A corporation, or a union, is an organization of humans. There is no fundamental thing that a corporation can do that the individual members could not do, not anything a union can do that the individual union members could not do. The organizational structure simply allows them owners, or members, to act in concert. Corporations and unions have long been doing “issues” advertising, and being able to name names is not going to make a significant difference.
And really, haven’t News Corp and most other publishing and broadcasting corporations been in the business of advocating individuals for elective office for a long time?
The fundamental difference in a corporation is that it is a socialist organization. The purpose of the corporation is to generate profits; indeed, the reasonable expectation of profits is the fundamental test the IRS applies to determine whether an organization is a business, and thus allowed to deduct reasonable and customary expenses, or a hobby, in which case gross income is taxable rather than net.
The GOP has been arguing for decades that too many regulations are harmful to the economy, and they’re right; they do have a stifling effect. The left has been arguing for decades that regulations are necessary to control the excesses of business, and they are right as well.
There is, however, a fundamental difference between a sole proprietorship (or a family business) and a corporation. The manager of a corporation is charged with generating profits, and to that end, he will engage in behavior that increases this year’s income by 10 cents, even though it will cost the corporation 10 dollars five years down the pike. What does he care? He’s likely to be working for someone else then. A family business is managed, at least to the ability of the owners, to maximize long term value.
If it were a family business, McDonald’s would never have served Stella Liebeck 190F coffee that would cause $20,000 in medical bills, especially when over 700 other diners had previously had to go to the hospital from coffee burns. If it were a family business, and they accidentally caused severe burns to Stella Liebeck, they would have paid Mrs. Liebeck’s out of pocket medical expenses, and offered their sympathy. If it were a family business, they would have posted a little notice in the paper saying that she’d been hurt, that the store owners were praying for her rapid recovery, and asking readers to pray as well. And Stella would never have filed the suit that led to a $2.9 million award, primarily to punish the store for irresponsible behavior.
Corporations aren’t inherently evil, my wife assures me; they just lack adult supervision. In any case, we need stricter regulations on corporations, and less regulation of sole proprietors. Loosening up the regulations for sole proprietors is reasonable because the tort system keeps the owner/managers in line, unlike the transient managers of corporations.
But letting them buy advertising in the newspaper, or run a few ads on television? Don’t be silly. If advertising were that effective, GM and Chrysler would be rolling in the dough. (You might want to think about the fact that controlling interest in Ford Motor Company is held by the Ford family, and the head man for almost the entire history of the corporation has always been a Ford family member.)
