James Madison and the Corporations
James Madison stood between 5’3″ and 5’4″ tall and weighed barely more than one hundred pounds. He was the most diminutive of the American presidents. He had no skills as a military leader, and he frankly acknowledged his inability to rouse crowds with his political oratory. Yet he was a giant among presidents. Our constitutional system was largely his creation; he supplied the detail and the mechanics where others furnished broad visions. I want to spend a few minutes with you looking at the problems that face us today through the eyes of James Madison. In the process, I want to focus on corporations and the growing role they play in our nation’s political life. The emergence of the corporate world is one of the things that divides our times from the age of Madison, but it is also something he anticipated.
Let us start with the question of corporations and political campaigns. When the Supreme Court handed down its controversial decision in Citizens United, striking down a provision of the McCain-Feingold Act restricting the corporate funding of independent political advertisements, there was a rush to discuss the case in terms of original intent–what would the Founding Fathers have thought of this decision vesting corporations with constitutional rights? Attention focused almost immediately on James Madison–he was not only the “Father of the Constitution,” but also the key architect of the Bill of Rights. In fact, at a key point in his opinion, Justice Anthony Kennedy actually quotes Madison to support the holding. “Factions will necessarily form in our Republic,” Madison writes in Federalist No. 10, “but the remedy of destroying the liberty of some factions is worse than disease. Factions should be checked by permitting them all to speak and by entrusting the people to judge what is true and what is false.”
This passage is in fact essential to understanding Madison’s thinking about the primacy of free speech. Whether one embraces original-intent jurisprudence or not, the process of investigating the Framers’ thinking is extremely important. As Livy suggests, and Machiavelli drives home in his discussion of Livy, it is not possible to preserve a republic without being conscious of first principles and constantly returning to them. More than flags and insignia, first principles define the nation and provide a living link to the past. A society may find that times have changed and departures are necessary; but those departures should never occur unthinkingly. On the other hand, Justice Kennedy seems to think that Madison is on his side on the Citizens United question–and he’s wrong about that. I have to acknowledge that, for reasons I’ll come to in a minute, it’s not really possible to forecast how Madison would have reacted to the issue of legislated restrictions on campaign finance with complete certainty. But I think you’ll agree that a review of what he had to say on the subject, and he said quite a bit, suggests clearly that Madison would not be pleased to be marshalled as an authority supporting the Citizens United opinion. If Kennedy wanted to pick a Founding Father to support his analysis, he picked the wrong one.
Understanding the rights of corporations under the Constitution is key to resolving Citizens United, which is surely one of the most important Supreme Court rulings in the past several decades simply because of the consequences it is likely to have for our political process. But this question invites us to take a broader look at the role that corporations play in the development of the national security state that has emerged since 19473 and to test that against the Founding Fathers’ expectations. That’s what I propose to do today–it can’t be a comprehensive study due to the constraints of time, but I do hope to get to the essential questions.
There are a number of passages in Madison’s writings that help us understand his attitudes towards corporations and the role they might play in politics, and three of them are particularly useful. The first comes in the course of argument in Congress on February 8, 1791, in which he mustered his reasons for opposing Alexander Hamilton’s proposal to charter a Bank of the United States. Madison began by stressing that corporations, unlike natural persons, had only the exact measure of rights that was conferred upon them by the state in express terms–in other words, they did not have “inalienable rights” which arose under natural law, like the “people of the United States” invoked at the outset of the Constitution. Moreover, Madison soon made clear that he thought corporations were “powerful machines” that might well do a great deal of mischief if left unguarded. He is plainly suspicious of Hamilton’s motives and talks repeatedly about “monopolies,” the risk to the economy on the whole of a run on the bank, and the risk of a nation which is credit-dependent upon this bank (here he cites the East India and South Seas Companies).