In his rather transparent effort to shift into a populist campaign mode, President Barack Obama today devoted his Saturday radio address to slamming the Supreme Court's decision in Citizens United v. FEC:
A hundred years ago, one of the great Republican Presidents, Teddy Roosevelt, fought to limit special interest spending and influence over American political campaigns and warned of the impact of unbridled, corporate spending. His message rings as true as ever today, in this age of mass communications, when the decks are too often stacked against ordinary Americans. And as long as I’m your President, I’ll never stop fighting to make sure that the most powerful voice in Washington belongs to you.
It might be worth spending a moment to ponder why corporations spend money on politics. Is it because they're antisocial? Is it because they're being used by corrupt managers to spout some chosen line of propaganda?
Or is it because the ever-increasing burden of regulation requires corporations to include lobbying regulators and legislators as part of their overall business strategy? If so, it is to be expected that corporations will seek to manage politics in much the same way as they manage other business risks.
Several years ago, Jill Fisch made an important contribution to this debate with a case study "examining the political involvement of one company, FedEx, in a series of regulatory reforms over a forty year period."
Drawing upon the business context, the legislative record, campaign finance materials and interest group analysis, the Article demonstrates that political activity has been an integral component of FedEx's business growth and operations. FedEx has successfully used its political influence to shape legislation, and FedEx's political success has, in turn, shaped its overall business strategy. Moreover, in identifying the specific components of FedEx's political activity, the Article highlights the range of mechanisms that corporations use to engage in politics, revealing that the exercise of political influence is far more complex than the purchase of political favors in a spot market.
Regulation is becoming an increasingly important factor for United States businesses. As a result, corporations must integrate political activity into their overall business strategy and must develop and manage their political capital in the same way that they manage other business assets. The FedEx story demonstrates the importance of politics to business and explains the growing investment by corporations in political capital. It further explains how the business world has responded, and will continue to respond, to regulatory restrictions by developing alternative mechanisms for exerting political influence.
In other words, when corporations play politics, they're just playing self-defense against Leviathan.
I firmly believe that in doing so, corporations contribute to the public good. In my article, Community and Statism: A Conservative Contractarian Critique of Progressive Corporate Law Scholarship, I argued that:
Most people belong to a host of communities with the potential to inculcate virtue and other communal values: churches, schools, fraternal organizations, and the like. While it may be unrealistic to think of a large multinational corporation as constituting such a community, it is perfectly plausible to think of the corporation as an intermediary institution standing between the individual and Leviathan. In other words, while virtuous citizens are developed by smaller institutions with roots in the local community, the corporation still can act as a vital counter-vailing force against the state. Resistance to expanding the realm of mandatory corporate law rules thus responds to the “notion that the prevailing moral threat in our era may not be the power of the corporations, but the growing power and irresponsibility of the state.”
Sphere sovereignty assumes that a limited state is an essential attribute of ordered liberty. In a society premised on sphere sovereignty, private property and freedom of contract are thus important not just in their own right, but rather because they provide essential limitations on the power of the state. As Russell Kirk observed, conservatives are persuaded that “freedom and property are closely linked: separate property from private possession, and Leviathan becomes master of all.” In the present context, we must amend this sentiment to encompass freedom of contract, but the point remains the same.
As a societal decisionmaking norm, the economic freedom to pursue wealth does more than just expand the economic pie. A legal system that pursues wealth maximization necessarily must allow individuals freedom to pursue the accumulation of wealth. Economic liberty, in turn, is a necessary concomitant of personal liberty—the two have almost always marched hand in hand. The pursuit of wealth has been a major factor in destroying arbitrary class distinctions, moreover, by enhancing personal and social mobility. At the same time, the manifest failure of socialist systems to deliver reasonable standards of living has undermined their viability as an alternative to democratic capitalist societies in which wealth maximization is a paramount societal goal. Accordingly, it seems fair to argue that the economic liberty to pursue wealth is an effective means for achieving a variety of moral ends.
In turn, the modern public corporation has turned out to be a powerful engine for focusing the efforts of individuals to maintain the requisite sphere of economic liberty. Those whose livelihood depends on corporate enterprise cannot be neutral about political systems. Only democratic capitalist societies permit voluntary formation of private corporations and allot them a sphere of economic liberty within which to function, which gives those who value such enterprises a powerful incentive to resist both statism and socialism. Because tyranny is far more likely to come from the public sector than the private, those who for selfish reasons strive to maintain both a democratic capitalist society and, of particular relevance to the present argument, a substantial sphere of economic liberty therein serve the public interest. As Michael Novak observes, private property and freedom of contract were “indispensable if private business corporations were to come into existence.” In turn, the corporation gives “liberty economic substance over and against the state.”
