Last weekend’s roundup triggered some lively back-and-forth regarding the Supreme Court and freedom of speech. Wednesday night’s Obama/Alito showdown was old hat to readers of The Big Questions, who had already been on top of this issue for a full four days.
With the start of the week proper, we had two more lively discussions, over relativity theory and capital taxation; never let it be said that this blog is narrowly focused. We also had a report on my collection of really bad animal books, and we saw pictures of a watermelon car.
Upcoming next week: A recap of the relativity controversy, a few words on how to think (and how not to think) about the national debt, and much more. See you Monday!
As you mentioned Obama/Alito again, let me advance a different argument that I don’t think was made earlier, although Philip made part of it.
Suppose a corporation spends money to support a candidate. If this is a self-interested expediture, then it can be self-interested in two ways: either (a) the corp expects that their donation will actually affect the outcome of the election, or (b) the corp expects that the politician will do them favors in office in return for the donation (in particular, if the politician is hoping for a similar donation in the future). Now, I think (a) is unlikely, for the same reason that (as you’ve pointed out many times) voting in an election is unlikely to influence the outcome. (And if it were for reason (a), then corporations would almost never donate to politicians who were clearly going to win anyway, and I doubt that is the case.) On the other hand, if they’re donating for reason (b), isn’t that bribery, and as such, shouldn’t it be illegal?
On the other hand, suppose — with a straight face — that the corporation is not acting self-interestedly by making the donation. In that case, they’re spending shareholder money on something that is unlikely to provide a return for them. And surely it’s a violation of corporate law for a corp to throw money away and deliberately lower the stock price.
Therefore, if a corporation expects something in return for its donation, it’s bribery, and if a corporation expects nothing in return for its donation, then it’s defrauding its shareholders. In either case the donation should be illegal. Q.E.D.
If you disagree, then (as you are fond of asking) what step in the reasoning do you disagree with?
This logic would not apply to individuals donating money, because individuals are free to throw their own money away. Of course if you could show beyond reasonable doubt that an individual donor was expecting a favor in return for their donation, that would be bribery, but surely the many people making $10 and $20 donations to Obama’s campaign were not expecting favors in return.
You responded to Patrick’s point by saying, “By the same token, we allow newspapers to run editorials in spaces that could otherwise be sold to advertisers, effectively taking funds from stockholders, whether or not they oppose the contents of the editorial. Does this seem problematic to you?” But that’s different because when a newspaper uses space for an editorial, while they may be giving up advertising revenue in the *short* run, they’re helping to maintain the quality of the newspaper and, in the long run, keep up circulation. If (for the sake of argument) you could prove that the decision to run an editorial instead of an advertisement was going to lose the newspaper money in the long run, and the board knew that when they ran the editorial, then you would have a plausible case that they violated their obligations to their shareholders.
On a totally unrelated note:
Steve, why is your book not being sold in the UK?
M.
Mikhail Dubov: I am rather surprised to learn this. I assume my publisher is still negotiating a contract with some British publisher. I’ll inquire about it; thanks for letting me know.
Meanwhile, I see that there are at least used copies available at http://www.amazon.co.uk/Big-Questions-Philosophy-Mathematics-Economics/dp/143914821X
Bennett, most of your arguments are dealt with by Justice Kennedy in his majority opinion. I suggest reading it.
You also seem to be ignoring that most corporations are not publicly traded, and have only one, or a few, shareholders. So, your shareholders’ rights issues are much better dealt with by laws dealing directly with such; proxy fights, shareholder meetings, even shareholder lawsuits, rather than as a Constitutional issue.
As for bribery, that’s a much more serious problem with earmarks, where officers or owners of a corporation make campaign contributions with their personal funds to gain the attention of a legislator who then returns the favor in much more than kind. The Seattle Times had an excellent series a few years ago:
http://community.seattletimes.nwsource.com/favorfactory/favorfactory_2008/
My favorite being the $4.5 million dollar boat no one wanted:
http://seattletimes.nwsource.com/html/nationworld/2003948586_favorfactory14m.html
There’s nothing hypothetical about that.
OK, so my reasoning would not apply to corporations with a small number of shareholders, and it wouldn’t apply to donations (bribes) made by the individual corporate officers themselves.
However, wouldn’t my argument be correct insofar as it applied to donations made by corporations themselves, when those corporations are publicly traded? Even if, as you point out, these cases may only amount to a small portion of the problem, smaller than I’d thought.
Mikhail: if you want to read the book, you can always just get it from Amazon.com. You pay a bit extra in shipping, but I for one wasn’t going to wait a year to read the new Steven Landsburg book…
How can a corporation have political self interest when it cannot vote?
May living (real) people spend unlimited amounts of money promoting a candidate?
If they may, then why is granting that right to corps not made moot by the ability of the corp owners to spend unlimited cash promoting a candidate.
If they may not, then why are corporations (as persons) granted rights that real people do not have?
Do corporations have gender? And how long until Massachusetts lets me Marry a Boy Corp.? How long until someone in South Carolina tries to molest one?