“We The People”… Those first words of our Constitution signal its essence. It was created as a governing framework to “…establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty”. The Founders seem to have had only us humans in mind when they wrote about people, but corporations have morphed into person-like forms, and made us secondary in the process.
There is no mention of “corporation”
or “company” in the Constitution. The word “business” occurs once, but only in
reference of congress needing a “Quorum to do Business”. “Commerce”
appears twice, both concerning the government’s power to “regulate
Commerce”. “Person” and “People”
are found two dozen times. So how did corporations manage to become one
of us?
I don’t think the framers had any intention of extending the same protections to corporations. After all, the American colonies, like others established around the world, were formed and governed by corporations, proxies of Imperial Europe. Years of experience had given the colonists little reason to trust their self-serving dominance. The Boston Tea Party, harbinger of the Revolution, had not only been a protest against the short-sighted policies of the British Crown, but a violence committed against the abuses of the East India Company. Thomas Jefferson, wary of corporate power, voiced his concern of the need for a bill of rights that included “freedom of commerce against monopolies“.
The Constitution reserved the powers for controlling corporations to the states. Many included strict corporate regulation in their own constitutions. Only state legislatures could issue corporate charters. They were quasi extensions of the state, granted for specific purposes, limited in operation to the issuing state, and constrained in the amount of capital they could raise. They were allowed neither to buy stock in other companies, nor own property unless needed to fulfill their charter. Shareholders were personally and individually responsible for debts incurred. Charters were granted for a set number of years, had to be renewed, and could be revoked.
Corporations were rare during the early years of the America union. Charters were granted to do the “people’s business”, to built roads and canals. Banks and insurance companies had to be chartered. Most businesses were not incorporated, but existed as sole owner and partnerships. That model proved adequate. By 1860 total American production rose to one of the highest in the world, second only to Great Britain. The system, by no means perfect, did work for nearly three-quarters of a century.
Railroads arose in the 1830’s. Charters were granted to the new form of transportation, and it grew swiftly over the next thirty years, replacing canals as a major form transportation. That was also when the charter system began to break down. Business boomed and railroads grew rich and powerful. They lobbied state legislatures for changes in the charter system, and people favored a fairer system. That started in the 1850’s, and accelerated after the Civil War. The original charter system was dismantled by 1880, replaced by a general incorporation process that was simple, easy to obtain and none-restrictive. The benign form of the corporate system was killed. Unwittingly, a virulent form was conceived.
II. Corporations Commandeer the Constitution
“Slavery is the legal fiction that a Person is Property. Corporate Personhood is the legal fiction that Property is a Person”. There is more irony in this quote than the truth it speaks; corporations gained personhood by commandeering the Constitutional Amendment that was meant to provide the rights-of-citizenship to former slaves.
The Fourteenth Amendment was passed in1868. In part it read, “...nor shall any State deprive any person of life, liberty, or property without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.” Note that the Amendment refers to “any State” in its admonition. The amendment was directed toward the states, specifically the formal Rebel States. The federal government had little to do with regulating industries in the early days, leaving it to states and local governments.
Railroads counted among the richest and most powerful corporations to arise after the Civil War. With the adoption of the 14th Amendment they became strident in their insistence that they were “persons” and should have equal protection of the law. Time and again their lawyers brought the argument to court, all because corporations had been referred to as “artificial persons” in the earliest charters. Time and again their cause went down in flames, but great wealth allowed them to play the Phoenix…and they had friends in high places.
In 1886 yet another case came before the Supreme Court, Santa Clara County vs. Southern Pacific Railroad. If not for a brief statement by Chief Justice Morrison Waite at the beginning, before argument commenced, the case would have been assigned, along with the many others like it, to the dust bin of irrelevance.
He remarked, “The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of opinion that it does”. The court‘s final decision, like the many cases before, did not include a ruling on the question of “corporate personhood”. The headnote (a summary of the decision) included Justice Waite’s statement, and that headnote seems to have launched our democracy on a path toward destruction.
It is yet a mystery as to why the Chief Justice made that statement. Speculation persists to this day. Several of the Supreme Court justices had been railroad attorneys - one Associate Justice, Stephan J. Field, was an unabashed supporter. Nearly every talented lawyer had worked for railroads in those days. The Court clerk, Bancroft Davis, who wrote the headnote, had also been a railroad attorney. That headnote subsequently set court precedent - corporations were “persons” as far as the Law was concerned.
Justice Hugo Black observed that, of the cases in which the Court applied the fourteenth amendment during the first 50 years after Santa Clara, "less than one-half of 1 percent invoked it in protection of the Negro race, and more than 50 percent asked that its benefits be extended to corporations".
During those fifty years corporations won numerous Supreme Court decisions that granted them Bill of Rights protections: First Amendment guarantees of political speech, commercial speech, and negative free speech; Fourth Amendment safeguards against unreasonable regulatory searches; Fifth Amendment double jeopardy and liberty rights; and Sixth and Seventh Amendment entitlements to trial by jury. The virulence usurped the Constitution, and there was yet more to come.
III. Corporate Control of Government with Money
In the 1970’s corporations opened another front. This one was aimed directly at controlling legislation passed by Congress and state legislatures (see: Powell Memorandum). It has been a highly organized campaign propelled with money - lots of money. Cash flowed into the political system in unprecedented volumes creating and financing organizations whose aim were to influence government policy. The operation has been hugely successful.
The Business Roundtable, one of the earliest and most powerful, was formed in 1972, and made up of CEOs from several hundred of the largest corporations in America - big table laden with money. One of the Roundtable’s early victories was the defeat of The Labor Reform Bill backed by labor unions in 1978. The bill was expected to easily pass because both Houses and the Presidency were controlled by Democrats. Congress was confronted by an unparalleled lobbying effort. Defeat came as a devastating blow to labor, and its been down hill for unions ever since.
The American Legislative Exchange Council (ALEC) arose in 1973. This operation is more subtle. It professes to be a nonpartisan provider of technical services to understaffed state legislators. In reality it is an association of over three hundred corporations that writes “model” legislation presented to several thousand state legislators who attend its sponsored meetings. Of course it goes without saying that these “nonpartisan” legislative “models” are anything but... Its recent endeavor, vote suppression in the guise of voter ID laws, has been passed in numerous Republican controlled State legislatures since 2010.
The Roundtable and ALEC are only two of the earliest associations. Billions of dollars fund many other corporate financed entities: Foundations, Think Tanks, Coalitions, Litigation Centers, PR agencies, Judicial Education Seminars, and K Street Lobbies. Phalanxes of lobbyists write “White Papers”, authoritative reports, to sway congress to “special interest” view points. Fifteen thousand K Street lobbyists are registered to push corporate agendas on Capitol Hill. That’s twenty-eight for each member of congress, and each lobbyist is supported by a gaggle of aides. For every public sector lobbyist in Washington there are a hundred speaking for Corporate America and the superrich.
Corporations also finance scores of front groups that pose as “grass roots” movements. Many public TV announcements are deceptive attempts to sway public opinion. The National Wetlands Coalition was sponsored by oil and gas companies and real estate developers to ease restrictions placed on wetlands. Consumer Alert fights government regulations on product safety. Keep America Beautiful, sponsored by the bottling industry, actively fights mandatory recycling legislation. The Center for Indoor Air Research was funded by the tobacco companies to mislead the public about the danger of tobacco smoke. American Coalition for Clean Coal Electricity is an association of coal producers, utility companies, and railroads trying to convince us that the phrase “Clean Coal” isn’t really an oxymoron.
Huge sums flow into political action committees to finance campaigns and manipulate elections. Fund raisers add millions to politicians’ campaign chests insuring corporate access and the best democracy that money can buy. In 1976 the Supreme Court ruled that political money was equivalent to First Amendment free speech (Buckley v. Valeo), and the 2010 decision (Citizens United v. The Federal Elections Commission) freed corporations to pump unlimited funds, anonymously, into politics. So, as the old saying goes… “You ain’t seen nothin yet”.
Vast resources enable corporations to broadcast limitless “free speech” over the airwaves. No mortal voice of dissent can match the deafening output. Corporate media interject opinions from “talking heads”, “think tanks” add their “learned and wise” voices, and coalitions chime in on specific issues. We are immersed in corporate “white noise” to the relative exclusion of all others.
The forty year campaign has enabled corporations to achieve overwhelming influence in government. A revolving door, by which individuals move back-and-forth between government and corporate jobs further enhances their dominion. The lines separating government from corporate power have become so blurred its difficult to tell which is the dog and which is the tail or which is wagging which. The malignancy has captured the machinery of government.
IV. Corporate Pursuit of Deregulation
The early American corporation was an entity chartered for public good, to serve people. That intension has been inverted. In the present economy it is people who serve and are expendable. The only reason for a corporation’s existence is profit, and that which limits it is anathema. A guaranteed way to maximize profit is to externalize costs (pass them off to people, society, government or the environment). If modern corporate political activity can be distilled to its essence, it is the endeavor to squash regulation, and return to a “Gilded Age” where its possible to destroy competition, cut wages, disregard working conditions, inflate prices, and foul the environment - all in pursuit of profit.
An endless bombardment of anti-regulation noise emanates from the corporate world. TV infomercials and media “talking heads” amplify the often repeated message, effectively shaping public opinion by transmitting a continual stream of propaganda into homes.
A balance between government regulation and corporate activity is obviously needed in a functioning system, but it is the “Big Lie” that government regulations are strangling business. Corporations simply don’t want to pay the full cost of doing business in the modern world and the financial sector is the biggest player.
It has spent millions to successfully nullify banking regulations, some enacted in the aftermath of the Great Depression. The Glass-Steagal Act of 1933 was passed to guard against the repeat abuses that brought the economy down in 1929. Congress effectively scuttled safe-guards by 2000 enabling banks to gamble with derivatives, credit default swaps, and other risky financial instruments that contributed to the Great Recession presently afflicting people.
The financial sector’s share of the Gross Domestic Product has dramatically increased over the last decades. That gain is not from productive investment, but from an extractive process conducted by speculators, arbitrageurs, and corporate raiders who do not create wealth, but extract and concentrate existing wealth. Other investors and society are the losers.
Bankers currently battle the potential effectiveness of the newly established Consumer Finance Protection Bureau. The bureau was formed to shield people from the predatory practices of the industry, requiring it to write contracts in plain, understandable English for example. The bankers say the Bureau doesn’t have enough congressional oversight, it will be bad for business, hurt the economy, or the consumer, …or something. They aren’t able to provide a convincing argument, but that doesn’t matter. Their lobbyists are busy in Washington, and have paid handsomely to get the attention of Congress, and successfully delayed the Senate confirmation of a head for eighteen months. The financial sector will continue trying to emasculate the bureau. Congress could provide a fair deal to the people by making it difficult for the moneyed interests to continue gaming the system, but the outcome isn’t certain.
Fracking, a process that dislodges natural gas from shale rock, has generated extensive activity in several states. The process involves pumping millions of gallons of water, under high pressure, into the rock strata - water no longer available for farming or drinking. The solution is 98 percent water, but the other 2 percent amounts to millions of pounds of chemicals, some toxic, and industrial secrecy surrounds the exact composition. Some residents are making fortunes leasing drilling rights, but others complain of ground water contamination (faucets catch on fire), poor air quality, noise, health issues, and a curious up-tick of earthquakes. The EPA gave its blessing in 2004, but is looking at it again. The gas companies say that it will alleviate our energy needs, and boost the economy. That’s probably correct, but what costs will corporations divert to the public and the environment in the process? Their coalitions say its perfectly safe, but we’ve been told things like that before.
Energy companies, think tanks, and associations wage a disinformation campaign over scientific evidence warning of climatic change. They follow the tactics tobacco companies used earlier in a long-running effort to discredit studies revealing the health hazards of smoking. Slick “public service” ads touting the corporate agenda enter American homes via the ubiquitous television. Many sponsors have innocuous names, like Americans for Prosperity, another of those front groups, this one belonging to Koch Industries, big in the oil industry, repeatedly fined for environmental violations, and one of the big backers of climate denial.
If regulations are likened to a democracy’s antibodies, then the corporate malignancy is destroying the immune system. Recent history is replete with examples of enormous costs being passed on (i.e. externalized) to people or society or the environment as a result of deregulation and/or lax regulation - the Fukushima Nuclear plant disaster, The Deep Water Horizon Spill, and The Great Recession to name three recent ones.
V. Modern Corporate Colonialism
The World Bank and International Monetary Fund (IMF) were created in 1944 to integrate the world‘s economies into one global market, a process known today as “Globalization“. In many ways this “Free market” economy has been a great success. Corporations and a relative few wealthy individuals have done fine. Poor countries and most of the world’s people have faired less well.
The Bank and IMF are mandated to provide loans to poor countries, stabilize exchange rates, do research, offer advise, and facilitate an international payment system. But the economically powerful nations are the ones who run the show and choose the leadership - who happen to be corporate executives. They therefore have a systemic bias in favor of rich countries and multinational corporations.
Policies, set unilaterally and in secret, have resulted in mounting criticism. Strategies required poor countries to abandon traditional economic structures and adopt western practices so raw materials could be supplied to the industrialized nations. Small farmers were displaced by estate sized agribusiness. Other export industries, logging and mining, caused environmental devastation due to poorly regulated operations.
The Bank demands draconian restructuring as a debt crises continues to overwhelm the Third World. Sharp cuts in social services are considered necessary so the impoverished governments can continue making interest payments on balances they will never repay. The net effect on indigenous people has been the disruption of their social fabric and fracturing of communities.
The North American Free Trade Agreement (NAFTA) was signed in 1994 by Canada, United States and Mexico in a major step toward removing trade barriers. “Globalization” and “Free Trade” became the catchwords in the run-up to Senate ratification. Corporations and their political shills praised it, assuring skeptics that all was for the best. But those guarantees proved hollow as thousands of our factories have since been closed, dismantled, and shipped to Mexico, India or China, or elsewhere.
The World Trade Organization (WTO) was created in 1995 to manage the global economy and arbitrate trade disputes between countries. The arbitration panel, staffed by multi-nation corporate personnel, is the most powerful legislative and judicial body in the world. They are the unelected whose decisions go unchallenged because of treaties entered upon by the United States and 186 other countries. The panel, unaccountable to the people, can nominally overrule national laws by laying heavy sanctions against noncompliant countries. Their actions have generated anger. Large, sometimes violent, demonstrations occur wherever they conduct meetings (Seattle in 1999).
Fifty-one corporations count among the hundred top economies of the world. The combined sales of the two-hundred largest corporations equal more than 28% of World Gross Domestic Product, but employ less than one percent of the world‘s work force. The corporate work force is a body that continues to shrink, blue collar workers made up earlier cuts, management counts among the latest. Innovations in computer and robotic technology may eventually position corporations where they no longer need humans. Who then will buy their products?
The present global economy, dominated by multi-national corporations, resembles the imperial colonial system of yesteryear in that it extracts wealth from the “colonies” and concentrates it in the hands of a relative few. It may be less brutal than its forebear, but human depravation still follows in its wake.
Fifty years ago the middle class was a robust segment of the U.S. population. The economy boomed with a plethora of good paying jobs, and wealth was more evenly distributed than at any time in history. The middle class is now shrinking, and the populace begins to mirror the “haves and have-nots” of the third-world. Instead of other nations catching up to us, we are joining them. The virulence has metastasized.
No comments:
Post a Comment