RETHINKING CORPORATIONS, RETHINKING DEMOCRACY
PART I by Richard Grossman
For the last three years we have been involved in a process of engaging
people to talk about what's happening in this country, to discover how to
talk about questions which haven't seemed really amenable to analyzing,
which haven't clarified terrible things that are happening or what we can
do about them.
At the beginning, our sense was that the giant corporations are causing
all kinds of harm-polluting, interfering with democracy, destabilizing communities,
making all kinds of products we don't need, manipulating the markets, abusing
working people. I remember a meeting that Ward Morehouse and I had with
Thomas Berry, a cosmologist. We said, "We want to dissolve the thousand
largest corporations in the world." Thomas Berry thought for a while--he's
a very contemplative man--and said, "That's interesting, but why do
you have such low aspirations?"
So we have moved on. We realize that the problem is what corporations are
designed to do and what they do well. They're designed to consolidate wealth
and power. They're designed to insulate human decision-makers from responsibility
for their actions. They're designed to limit competition. They're designed
to function as governing bodies, as governments. That's what they do.
The job of the East India Company, which was one of the first multinationals,
was not only to vacuum the resources of India and other countries and send
them back to England, but also to change the culture, to destroy the culture,
to destroy people's confidence, to destroy the whole structures that existed
in the subcontinent of India three hundred years ago, to become the governing
entity. It had the authority to raise troops, wage war, decide, once they
took power, what people could grow. It was the same with the crown corporations
that settled the North American continent. They could tell you what to grow
and where to ship your products. They were dictatorships who could press
you into the military.
Today giant corporations essentially are governing bodies which serve the
purposes of government. Yet in the context of our country, our history,
they're not constitutionalized, and we have no real active authority over
them. So we had redefined the question: it wasn't the obvious harms that
corporations did that was the problem, it was the nature of these large
corporations, how they had recreated themselves throughout our history to
become this entity and to have the powers that they have. It's not enough
just to revoke the charters of the worst corporations. The problem--as we
pushed further--is that the corporations have played a major role in interrupting
the move towards democracy in the United States.
The functioning of this country, the strivings of our people, the organizing
and educating that has taken place throughout the twentieth century, has
been relatively limited, outside the economic arena. Issues of who controls
the money and the whole financial institutions of this country, who controls
the production, who controls investment, who controls the organization of
work, have essentially been off the public agenda since the end of the nineteenth
century. And corporations aren't just dominant in financial terms or political
terms; they're dominant in a cultural way. They are shaping and defining
the culture, defining the language. The language of corporate propaganda--the
language of public relations--is the language of deception, the language
of diversion, the language of intentional misleading. Adults go to college
to learn how to get us to buy things or get us off the point. They're paid
big money by corporations. They've had a long time to perfect that skill.
So the culture is a reflection of the control and dominance that these large
corporations exert.
If we want to talk about what's going on and look at all the problems, all
the symptoms, we have to do it in our own language, through our own lenses.
That means we have to break away from the received culture--how we're taught
to see. Just as the minds of the people in India were colonized by the East
India Company, so our minds have been colonized. The East India Company,
with basically 50,000 employees or civil servants and 50,000 troops, pacified
the subcontinent of India, several hundred million people. It wasn't all
by force of arms; they colonized people's minds.
Some of you may know the book by Thomas Kuhn, The Structure of Scientific
Revolutions, written about 30 years ago. The theme of Thomas Kuhn's book
is that when there's enough information in the scientific community, when
there's enough internal contradiction to a dominant theory, when there's
sort of a revolt, a revolution, and people's attitude changes, then a new
theory takes its place. It's very relevant to what we're engaged in. Kuhn
says we are trying to break through the received (corporate) culture and
refashion our framework of how things are happening:
"The assimilation of a new theory requires the reconstruction of prior
theory and the reevaluation of prior facts which is intrinsically a revolutionary
process that is seldom completed by one person or overnight."
That's the best explanation I've seen of what has been going on with people
around the country: a "reconstruction of prior theory and the reevaluation
of prior fact."
The Corporate Theory
The corporate theory, the cultural theory, of how things are today is that
the corporation is basically an agglomeration of individuals who get together
and basically sign a contract with each other in order to get work done.
It's called a contractarian theory. Because these are persons and they're
just signing a contract, the state--and we as the self-governing people-
-don't have any business telling them what to do. They claim that the state
corporation codes are essentially enabling legislation that just lay out
the framework and get these corporations to do what they want to do. The
most important thing is that corporations get the maximum profit they can
for their shareholders. That, as Milton Friedman says, is "social responsibility."
When the corporations maximize their profits, that's the most efficient
way, in a free society, for things to get done.
Fundamental to the theory is that we-as the sovereign people-don't have
much authority over them. In a debate with someone from the American Heritage
Institute, we were talking about the Union Carbide Corporation, the massacre
for which it is responsible in Bhopal, India, where in one night almost
10,000 people were killed, and 100,000 people injured, many of them permanently.
I said, "Here is an example of a corporation doing a harm. What should
happen to the corporation?"
He said, "First of all, it was in India. So why are you even bringing
it up?"
I said, "Well, it is a corporation chartered in New York State, and
I happen to be a New Yorker by birth; it's chartered in my name."
He said, "The stock, although it went down at the time, now is up."
He was saying, leave it to the market.
I said, "But the market is up. To me that means that the shareholders
don't give a damn."
He said, "That's true, and that's okay because it's the shareholders'
job. The shareholders are investing their money in order to get a return,
and they really don't care."
But that doesn't deal with what's happening, with what the company is doing.
The bottom line--explicit in the current dominant theory of the corporations--is
that the people running the corporation are legally unaccountable to anybody,
that we, as the sovereign people (we're supposed to be the people in authority
in this country, according to our theory of government) don't have the authority
to do anything when something terrible happens.
So we're in the process of framing our picture of how we got this way-our
framework, our myth-in contrast to the myth that's put forward in the corporate
culture. That involves looking at the beginnings of our history and what
actually was going on.
Examining Our History
One of the ideas of the Revolution was that we were going to be a self-governing
people, that no essential realm of decision-making would be beyond our authority,
beyond our agenda. Look at the Preamble to the Constitution. " We the
People" existed before the Constitution, before the creation of the
United States. It was "we the people" defined very narrowly, but
still, "we the people."
The principal thing the American Revolution did was to destroy the idea
of the monarchy and get rid of it. The colonists didn't say we want a better
king, or we want a parliament that's responsible to us. It was a major shift
in thinking to say we're going to replace the idea of the monarchy where
people are subjects and the monarchy defines the society and the relationships
between people; we're going to replace that with a self-governing nation,
with a democracy.
The colonies began to be settled in the 17th century, but it took almost
200 years for them to get to the point where they could uproot the idea
of monarchy and send it packing and replace it with another concept--the
idea of democracy, of people governing themselves.
Secondly, even within the narrowness of the Revolution, there was a struggle
between those who were seeking a broader democracy and those who were seeking
control by a few. A great many of the founding fathers who were most vigorously
active in getting rid of the king, were very happy to replace the king with
government by a relative handful of people. All through the 19th century,
Americans were struggling to define and redefine what self-government meant.
It's inconceivable, however, to believe that the founding fathers-the men
of property who engineered the revolution-having gotten rid of one monarchy,
one concentration of power, one idea that defined and controlled the culture,
would be content to turn their freedom over to a new monarch, a new entity
like the corporation. In the pamphleteering literature of those times, people
were very clear-and not just the men of property-workers and artisans were
also clear, and those who actually fought in the revolution, that we did
not fight in the revolution to turn over our freedom to the corporations.
They knew what corporations were. They knew that the East India Company,
the Hudson Bay Company, the Virginia Company, the Massachusetts Company,
and the Carolina Company were crown corporations. The Revolution transformed
these crown corporations into constitutionalized states, changed their structure,
changed the idea of what they were.
Prior to 1870 or so, if people in the states wanted to call the corporation
up to scrutiny to see if it had been living up to its charter and the state
corporation laws, the hearing was called a quo warranto, which in Latin
means "By what authority." The people would ask, "By what
authority has this corporation done such and such?" If it was judged
that the corporation had exceeded its authority, then it was declared ultra
vires; it had acted beyond its authority and therefore was subjected to
dissolution and its charter was revoked. The idea was the body politic had
to be protected from this cancer. If the corporation had harmed the body
politic in a fundamental way, the only answer was to remove it; it couldn't
be just fined or punished in some limited way.
The Populist Movement
After the Civil War, banking companies, railroad companies, insurance companies,
land companies, and grain companies started to grow and get wealthy and
begin to manipulate the political process and learn how to use their money.
The Populists in the 1880s-starting in the 1870s with the Greenbackers,
then the Grange Movement and the Knights of Labor-saw that a corporate state
was coming into existence, that corporations were beginning to define the
culture, define the society. Populists spent enormous amounts of time engaging
one another. Something like 20,000 lecturers were going around and calling
meetings that lasted for days. People riding in wagon trains to a meeting
could look back and see other wagon trains stretching for miles in the distance,
see their own movement building. They were learning to challenge the accepted
framework, the received culture, to get their roots back, to connect with
the people of the Revolution and after, who had been part of the debate
for democracy, part of the struggle to expand the democratic process and
disperse wealth and power. They were seeking public ownership, seeking to
transform these entities, not just regulate them around the margins. They
were talking about defining the corporations, defining all the institutions,
the institutions being subordinate to the sovereign people
The Populists rose up in an extraordinary way-farmers and working people
in the West and the South primarily-and they were crushed. Out of the defeat
of the Populists in 1896 came the concept and the mechanics of the regulatory
state. In the election of '96, McKinley vs. William Jennings Bryan, it was
the McKinley forces that countered the populist platform with what they
called the "progressive society." They would have these corporations
be efficient, socially responsible. That's when the phrase "socially
responsible" came in. The Populists challenged the corporation, challenged
the legitimacy of the subordinate entity being responsible for progress,
for growth, for our lives, for jobs, for everything. In contrast, the Progressives
embraced the corporation as the vehicle for fulfilling manifest destiny
and bringing all the good things. The Progressives immediately got much
more recognition and legitimacy from the corporate culture than the Populists
ever had, because to a large extent they were legitimating the corporation
and doing their bidding.
The Counter-revolution
The last thirty years of the 19th century saw a counter-revolution. A wave
of changes took place that set the stage for the whole twentieth century,
that defined business and industry and the legal and cultural relationships
between us and these corporations. Corporate lawyers, corporate owners orchestrated
a transformation of the common law. The Supreme Court and the federal courts
were the key vehicles, basically declaring that intangible rights of deciding
where your investment goes, what products to make, and how you organize
work were "property" under the Constitution, so the corporations
got constitutional protections to take off the public agenda this whole
realm of essential decision-making that shapes our communities, defines
products and control of the money and our very lives (given that most people
spend their lives working). They created something called the Market and
Natural Laws. We couldn't have a say in anything that was classified as
the Market under the law. By the end of the century, the essential decision-making
about investment and production were beyond our authority as a sovereign
people. We had little legal standing in dealing with money, finance, production,
and work.
Most of the debates in this century have not been about shaping investment
and production, but just regulating it around the edges. With very few exceptions,
most of the work, the organizing, the activism of citizens has been confined
within the regulatory structure. We have not challenged the whole structure
of money and the institutions of finance. We have not challenged the idea
of the giant corporation as the vehicle for bringing jobs, for defining
our communities, for shaping our society. We've become subjects again. Corporations
have become the sovereign citizens.
What does that mean in terms of what we do? How do we reframe the problem
and reframe our language and look at different political arenas in which
to organize? We're saying that the corporation is an illegitimate entity
to do what it's doing now, that it interrupted to a serious degree the progress
towards opening up democracy, moving toward a self-governing nation at the
beginning of this century. We need to educate ourselves sufficiently to
know what arenas to go into in order to deal with this; we need to change
the language, re-frame our own culture.
That's what these meetings are about.
Material for this article was excerpted and edited from a presentation by
Richard Grossman on July 25, 1996, in Santa Rosa, CA, at the Unitarian Universalist
Fellowship Center, co-sponsored by Peoples Alliance of Sonoma County and
the Occidental Arts and Ecology Center. Part II will appear in our next
issue.
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