of corporations to spend money, the Supreme Court will actually save them money.

The Supreme Court says this is a First Amendment issue, a matter of free speech. But history says that in exchange for their superhuman rights, corporate speech in elections was regulated to protect the common good. Corporations have no standing whatsoever in the Constitution. They are created by the states, not by the federal government. So bringing the First Amendment into this demonstrates ignorance of history, the Constitution, and corporate law.

Since Supreme Court Justices are NOT ignorant of history, the Constitution, or corporate law, it implies one other explanation for their decision: An unspoken agenda. The majority Justices believe that reinventing the Constitution to unleash corporations will help Republicans win elections. In that they are right. This agenda is not completely unspoken: Everyone BUT the Supreme Court is talking about it.

Money has a loud voice. But that voice comes from the money itself, not from the Constitution.

While many Conservatives celebrate this increase in Republican power, the curious thing is how anti-Conservative this decision really is. It required inventing a wildly imaginative intent of the First Amendment, totally at odds with history, which Conservatives respect. And consider other traditional Conservative principles for instance: family values, small government, and low taxes. In what way does legalized bribery promote family values? In what way do legalized special interest and pork barrel politics promote smaller, cheaper government? In what way do bribed corporate tax loopholes reduce your taxes? If corporations have the power to grant themselves tax breaks, land grants, mineral rights, eminent domain, or other gifts out of the public trough at the expense of the common good, does anyone expect them to hesitate?

Some say this is an issue of freedom of association, also covered by the First Amendment. But a corporation is not just a bunch of people standing on the corner. A corporation is a powerful entity granted superhuman rights by the government. If you don't like the regulations attached to the avoidance of individual responsibility, simply remain an informal association, pool your money, and remain responsible for your actions, just like the rest of us. But if you choose superhuman rights, then accept regulations limiting your participation in elections. Conservatives do not expect to have their cake and eat it, too. If you choose superhuman powers, then pay for them. There ain't no such thing as a free lunch. That's a Conservative principle.

The Supreme Court claims that corporations are "disadvantaged" citizens warranting freedom. But they have it exactly backwards. If they want to grant advantages and freedom, please, TURN US ALL INTO CORPORATIONS!

Corporations are shields, not people. And money is property, not speech. The court did not make a Conservative decision, but merely a Republican decision, at the expense of Conservatism and the Constitution. The ends justified the means, no matter the cost.