What did the Founding Fathers really think about corporations and their rights?
All the perplexities, confusion and distress in America arise not from defects in the Constitution or Confederation, not from a want of honor or virtue so much as from downright ignorance of the nature of coin, credit and circulation.”
–John Adams, at the Constitutional Convention (1787)
Does this sound like a man who intended to give corporations, a legal fiction whose life exists only on paper, the right to free and unfettered speech?
The reality is that the Founding Fathers didn’t think very much of corporations or, for that matter, any of the organized moneyed interests that played so large a role in the decision to revolt against Mother England.
To understand this, it is important to understand the nature of corporations during the days when the United States was founded.
The modern corporation dates back to the early 17th century when Queen Elizabeth I created the East India Trading Company. During that time, corporations were small, quasi-government institutions chartered by the crown for a specific purpose. Not unlike today, the idea behind these organizations was to bring together investors interested in financing large projects, such as exploration. Indeed, many American colonies were originally governed by corporations, such as the Massachusetts Bay Company. We all know how well that went over.
The English monarchs kept a close eye on these organizations and did not hesitate to revoke charters if they didn’t like the way things were going. However, as the money piled up in these corporations, they began to take on increased political power.
Which brings us back to the The East India Company, the dominant corporation of that era.
Trade-dominance by the East India Company aroused the greatest passions of America’s Founders – every schoolboy knows how they dumped the Company’s tea into Boston harbour. At the time in Britain virtually all members of parliament were stockholders, a tenth had made their fortunes through the Company, and the Company funded parliamentary elections generously.”
Clearly, the Founders did not think much of these corporate entities and the corruption they produced in parliament. Still, it never occurred to the Founding Fathers to directly address corporations in America when they wrote the Constitution. While we can only speculate, it is not hard to understand why this would be the case. The Constitution speaks to control of government by the people…for the people…and of the people. Why would it even occur to the Founders that a corporation would ever be perceived as one of ‘the people’? History makes clear that they viewed these entities as forces that preyed on people (see The Boston Tea Party.) Indeed, but for a legal determination made in a perverse Supreme Court holding in 1886, who would rationally see a legal entity as a person? Is a trust a ‘person’? Does it eat, breathe, etc.?
Still, since we are forced to speculate, there is evidence of how the Founders, and the society they created, viewed these legal entities.
After the nation’s founding, corporations were, as they are today, the result of charters granted by the state. However, unlike today, they were limited in how long they were permitted to exist (typically 20 or 30 years), only permitted to deal in one commodity, they could not own shares in other corporations, and their property holdings were expressly limited to what they needed to accomplish their corporate business goals.
Do any of those attributes and limitations apply to people? Neither the Constitution nor laws of any governmental entity ever limited our lifetimes to a set period of time, never required that we trade in only one business or commodity, never attempted to limit our ability to buy shares in a variety of companies and never limited how much property we can own, or for what purposes.
Clearly, the society created by The Constitution did not see people as the same as corporations or vice-versa.
But here’s the biggie. Back in the early days of the nation, most states had rules on the books making any political contribution by a corporation a criminal offence.
Indeed, so restrictive was the corporate entity, that many of early America’s greatest entities were set up to avoid the corporate restrictions. Andrew Carnegie formed his steel operation as a limited partnership and John D. Rockefeller set up Standard Oil as a trust.
Not surprisingly, as corporations grew larger and their shareholders wealthier, they began to influence the rule making process that governed corporations. Using the money they had accumulated, they began to chip away at corporate restrictions. Eventually, corporations were permitted to go on forever. Where shareholders had once been personally responsible for the actions of the corporation, modern corporations shield them from liability. And as more money became involved, the politicians who regulated them grew increasingly seduced by what the wealthy corporations could do for them.
This history is what makes yesterday’s decision by a Supreme Court dominated by alleged strict-constructionists dedicated to giving full force and effect to the intentions of the Founders so … odd.
Reading the majority opinion, written by Justice Kennedy, one has to say that it is a very well written and persuasive argument. But when I read the minority opinion written by Justice Stevens, it is equally as persuasive.
At the end of the day, this entire question is about who, as a ’speaker’, is entitled to First Amendment protections.
Justice Kennedy, and the majority, believe that the criminalization or restriction of a corporation’s right to express itself via political contributions is a violation of the First Amendment right to free speech.
Justice Stevens, and the minority, believe that a corporation was never intended to be defined as being capable of being a ‘speaker’ as it is a legal fiction.
Based on the history and a rational reading of the Constitution, it seems clear that Steven’s argument carries the day. Yet, his was the minority point of view.
And it’s not just the Founders. Since we rarely go wrong when listening to the words of Abraham Lincoln, here is what he had to say-
The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies, all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the Bankers in the rear. Of the two, the one at my rear is my greatest foe.. corporations have been enthroned and an era of corruption in high places will follow, and the money powers of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed.
If we’ve learned anything this past year, as we’ve watched corporate special interests shape both the debate and the outcome of the pressing issues of the day, corporations already control federal policy. Up until now, more corporate money has gone to the financial support of lobbyist who use that money to influence the outcome of legislation to the benefit of their corporate sponsors. By permitting these interests more latitude in the election process, it might simply result in ‘transferring’ the expenditures to the front end of elections rather than the back end. If corporations have already bought their elected officials by providing the money to get them elected, they may then spend less in lobbying because the vote will already have been paid for.
What the Court ruling highlights is that there can be only one solution - government funding of all federal campaigns. Until we force our elected officials to take private money out of politics, this problem is not going away. The Congress has the ability, even in the face of yesterday’s court ruling, to legislate full government finance of federal elections. They always have. It’s simply a matter of forcing them do the right thing.
I would add that yesterday’s Court decision sheds light on one other important matter. The conservative forces on this Court are not about preserving the intent of The Constitution despite their pretense that this is their mission. We saw it last week when they stepped in to tell a local District Judge that he could not broadcast the Prop. 8 trial in California challenging the California constitutional amendment prohibiting same sex marriage. For the first time in history, the Court issued such an order interfering with the procedural and administrative process of a local court. Now, despite clear and convincing evidence that the Framers of the Constitution would have strongly disapproved of their actions, the Court has greatly expanded corporate rights in the nation’s elections.
This is a Court with a mission of activist change – not Constitutional preservation. While that may please the more conservative elements of our society who think it is time to pursue a more conservative court agenda, none of us should pretend that these are people who desire a strict enforcement of the our founding principals and documents. They don’t. They have something entirely different on their minds.