Rob Natelson: The Misplaced “Philosophy” of I-166

    In the 2012 elections, Montanans overwhelmingly approved I-166—a measure that has no substantive effect, but expresses the “philosophy” (the word used in I-166) that corporations have no First Amendment rights.

When you read I-166 carefully, you have to wonder what the voters were thinking when they passed it. In case your own thoughts on the subject are fuzzy, here are some cool, clarifying fresh breezes:

1.     Corporations are not alien cyborgs from the planet Bloton. They are merely teams of people working for a common purpose.

Some are big and rich, but most (especially in Montana) are small and relatively poor.

People incorporate because the state pushes them to.  The state offers them the right to (1) use the corporation’s name in lawsuits rather than listing all the owners individually and (2) dispense with clumsy liability disclaimers to protect owners’ and members’ personal assets. (Corporate assets are still vulnerable.) But the team choosing incorporation has to pay extra taxes, extra fees, disclose a lot of private information, and abide by numerous state rules.

2.     The “philosophy” of I-166 would destroy freedom of the press.

Because of how state law is structured, nearly all media companies are forced to incorporate. If groups choosing the corporate form have no constitutional rights, then they have no freedom of the press. Some of the greatest victories for freedom of the press were won only because media corporations could defend their rights in court (for example, the Pentagon Papers case).

So if your “philosophy” is that the politicians should be able to bully all the newspapers and broadcasters into silence, then I-166 is for you!

3.     The “philosophy” of I-166 would heavily impair freedom of speech.

State law effectively pushes political associations to incorporate. If the “philosophy” of I-166 were to prevail, those associations would have no free speech rights.

In the 1950s, racist state officials in the South tried to crush pro-civil rights membership corporations like the National Association for the Advancement of Colored People (NAACP).  Those state officials didn’t think corporations had First Amendment rights, either. Fortunately, the Supreme Court disagreed. (NAACP  v. Alabama).

4.    I-166 has nothing to do with “leveling the playing field.”

I-166 says it seeks a “level playing field in campaign spending.” But does it?

The “philosophy” of I-166 restricts corporate spending, but not union spending. Even worse, it says nothing about controlling government political spending, such as lobbying and other government interventions in the political system. Government political spending is a MUCH bigger problem than corporate spending, because government political expenditures are bigger, largely hidden, and financed with money forced from people.

5.    Campaign finance laws are counter-productive.

In the real world, government campaign laws always are politically manipulated, but still yield unintended results. As I pointed out last week, the 1912 Montana initiative that abolished corporate spending may have INCREASED the power of the Anaconda Company over Montana politics.

Montanans need to reconsider what they did when they approved I-166. And make sure that they are more wary in the future.