The Merriam Webster definition of corporation is: “a large business or organization that under the law has the rights and duties of an individual and follows a specific purpose.” This purpose is almost always to increase profit for the benefit of shareholders and therefore increase the value of their stock. They have many rights similar to those of individuals, but fewer responsibilities.
While the line between a corporation and a citizen of the United States seems as though it would have an easy distinction, in recent years this has become much murkier. Some days it seems corporations have more access to the benefits of our democracy than do individuals. Corporations receive handouts from local and federal governments, have the ability to influence politics, and allow the individuals that are their components to avoid any personal responsibility in case of civil and environmental crimes.
Corporate welfare is a colloquialism that refers to a few aspects of the relationship between corporations and the U.S. government. The term is meant to call to mind social welfare systems such as food stamps and unemployment checks. These systems have long been under fire from opponents to big government, specifically the far right, claiming their recipients are “lazy.”
During the recent recession, many huge companies “had” to be bailed out by the government. Local governments also use a variety of incentive plans to encourage job growth and to lure investment in their region. These incentives can involve anything from huge tax breaks to dollar amount rewards for each person they employ. While on the surface this may seem like a positive, the benefits do not outweigh the problems with this system. As stated by George Leef in Forbes “It is not a function of government to ‘create jobs’ or attract business. Its function is to protect life, liberty and property so that individuals or groups can best pursue their own goals.” The money spent on “job creation” could instead be spent on infrastructure and education that increases citizens’ quality of life and success. Taxpayer money is literally being used by the government to ensure that large corporations don’t have to pay their own taxes.
One huge aspect of corporate personhood started with court cases from 1868, where corporate lawyers started using the 14th amendment to “make sure that states didn’t unequally treat corporations.” From 1907 to 1978, corporations were banned from being involved in federal election campaigns. Even after a ruling that year, corporations could only become involved monetarily in state campaigns while still staying out of federal elections.
In the 2010 Supreme Court case Citizens United v. Federal Election Commission, it was ruled that “corporations and unions have the same political speech rights as individuals under the First Amendment.” In another decision, “the court ruled that the disclaimer and disclosure requirements associated with electioneering communications are constitutional.”
President Barack Obama responded in his weekly radio address by saying “this ruling strikes at our democracy itself […] I can’t think of anything more devastating to the public interest.” In his State of the Union speech, he said, “The Supreme Court reversed a century of law to open the floodgates for special interests. […] I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities.”
The ruling means that corporations can now spend as much money as they want to attempt to influence the outcome of elections for candidates that will make money for their stockholders. At its core, this situation is a First Amendment issue. How should freedom of speech be defined when it comes to large, joined groups of people and political campaigns? This brings up two important questions. Should money be considered speech? Why does a corporation need the right to spend on politics when each individual within it has the right to donate, vote and campaign on their own?
The problem isn’t necessarily that corporations are having a say, the problem is that the more power they have, the more power and wealth they can concentrate in the top one percent. Our democracy is supposed to allow for any citizen to have the ability to at least run for office.
If the voting individuals within their jurisdiction think that this person will serve them and their community well, they will be elected. This system is hurt when individuals whose policies can benefit large corporations have a better chance of winning. In effect, this system makes it essential for any candidate who wants to have their message heard to align their values with that of as many corporate giants as possible who will help amplify their vision. Once these officials get elected, they continue the cycle by providing the tax breaks and subsidies that they promised to their benefactors.