2024 Freedom of Thought Conference: Panel 1 - Did James Madison Think Corporations Were People Too?

How did citizens understand corporate power at the Founding? What were the rights, privileges, and limits on corporations, and how did the rights of corporations compare to those of individual citizens? Should the fact that significant elements of the corporation–including their creation and ability to operate across state lines–were privileges granted by the state affect our thinking on corporate rights? And how does contemporary thinking about corporate rights align with founding-era understandings?

Featuring:

Prof. Julia Mahoney, John S. Battle Professor of Law, University of Virginia School of Law
Hon. Doha Mekki, Principal Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice
Ryan Newman, General Counsel, Executive Office of the Governor, State of Florida
Lael Weinberger, Fellow, Constitutional Law Center, Stanford Law School
Moderator: Hon. Julius "Jay" Richardson, U.S. Court of Appeals, Fourth Circuit

Episode Transcript

(00:06):
If we're going to get started injust a minute. Wonderful. Welcome.
I'm Leadakass, vice president for StrategicInitiatives and director of the Freedom of Thought
Project, an initiative of the FederalistSociety to examine threats to freedoms of thought,

(00:27):
speech, and conscience. You canlearn more about the project at the
Freedom of Thoughts section on the FederalistSociety website. Our theme for this year's
conference is corporate rights and individual Liberties? What rights do corporations have? Do
all corporations have the same rights,regardless of structure or purpose. How should

(00:48):
we think about corporations advancing social goalsthrough or outside of the democratic process?
And what role or responsibility does thestate have when these corporate social goals conflict
with the individual liberties of their citizens. Many interesting questions to consider, and
we will start at the beginning.What was the founding era thinking about corporations?

(01:10):
Did James Madison think corporations were people? Too? With us to moderate
that discussion, we have Judge J. Richardson. Judge Richardson serves on the
Fourth Circuit Court of Appeals, Vanderbiltundergrad Ununiversity of Chicago Law School, Clerked
for Judge Posner and Chief Justice Renquist, and also comes I as I understand
it from a family with its ownstrong history of fighting for freedom owned justice.

(01:34):
Judge richardson the floor is yours.Thank you so much. It's a
real pleasure to be with us.I might reframe it instead of just asking
what Madison thought, and sort ofask what did Americans think about corporate power
at the founding its rights and limits? Living in breathing humans are endowed with
their creator with certain rights and grantedgovernment protection of those natural rights, along

(02:00):
with others that are not so natural. But corporations maybe not. They are
created by states and may lack thenatural rights possessed by man. Yet corporations
are deeply rooted in our constitutional traditionand entitled to at least some constitutional and
legal rights. It's simply a legallyrecognized group of people associating to cooperate in

(02:23):
the service of a common end.Yet thinking about these free associations requires a
different mindset about ideas and rights andprivileges. Even so, the roots of
corporate personhood stretched back to our Englishcommon law tradition and existed in the minds
of the founding generation. Io Blackstone'sCommentaries of Corporations is included in the chapter

(02:50):
on the Rights of Persons, andWilson and many others describe the role of
corporate personhood. But deep skepticism towardcorporations and their potential for abuse existed as
well, and we want to talkabout both today. I'm excited to hear
from our distinguished panelists today as theytalk through the Founding generation and its understanding

(03:13):
of corporations. They're worries about itsabuse and the limits that they saw.
Tim Plows, I'd like to startwith my good friend, Professor Mahoney,
who's the Battle Professor of Law atUVA, where she's a beloved professor on
a variety of topics, including constitutionallaw, property and the like. A
Yale Law graduate, she worked atWachtel before joining UVA in nineteen ninety nine

(03:38):
and with a broad and influential rangeof scholarship, including recent work on state
standings and takings and original meaning.And I must add, given the nature
of our gathering today, that she'sdevoted to academic freedom and has worked tirelessly
to champion it. Professor, canyou start talking with us a little bit

(04:00):
about the concerns about the dangers ofcorporate power at the time of our nation's
founding. Yes, indeed, thankyou very much to the Freedom of Thought
Project, and thank you for thatwonderful introduction, Judge. In thinking about
corporate rights and individual liberties in theearly twenty first century, it is I
believe highly illuminating to go back tothe beginning of the United States as a

(04:27):
nation and to keep in mind thatthe founding generation was deeply concerned about indeed,
I would say obsessed with corruption,and they were obsessed with corruption in
a sense that highlighted the potential dangersof corporations as a potent vehicle, maybe

(04:48):
at least in some circumstances for corruption. Now, the term corruption as used
in the founding and early national era, it is crucial think to understand,
comprised far more than bribery and otherforms of standard quid pro quo corruption.

(05:09):
Of course, the founding generation wasconcerned about bribery and quid pro quo corruption,
whereby a public official would accept somethingof value in return for doing something
that she shouldn't do or not doingsomething that ought to be done. But
corruption as commonly employed by members ofthe founding generation referred often to a systemic

(05:34):
problem, a systemic problem by whichthose in power, both executive and legislative,
would, in effect, or sodetractors would say, rig the system
by restricting entry into valuable economic activities. These restrictions were frequently imposed by the

(05:57):
creation of monopolies, about which foundinggeneration was extremely suspicious, and by the
grant of restrictive corporate charters that bestowedspecial privileges on a selected few, a
selected few that were of course selectedby government actors. Now, to be

(06:18):
clear, in no way is itaccurate to suggest that in the revolutionary and
early national eras, and in theearly nineteen cent going into the early to
mid nineteenth century, corporations were insome way regarded as inherently toxic or bad,
not in the least, as JudgeRichardson just said, very very very

(06:38):
important components of society. Governments grantedcorporate charters for many, many different sorts
of organizations, including for profit corporationsthat were charged with and empowered to construct
and maintain crucial infrastructure think bridges andcanals of the Bank of England created in

(06:59):
sixteen ninety four war in order tofacilitate public finance and smooth out the difficulties
that governments had the sovereigns had interms of borrowing. We also saw a
lot of corporate charters granted to nonprofitinstitutions and flat out charitable institutions. So
the corporate form, with its limitationson liability for investors and other formidable benefits,

(07:25):
was a welcome innovation, and notjust a welcome innovation, and innovation
that was at the heart of theextraordinary surge in economic growth that began in
the early eighteenth century in the West, including in the British colonies that were
to make up the new United Statesof America, and eventually spread throughout the

(07:47):
world, leading for us all inthe early twenty first century to live in
a world of extraordinary technological development,prosperity, and security. Not that there
aren't problems today, but I thinkit's very important to always keep in perspective
just how extraordinarily far we have comein the last three centuries in the world.

(08:09):
But getting back to the founding era, the dangers of what today we
call crony capitalism were evident, andthese dangers featured prominently in many debates in
the early national era, including theferocious debates about the creation, the expiration,

(08:30):
the renewal, and the eventual nonrenewal of the Bank of the United
States, originally chartered in seventeen ninetyone for a term of twenty years.
Its formations contributed to a deep chasmbetween Jefferson and Madison on the one hand,
and Alexander Hamilton on the other,because Jefferson and Madison saw that what

(08:52):
Hamilton and other supporters of the Bankof the United States wished to do,
from their perspective anyway, was toimpact our a financial elite which would then
possibly work very closely with the governmentin a way that would help make the
United States, or risk the UnitedStates being turned into a kind of limited

(09:13):
access society, one where the benefitsof liberty were open not to all,
or at least not to a lot, but open only to a few favored
cronies of the government. Hamilton,of course, vehemently opposed this characterization of
the Bank of the United States.This is going to be an innovative financial

(09:33):
institution chartered, of course by theUnited States government, that was going to
deliver prosperity for all. We cansee everyone's perspective on this. The Bank
of the United States originally original banklapsed in eighteen six eighteen eleven, and
in the next five years the UnitedStates did indeed run into some significant difficulty

(09:56):
in financing its operations, particularly asit had to win the War of eighteen
twelve, and in eighteen sixteen,the Second Bank of the United States was
created with a twenty year charter,and by eighteen thirty two the controversies over
whether we were going to be alimited access society a more open access society

(10:18):
were again in full swing, andthen President Andrew Jackson produced his famous Veto
message when he vetoed a bill thatwould have provided for the renewal of the
charter of the Bank of the UnitedStates. And what Andrew Jackson had to
say in his famous veto message resonateswith us today. He wrote, every

(10:41):
monopoly and all exclusive privileges are grantedat the expense of the public, which
ought to receive a fair equivalent themany millions which this act proposes to bestow
on the stockholders of the existing bankmust come directly or indirectly out of the
earning of the American people. Thevalue of the monopoly in this case may

(11:05):
be correctly ascertained and it was inJackson's view massive. So Jackson vetos the
renewal, and he says in thismessage, he goes on to say that
while he cannot, he does nothave the power to put an end to
every special privilege that he sees thatwe can, at least, he says,

(11:26):
push back against and prevent quote allnew grants of monopolies and exclusive privileges,
against any prostitution of our government tothe advancement of the few at the
expense of the many. Now,in the mid nineteenth century, the idea

(11:48):
that there should not be special privilegesbegan to gain enormous momentum. And one
way in which we see that ideagaining momentum is the passage of laws and
the amendment of state constitutions to flatlyprevent, flatly prohibit the granting of corporate

(12:11):
charters that would give special privileges.And with that I will turn things over
to Lyle cool so gind you thestory right in theory. The story now
will pick up with Lyle Weinberger,who's a fellow at the Constitutional Law Center
with Professor McConnell out at Stamford.Lyle's a lawyer, historian, and deep

(12:33):
thinker. He graduated from the Universityof Chicago Law School and clerk for Justice
Gorsich, Judgeester Brook, and IdahoSupreme Court Justice Eisman. He served at
a fellow at Harvard and Stamford whilebalancing being an associated Gibson Dunn. For
the young lawyers in the room.You should ask him how he manages to

(12:54):
do all of that. He's gota PhD in history from Chicago with a
focus on American legal history, rareand valued background for originalist thought, and
his wide scholarly and public appearances havemade him a prominent voice and the ongoing
debates. But lyle drawing a littlebit on Julia's discussion, can you talk

(13:20):
a little bit about how the moderncorporation compares and how it evolved in the
years sort of after Jackson's veto message. Thank you Judge for that extremely generous
introduction. Thank you to the Freedomof Thought Project and the Federal Society for
hosting this really important conversation. AndJulia did it wonderful job kicking us off

(13:48):
with this deep set of political theory, concerns about corruption and concentrations of power,
and of course the founder on thisand many other issues, often shared
political commitments at relatively high levels ofabstraction, and then disagreed passionately about them

(14:09):
when it came time to implement onthe ground. A familiar dynamic to many
of us in this room and anybodywho's been around federal society conversations for a
while, where many of us findourselves having some shared constitutional commitments and concerns,
and then many points for disagreement andhopefully productive debate, which is continuing

(14:33):
today. I trust this is thedynamic that made it possible for Madison and
Hamilton to collaborate on constitutional design,on ratification, on authoring the Federalist papers,
and then to passionately disagree about theBank of the United States and the
emerging political economy of the early Republic. But then how to to apply the

(15:01):
founder's concerns about concentrated power changed too, as the nature of the corporate form
changed. Corporations of the seventeen eightieswere in many ways not the same as
corporations of the mid nineteenth century,and with that change it becomes harder,
rather than easier, to tell howto apply the Founder's concerns about concentrated power.

(15:22):
That Julia is so eloquently described.So for my time in this opening
statement, I want to tell abit of the historical development of the story
of corporations from the founding period intothe nineteenth century, and then close with
a couple thoughts about how this takesus forward. Let's start by picking up

(15:46):
the thread that Julia already introduced aboutcorporations coming as the grace of the sovereign,
the special act of the sovereign,because for quite a long time in
English law, the backdrop that allof the American colonies were familiar with the

(16:08):
active incorporation was a special act ofgrace by the sovereign, by the king.
The early corporations were a delegation bythe king to accomplish public purposes,
and indeed, at the outset,the default rule was that colonial legislatures were

(16:29):
forbidden from granting corporate privileges without royalpermission, So you could not incorporate in
America in the colonies. Now,there were various workarounds and sort of de
facto corporations interesting conversation, but ingeneral it was difficult to have access to

(16:53):
the corporate form until independence. Withindependence, the restraints were off the right
to incorporate was no longer the domainof the crown. Now the American legislatures
could, with a great deal offreedom, bestow this privilege of incorporation.
Things changed, although from some perspectiveswe might think it looks a bit slow

(17:17):
at the start. In the lasttwenty years of the eighteenth century, by
one scholar's count, just over threehundred corporations or acts of incorporation were granted
across all of the colonies, andincorporation was still a legal privilege. It
was still the domain of the sovereignto be granted by a special act.

(17:41):
One could not simply opt into agenerally available system of corporate law. So
how did Americans learn to love incorporation? I want to suggest that the answer
is maybe an unexpected corner of theworld at church, though not not from
the pulpit, but in the churchtrustee meeting, church board meetings. The

(18:04):
first beneficiaries of general incorporation statutes werechurches. General incorporation was first thought of
as a way to democratize the benefitsof the corporate form while avoiding the risks
of religious establishment involved in special actsof incorporation. Remember that most colonies had

(18:27):
established churches in one form or anotherbefore independence, and they only began to
end these establishments after independence, andthe process of disestablishment took a while and
varied from one colony to the next, but by seventeen ninety a majority of
the states eleven out of fourteen,had either abolished religious assessments or they had

(18:52):
at least failed to renew their mechanismsfor religious assessments, and so formal tax
support or establishments were dying out,and the last of them, though,
didn't die out in New England untilwell into the nineteenth century eighteen thirty three.
In Massachusetts, the end of publicfunding for churches directly correlated with an

(19:15):
increase in preachers per capita, moreactive competition among denominations. You have the
incredible profusion of religious organizations and sectsin the Second Great Awakening. Historians and
sociologists of religion have argued that theprocess of disestablishment effectively freed up a market

(19:36):
for religious competition, and what followedwas lots of creativity in some amount of
chaos as churches proliferated. Though itwasn't always easy to sort out matters of
simple day to day functioning. Howdo you sort out the legal existence of
these organizations, as they acquired anddisposed of buildings, as they fought over

(20:00):
control of assets, as they hiredand fired ministers. The solution turned out
was incorporation. Incorporation provided churches witha way to exercise greater control over succession
by giving the church body the abilityto appoint trustees, for instance, by
establishing how ownership worked it. Buthow to incorporate a church in an era

(20:29):
of special incorporation raised complicated questions ofpolitics religious politics, and there was concern
that this would become just establishment byanother means and would end up privileging folks
on the inn with the legislature,to the detriment of those who were on
the outs. The way to squarethis circle was general incorporation. New York

(20:53):
led the way. It was thefirst state to disestablish church seventeen seventy seven
eighty four. The first general incorporationstatute of any sort in America was for
religious bodies, providing a way forthem to simply opt in, no special
active legislation needed, and say weare incorporating under this set of established provisions,

(21:19):
and churches quickly became among the mostcommon entities to incorporate. In early
America, it was churches, andthen the other was actually local government entities,
townships, municipalities, counties, sovery very much not the standard business
corporation that is often what we thinkof first when we talk about corporate power.

(21:47):
Churches led the way. They werenot alone. Americans were joiners.
And this takes us into the otheraspect of early nineteenth century corporations. Develop
meant that civic associations became widespread,very common, and incorporation became very appealing

(22:10):
to these as well, for manyof the same reasons it was appealing to
churches. The members of these corporationsare increasing rapidly and daily. Judge wrote
in eighteen ten, and over thefirst three or four decades of the nineteenth
century, massive numbers of associations wereformed, and many of them incorporate.

(22:33):
We still didn't have general incorporation thatwas in most places. It was a
slow process over the course of thenineteenth century, but legislators routinely were passing
acts of incorporation that were recognizing theseassociations. And when America's greatest observer,
Alexis the Toekevelle, visited the youngnation a few decades later, the associational

(22:55):
trend was progressed to impressive heights.Tolle wrote, Americans of all ages,
all conditions, all minds, constantlyunite. Not only do they have commercial
and industrial associations in which all takepart, but they have a thousand other
kinds religious, moral, grave,feudal, very general and very particular,
immense and very small. On hegoes. They use it to found seminaries,

(23:18):
buildings, raised, churches, createhospitals, prisons, schools, on
and on it goes. Many ofyou probably know this passage where he concludes,
where in France you would find agreat project led by the government.
In England you would find it ledby a great lord. Count on it
that you will perceive an association inthe United States. That's what Topeville observed,

(23:45):
and what the courts and legislatures observedwas that these associations liked to incorporate,
and there are then over the courtover the ensuing years. These institutions
actually lead the way in some ofthe developments, some of the early litigation,
providing some of the opportunities for courtsto sort out how much will you

(24:06):
police the internal affairs of these organizations, how hands off should you be the
business corporation then, was the beneficiaryof this broader cultural passion for joining,
organizing, and incorporating. One couldhave find plenty of Americans who were distrustful
of bankers and of big business,but they two, even the most populous,

(24:29):
valued the ability to associate, toorganize, and the simple legal tool
of incorporation benefited both alike. Soto conclude, let me note two possible
ways to understand this history. Optionsthat I suspect will be in the background
of many of our conversations as theday proceeds. One is that maybe we

(24:51):
would see in this robust, flourishingworld of private voluntary associations a happy story.
Maybe general incorporation laws provided the democraticsolution to the problems of corruption and
cronyism that Julia raised. Maybe theseorganizations, in a kind of quasi Madisonian
way, will check each other,and in a large republic they can buy

(25:15):
their interaction and occasional conflict, theycan help avoid takeover by any single private
faction. Or maybe the story isa less happy one. Maybe by spreading
the benefits of the corporate form freelyto the American people, everyone has the
chance to amass power. But thenit leaves the potential problem that if,

(25:40):
in this rough and tumble world ofincorporated associations, if the power balances get
out of whack, if certain corporationsprove to be maybe too effective at amassing
wealth and power, how can oneput the genie back into the bottom.
Could we have created the monster afterthe end of special incorporation with general availability

(26:00):
of incorporation, do we have fewerresources to check accumulations of power? But
could we check it without causing harmto the free development of churches, voluntary
associations, the kind of institutions thateven the most populist might deeply appreciate.
So whose power is most in needof being checked? That is the question

(26:22):
that drives many of the major Americandebates about corporate power at the end of
the nineteenth century, as we movedtowards the era of trust bust thing and
with that turn it over we gohe great. So we're very, very
pleased to have Dona Roaldea Mechi withus. She's the principal Deputy Assistant Attorney
General for the Anti Trust Division atthe Department. She manages hundreds of attorneys

(26:45):
that are investigating and prosecuting civil andcriminal violations of any trust and competition laws.
She's been at the Anti Trust Divisionsince twenty fifteen, following private practice,
and she has rightfully received an arrayof awards for playing a pivotal role
in the division's priorities, including aparticular focus on labor markets. She holds

(27:08):
a BA from Duke, a jdfrom Pennsylvania University of Pennsylvania, and an
MBE in bioethics. I'm not surehow that relates to where we're going to
go today, but maybe she'll bringit around for us from the University of
Pennsylvania's Pearlman School of Medicine. She'smade a habit of being willing to engage

(27:30):
in the debates of the day,including it places that aren't always friendly to
everything she believes in, and sowe are particularly pleased to have her with
us today. And maybe let's starta little bit with the where Yle ended

(27:51):
that maybe there's a less happy versionof general in corporation, and that we've
ended up perhaps in a way worldwhere we need some check on those corporations.
Can you talk a little bit aboutfrom a historical perspective, the Supreme
Court's concerns that have been long expressedthe need to arrest that concentration, and

(28:18):
what areas of reform you think sortof like resonate today. Certainly, Thank
you so much, Jeed Richardson,and thank you to the Federalist Society and
the Freedom of Thought Project for havingme here. It is true this is
perhaps not a natural home for someonelike myself who is an appointee in the
administration, but I pause it.This is actually my third administration at the

(28:41):
Justice Department, and I've seen alot of different ways of enforcing the anti
trust laws, and I'm so privilegedto be able to serve in this moment
where antitrust is in the zeitgeist andit's really uncomfortable for people like me who
have never been cool, but it'san opportunity I need to talk about something
that is incredibly important and that Ithink really goes to the core of economic

(29:06):
liberty. So I am not anacademic, I'm not a historian. I
am a humble practitioner. I ama humble practitioner who grew up in the
executive branch, and so it ismy full time job to think about how
to apply the law to facts.And I happen to be doing that in

(29:29):
this moment where people across an arrayof views, a political continuum, if
you will, are very concerned aboutcorporate power. And that's very exciting because
it's a chance to do something thatreally accrues to the economic liberty of ordinary
people. And that is the bestand highest calling for a public servant such
as myself. So in the standardtelling, we have a few anti trust

(29:52):
statutes, the Sherman Act being themost famous of them, and the Clayton
Act, which is passed in nineteenfourteen and deals with a variety of different
acts of the corporation. And againin the standard telling, there's Section one
of the Sherman Act, which dealswith conspiracies and economic cartels, and then
there's the cornerstone section two, whichdeals with monopolization and conspiracies to monopolize in

(30:18):
the encod defense of attempted monopolization.And then there's the illegal merger, the
merger to monopoly or maybe a mergerto douopoly or something like that. And
we enforced that law, those laws, and there has been a pendulum sling
over the one hundred and thirty yearsor so that we have had federal antitrust

(30:40):
legislation in this country. But thetruth is that antitrust is actually it goes
much deeper than those statutes. Therehas been a probrium associated with monopoly for
a long time. Some scholars positthat there are provisions of Robbie's Code that

(31:00):
were concerned with monopoly. Aristotle writesabout how it is unjust to have,
you know, take up corners inolives and presses, and then to charge
high prices for olive oil and timesof great demand. There are provisions of

(31:22):
Justinian's Code and early Christian thought andIslamic thought about why monopoly is concerning,
and so it is not extraordinary thenthat the founders and Madison in particular would
have had concern about monopoly. Andin fact, in Thomas Jefferson's letters with

(31:44):
James Madison, he's off in Franceand he's writing to his pal James Madison
about this new fangled constitution that theywere working on, and he offers some
plaudits, but one source of criticismis that the constitution does not expressly outlaw
monopoly. And of course he wasconcerned with the government grant of monopoly power.

(32:08):
And I should say I grew upin North Carolina, and so it
is right in our constitution. We'revery proud of this, that monopoly is
the quote monopoly is antithetical to thegenius of a free state. And so
again you see this in state constitutionsand discussions about the federal Constitution. And
I think that is because anti trustand the earlier anti monopoly movement, And

(32:35):
to be clear, those things aredifferent. Right, the anti trust laws
were passed to take on a veryparticular type of the corporate form, which
was the trust right, and thetrust were introducing a sort of private coercive
power that really intruded on many aspectsof life in the late nineteenth century.

(32:58):
And you need only take spinned throughHenry DeMars Lloyd's article in eighteen ninety three
in I Think It's the Atlantic wherehe writes about the Great Monopoly, and
it is hard reading, and ifyou care deeply and passionately about the American
people, as I do, itis a vivid illustration of why life is

(33:22):
brutal under the standard oil monopoly.And he takes great pains to talk about
their conspiracies with the railroad and howthey've taken up corners and corn and wheat
and there was concern that the richwould never be held to account, and
that there was a sort of verticalityof that tyranny, that it wasn't enough
that they took up corners in therailroads and in petroleum, but that they

(33:46):
were able to then use that wealthto amass power and newspapers and other again
aspects of American life that really accrueto our social, political, and economic
liberty. The other thing I wouldpoint out is that you know, anti
trust and economic liberty really go handin hand Justice Black rights in a famous

(34:12):
Supreme Court opinion called Northern Pacific Railroadthat the anti trust laws are a comprehensive
charter of economic liberty. He writesabout how they accrue to our social,
political, and democratic institutions. Butat its core, the Sherman Act is
concerned with competition, and so theeconomic dispersion of opportunity again goes to this

(34:34):
idea that if you disperse power,it is liberty enhancing. And I credit
my conservative friends and those in theconservative legal movement who I think were fastest
in the modern era to recognize thatthere are ways in which private coercive power

(34:54):
of corporations can be as dangerous orharmful to him American life as the intrusions
of the state, and that isparticularly resonant in this moment where there are
big debates about whether government intervention inmarkets is appropriate how to you know,

(35:16):
there's discussion about error types. Shouldwe be concerned about false positives or should
we be more concerned about false negatives. And again there's this long held tradition
that favors enforcement, vigorous enforcement,early enforcement. Right you see Congress every
time it amends the antitrust laws,it actually gives the government more power,

(35:38):
right to reign and monopoly power,and it also gives the people a private
right of action. Right to me, there's a very comprehensive picture about concern
with private course of power. Andyet in the late nineteen seventies there's sort

(35:58):
of a new way of thinking thatstarts to take hold. And for the
last forty years or so, wehave had a more hands off approach.
We have had you know, lessfunding for antitrust enforcement. And I think
that we are now in this momentwhere people across the continuum are taking stock

(36:22):
of whether that experiment was an appropriateone or whether adjustments are in order.
And I think there are a fewthings that have brought people to that debate.
You know, there was the financialcrisis and a two tiered recovery from
that financial crisis, and a viewamong some in this country that in the

(36:45):
face of crisis there were ways inwhich government took action to redistribute wealth to
certain people at the expense of others. There was the massive demand side market
failure that was ushered in by thepandemic, and again there is an example
of a government response. And Ithink for young people in this country,

(37:06):
their lives have been punctuated by thesetwo crises, and so it is not
extraordinary then that they have some questionsabout how markets are working and what markets
are supposed to do for ordinary people. And I think on the right that
has been most clearly or I guessconcerned about anti monopoly has been most clearly

(37:27):
expressed in terms of the power ofbig tech. Right, if you are
forced to use one search engine,if you are forced to use one platform,
if you are limited in your availabilityof news sources so that you can
make decisions about your family and howyou want to live your life, the
power of one entity to deplatform youor only show you a certain viewpoint again

(37:54):
that is not expressly the goal ofthe anti trust laws, but consume choice
and the dispersion of opportunity absolutely isin the wheelhouse of anti trust and I
think that sort of brings us tothis moment, and it also helps us
understand why conversations like this one arevery, very important. So I will

(38:17):
end there, and I suspect we'llhave an opportunity to talk more about antitrust
and corporate forms great. Our finalpanelist, at least in the opening round,
is Ryan Newman, who's the GeneralCounsel to Florida Governor Ron Dessentis,
where he provides him legal counsel andguidance. Prior to his current role,

(38:42):
he's had quite a few others.He was Counselor to the United States Attorney
General, Deputy General Council for theDepartment of Defense, Acting Assistant Attorney General
for the Office of Legal Policy,and Chief Counsel to Senator Ted Cruz.
He is a West Point graduate whoserved as an armor officer in the Army,
including deploying to Iraq during Operation IraqiFreedom. He graduated with high honors

(39:07):
from the University of Texas and Clerkfor Justice Alito Judge Leon and Judge Edmondson.
Ryan Dollah talked a little bit aboutthe federal efforts and the need for
reinvigoration to address these Founding era concernswith corporate power. But at least at

(39:27):
the Founding many would have understood theprimary source of regulation for corporate power to
be the states. Can can youtalk to us a little bit about why
maybe that's not the perspective we alwayshave today. I sure will. Thanks
for the introduction, Judge. It'sgreat to be back among friends up here
in Washington. It's pretty hot andswampy down in Tallahassee, so I thought

(39:50):
moving north I would get some relief, But as I was walking around yesterday,
I was reminded it's pretty swampy uphere as well. Doah. I'm
I'm not a historian a legal historianeither, but you might have heard we've
had some tussles with corporations in thestate of Florida, and so I have
taken a bit of a renewed interestin the subject, certainly with respect to

(40:20):
the power of state legislatures over corporations. Based on my sort of quick review
of the history here, I justwant to I want to throw out,
and I want to positive hypothesis herethat at the end of the day,
it seems to me that the Federaljudiciary has precipitated a constitutional revolution sorts and

(40:43):
with respect to this subject in twofundamental ways. First, it has extended
certain natural rights, in particular theright of free speech, but others as
well, to all corporations, irrespectiveof whether the particular type and nature of
the corporation is a genuine association ofnatural persons capable of possessing and exercising natural

(41:08):
rights. Second, it has appliedthe dormic Commerce Clause in such a way
to deprive the states of their historicauthority to dictate the terms under which corporations
may exercise their corporate powers and privilegeswithin a particular state's jurisdiction. These innovations

(41:30):
deviate, i think, from Foundingera practices and were largely for foisted on
the states and the American public generallyby the federal tituary. The result is
that large now global corporations have grownstronger and more influential powerful in American life,

(41:51):
while American representative institutions have gotten weaker. Let's take for example, Amazon
recently came across an article reporting thatAmazon has the fifth largest market cap in
the world at nearly two trillion dollars. It employs one point five million people,
second only to Walmart among private corporations, and has annual revenues of about

(42:15):
five hundred and ninety billion dollars,also second to Walmart. Only nine countries
governments have annual revenues greater than Amazon's, at least according to the article I
saw. Now. To be sure, Amazon is not a person in the
sense that it has a right tovote in elections. It is not counted

(42:36):
for purposes of representation. It hasno right to representation in any legislature in
the Congress. But then again,why would it ever need the right to
vote when it has the right touse vast resources to speak and petition the
government on virtually any subject it wishes. To a global corporation with hundreds of

(42:59):
billions of dollars, those rights arefar more valuable than any right to vote,
because with them, Amazon can wieldvirtually unchecked cultural power and influence over
government officials, politicians, countless voters, and the public generally. Amazon spends

(43:20):
millions on progressive social causes. Ithires armies, of lobbyists to press its
interests in Washington and state capitals acrossthe country. It even bans books from
its platform, like Ryan Anderson's bookWhen Harry Became Sally, to manipulate public
opinion. It arguably engages in anticompetitive conduct, as when Amazon Web Services

(43:43):
refused to host Parlor as a competitorto Twitter. If there ever was a
threat to democracy, as the medialikes to say, then surely Amazon and
similar massive global enterprises like it areit eve and no business corporations were compared
to the day relatively rare at thetime of the founding. A number of

(44:07):
prominent founders expressed concern about them who'vealready been discussing some of this. Thomas
Jefferson complained about the aristocracy of ourmoneyed corporations, which dare already to challenge
our government to a trial of strengthand bid defiance to the laws of our
country. James Madison believed that theindefinite accumulation of property was an evil which

(44:29):
ought to be guarded against, andthat the power of all corporations ought to
be limited in this respect. AndJames Wilson warned that corporations have in their
progress counteracted the design of their originalformation, and should be erected with caution
and inspected with care. Even thoughAmazon is not itself a natural person,

(44:51):
it is, as Blackstone described it, an artificial person. The US Supreme
Court has nevertheless deemed corporations like Amazonto pet possess the natural right of free
speech, among others. But howcan an artificial person possess a natural right?
Natural rights, after all, arediscernible by reason based on the nature
of the human person in the stateof nature. Amazon is not a human

(45:14):
a person, and I think it'sfair to say that corporations like it don't
exist in the hypothetical state of nature. The Supreme Court attempts to square the
apparent circle. This apparent circle byconceiving of corporations as associations of natural persons,
such that the corporation can exercise therights of the persons who comprise it.

(45:37):
But in what sense is a corporationlike Amazon really an association of persons.
Amazon has over ten billion shares outstanding. Almost half are owned by institutional
investors, who are themselves artificial persons. Forty one percent are owned by public
companies, again artificial persons and individualSome nine percent are owned by insiders like

(46:02):
mister bezis Another stat I saw sixtythree to sixty four percent of Amazon's stocks
are actually held just by institutions,and there's sixty two hundred of them.
These shares are constantly changing hands,and most of the shareholders are just passive
investors whose only interest in the companyis to decrease their return and who actually

(46:29):
controls Amazon. Take for example,the power to spend corporate resources. Amazon
is a Delaware corporation and under Delawarelaw, the corporation has the power to
make donations for the public welfare orfor charitable, scientific, or educational purposes.

(46:50):
But who decides where these donations go? Well, management does. Most
shareholders may be proud, with theexception of mister Besis, don't really have
much to say given how little controlmost shareholders exercise. Simply does not reflect

(47:12):
reality, at least for large publiclytraded corporations. To say that the corporation
is simply exercising the natural rights ofits members. In reality, management is
using the vast resources of the shareholdersto exercise their own rights and prerogatives.
And this is why companies like Disneyand By Budweiser take positions and do things

(47:37):
that are show out of step withmost of their customers, their shareholders,
and the public generally, not suggestingthat no corporation, however constituted, can
ever possess an exercise on behalf ofits members certain natural rights. Whether a
corporation can exercise a natural right,I think, depends on the nature of

(47:59):
the corporate and the nature of theright that it seeks to invoke. It
is perfectly sensible, for instance,for a corporation formed to aggregate the property
of a shareholders and to require additionalproperty for corporate purposes to invoke property rights.
As early as eighteen oh nine,Chief Justice Marshall in Bank of the
United States versus DeVoe seem to discernthat courts would need to explore the substance

(48:23):
and nature of a corporation to determinehow the Constitution's provisions should apply to it,
and determining that a corporation qualifies acitizen for purposes of diversity jurisdiction by
virtue of the persons who make upthe corporation. The Chief Justice observed that

(48:44):
the technical definition of a corporation doesnot formally circumscribe its capacities, but that
courts for legitimate purpose will contemplate itthe corporation more substantially. He went on
to conclude that it was appropriate tolook to the character of the individuals composed
the corporation, but the free willingextension of certain natural rights, especially First

(49:06):
Amendment rights, to corporations, withoutany exploration of the underlying substance, nature,
or reality of a given type ofcorporation, for example, whether it's
a business corporation versus a non profitcorporation, or a closely held corporation versus
a publicly traded corporation, is aconstitutional innovation I think that is out of

(49:27):
step with the founding air practices andunderstandings, and the obvious consequence of extending
these rights to all corporations of anytype is that the power and authority of
the people, through their elected representatives, to regulate and check the power and
influence of corporations, especially in theStates, is diminished. In addition to

(49:49):
conferring unwarranted natural rights on corporations inthe way I've been describing, federal judiciary
has also precipitated another significant constitutional revolutionin the real relationship between corporations and the
states. That has significantly undermined thepower and authority of state legislatures over the
corporations operating in our jurisdictions. Remember, corporations owe their existence to the states.

(50:15):
The power and privileges of a corporationare determined by state law. But
obviously corporations often operate, especially today, more than one state. For much
of the early history of our country, the general rule was that a corporation
incorporated in one state could operate inanother state as a matter of comedy,

(50:37):
not as a matter of right.And I would like to commend to you
all the great article by Professor staffSachs, Harvard Law Professor, on Dormant
Commerce and Corporate jurisdiction. Great.It's a great article on this point.
As the Supreme Court put it earlyon, a corporation can have no legal

(50:59):
existence, since out of the boundariesof the sovereignty by which it is created,
it exists only in contemplation of lawand by force of the law.
And where that law ceases to operateand is no longer obligatory, the corporation
can have no existence. It mustdwell in the place of its creation,
and it cannot migrate to another sovereigntyexcept to the extent that that other sovereignty

(51:24):
permits it to. But beginning inthe late nineteenth th early twentieth century,
the Court began robustly applying the dormantcommerce Clause to prevent the states from exercising
their historic authority over the power andprivileges of foreign corporations operating in their territories.

(51:45):
This means that corporations operating under therules of incorporation and corporate governance of
another state can operate relatively freely insay, my state of Florida, with
little meaningful conditions imposed by the Floridalegislature. Florida legislature, for instance,
cannot dictate the internal rules of corporategovernments for foreign corporations operating the state.

(52:07):
Generally speaking, in other words,it could no longer say that only corporations
incorporated in Florida that satisfy rules forcorporate governance in Florida can exercise the powers
and privileges of a corporation in Florida. Indeed, the Supreme Court has gone
on to say that states have nointerest in regulating the internal affairs of corporations.

(52:31):
But of course, how a corporationoperates. Operating in a state is
managed. How a corporation is managedis actually of great interest to the state.
It's kind of dawned on me recentlyand just reflecting on some of the

(52:52):
disagreements that we've had with, say, the Disney Corporation. The Disney Corporation
wanted to use its power and influenceto repeal a law that governs what is
going to be taught in Florida publicschools has absolutely nothing to do with Disney's

(53:15):
business. So how does Disney reachthat determination. Well, that's a question
of corporate governance. And so tothe extent that corporate managers are sitting atop
of massive mounts of resources and thenusing that power to dictate without any meaningful

(53:37):
control by the shareholders, to dictatepolicy in our state. Well, actually,
as it turns out, how stateis constituted, how it is governed,
actually matters a great deal then tothe state of Florida. It is
a remarkable turn of events that thestates now have so little control over corporations

(53:59):
that, at least in theory,owe their existence to the states. The
states, i fear, are beingconsumed by their own creation. But alas
this is the world I think ourfederal judiciary has created a lot of not
a lot of votes taken on this. I just hope the courts haven't sacrificed

(54:20):
our Republican institutions on the altar ofeconomic efficiency. But I suppose we shall
see never have to worry about Ryanlaying low in the tall grass. Right.
But before we turn to Ryan's thoughts, which might end up being the
focus of the rest of our time, we've beaten up on corporate associations an

(54:45):
awful lot this morning. And whileyou talked a little bit about Topeville's observations
around the founding, can you giveus a little bit of his perspective,
not just to the prevalence of thoseassociations, but his blue both in the
value of them as well as perhapstheir necessity in a society like ours.

(55:06):
Yeah, so Tokeville as an observerof American society, read that little passage.
But this comes from a chapter thatis probably familiar to many here where
Tokville elaborates on the significance of privateassociations in doing a whole bunch of different

(55:27):
functions in American life. And thatlast sentence that I read, where he
said, you compare this to othercountries. In France, you would expect
the government to be doing this,in England a great lord, but in
the United States it's a private voluntaryassociation that is doing and then he has

(55:49):
that long list of activities ranging fromhospitals to religious organizations to prisons. We
could debate that as well. Toquevillesuggests that there is this relationship between associational
activity and governmental activity, and inthe background of this we might see a

(56:15):
kind of trade off that's present herethat if one wants some of the things
that associations are providing, you canhave them through the private associations, or
you could have them through government provision. And so one of the trade offs
that we might think about here isin facilitating the easy formation of private voluntary

(56:44):
associations the state. Maybe we couldview it as opting for smaller role for
state functions, larger role for privateprovision. We could imagine recalibting in a
different way where it's much more difficultto form private voluntary associations and that could

(57:06):
be evactuated through corporate law and variousother means, and the state provides more
of the infrastructure that we want.So I think One of the questions that
we have to wrestle with as welook at the role of the corporation,
our corporations persons, how easily shouldthey be formed, is that with all

(57:34):
the risks that come with the corporateform, we're trading them off against other
kinds of risks that come from accumulationsof power and just bureaucratic expertise in the
public sector. And maybe that's easierto control, but maybe not. And
that's certainly something that with the growthof the administrative state over the twentieth century,

(57:57):
that we also have to wrestle with. That if if we shrink one
and the other grows, if there'sa hydraulic relationship here, what do we
get if we recalibrate, and dowe really just shift the problem from one
place to another, or do weactually solve the problem of accumulated power?
Julia, I do I have somethingto say in response to this? And
I'm very I can tell you broughtthis up. You can see me shaking

(58:22):
this. We look at the nonprofitsector and so on, and it doesn't
look I grieves me to say,it looks quite different from the world that
Detauqueville described It is quite different because, in particular, when we look at
the health sector and the higher educationsector, what we see is not a
group of civic minded organizations, butwe see organizations that, very sadly,

(58:46):
though nominally nonprofit, are behaving ina way that many call rapacious and unprincipled,
and not without good reason. Somany of the pathologies that have been
we have touched on, many ofthe criticisms that are lobbied against big business
are now also lobbied against big nonprofit. Not only I think adds to the

(59:09):
list of problems that we're discussing,but I think it is at least flagging,
it is at least worth flagging,but pivoting to big business. It
seems that someone on this panel hasto defend big business, and I will
take it upon myself to do so. It was terrible the trusts that describes.
So from that, yes, many, many, many small businessmen suffered

(59:35):
terribly. Their families suffered terribly.The kinds of economic recessions that were common
in the nineteenth century were utterly devastatingcommon, of course into the early to
mid twentieth century, and yet theUnited States was undergoing explosive economic growth after
the Civil War that resulted not onlyin massive increases in wealth, but also

(59:58):
big increases in life expectancy and inhealth span. And turning to the United
States in the last twenty years,yeah, we do seem to be suffering
a lot when it comes to healthand even life expectancy. We've had some
dips in life expectancy and that isextremely worrisome and I would never want to
dismiss those concerns out of hand.But looking at the United States in the

(01:00:20):
last twenty years, we also seeeconomic flourishing and growth that is way outstripping
say Europe. And one of thereasons, potentially is these vampire squid big
tech companies and others that come infor such criticism. So is it possible
that some of these very very largecompanies, eh, we are in effect

(01:00:43):
having to take the bidder with thesuite. How is bigness inherently bad?
Is bigness inherently uncontrollable? Or isthis just a matter of maybe tweaking our
institutions, our existing institutions in orderto deal more effectively with some of the
problems that we have just been talkingabout. Dah I loved her respond I

(01:01:04):
thought, so this is great.I don't even have ask questions. I
appreciate so much that Professor Mahoney isthe person who's standing in for business.
I will say this, I youknow, my family was sustained because my
dad was able to start a smallbusiness after we moved here, and so

(01:01:24):
there's nothing inherently bad about business.Business is great. We are unrepentant capitalists
at the Justice Department. The thingthat we are opposite as exploitation. And
there are not only the like sortof basic experiences of the American people that
are brought to bear on how wethink about the last forty to fifty years

(01:01:45):
or so, but there's also empiricalsupport for the idea that you know,
there's not just sort of macro economicflourishing. I think the more focused question
is economic flourishing for whom seventy percentof industries are more concentrated than they were

(01:02:06):
fifty years ago. The rate ofnew business formation has cut in half.
Right, There are empirical studies thatsuggest that markups have tripled tripled. Right,
that's the delta between price and costand something like forty percent of industry.

(01:02:27):
Is all of that to be laidat the feet of big businesses,
of course not, but it doessuggest that we need to do a better
job of policing when it is thatcompanies cross that threshold for making products and
services that people love, that peopleare freely choosing without economic coercion, to

(01:02:49):
the encroachment on that choice and thelimit of different opportunities. And so again,
you know, if I made claimsabout anti trust, which is kind
of a microeconomic specialty, and triedto tie them to the macro economic environment,
I think all of you at throughtomatoes at me, and you should

(01:03:09):
to be clear. But we shouldalso be aware that there have been periods
in our history when some have advocateddialing down antitrust enforcement because of geopolitical concerns,
to include when there were calls notto break up AT and T's monopoly,

(01:03:30):
which by the way, was blessedwith the hand of the government for
a very long time because we thoughtwe might lose out in our competitive edge
relative to the Soviet Union. Andso again, I think antitrust maybe answers
for some of the trade offs andconcerns that Lyle appropriately pointed out, and

(01:03:51):
they're really elegant concerns that Professor Mahoneypointed out, there's some people who will
tell you that anti trust is maybean alternative to regulation in some cases.
I think some regulation may be necessaryin some industries. But I'm thinking about
the debates in the Senate when therewas discussion about how much and to what

(01:04:15):
extent we should regulate the Internet.I think it was Orrin Hatch who said
timely and effective anti trust enforcement ispreferable to the hand of the government regulating
these industries. So I think thereis balance. I think antitrust is not
a panacea for everything, but Ido think that it is a mode of
inquiry that can really ground our analysisand help us continue to flourish. Right,

(01:04:41):
Because I never bet against American ingenuity. Right? Are we are special?
Right? We are? We inventedflight, We invented the car,
Right we The Internet is a giftthat we have because of investment from the
American military. Right. I don'tbelieve that big business alone is the answer

(01:05:08):
for innovation and for our future.Can I follow up with you on that,
sure? Sort of to maybe tiea little bit back to Ryan.
You talked a little bit about standardoil and not only the limits that it
was placing or the harms that wasbringing to competition, but also its acquisition
of newspapers and sort of more indirectnegative sort of repercussions that come from it.

(01:05:33):
When you think about anti trust,particularly from a law enforcement and after
the fact perspective, is that partof the consideration that ought to be in
play or is it competition all theway down? So it's a great question.
Anti trust is concerned with horizontality,which is when you buy out your

(01:05:56):
competitors, either the ones that existtoday or the ones that might come to
be in the future, but it'salso concerned with non horizontal forms of competition.
There are really incredible examples of companiesusing their power and facilitating what we've
sometimes called the tyranny of the intermediary. Right. They use their all seeing,

(01:06:19):
all knowing ability to sort of buyout companies or snuff out competition in
the field. And sometimes that looksvertical, which is to say, in
a supply chain, right, Andsometimes that looks like adjacent markets and in
ways that threaten future technological paradigms ormeans of distributing products and services. But

(01:06:45):
I think what's so interesting about theStandard oil example is you have Standard Oil
producing something like two percent of allrefined petroleum at that time get its height,
but controlling ninety eight percent of theexport of petroleum to other places,
and it does so by conspiracy withthe railroads. And I think Henry DeMars

(01:07:10):
Lloyd's criticism is that that sort ofsupernatural astronomical wealth is allowing them to set
atop the economy and essentially buy upcorners in related industries. And again,
I think you see modern examples ofthat, which is possibly why more Americans
are interested in anti trust enforcement.So Ryan, maybe you've got a friend

(01:07:32):
in Washington, but talk to mea little bit about You talked a lot
about problems, right and the challengethat these corporations now pose, and the
limits that the federal judiciary, whichis not only me. I took it.
It's okay, But the limits thatwe've placed on state legislatures. Can

(01:07:59):
you can you give us a littlebit of insight into a hope or potential
solutions? What what what should statesbe doing? I'm not known for my
sense of hope, unfortunately, butI do I do want to say.
I do want to say I don'thave anything against corporations. I mean,
American Airlines got me here and I'mvery thankful for that. I mean,
I paid for it, or youknow, maybe somebody else did. I

(01:08:23):
don't know, but American Airlines gotme here. I don't have anything against
corporations. And there's no question thatthe corporate form, and even a widely
held corporation that's able to aggregate lotsof capital to do big and important things,
is not in itself a bad thing. I just don't want to be
governed by corporations, right. Iwant the people to govern themselves. And

(01:08:48):
I think and and and I thinkthat's what's being stripped from the public is
their ability through their representative institutions.As imperfect as these represent represent uh representative
institutions can be. And you know, we see this all the time,
all the problems with legislatures and thedifficult you know, and the issues with

(01:09:12):
but but that's the system. Now, that's what we fought for, that's
right, the ability to govern ourselves, that's what I care about. And
so what I was trying to whatI was trying to focus on, are
all the ways that roadblocks have beenput up in the path of representative institutions
to address uh when to address problemsthat that may be cost by corporations that

(01:09:39):
that are itself a problem. Theother thing I want to point out too,
is that, you know, notevery problem is an economic problem.
I meant, part of what hasdriven this home for me is why is
why would why is American Airlines takingpositions on voting rights in the state of
Texas? You know why? Whyare corporations? You know, why did

(01:10:02):
corporations bully Indiana when Indiana passed areligious freedom of law has nothing to do
with their businesses. They're bully representativeinstitutions on issues that have nothing to do
with their business. They're wielding powerthat is in that respect kind of unprecedented.

(01:10:27):
And you know, all we're reallyasking for is, hey, go
back and be the best widget makeryou can be. Do that, focus
on that, go make money doingthat. Don't have a problem with that,
But let's let representative institutions work.So I think some of it is
just going to have to be Look, so, I don't think we're ever
getting back to the right, theoriginal understanding and practices of the Founding on

(01:10:53):
this subject. I just don't seethat happening. But you know, small
things like you know, Disney makesa First Amendment retaliation claim against the State
of Florida for adjusting its power andauthority over the special district that it had.
Well, I don't think they shouldbe able to make that claim,

(01:11:15):
or if the State of Florida wantedto pass a law that says, look,
any corporation in the state, operatingin the State of Florida that wants
to lobby the legislature must get ashareholder vote on the position before it can

(01:11:36):
lobby a position before the legislature.Can Florida do that? I mean,
maybe it's a bad idea, I'mjust suggesting it, but I'm concerned that
the legal doctrines that exist where thiswouldn't even have been a close question two
hundred years ago, it shouldn't bean impediment to the state's ability to provide

(01:11:57):
some oversight of these mass of verypowerful institutions operating within their jurisdictions. Juliat,
you've written on corporate governance and theinfluence of certain groups on messaging.
You want to respond to Ryan's idea. Is it a good one? Yes?
I think it's not entirely particularly thinkingabout some of the court's reacing and

(01:12:19):
the recent Mallory decision. I thinkit's entirely plausible to think that we could
move toward a vision of in theindividual states being able to regulate certain corporate
practices. That's roughly along the linesof what Ryan is suggesting. I mean,
it would be done step by step, But I think it's entirely,

(01:12:40):
entirely plausible, and frankly would notrequire a revolution in constitutional interpretation, but
an adjustment and some of the majordormant Commerce Clause decisions. But sure,
I think actually that the foundation isthere and we should talk yes for what
it's worth. I think that theanti monopoly tradition and its thought leaders have

(01:13:02):
long recognized that with great economic power, there's increased political power. Right,
and again, I sort of keepcoming back to this theme, the tight
interconnectedness of corporate power and government power, and questions that go to the core
of how we want to live ourlives. But in response to Ryan's concerns,

(01:13:28):
I was reminded of a case thatall of us read in preparation for
this panel, and it's the DartmouthCollege case. And there's a great line
or the majority rights about corporations,but this being does not share in the
civil government of the country unless thatbe the purpose for which it was created.
Finally, I'm so intrigued by Ryan'squestion, wise everything an economic question.

(01:13:57):
I think that there's certainly sometimes whenthere are social and political questions,
they're kind of dressed up as economicquestions. But trying to be glass half
full and thinking always about ways tobring people into a conversation and be hopeful,
because I do think anti trust isalways about the future, right,

(01:14:18):
Americans look to anti trust when we'reconcerned about the future. I think that
economic liberty is a happy space forall of us. I think about you
know, yesterday was juneteenth. We'regoing to celebrate our independence on July fourth.
I mean, this is really,this is the moment right to be

(01:14:38):
thinking about actual and guaranteed liberty.And you know, as we think about
what citizenship means in this country,we should be mindful that Congress attempted in
eighteen sixty six to define citizenship notjust in terms of the rights of your

(01:15:00):
political rights or civil rights sort oftraditionally understood, but in terms of real
economic rights. Right it wrote inlanguage about your ability to hold property and
dispose of it, and you know, essentially lots of rights that I think
we now understand as economic rights.And even when we have had our darkest

(01:15:25):
days in this country, right whendifferent groups have struggled for real and meaningful
freedom, I think many people haveobserved that you can't really have social or
political rights and expect to participate fullyand meaningfully in our representative republic unless they're
backstopped by economic rights and economic liberty. And so again, I'm an anti

(01:15:49):
trust lawyer. I see the worldthrough antitrust. That's my shortcoming for sure,
But I think this is a happyplace to be. Noomical liberty,
and I think that where there areother tools to slot down overreach a private
course of powers, we should callthat out, but preserve economic liberty is

(01:16:11):
the happy place for ourselves. Soas we could keep talking, but I've
been instructed that we're supposed to takequestions from you two. So questions stand
up, if you don't mind goingto the microphone so folks can hear you.

(01:16:33):
I have a question, I thinkfor while on the religious corporations,
So which to begin. I thinkthat this establishment was on balance and mistake,
which I could say it I'd suck. But the connection of the corporate

(01:16:58):
form with churches, I think isa really interesting one because, as I
understand the history, the use ofthe corporate form for economic enterprise is really
quite new, and that back tothe Roman Republic, the corporate form was
almost exclusively used for religious institutions churches, monastic orders, etc. And the

(01:17:24):
particular legal features that comprise the corporateform, like limited liability, perpetual existence
have been considered a kind of sacredright that's appropriate for these kinds of religious
institutions, but don't fit as wellto say, more secular things like economic
enterprise. And so my question iswhen the states in the Early Republic began

(01:17:53):
to extend general incorporation to religious corporations, was there no trepidation then that we
would start extending those two more mundanebusiness enterprises once those started to be extended
as well. Yeah, So theextension of incorporation and who who's in and

(01:18:15):
the movement of incorporation from institutions withwhat you might call a public purpose or
a charitable purpose, and these arewhat Blackstone mostly talks about. This is
it is a really significant move.I mean, so Blackstone's discussion of corporations
pre you know, in English law, he basically has the categories of your

(01:18:43):
either corporation for public benefit, andthere there may be a profit motive think
East India Company, or you're acharitable institution, and if you're in that
category, I mean there's also kindof a pub look benefit component. And
then the shift in the early nineteenthcentury towards increasingly having corporations that have primarily

(01:19:14):
profit motives. It is a It'sa significant shift, and I think one
of the threads that might actually beinteresting to pool on here is how this
connects to the Dartmouth College case,which really reconceptualizes the corporate form from being
something that is oriented towards public serving, public focused, civic oriented, towards

(01:19:36):
something that is entirely private and isreconceptualized as a contract that can then be
subject to the protections of the Constitution'srestraint on modifying contracts. That's a significant
twist. And one of the ironiesof this is it goes to one of

(01:19:57):
Ryan's points that if we're thinking aboutthis as a problematic about governance, most
of the American colonies started as corporations. The charters that they had were corporate
charters. They were granted by theKing, letters patent and letters corporate that
allowed them to incorporate. There's agood argument to be had if you want

(01:20:18):
a fun legal historical read. NikoBui has this great paper why was the
Constitution written down? Or Why theConstitution was written down, where he argues
that it is in large part workingon the model of a corporate charter,
because that's what they all learned fromin having their corporate charters written down and

(01:20:39):
granted by the king. And thenyou become independent and what do you do.
Well, we're going to write downit's now not exactly a charter,
but it's this new thing, awritten constitution. England had an unwritten constitution.
So something interesting happened here where westopped thinking about corporations, though primarily
as a mode of governance, ina much more diversifide set of governing modalities

(01:21:00):
where you've got i mean, theEast India Company is a government for India.
You have governments for the American coloniesthat are corporate, and then you
have governments for the University of Oxford, which is also so that's charitable and
incorporated. So if we undo theDartmouth College move, and we stopped thinking

(01:21:24):
about this as an exclusively private arrangement, a whole bunch of options come back
on the table. I'm not surethat whether we should then get rid of
perpetual existence and how it works acrossthe board here. Lots more to talk
about there, but I think thisis the right thread and a very important
one to be pulling on. Thanks, yes, sir, thank you to

(01:21:46):
for speaking here today. So thispanel saw the go off talking about the
issue of corruption from allocating too muchpower in the hands of cooperations. However,
Locke, Montesquieu, and even Madisonin the Feathers papers all discussed the
issues of allocating the executive, legislativeand judiciary powers in the same person or

(01:22:06):
group of people. So, particularlyin regard to the administrative state with the
FTC, what the founders have everbelieved that allocating the executive, legislative or
judiciary powers in the hands of thesame people or person would be necessary to
combat corporate power in the same way? So who wants to go off topic

(01:22:30):
and talk about separation of powers?I'll actually give a quick answer. I
think no. I mean I thinkthat that would not have been seen as
a good solution to counterweight corporate power, not at all. I mean,
on the want on the service thatcan be attractive. The idea that big
government, big centralized government, isessential for combating big business. But I

(01:22:53):
think that is wrong, and Ido not think that that is anything that
would have been considered to be inkeeping with the original design. Now,
I should say, for purposes offull disclosure, I'm a member of the
Board of Advisors of the New CivilLiberties Alliance, which is very active in
terms of attempting to write size theadministrative state, and very active in terms

(01:23:15):
of making sure that government power iswielded by the entity that it ought to
be wielded by. So others,I think it's fair to say that she
speaks for herself, not the entirepenst exactly, and I speak for my
right. Go ahead, thank you. I'm curious. Judge Richardson pointed out

(01:23:36):
that, mister Newman, many ofthe problems that you raised are being prevented
from being solved by the federal judiciary. And as much as I like the
solution that you and Professor Mahoney agreedon, it certainly does not solve all
of the issues that you raised.I'm curious, given especially Florida's long history

(01:23:58):
of being an advocate it for foramending the amending the Constitution using the Article
five convention process. I'm curious howyou would go about proposing go about structuring
an amendment to the Constitution that wouldsolve a lot of the issues that you
people, that you have all raisedthat may be impossible under the current interpretations

(01:24:20):
of the Constitution. Oh boy,a constitutional amendment. It's tough because I
guess part of you know, whatI was pointing at was the court's application
of the doc dorm Commerce clause,which I think, for the most part,

(01:24:43):
is itself a judicial uh, isitself a judicial innovation. So unfortunately,
a lot of the constitutional amendments thatwe would need to enact would be
to undo misapplications and interpretations of theConstitution by the federal judiciary. That's what
is created so many of the problemsas to the judiciary is just this applical
supplying original understanding of the Constitution forso long in so many areas. So

(01:25:10):
one one would be, you know, maybe to take a whack at that,
because that certainly seems to be thedoctrine that's impairing a lot of the
state's ability to regulate, especially largeyou know, corporations that they do have
operations that span across state lines.And that's not to say that there's not
something to what the judiciary is doingobviously in terms of recognizing uh, you

(01:25:34):
know this dormant uh a dormant commerceclause because the founding generation certainly wanted to
have and integrated national economy. There'sno there's no question about it. I
think my my, my trouble withit is that's why they gave the commerce
power to Congress, and so Congressis supposed to decide these things, uh

(01:25:56):
not not not the federal Juituary.So I maybe would take a stab at
that and also take as you know, stab at corporate rights. Was I
was. I was suggesting the ideathat you know, these corporations can wield
to the First Amendment to influence statepolicies and areas that really don't have anything

(01:26:16):
to do with the corporation, tome, is a real problem, and
it does have real impacts on statelegislatures and state you know, the people's
ability to govern themselves honestly, whichand that's why I try to sort of
point out the massive power of acompany like Amazon and why I like,

(01:26:38):
voting to them doesn't make any difference. Right, But to the average person,
the only power that they have towield is that vote, and so
my goodness, when they when theyexercise it and they deliver power to their
elective representatives, it ought to functionat least at some level. Right,
I think we've got time for onemore question. Oh great, all right.
My question is for the our friendfrom the Justice to apartment. And

(01:27:00):
thank you very much for being hereand helping us hear both sides. Although
I don't agree with you. Youknow what, I was listening when you
were talking about the history of antitrust and you said there was this theory
that came upon us in the nineteenseventies, and I was listening for the
words consumer welfare standard, i e. Mergers that make us all richer.

(01:27:29):
And as to who, I'd adviseeveryone in the room to just look up
the work on Walmart as to theextent that they single handedly have contributed to
raising standards of living to people atthe very bottom. Now here's my question
for you. One thing about theconsumer welfare standard. It is a standard.
It is measurable relatively objectively by experts. I did not hear anything from

(01:27:56):
you that could be considered a standard. I did hear some statistics about fewer
businesses opening and that sort of thing. So the guy who would have been
his own billionaire, you know,under the old standard, now has to
work for Google. But not anyreason to believe that that was better.
Aren't you afraid that without a realenunciated standard, that now you're really putting

(01:28:21):
anti trust in the whim of emotionality, you know, populist and amid all
kinds of winds blowing. That ismy concern. It's a great question,
although I think only like one percentof that was actually the question. I
will say this, I like mywords better to me. The question is

(01:28:45):
not one that invokes a standard,because there's only one right answer here,
which is that to interpret the goalof the anti trust laws, you look
to the text of the statute,and Congress was very clear that the goal
of the antitrust laws is competition.And so there is a wealth of Supreme

(01:29:09):
Court precedent and interpretation by the courtsof appeals in this country that focus on
what competition looks like in a particularmarket, and whether that competition has been
reduced. That is the question.Frankly, I would be terrified of a
world where the executive branch, orany member of the executive branch is left

(01:29:31):
to define for themselves what standard we'regoing to apply when we bring the weight
of the federal government to bear oncompanies and individuals making business decisions in the
United States. And so to me, I think that's a side question and
a distraction. The question is whatis the law as Congress has written it,

(01:29:55):
and the Supreme Court and the courtsof Appeals have interpreted it. And
I think we are on record overand over and over again saying that is
exactly what we are going to dountil the end of time. Great,
well, thank you so much forbeing with us, Julia, Ryan and
Lal. We enjoyed our conversation andlook forward to the rest of the day.

(01:30:16):
All right, please join me andthanking our moderator and our panels for
a great conversation. Two quick thingsfor those physically present in the audience who
have signed signed up for cl TheQR code is on the back of the
program. Please make sure you login with that. We're going to take

(01:30:38):
a fifteen minute break and then resumeat ten forty five to talk about Citizens
United. Thank you so much.