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Ending corporate Rule
by Richard L Grossman and Ward Morehouse
In 1886, the Supreme Court [Santa Clara v. Southern Pacific
Railroad] held that a corporation was a person under the FourteenthAmendment
and thus was entitled to its protection (Morton Horwitz, The Transformation
of American Law; 1870-1960, p. 66).
Giant Corporations in banking, food, pharmaceuticals, railroads, publishing,
petrochemicals, utilities, forestry, real estate, insurance, data, entertainment,
health-care, weapons-you name it-rule us. Over a century of corporate expropriation
of law and land, along with corporate violence against nature and communities,
have undermined our independence and colonized our minds.
Today, "We the People" give legal fictions called corporations
greater rights than we give to people. We concede to them the sole right,
the constitutional authority to make investment, production, technology
and work decisions which shape our communities and our lives. The largest
500 U.S. industrial corporations control 25% of the assets of America's
3.8 million corporations. And corporations are awash in money; according
to The Wall Street Journal, the first quarter of 1995 brought "the
highest level of corporate profitability in the postwar era . . . Life in
corporate America is about as good as it can get." As a result of corporate
decisions, poverty is up, wages are down and millions-largely people of
color-are literally working their way into poverty. David Dembo and Ward
Morehouse, in The Underbelly of the US Economy, call this the corporate
"pauperization of work . . . replacement of higher paid jobs by those
at or close to the minimum wage, often part-time, and below the poverty
line."
Corporate leaders and their shills in effect direct Congress, state legislature
and local officials to close libraries, schools, hospitals and parks; to
gut health and environmental protections; to withhold services to young
people, the poor, the sick and elderly; to obstruct citizen lawsuits. A
recent New York Times headline says it well: "State Budgets are Cut,
Millions in Tax Breaks Go to Companies." Most Americans exercise little
authority over corporations. Poor Americans and Americans of color have
even less say. They are especially assaulted as corporations warp elections,
legislatures and the courts; move vast amounts of capital seeking the cheapest
labor; manufacture poison; and disinvest and intimidate.
Corporations vs. the People
Great gaps have always existed between the ideals and the achievements of
the American Revolution. Our Constitution and the law have served as tools
for legalized oppression as well as for inspiration and liberation. The
founders, who boldly extolled equality and liberty, denied Africans, Native
peoples and women the rights of personhood. But the American Revolution
did launch a struggle that has lasted until today: people excluded from
constitutional personhood agitating for inclusion in "We the People."
Since the last third of the 19th Century, corporations-unmentioned in the
Constitution-have opposed this popular struggle by shaping judicial doctrines,
claiming corporate rights as property, imposing their hierarchical-profit-and-production-oriented
values and interfering with the mechanisms of government. In 1877, for example,
Thomas Scott, president of the country's largest corporation, The Pennsylvania
Railroad, helped broker a deal between the Republican Party and politicians
from former slave states to withdraw federal troops from the South and bring
Reconstruction to a screeching halt. Nine years later, in a case brought
by a railroad corporation, the U.S. Supreme Court declared corporations
to be legal persons, whose life, liberty and property were constitutionally
protected by the Fourteenth Amendment (even though that amendment had been
written and ratified in 1868 to protect the rights of freed slaves).
By 1904, corporations controlled four-fifths of the nation's industrial
production, had begun to perfect a corporate system of finance, industry
and governance, and had brought about what Morton Horwitz calls "the
transformation of American law." Corporations actually turned themselves
into de facto persons able to participate in elections and the process of
self-governance-well before indigenous peoples, women, African Americans
and other persons of color, and most people without property.
The Sovereign People In every generation, valiant organizing by millions
of "non-persons" has expanded the civil and political rights of
people, gaining (in theory, at least) equal protection of the law. And there
has been a continuous history of struggle in this country against corporate
harm-doing. But in these struggles against poverty and discrimination, and
for equity, health, jobs and the environment, the focus has not been on
breaking corporations' grip over capital, production and jobs; on changing
bedrock legal doctrines relating to property; or on getting corporations
entirely out of our elections, out of our legislatures, out of our governors'
houses and judges' chambers. Taking back the wealth, power, privileges and
immunities that corporate fictions have stolen, and dismantling offending
corporations, has not been the subject of public debate and action.
Recently, Cynthia Hamilton has urged all Americans "to demand greater
democratic control of economic ownership, production and investment. The
environmental justice movement cannot allow questions of land use, land
rights and land ownership to remain the province of corporate decision makers.
It needs instead to create a democratic alternative."
If people were to demand "greater democratic control of economic ownership,
production and investment," from whom should we demand it?
The answer may be surprising: We the People can draw upon our own sovereign
authority to impose our collective will upon tyrannical corporations.
For what other reason did so many non-persons educate, agitate, and organize
since the Revolution? Why else did people build suffrage, abolitionist,
labor, populist, civil rights, anti-poverty, Indian rights, women's, gay,
lesbian and environmental movements across the land-if not to govern ourselves?
Lessons from History
History provides some inspiration. There was a time when corporations were
understood to be mere fictions, subordinate to the sovereign people and
the public interest. Incorporation was a public trust, a privilege-not a
right. The legal powers corporations weild today were nothing more than
the wish list of corporate lawyers.
Elected state legislators issued corporate charters and wrote state corporation
laws that carefully defined the nature of corporations. Charters were granted
only for fixed terms, which meant that corporate directors had to come back
to the people at regular intervals to request renewal of their charters.
Corporate owners, managers and directors were liable for corporate debts
and for harms their corporations caused (sometimes doubly and triply so).
Corporations were prohibited from functioning except as specifically permitted,
as this 1864 Wisconsin law decreed: "The purposes for which every such
corporation shall be established shall be distinctly and definitely specified
in the articles of association, and it shall not be lawful for said corporation
to appropriate its funds to any other purpose." A 1923 Wisconsin statute
read: "The legislature may at any time limit or restrict the powers
of any corporation organized under any law." An early 20th Century
amendment to the Maine Constitution stated: "However formed {corporations}
shall forever be subject to the general laws of the state."
Citizen authority clauses dictated rules for issuing stock and for public
access to corporate information. The power of large stockholders was limited:
large and small investors had equal voting rights. Interlocking directorates
were outlawed, and the rates corporations could charge were sometimes set
by legislators. Turnpike charters frequently excepted the poor, farmers
or worshippers from paying tolls. In New York, turnpike gates were "subject
to be thrown open, and the company indicted and fined, if the road is not
made and kept easy and safe for public use." Banking corporations had
to get legislative approval to increase their capital stock or to merge.
Some states required banks to make loans to local manufacturing, fishing,
and agricultural enterprises, and to the states themselves. Other states
banned private corporations altogether.
People did not want business owners hiding behind legal shields, but in
clear sight, so corporations were prohibited from owning other corporations.
And corporate property and capital holdings were routinely limited. As the
Pennsylvania legislature stated in 1835, "A corporation in law is just
what the incorporating act makes it. It is the creature of the law and may
be molded to any shape or for any purpose that the Legislature may deem
most conducive for the general good."
Most important, people reserved the right to amend corporate charters, and
to dissolve a corporation by revoking its charter if the corporation exceeded
its authority or caused harm to the body politic. In 1825, Pennsylvania
legislatures adopted broad powers to "revoke, alter or annul the charter"
at any time they thought proper. The Rhode Island legislature declared in
1857: "The charter or acts of association of every corporation hereafter
created may be amendable or repealed at the will of the general assembly."
Pennsylvanians adopted a constitutional amendment in 1857 instructing legislators
to "alter, revoke or annul any charter of a corporation hereafter conferred
. . . whenever in their opinion it may be injurious to citizens of the community."
We the People have always been sovereign over the fictional entity called
the corporation and today 49 states (all but Alaska) have charter revocation
clauses. By revoking corporate charters, we can uproot the most abusive
corporations from our communities. By amending state corporation codes and
the charters themselves, we can define corporations any way we want.
Organizing Against Corporations
Working through The Program on Corporations, Law & Democracy, we have been
striving to place the corporation as an institution and resistance to corporate
rule, onto the agendas of people aspiring to justice and self-governance.
Towards these ends, we have organized ten "Rethinking the Corporation-Rethinking
Democracy" gatherings, involving about 250 people, from Washington
state to Maine; half a dozen more meetings are planned for the coming months.
We've also been coordinating popular research on the history of corporations
and corporate law in our states and documenting citizen use of state mechanisms
to limit corporate authority. Out of these initiatives is emerging a growing
network of people and a strategic agenda. Among other things, people are
exploring ways to:
*Dismantle especially harmful corporations;
*Re-charter corporations for limited time periods, subject to precise restrictions;
*Reduce the size of corporations;
*Establish worker and community control over production units of corporations
to protect the property interests and other rights of workers and communities,
ban specific toxic chemicals and technologies and the hiring of replacement
workers during strikes, cap management salaries, etc., by writing explicit
rules into charters and state corporation laws;
*Organize referendum campaigns to strip corporations of "personhood"
and constitutional rights appropriate only for natural persons; *End corporate
extortion and subsidy abuse, by which corporations have been raking off
billions of taxpayer dollars; *Prohibit corporations from making any contributions
to electoral campaigns, from all lobbying, from using any money to influence
public policy;
*Prohibit a corporation from owning another corporation;
*Nurture cooperative worker-community-owned and-controlled enterprises;
*Invigorate debates on property and the rights of natural persons, communities,
other species and the Earth, and on the role of government.
Because corporations, with few exceptions, are created by state governments,
our states will have to become key arenas for citizen organizing. In many
ways, the move on the part of the Right and corporate leaders to devolve
power from the federal government to the states could strengthen organizing
to disempower corporations. So far, groups have formed in Maine, Wisconsin
and Oregon to plan agendas and begin this work.
As we connect with people around the country, we find growing numbers who
recognize that corporations now govern . . .that these corporations are
major causes of poverty, community destabilization, discrimination, ill
health and environmental destruction. A potentially powerful consensus is
emerging that to begin investment transitions in energy, housing, transportation,
agriculture, food, timber, finance, etc.; to have fair and democratic elections
and lawmaking where people (not corporations) are represented; to create
institutions of enterprise that will not turn upon us like the sorcerer's
apprentice; to get justice in our courts-We the People will have to learn
about the sources of corporations' powers, take those powers away, dismantle
the worst corporations and assert popular sovereignty over all enterprises
we allow to do business in our land.
Logical? Yes. Difficult? Of course. Corporate leaders and the politicians
in their pockets will resist with vigor. They will call upon the most manipulative
advertising, public relations, media and law corporations for help, threaten
to wipe out jobs and tax payments, intensify their divide and conquer campaigns
by driving wedges between workers, environmentalists and communities, between
people of color and whites, and among people of color. They will try to
split community against community, state against state, country against
country. They will challenge the histories that people are uncovering in
their states, while they continue to unleash their nonprofit, subtly named
corporate front groups designed to look like just folks for health, property,
justice and apple pie. They will try to buy people off with grants or negotiations
or empty promises. When citizen pressure mounts, they might even invite
token representatives to join their corporate boards.
We cannot control the tactics corporate leaders will use. But we can end
the colonization of our own minds, what Edward Said calls our "ideological
pacification," by helping one another dispel the absurd idea that today's
giant corporations were inevitable and that there is no alternative to these
global fictions ruling our lives. And we can and must reach out to people
in other countries organizing to end corporate rule. Indeed, there is much
we can learn from them; witness the community groups in India that forced
two American giants-DuPont Corporation and Cargill Corporation-to close
down their operations through well-planned and persistent direct action.
Since the 1776 Declaration of some Americans' independence, people excluded
from personhood have organized to gain the rights of citizenship and the
constitutional guarantee of equal protection of the law. We the People are
now numerous enough and strong enough to govern ourselves. We can dismantle
corporate tyrants. We can establish the institutions of enterprise we want
and need. The alternative is abandoning our children and the Earth to global
corporate authority, and living out disenfranchised toxic lives, not as
citizens, but as automatic consumers squabbling over corporate crumbs.
-Reprinted with permission from the September/October 1995 issue of Poverty
& Race, a publication of the Poverty and Race Research Action Council. Richard
Grossman and Ward Morehouse are co-directors of The Program on Corporations,
Law & Democracy. Grossman was director of Environmentalists for Full Employment
from 1976-1984 and is co-author (with Frank Adams) of the pamphlet Taking
Care of Business: Citizenship and The Charter of Incorporation. Morehouse,
president of the Council on Public and International Affairs, is a human
rights activist and co-author (with David Dembo) of the 1995 publication
The Underbelly of the US Economy: Joblessness and the Pauperization of Work
in America. To obtain these publications, or for further information, contact
the Program at 211 1/2 Bradford Street, Provincetown, MA 02657; (508) 487-3151
or (212) 972-9877. Contacts for the 3 states where Program groups already
have formed are as follows: Maine: Pine Tree Folk School, RR2, Box 7162,
Carmel, ME 04419; Wisconsin: The Wisconsin Campaign, 731 State St., Madison,
WI 53703; Oregon: The Oregon Campaign, HCR-82, Fossil, OR 97830
Interested in this project? If you'd like to help form a local North Coast
group to pursue these issues, please contact Betty or Gary at the MEC, (707)
468-1660. If there is interest, Richard Grossman has indicated a willingness
to come and help us get started.
NCX Feb/Mar 1996