reprinted by
The Program On Corporations, Law & Democracy
P.O. Box 806, Cambridge MA 02140
----------------------------------------------------------------------------
PRRAC
Poverty & Race
------------------------------------------------------------------
POVERTY & RACE RESEARCH ACTION COUNCIL
------------------------------------------------------------------
September/October 1995 Volume 4: Number 5
Minorities, the Poor & Ending Corporate Rule
by Richard L. Grossman and Ward Morehouse
[In Santa Clara v. Southern Pacific Railroad (1886), the Supreme
Court] held that a corporation was a person under the Fourteenth
Amendment 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 legislatures 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 poisons, 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 US 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, well before 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.
------------------------------------
We the People give legal fictions
called corporations greater rights
than we give to people.
------------------------------------
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 wield today were nothing more than the wish lists 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: . . .
[H]owever 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 exempted 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 banking 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 moulded 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 legislators 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 giant 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.
--------------------------------------------------------
Minorities, the Poor & Corporations at a Glance
* Compensation: Ratio of corporate CEO to pay of
average worker: 1974 -- 34:1; 1994 -- 159:1.
* Corporate Assets/Jobs: Assets of 500 largest US
corporations are up: 1980 -- $1.18 trillion; 1993
-- $2.68 trillion. Jobs provided by 500 largest US
corporations are down: 1980 -- 15.9 million; 1993
-- 11.5 million.
* Wage Levels: Worker productivity is up, but 1994
average real weekly wage decreased to 81% of 1973
level. 75% of 26.5 million jobs that corporations
have created (1979 to 1994) are in two lowest-pay
categories of service sector (retail trade, health
and business services).
* Toxics: 230 times more toxic waste is dumped in
disproportionately lower-income and minority
neighborhoods near polluting corporate factories
than where corporate CEOs live.
* Corporate Profits: First quarter 1995, average
return on equity of Standard & Poor's 500
corporations was 20.12%.
* Taxes: Corporations now pay less than 10% of the
nation's taxes, compared to 1/3 of the taxes in the
1940s and 1/5 of the taxes in the 1970s.
--------------------------------------------------------
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 lawyers, bully
judges and marshal their non-profit, 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.
------------------------------------
Giant corporations are major causes
of poverty, community
destabilization, discrimination, ill
health and environmental
destruction.
------------------------------------
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.
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.
------------------------------------------------------------------
P&R welcomes letters & comments on our articles; we will print as
many as space allows.
We also more than welcome voluntary "subscriptions" to cover our
production/mailing costs, so we can continue to distribute the
newsletter without charge. Some 550 of you already have
contributed (see p. 8 for the latest honor roll); the modal amount
has been $25, but lots of $50 and $100 checks, too, we're happy to
say.
CONTENTS:
Ending Corporate Rule . . . . . . 1
Cumulative Voting . . . . . . . . 5
Thank You, New Contributors . . . 8
L.A. Researcher-Activist Network . 9
Independent Politics Gathering . . 11
Advocacy Updates . . . . . . . . 12
Affirmative Action Resources . . . 13
PRRAC Update . . . . . . . . 14
Resources . . . . . . . . 15
Poverty & Race (SSN 1075-3591) is published six times a year by
the Poverty & Race Research Action Council, 1711 Conn. Ave.
NW,#207, Washington, DC 20009, 202/3879887, fax: 202/387-0764.
Chester Hartman, Editor; Catherine M. Dorn, Editorial Assistant.
There is no charge for the newsletter (except to libraries), but
donations are encouraged. Articles, article suggestions and
general comments are welcome, as are notices of publications,
conferences, job openings, etc. for our Resources Section.
Articles generally may be reprinted, providing PRRAC gives advance
permission.
_____________________________________________________________________________
This document is available on the web
at rat haus reality, ratical branch via the URL
http://www.ratical.org/corporations/MPEndCRule.txt
To see all the documents available, go to
http://www.ratical.org/corporations/
_____________________________________________________________________________