From the marketplace of goods and services, corporations of late have begun to push into the marketplace of ideas - and are demanding the same rights as everyone else.
Last year they scored a major victory when the U.S. Supreme Court ruled that companies could campaign for or against state referendums. The fallout from that case continues to settle over the nation's business and political communities.
It was a sweet win for the business world, particularly because America's corporate class had been accustomed to having its messages regulated. The courts delcared several decades ago that "commercial" speech, such as advertising and door-to-door solicitation, was not entitled to the same First Amendment protections as "political" speech and so could be supervised by the government. Advertising, in effect, had been relegated to second-class status.
In recent years, however, corporate advertising has taken on new forms. It messages today are often less commercial and more political, reflecting the stepped-up political activity of U.S. firms. No longer do ads sell just goods and services. Now they sell issues was well.
For example: Weyerhauser in its ads doesn't sell paper, it preaches conservation. Kelogg doesn't peddle cereal, it promotes nutrition. Bethleham Steel argues the fine points of U.S. trade policy. American Telephone and Telegraph celebrates technology. Citibank expounds on the greatness of the capitalist system. And Mobil addresses itself to just about everyting.
The case considered by the Supreme Court last year (First National Bank of Boston v. Belotti) took corporate advocacy one step further and fully into the political arena. Five companies opposed to a planned increase in the state personal income tax challenged a Massachusetts law that prohibited them from spending money on ballott issues in which they had no material interest. The court declared the statute unconstitutional.
As with many important decisions, this one raised more questions than it answered. It left unclear where protected corporate political speech ends and regulated commercial speech resumes. It left corporations wondering whether a company could lobby its employes in the same way it now can lobby the public. It left labor unions and government officials asking whether the same freedoms applied to them. And it left tax and regulatory agents questioning whether they would have to rewrite their rules.
It also stired a number of lawyers, professors and business people, a couple hundred of whom met in Atlanta this month in a conference sponsored by the National Legal Center for the Public Interest. The center tends to allign itself with business interests, and the Atlanta conference tended to sound more like a rally for business' First Amandment rights than a critical examination of the issues.
However, the meeting was significant not only because it was held at all but also because it was the second such gathering on the issue inside of two months. The American Bar Association had organized a similar meeting several weeks before.
That America's legal and corporate communities should be wrestling now with the question of business' free speech rights is a natural outcome of several trends. In fact, corporations have come to their political maturity rather late in the nation's life.
Labor groups started organizing political action committees as early as the 1930s. Civil rights organizations began voter registration and publicity drives in the late 1950s. Consumer and environmental groups burst onto the national scene in the 1960s.
All the while, instead of organizing into counter-political action groups, business relied on fund-raising as its avenue to influence. By 1968, there were fewer than 60 corporate political action committees in the country.
That began to change in 1971, when Congress clamped restrictions on corporate political contributions. Companies were forced to turn to the same political instruments and tactics already developed by their critics, relying less on fund-raising and more on campaign organization and political education. By last year, nearly 700 corporate politial action commitees had been formed, and more were being chartered at the rate of 10 a week. Trade associations flourished and super business groups such as the Business Roundtable had set up office in Washington to espouse the corporate cause.
This heightening of overt political activity by U.S. firms, occasioned in part by a change in the law, also was motivated by a mix of public and private factors. The business community by the early 1970s was feeling harassed by both public interest groups and the government. Regulations kept piling up and tying up companies, and there was a growing sense that America's world economic position was eroding.
"For many years, executives expected others to represent them in public dialogue and in many dealings with legilatures and government agencies," said William Dill, dean of New York University's business school at the Atlanta conference. "Now there is a new mood, with encouragement of both their political and journalistic critics, to speak more assertively for themselves.
The voice of business was, of course, hardly a new sound to the political audience. Whether on oil, cars, sugar, milk or some other good (or bad), corporate interests had never been shy about speaking up when their livelihood was at stake. The courts, too, long had held that businesses could lobby on issues that affected them amterially.
What happened in Massachusetts, however, did not fit this traditional mold. The income tax question on the ballot there bore no direct threat against the state's business community; it was for a higher individual tax. But several businesses sought to campaign against it because they were concerned about what its passage would mean for the state's economic climate.
May still question whether businesses hould have the same rigth to unfettered political speech as individuals. (The Supreme Court itself split 5 to 4 on the case.) After all, one argument goes, a corporation is not really a person but a legal entity, an artifical person. Also, it is claimed, corporations can muster more financial and thus political weight than individuals, thereby tilting any contest in its favor.
These arguments found little sympathy at the meeting in Atlanta. "A corporation is nore than legal entity, it is an adaptive learning group," asserted Edward Littlejohn, public affairs chief for Pfizer Corp. Later he added, "Corporations quite evidently have a role in the political process as it exists today."
Other speakers woundered aloud what all the fuss was about. For all the muscle and bluster corporations can bring to bear on an issue, the corporate influence ofter makes little difference at all, they said.
The Massacheusetts, tax referendum, for instance, lost by the same margin in 1972-when it was first on the ballot and before the state tried to block corporate campaigning-as it did in 1976 when companies were excluded.
Pointing also to the First Amendment freedoms enjoyed by large media conglomerates, representatives of business asked why their companies should be regarded any differently under the law. And the lawyers concurred.
"It is not coherent law to prohibit a company from buying space in a paper but permit a publisher to print whatever the publisher wants," said Yale law professor Ralph Winter.
In this, Winter and others echoed the warning given by Chief Justice Warren Burger in the Massachusetts case. Siding with the majority but writing a separate opinion, Burger reminded that if the court had to protect the public against excessive corporate persuasive power, media conglomerates would be as vulnerable to challenge and restraint.
There were some notes of concern and caution sounded over business' new-found freedom. "It is unclear whether the evolution of businessmen into policians is good for the system," stated NYU's Dill. He referred to a recent ad in the Wall Street Journal which promotes Washington as an attrative location for business because it is where the people in power are. Holding up the ad, Deill said, "There's nothing here about markets, resources, population, any of the traditional concerns of business."
It is still not very likely that corporations will begin speaking out on whatever strikes their fancy. Ommenting on some issues, particularly those as politically charged and divisive as the Equal Rights Amendment and abortion, would risk a loss of customers and, besides, are decidedly too removed from the interests of most companies.
More likely business will be mounting other court attacks for further clarification of its rights. Possible targets include:
The Internal revenue Service, which currently allows deductions for "direct" lobbying activity (one-on-one contacts with legislators) but denies them for "grassroots" lobbying (attempts to influence public opinion).
The Federal Elections Commission, which allows corpoartions to spend money on a political campaign but does not allow direct corporate contributions to a candidate.
The Federal Trade Commission, which regultes advertising and which has been having as much trouble as everyone else drawing the line between commercial speech and political advocacy.
Other groups, too, including labor unions and local governments, will be turning to the courts for clarification of their free speech rights. Last fall, Boston Mayor Kevin White tried to spend $1 million of the city's money in support of a state constitutional amendment to change property tax rates.
He was sued under a state law that prohibits spending of public funds to elect people or take general political views. A state court enjoined him, but Justice William Brennan reversed the unjuction, allowing White to spend the funds. The amendment passed.
After the election, though, the full Supreme Court declined to hear the case, leaving the question of government's free speech rights hanging.