By: Tamara Piety

Tamara Piety — Sun, 24 Jan 2010 22:36:36 +0000

David – As you know,I couldn’t agree more that this is a very troubling decision and is likely to have pernicious effects. But I think these interests will block efforts to reform corporate law to make corporations consider stakeholders as well as shareholders just as they will block many other regulatory efforts. And I’m concerned that trying to reform for-profit corporations to make them more democratic (which I think is unlikely to succeed and even if it succeeds is likely to present unmanageable complexity to corporate decision-making. It is already the case that managers have very complex and difficult decisions to make just trying to make decisions as between long and short term profit. If we add into this the notion that they should do internal goal setting or decision-making within the rubric of goals other than profit-making I am not sure that is going to be a manageable task, institutionally. Moreover, since I do not have a say in electing their boards or managers, I’m not sure I really want them charged with social policy responsibility. And I most definitely don’t want them to be able to assume the mantle of social responsibility without actually delivering any more of it. My biggest concern about Citizens United is my concern that the language of corporate personhood will be quickly adopted in the commercial speech context and so we will see that just as Bellotti was used to bolster arguments by Nike to fend off Kasky’s suit, so too Citizens United’s rhetoric will be used to assert freedom from regulation of tobacco advertising, prescription drugs, securities regulation (and boy does it ever seem to be a bad time to undermine the ability of the government to regulate the financial sector and the capital markets!), etc. We’ll just have to wait and see but I predict a flurry of motions for rehearing, motions to dismiss, and motions for summary judgment in these commercial speech cases arising out of the rhetoric in Citizens United. I actually think maybe old style, externally imposed regulation by government is also most economically efficient for businesses, much as managers like to gripe, because there it is (at least in theory) the polity that is making the decisions about social policy and relieving management of the decision-making. It is simple. You just can’t do it. Of course, because corporations can’t be jailed and because the decision to break the law and pay the fine is often economically attractive, even externally imposed limits may not function as real limits on corporate misconduct. This decision may end up being the Lochner, or even the Dred Scott, of this century, that is, a decision which will ultimately be repudiated as inconsistent with our values and seen as a blot on the institution of the Court but which in the meantime may do terrible damage.

Comments on: Our Stake in Corporate Behavior

By: Tamara Piety