Wednesday, March 17, 2010

Don't vote for XYZ Inc.

Murray Hill is running for the US Congress. At first glance, nothing seems to be wrong with that – surely anybody can run for Congress. But then Murray Hill is unique and a first. For its full name is Murray Hill Inc. It’s a company; not a person. An interesting article in the Economist (click here) examines this quirky issue superbly.

This is a consequence of a landmark US Supreme Court judgment in January. In a bitterly divided 5-4 decision, the Supreme Court ruled that the First Amendment free speech rights extended to corporations. The biggest impact of this ruling would be that no limits can be placed on political contributions by businesses. The impact of business on politics is bound to increase, and this has generally been considered to be not a good thing.

But another consequence of the decision seems to be what Murray Hill is contemplating. It faces huge hurdles for sure – there must be a myriad of other laws that require a candidate to be of flesh and blood. As The Economist says, Murray Hill is sure to fall foul of one requirement– all candidates have to be 18 years of age or above and Murray Hill Inc is only 5 years old ! In any case, it has little chance of getting elected – its slogan is “put people second” and “create the best democracy money can buy”. After all Murray Hill is a PR company trying to gain some publicity.

But underneath this lurks a real issue, The rather blasé view in The Economist that companies can be pressurised to act responsibly in engagement with the political process is dangerous. Businesses will not act responsibly – they will act precisely in their own self interest and to hell with everything else. After all that is their charter. They will lobby furiously for breaks; they will compete for pork; they will finance candidates who will do them favours after getting elected.

The Supreme Court decision has raised alarms across the US. The Court appears to have become as bitterly divided as the US nation itself – there is a big drift to the extremes on both sides of the political divide. All the “conservatives” on the bench voted for the decision. All the “liberals” dissented.

In my view businesses are crucial to economic activity, but must remain there. There is grave danger in allowing them to be part of the political process. Businesses are not members of society – only people are. Businesses already influence political processes far too much because they finance much of it. By their very nature they cannot aid sensible public policy. They should not be allowed anywhere near it.

There is grave danger in voting for XYZ Inc.