Revoking the Corporation
by Ward Morehouse
W e need first to define corpo-rate power, then dissect it, then denounce
it, then disrupt it and finally dismantle it. The first challenge for all
of us is to overcome the colonization of our minds. Cornel West said it
best: "The sheer power of corporate capital . . . makes it difficult
even to imagine what a free and democratic society would look like if there
were publicly accountable mechanisms that alleviated the vast disparities
in resources, wealth, and income owing in part to the vast influence of
big business on the U.S. government and its legal institutions."
·Our second challenge involves taking a lesson from the play book of
the corporations who have spent the last century or more consolidating their
power and insulating themselves from meaningful democratic control. We therefore
will try to change a body of legal doctrine rather than fight case after
case after case of corporate transgression..
·Our third challenge is to resist the temptation for co-optation and
accommodation, and not to accept as victories those which leave corporate
power unchallenged and intact. I would put the social investment movement
in this country in the category of accommodation to corporate power.
·Our fourth challenge is to recognize the myth of American democracy
and to overcome the plutocracy with which we live. All societies have myths
about themselves. Ours is no exception.
·The fifth is to understand that we will never win this struggle if
we play by their rules because they wrote the rules.
Our sixth is to determine how we know when we really have won in the struggle
against corporate power. I would submit to you we only really win when there
is a fundamental shift in power from corporations back to the people where
it was in the first place.
I will save the seventh challenge until the end and go on to one of Clinton's
throwaway lines in his State of the Union speech: "The era of big government
is over." I would submit to you that the era of the giant corporation
is over and that it is time for us to take the offensive in the struggle
to establish democratic control over corporations. Here is an eleven-point
program for doing that:
1. We can start by revoking the charters of especially harmful corporations
who have inflicted mass harm on innocent people. There are provisions for
the revocation of charters in 49 of the 50 states.
2. We can recharter corporations to limit their powers and make them entities
subordinate to the sovereign people. For example, by granting charters (as
used to be the case) for limited time periods, requiring that there be a
conscious, deliberate act of approval by communities and workers for corporations
to continue beyond the initial time in which they have been chartered. For
making corporate managers and directors liable for the harms done by corporations.
3. We can address a fundamental obstacle to democratic control over corporations-their
sheer size. The largest corporations today are larger than most nation-states.
General Motors has gross income greater than the gross domestic product
of Denmark. So we need to reduce the size of corporations by breaking them
into smaller units with less power to undermine democratic institutions.
As an issue in public policy, this has historical precedence in the Public
Utility Holding Company Act of 1935, which did just that: it said certain
public utility companies will divest themselves because they may not be
larger than a given set of criteria determined through a democratic process.
4. We need to establish effective worker and community control over production
units in order to protect the "reliance interest," an important,
if not fully developed, legal doctrine which workers and communities acquire
over time in the actions, the activities, and the assets of corporations.
This could be done in a variety of ways, including prohibitions in the charter
of the corporation in the future, prohibitions for the hiring of replacement
workers (scabs), requiring independent health and safety audits by experts
chosen by workers in the affected communities, etc.
5. We can initiate referendum campaigns or take action through state legislatures
and the courts to end constitutional protections for corporate persons.
We are in the belly of the beast here in Santa Clara county because this
is where all this terrible mischief of corporations being persons before
the law, began.
6. We can prohibit corporations from making campaign contributions to candidates
in any elections and from lobbying any local, state, and federal government
bodies. And if you think this is off the wall, you should be aware that
in the state of Wisconsin, up until a couple of decades ago, it was a felony
for corporations to make political contributions.
7. We can stop subsidy abuse and extortion by corporations through which
large corporations rake off billions of dollars from the public treasury.
This is extortion and subsidy abuse, and we need to stop it; let us not
call it "corporate welfare." Welfare should be a positive concept.
8. We need to launch campaigns to cap salaries of corporate executives and
tie them to a ratio of average compensation for production workers (say
5 or 10 to 1).
9. We can encourage worker and community-owned-and-controlled cooperatives
and other alternatives to conventional limited liability profit-making corporations.
10. We can prepare model state corporation codes based on the principle
of citizen sovereignty and begin the campaign for their adoption, state
by state.
11. We can invigorate, from the grassroots up, a national debate on the
relationship between public property and private property-including future
value and the rights of natural persons, communities and other species when
they are in conflict with those corporations. The whole subject of how we
define property rights is at the heart of much of the accumulation and codification
of corporate power.
So there is an 11-point agenda to get you started on this challenging task.
You can make one concrete step in that direction if you are so moved. You
may have seen an advertisement that appeared in the New York Times in December
entitled "Should Corporations Get Away with Murder?" That is what
they do. The example is Union Carbide Corporation, the perpetrator of the
world's worst industrial disaster. This ad asks that readers do two things:
1. Send a telegram by calling Western Union at 800-651-1421 demanding the
CEO of Union Carbide stand trial in Bhopal for culpable homicide. 2. Send
a communication to the New York State Attorney General (since Union Carbide
is incorporated in New York State) demanding him to begin charter revocation
proceedings under Section ll0l and other sections of the state incorporation
code, as long as Union Carbide continues to flout the law.
The seventh challenge, which I have left for last, is the challenge to take
to heart the big lessons of 20th century history and not to be discouraged
by the challenges that indeed do confront us. It was said nowhere better
than by Howard Zinn in one of his recent books:
[T]he struggle for justice should never be abandoned because of the apparent
overwhelming power of those who have guns and money, and who seem invincible
in their determination to hold on to it. That apparent power has again and
again proved vulnerable to human qualities less measurable than bombs and
dollars: moral fervor, ingenuity, courage, patience. No cold calculation
of the balance of power need deter people who are persuaded that their cause
is just.
Ward Morehouse is a co-director with Richard Grossman of the Program on
Corporations, Law & Democracy, and President of the Council on Public
and International Affairs. The foregoing is a partial transcript of his
contribution to "A Workshop on Revoking the Corporation," a discussion
with Richard Grossman in Palo Alto on January 29, 1996.
