reprinted by
The Program On Corporations, Law & Democracy
P.O. Box 806, Cambridge MA 02140
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     PRRAC

                               Poverty & Race
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                   POVERTY & RACE RESEARCH ACTION COUNCIL
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                 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.

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     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

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