I love Stephen Colbert’s “The Word” segment in general, and I particularly enjoyed the one from last night entitled “Let Freedom Ka-Ching.” I guess it’s not really surprising that I take a particular shine to the money-related episodes, but this one does even better, incorporating both money and history for an econgirl double whammy…
To begin his argument, Stephen references the 1907 Tillman Act, which was the start of a long series of legislation on campaign finance reform:
The act specifically prohibited direct contributions from corporations and businesses to political parties and election committees. It was the first law on the books to specifically address campaign funding on the federal level.
Unfortunately for those who wished for an incorrupt government, this law was easily circumvented. Businesses and corporations would give their employees large bonuses with the understanding that the bonus would be given to a company “endorsed” candidate. The corporations thus found a loophole, gained political access, and received an additional tax deduction for “employee benefits.”
First off, score one for unintended consequences. 🙂 Stephen then goes on to cite Santa Clara v. Southern Pacific Railroad (1886) for it’s commonly (mis)cited ruling that corporations are entitled to equal protection under the fourteenth amendment. Stephen’s a smart guy, though, so he points out the technicality:
The question of whether corporations were persons within the meaning of the Fourteenth Amendment had been argued in the lower courts and briefed for the Supreme Court, but the Court did not base its decision on this issue.
However, before oral argument took place, Chief Justice Morrison R. Waite announced:
“The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.”
This quotation was printed by the court reporter in the syllabus and case history above the opinion, but was not in the opinion itself. As such, it did not technically – in the view of most legal historians – have any legal precedential value. However, the Supreme Court is not required by Constitution or even precedent to limit its rulings to written statements.
The persuasive value of Waite’s statement did influence later courts, becoming part of American corporate law without ever actually being enacted by statute or formal judicial decision.
I can only hope that the inadvertent tweet about Obama calling Kanye West a jackass will have the same impact. But I digress…Colbert is trying to satirize the point that corporations are people too, but he’s closer to the truth than he thinks. Corporations are essentially a set of contracts. I’ve never quite understood the “corporations vs. people” mindset, since those that benefit from corporations are, in fact, people. Employees benefit in the form of wages. Stock and bondholders benefit in terms of claims on profit. (Before you complain about a company making unfairly high profits, you might want to consider buying stock in that company instead, no?) Corporations are just groups of people coming together to conduct business activity. Yes, corporations often have more power than an individual person would, and people generally don’t seem to like others having more power than they do, but it’s not like action is taken at the expense of the people in order to feed some big corporate monster. Actions are taken at the expense of some people in order to benefit other people. Duh. It’s way too easy to think of the corporation as “the man,” and way too easy to forget that those behind the curtain are for the most part just ordinary people that don’t like “the man” any more than you do. (I am willing to acknowledge, however, that the limited liability nature of corporations serves to unlevel the playing field in some ways.)
So if corporations are people, then they deserve to be heard, right? Again from Stephen, “…they must speak with with the only way they can- through billions and billions of dollars. In 1976, the Supreme Court ruled that money is speech.*” Well now he’s on to something…you may remember that I’ve written before about voting with your dollars– if you think that a corporation isn’t acting in your interest, stop supporting that corporation with your money. Granted, there is a bit of a coordination failure aspect here, but if people figured out how to work together then they could provide incentives to direct resources in the proper way. So if it’s reasonable for people to vote with their dollars, both in terms of using their spending as an incentive and contributing directly to political endeavors, why can’t corporations do the same?
* see Buckley v. Valeo
One argument against this is one of double-counting- since there are limits on the amount that an individual can contribute to a political campaign and corporations are just groups of people, allowing corporations to contribute on their own would allow some people to effectively exceed the limits set forth in law. But the general idea still holds that letting economic entities put their money where their mouths are in order to direct choices isn’t automatically a bad thing.
Since you’ve been patient with me for this long, I figure I should at least give you the clip:
|The Colbert Report||Mon – Thurs 11:30pm / 10:30c|
|The Word – Let Freedom Ka-Ching|
I will now enjoy thinking of currency as “paper ballots.”