On Corporations and Free Speech

By J. DeVoy

Earlier this month, when I danced on Russ Feingold’s political grave, Randazza and several others critiqued the desirability of unbridled free speech for corporations.  This is a subject where many will have to agree to disagree.  Since defending corporations seems to be the minority position, though, I think the rationale should be clearly delineated.  In many ways, it makes sense and provides value to society.

A few disclosures: My stock portfolio is worth $0, and my net worth is just slightly in the negative six figures.  (Adios, gold-diggers!)  To understand my opposition, I spent two-and-one-half hours watching The Corporation, a documentary on the corporate form and the evils it has allegedly wrought on the world.  I have nothing to gain from my position, and some might accuse me of being a shill for not getting anything out of my beliefs.  Still, I think that broader policy concerns trump the fact that my positions do not translate into pecuniary gains.

Misconceiving “Corporations”

When people talk about corporations, names like Nike, Monsanto, Intel, Bechtel and Comcast come to mind.  In reality, these are a tiny number of the corporations operating in America and internationally, though they do wield tremendous wealth and power.  The pejorative use of “corporation” has become synonymous with the Fortune 1000 – large international entities that are not wholly committed to any one nation and, thus, not exclusively within their jurisdiction.

This perspective ignores people who incorporate simply to limit their liability.  This group is fantastically large, including people such as someone who owns two small local bike stores, or a landscaper who wants to protect himself – and his retirement, children’s college funds, and house – from any negative consequences coming from using heavy equipment around his employees or customers’ residences.  Being a corporation allows a man or woman, and possibly a few others, such as friends, relatives, operators or investors, to pool their money and obtain credit and assets without worrying about their personal assets being subsumed by a new business operation that’s actually quite risky.  Suddenly, the faceless corporation is made quite human.  And its interests, like human interests, need to be expressed not only in the commercial marketplace, but the political and social ones as well.

Achieving Perfect Information

The ultimate goal of allowing corporations to have speech rights equivalent to individuals is expanding the total universe of available information.  In economics and in practice, perfect information is theoretical, but the availability of more information leads to better decisions.  A larger pool of data allows for more trends to be spotted, more externalities to be found, and for anecdotes to congeal into patterns.

Given their size and research capability, corporations have lots of data they can share with the public – even if it’s to serve an agenda.  Having this information on the marketplace, however, is better than not having it there, simply by virtue of it being fact.  To the extent these facts are incomplete, misleading or stilted, as statistics and other findings sometimes are, other entities can dispute them and for less money.  Once a corporation has released its information, a special interest group, individual or other corporation – even if acting through a proxy – will have an easier time disputing these findings without even paying for the advertising to do so.  Public relations and other media activity relating to catching a large company with its pants down will 1) be free, 2) likely be effective, due to its implications, and 3) may even outshine the first corporation’s message.

There is also the belief that corporations will lie and mislead the public.  In fact, it has happened numerous times, from environmental disasters to accounting scandals.  But as the informational hierarchy has flattened over the last five years – and especially within the last two, due to renegade agents of truth such as Anonymous and Wikileaks – there is more likelihood of corporations being caught in their lies, with the corresponding public relations and financial damage included.  The relative ease of truth-finding compared to the past creates disincentives for corporations to lie, as they can face tort liability from shareholders and consumers, and criminal or administrative penalties from state and federal government agencies.  There is also the penalty of a sinking stock price, as informed shareholders and brokers who are pressured not to invest in these “headline risk” companies sell their shares amidst a crisis of confidence in the corporation’s management.  While a corporation cannot be imprisoned as a person can, as Randazza pointed out, there are enough other penalties that can curtail its activities and end its existence that such a distinction seems arbitrary.

With that said, the easiest way to achieve this state of information availability is through Citizens United-style free speech.  Allowing corporations to speak freely in the course of their operations, even for non-commercial reasons, allows them to take advantage of tax incentives for business activities and release more information on the marketplace.  Predictably, this information will be countered, increasing the total amount of information available.  To the extent we want free expression to give people choices, information and the ability determine what they want – including what evidence they choose to believe – unlimited corporate speech seems to further these goals.

Signal-to-Noise Ratio

One persistent complaint throughout the internet age is the increase of “noise” surrounding the information we actually seek.  Andrew Keen’s The Cult of the Amateur confronted this problem directly – though dating itself by focusing on the now-irrelevant MySpace – and raised good point about the cheapening of art and culture by thoughtless reproduction by amateurs.  Artistically, I agree with Keen, but dealing with unfunny “Ow, My Balls!“-level shit on YouTube is the price we pay for freedom and self-actualization.  A blend of technology and commitment to free speech has made this explosion of extraneous information inevitable.  Simultaneously, Google and other constantly improving search technology has made it easier to find relevant information, diminishing the consequences of data proliferation.  So really, the issue isn’t purely one of signal-to-noise, since we believe that everything produced by a person or business, however amateur or derivative, has expressive or commercial value, but a matter of subjective relevance.

From this point, the options are limited:  The signal-to-noise ratio can be limited by constraining expression, or eliminated by some kind of elevated mass public consciousness.  The former is easier to dispatch, as it reduces aggregate freedom and expression.  The benefit of the internet and mass communication is that it allowed more people to be heard; moving backwards from that point seems like a waste of the technology’s potential, especially when the utility of individual voices can be rated by users (such as blog comment ratings).  It doesn’t make sense to advocate restricting expression in the interest of enhancing speech’s value.  To the contrary, if your message comes out on top in an unrestrained forum, it’s probably “better” – however defined – than one that would prevail in an arena where competitors are excluded from entry.

The other school of thought, that we should become more responsible with our communication and reduce the signal-to-noise ratio because it is in our own self interest to do so is laudable, but impossible.  One of the critical ways people believed this would happen is through education.  Unfortunately, primary education is costly and minimally effective in affecting outcomes.  This phenomenon is summarized in an imperfect but representative graph from the Cato Institute:

Yes, there’s no indication as to where this spending is happening, whether at primary or university levels, or how it is distributed; additionally, the NAEP scores don’t reveal much about aptitude or competence without further information.  Still, this snapshot should undermine the assumption that increased education spending – and increased education – creates a smarter, more responsible populous.  Most of that spending could be in the form of students attending college for four years of skinny jeans, androgynous haircuts, pregnancy scares and talking about how they were really “othered” by someone’s facebook post before retreating to mom and dad’s basement.  That doesn’t seem to further the goal of self-policing expression to limit the signal-to-noise ratio as some would hope education does.

Indeed, there seems to be little hope for responsible self-regulation of communication.  The above scenario applies to about 1/3 of Americans, though I’ve gone on record stating that a generic college degree in this day and age is pretty worthless as an indicator of intelligence or potential.  Is self-regulation of the signal-to-noise ratio even possible, though, when dialogue is reduced to memegenerator.com and stale ripoffs of years-old jokes from /b/?  In other media, the Jackass franchise has a third movie out, and Blood On The Dance Floor writes songs like “I Hope You Choke”:

This world is just so fucked up!
My life is just so messed up!
Nothing makes sense in a world that is so dead
The bleeding in my heart are from these stitches that are falling apart
You make me sick from this shit
How could yoou everr [sic] do this?

Deep.

So let’s abandon this fantasy of achieving a deeper shared consciousness that promotes only the highest and most refined communication on the marketplace.  While it would be nice if everyone decided to search for truth and excellence at the expense of lesser information, it will never happen – and that’s just fine, as it enriches the lives of millions.  But since there’s not a collectivist desire for perfect and unbiased data, let’s not erect barriers to its dissemination either, even if it’s a choppy process.

Conclusion

This is a contentious issue on which I don’t expect to win any converts.  There are, however, many upsides to allowing nearly unfettered corporate speech, for which Citizens United may be a prelude, as opposed to the former paradigm of McCain-Feingold restrictions on corporate political speech.  Corporate dissemination of this information invites scrutiny and rebuttal, which increases the data available for individuals to consider when informing their purchasing decisions, positions on various issues, and overall worldview.  Externally imposed restrictions on this type of speech in the interest of limiting the signal-to-noise ratio in publicly available information are abhorrent.  It is also an unrealistic expectation for others to believe that the public writ large will suddenly demand only the most pure and relevant information be presented to them — especially given the subjectiveness of relevance.  Indeed, the best thing anyone can hope for is that the most information that can be made available to the public is presented to it.

This post is written with regards to Marc Randazza and Brett Stevens, both of whom I’m sure will have things to say to me about it.

9 Responses to On Corporations and Free Speech

  1. […] See the article here: On Corporations and Free Speech « The Legal Satyricon […]

  2. Zero says:

    Considering that the argument here is that Corporations have comparable rights to persons and thus have free-speech. Where is the logic that an individual is limited in how much money they can spend and contribute yet a corporation is not limited as such.

    I believe the result here is that, as usual, it turns into a case of “he who has the gold, makes the rules.” This recent election is a fine example of that when you look at how republican’s outspent democrats about 7-to-1 on Ads, and 90% of all the political Ads were completely baseless mudslinging. This destroys all political discourse into a giant school-yard name calling fight rather than intelligent debate about issues.

    I’d be hard pressed to conclude that the unlimited amount of money corporations could spend didn’t contribute to that at all.

    • J DeVoy says:

      as usual, it turns into a case of “he who has the gold, makes the rules.”

      And yes, it sucks, but that’s life. Life isn’t fair, even when all of your constitutional rights to equality are being upheld. Someone will always be taller, better looking, richer, etc.

      The loss of political discourse would be a real shame if the parties were meaningfully different.

  3. Thanks for the props.

    The only thing I dislike about this post is how utterly well thought out and presented it is. Now, I either have to concede the point, or I have to blow a pile of billable hours refuting it.

    Well done, sir.

    • Mark Kernes says:

      That was my thought, except for the “billable.” Not sure it’s worth the time, though: If one hasn’t yet figured out that a corporation pumping massive amounts of cash into an election in the clear expectation that the politician, if elected, will pass laws and regulations favorable to the corporation, I’m sure I won’t be able to convince anyone that that’s a bad idea.

      • J DeVoy says:

        Of course. Nothing’s free in this world.

        But, if corporations are putting facts and ideas out there for public consumption, there’s inherent value in that. Similarly, allowing free corporate speech will, in conjunction with the tax code, incentivize rebuttal, or calling shenanigans on corporate spending as a means to gain favor – or at least remove the disincentive of legal uncertainty.

        Corporations are not our friends. Sure, we have cheap televisions and a few dozen types of microwavable meals, but at the cost of being marginally employed and poisoned by the food supply. We’re never going to get rid of these things, and I don’t think we necessarily want to, either. In light of that reality, we might as well bilk some public utility from corporations while ostensibly giving them what they want.

  4. […] CORPORATIONS: On Corporations and Free Speech « The Legal Satyricon Wow. This is the best argument for allowing corporations to have unbridled free speech like people do. Hmm. Quite compelling indeed. Maybe we're all wrong. (tags: politics corporations FreeSpeech freedomOfSpeech freedom speech Constitutionalrights rights 1stAmendment FirstAmendment TheLeglSatyricon editorial compelling posts articles) […]

  5. […] CORPORATIONS: On Corporations and Free Speech « The Legal Satyricon Wow. This is the best argument for allowing corporations to have unbridled free speech like people do. Hmm. Quite compelling indeed. Maybe we're all wrong. (tags: politics corporations FreeSpeech freedomOfSpeech freedom speech Constitutionalrights rights 1stAmendment FirstAmendment TheLeglSatyricon editorial compelling posts articles)   […]

  6. Anon says:

    “obtain credit and assets without worrying about their personal assets being subsumed by a new business operation that’s actually quite risky.”

    This statement alone proves you have no idea what you’re talking about. I suggest you start a business – incorporate even – and try to get credit without a personal guarantee.

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