Tools for Corporate Funding of Elections

What sorts of things are corporations — and charities and associations and churches and unions and so on? Should we think of such organizations as things that are themselves capable of taking action, or should we think of them as tools that people use when they want to take action?

Case in point: the controversial organizations discussed in this recent NYT editorial, The Secret Election:

…the most disturbing story of this year’s election is embodied in an odd combination of numbers and letters: 501(c)(4). That is the legal designation for the advocacy committees that are sucking in many millions of anonymous corporate dollars, making this the most secretive election cycle since the Watergate years….

Now, recall that, in the wake of the U.S. Supreme Court’s Citizens United decision, all the talk was about the notion of corporate personhood — despite the fact that the majority decision made only passing reference to the concept. (See my blog entry here.) But notice that there’s no reference to corporate or organizational personhood in the NYT editorial. It’s simply not at issue. What’s at issue is the use of organizations as a certain kind mechanism, or tool. Note that, according to the NYT, interested corporations are using 501(c)(4) organizations as a conduit, with a court-sanctioned secrecy shield. The question here isn’t so much what the 501(c)(4)’s are doing, but what they are being used for.

I think that difference in perspective — between thinking of organizations as agents and thinking of organizations as tools — is worth taking seriously. Now, to be clear, I don’t think it makes sense to say that one or the other of those perspectives is the right one, for all cases. I strongly suspect there are cases where each makes sense. Clearly there are differences, and each will highlight certain aspects of a situation at the expense of others.

For example: focusing on the organization’s capacities as an agent (or quasi-agent, if you like) allows us to consider the possibility that the organization, as a whole, is deserving of punishment for wrongs that result from its actions; but it can obscure the interests and motives of the people behind the organization. (In the present case, if we focus on the personhood and/or rights of the 501(c)(4)’s, we might be distracted from crucial questions about the political motives of the people making use of them. On the other hand, focusing on the organization’s instrumental nature can obscure the complicated ways in which organizations transform and sometimes mistranslate the intentions of the individuals behind them. But it can also facilitate an engineering perspective on organizations, one that allows us to think about how the organization — as a complex mechanism — can be taken apart, re-engineered, and put back together again. So, in the present case, thinking about the 501(c)(4)’s as mechanisms allows us more readily to consider which of the legally-constituted features of 501(c)(4)’s are serving useful functions, and which (if any) ought to be re-engineered.

Now, I’ve argued before that there are certain purposes for which we simply must regard corporations as persons — as particular kinds of agents (“must” because important goals that we all endorse would be impossible to achieve otherwise). But when it comes to particular instances of ethical assessment of a corporation or other kind of organization, we should ask ourselves: is this one of the cases where it’s useful to think of the corporation as an agent, or is this one of the cases where it’s useful to think of the corporation as an instrument? Or are there other ways of framing the issues that serve us better still?

5 comments so far

  1. Tom Herrnstein on

    I think I get your point about the downside of focusing on personhood or rights of an organization: we are less likely to notice and appreciate the purpose of the organization and its goals – possibly unethical goals. But after that, I’m not clear about what you mean when you state, “On the other hand, focusing on the organization’s instrumental nature can obscure the complicated ways in which organizations transform and sometimes mistranslate the intentions of the individuals behind them.” Applying it to the example at hand, do you mean that in some cases 501(c)(4) groups are taking corporation money and using it differently – i.e., producing a different political message – than the corporations intended? Also, when you write about the “engineering perspective on organizations,” is the implication that broadly considered 501(c)(4)’s may be good (they are a vehicle for political speech) but there are certain features of the way they function should be changed?

  2. Chris MacDonald on

    Tom:

    Good question.

    Yes, basically that’s right — when we look at an organization as a “mere” instrument, we may lose sight of the fact that the organization has a life of its own, and its outputs might be quite different from what was intended by any of the human beings (or other organizations) who sought to “use” it for their own purposes.

    (Note that the present case is complicated by the fact that there are 2 kinds of organizations — corporations and 501(c)(4)’s — involved. Everything I said applies to both kinds.)

    As for your 2nd question: yes. I’m not advocating for any particular change. But thinking of an entity as an instrument (or as a piece of technology) immediately puts one’s mind into engineering mode. How can we *tinker* with this in order to get it to work better?

    Chris.

  3. Nadeem Moghal on

    Another interest post. I should bookmark this blog; it seems it offers some rather thought-provoking discussions.

    You have raised a question that could certainly help define what a corporation is. Good points and nice supporting comments. But I personally think it’s an academic question and is not where you seem to be going with it.

    Instead of this, we should be asking what’s the purpose of a corporation. That might open up the figurative pandora’s box!

    In another one of your posts https://businessethicsblog.com/2010/09/19/directors-of-failed-companies/ … you seem to be wondering about the same topic. Let me attempt to provide my perspective.

    A corporation’s “reason of being” is to satisfy the interests of its shareholders. It is not just its foremost objective; it’s the only one. Anything and everything that does not directly support that objective is off the table. Other ideals, such as corporate citizenship, social responsibilities, green movement, are only relevant as long as they are aligned with the principal motivation, or if they can score some PR points. In the absence of such gains, it is not common for us to see companies shedding these pursuits from their list of KPI’s.

    This is not meant to be an attack on corporations, or their boards or officers. It is not even to question their integrity. It is meant to be a realization that allows us to view the situation objectively.

    And this realization is even more important if you stand on the side of an issue where there is minimal financial justification for an action. Case in point: environmental impact.

    I could certainly fill pages after pages, dissecting each time a company ends up in the news headlines in a less-than-savory context. In most cases, it happens because a corporation is too busy looking at the bottom line and lost sight of their communal responsibilities. And in nearly every case, it would be found that they end up in the news because they made an inordinate amount of money during the process.

    Now, if one probes further, and looks at the motivation of executives (the people behind these companies), and juxtapose them with the corporate objectives, you see interesting results. HP’s Mark Hurd provides an exhibit of a conflict that went public. And for every one that does, we can be sure there are dozens, if not hundreds, that get shoved under the rug.

    Any thoughts? Comments? Does this make any sense? I’d be more than glad to enter into a debate.

  4. Chris MacDonald on

    Nadeem:

    Thanks for your comment.

    I think I mostly agree with the spirit of your comment. But I also think that it’s a bit difficult (and may lead us off-course) to try to define THE purpose of a corporation. Certainly profit is the *shareholder’s* goal for the corporation. But that may not be the goal of the people who founded it (and for whom shareholders are just a way to raise money). Likewise, we could as about the goals of the society that provided the enabling legislation that let the organization incorporate — society’s goals for the corporation are more complex than just profits for shareholders. And yes, as you suggest, it’s worth looking at the motives of executives, whose interestes may or may not line up well with those of their shareholders.

    Now, whether the corporation *should* be run solely in the interests of shareholders is a separate issue. Many think not. But others point out that profit-seeking tends to be socially-beneficial (and hence not generally ethically objectionable) so long as it is carried out in a suitably-constrained way (i.e., playing by the rules of the game).

    Chris.

  5. […] I myself presented some of my current thinking on the various ways we might think of corporations in their interactions with government. In particular, I argued that while, in some cases, it makes sense to conceptualize the corporation as an agent in its own right, there are other cases (perhaps many more cases) in which it makes sense to think of the corporation as a tool or technology used by citizens to advance their goals. (This is something I’ve touched on before, informally, in a blog entry.) […]


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