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Fighting corporate power since 1776

Boston Tea Patry print
Sorry, Tea Partiers. The original Boston Tea Party wasn't targeting socialism but excessive corporate power and plutocrats of the East India Company.

The Boston Tea Party, claims liberal talk radio host Thom Hartmann, wasn't really a protest against higher taxes and unrepresentative government. Instead, its target was the excessive power of a large corporation -- the British East India Company.

In Unequal Protection: How Corporations Became "People" -- and How You Can Fight Back Hartmann explains that, at the behest of the East India Company, which counted members of Parliament and even the King himself as shareholders, the Crown put a tax and other restrictions on small colonial businesses in the tea trade while exempting the Company, essentially creating a monopoly and helping it to crush competition from American entrepreneurs.

Unequal Protection book cover

Dumping the monopoly's tea into the harbor was a way for the small businesspeople of Boston to protest the corporate plutocracy of their day.

And we all know where that led. The American Revolution established a democratic republic in North America and inspired revolts against rule by despots and their wealthy backers from France in 1789 to Egypt in 2011.

That American democracy has now been hijacked by big corporations, which want ordinary citizens to feel powerless, to get cynical and to forget about taking action. But Hartmann says no way.

Do you think it's impossible to dethrone plutocrats before American society collapses under the weight of debt, unemployment and an oil crash? Don't worry. Hartmann's got a plan.

The power behind the throne

Behind the history of world revolutions -- battles and riots, congresses and assemblies, ditsy queens and thuggish caudillos -- is an ongoing tug-of-war between citizens and the largest businesses over who would ultimately rule: the broad public or a few rich people.

Back in the US, Hartmann finds that after the colonists liberated themselves from King George and the East India Company, the Founding Fathers called on their fellow citizens to remain vigilant against the power of moneyed interests.

"Let monopolies and all kinds and degrees of oppression be carefully guarded against," said Samuel Webster in 1777. Madison and Jefferson feared a pseudo-aristocracy of corporations and echoed the sentiment that large corporations needed to be subordinate to ordinary citizens. Jefferson even wanted to control the size of corporations, as Hartmann explains:

Jefferson kept pushing for a law, written into the Constitution as an amendment, which would prevent companies from growing so large that they could dominate entire industries or have the power to influence the people's government.

For the next century, federal and state governments passed laws to prevent any future corporations from gaining as much power over government as the East India Company had exercised over Boston -- and over London.

In 1833, Andrew Jackson shut down the Second Bank of the United States, a private entity with authority over public finance much like today's Federal Reserve. Throughout the nineteenth century, most states had laws that limited corporations to a specific purpose, such as building a certain bridge, canal or toll-road, and prevented them from expanding beyond it. According to Hartmann:

  • After it had completed its assigned task, a corporate charter would expire and the company would be dissolved. Corporate charters were not given, as they are today, "in perpetuity."
  • The state could revoke a corporation's charter if it either exceeded or did not fulfill its stated purpose or if it misbehaved.
  • To keep them out of politics, corporations were prohibited from making any political contributions, directly or indirectly through other groups.
  • To prevent them from extending their economic power inappropriately, corporations could only own real estate necessary to complete their stated business and were prohibited from owning shares in other companies.

Corporate charters were revoked on a regular basis during the first half of the nineteenth century when companies tried to overstep their limited bounds. Then, as today, most Americans did business without starting corporations, as sole proprietors, partnerships or without any business structure other than keeping track of receipts for taxes, so most Americans saw clear benefit in keeping the economy safe for small and medium-sized businesses and preventing the rise of monopolies.

But the period during and after the Civil War saw the rise of large monopolies, particularly in railroads and oil. And with a hunger for power to match their massive wealth, Gilded Age Robber Barons like Rockefeller, Carnegie and Jay Gould chafed under the limits on corporations prescribed by the Founding Fathers.

The original Supreme Court coup

Before the onset of mass media brand marketing and corporate-disinformation campaigns like today's Tea Party Patriots, Americans had a healthy distrust of the rich and big business. Since popular opinion was strong against monopoly power, the plutocrats knew that they'd have little luck with the president or Congress, so they used the forum where their money really meant something, the Supreme Court. With an ability to hire expensive lawyers and file a seemingly limitless number of court cases until they finally prevailed, the corporations hit on a strategy.

Why not use the Fourteenth Amendment, passed after the Civil War to give equal protection to all citizens, to free corporations from popular control? It's the theory of corporate personhood.

Of course, only a psychopath -- and 5% of American corporate managers qualify as psychopaths, according to Jon Ronson -- could come up with the idea that an amendment to free the slaves should also help rich white men to become even more powerful. But the Robber Barons obviously knew that this devilishly clever strategy would eventually work with their audience, the men of the SCOTUS.

And work it did, in a kind of backdoor way. The 1886 case of Santa Clara County vs. Southern Pacific Railroad has been interpreted as a precedent that corporations have the same rights as natural born persons to "equal protection" under the law guaranteed by the Fourteenth Amendment, including freedom of speech and freedom from search and seizure.

But what almost nobody recognizes is that the prevailing interpretation of the Santa Clara case is wrong. It is perhaps Hartmann's biggest historical bombshell that the Supreme Court decision explicitly stayed away from the issue of whether corporations qualified as persons under the US Constitution. Instead, the court chose to narrowly rule on the tax issue at hand between the railroad and the county.

Corporations being persons is only mentioned in the headnote to the case, an add-on written by court reporter JC Bancroft Davis as his own personal opinion that carries no validity in law.

In other words, the whole edifice of corporate power in America for the last 125 years was built on a misunderstanding. According to Hartmann, no case has ever ruled that corporations are people too.

But what does it matter? Thousands of cases since have taken Santa Clara as precedent, and by now, the weight of corporations-are-persons law is just too huge to go back and correct the mistake from 1886.

Legally, that may be the case. But morally and politically, Hartmann wants us to know that corporations enjoy all the benefits of being people without any of the inconveniences of being a mortal, such as having to face death or prison, because of an underhanded and sneaky effort rather than through legitimate legal process.

And why does it matter that corporations are treated like people? Well, it means, for example, that almost any law passed to restrain corporate misbehavior can be challenged in court as discrimination.

Why corporations shouldn't be people

In politics, corporate personhood guarantees plutocratic rule. Limits on campaign contributions from corporations? That's unfair, since it would limit their free speech, as the recent Citizens United case decided.

Hartmann details many examples of corporate chicanery and outlines the extent of corporate power over government today, confirming what anyone who cares seriously about climate or energy policy already knows: that corporate interests trump the will of the people for clean energy time and time again.

But Hartmann doesn't despair. Instead, he enjoins us all to join the movement to dethrone the new East India Companies of the world and take back America and other western democracies for their people. In the US, that would start with a campaign to declare that corporations do not have the same rights as people do, such as Free Speech for People.

On the federal level, we'd need to change the Fourteenth Amendment or pass a new amendment. This won't be easy, so Hartmann suggests that in the meantime localities can start to pass ordinances denying corporate personhood one community at a time. That will help create momentum for a national effort.

It sounds daunting. But then fighting climate change and preparing for peak oil both present such a threat to the profits of so many big corporations, from Big Oil and Big Coal on down to automakers and big box retailers, that there may be no other way than fighting plutocracy to stop America from committing national suicide and taking the rest of the world down with us.

Until we take corporations back down to size, big polluters like ExxonMobil, BP, Massey Energy and their agents at the US Chamber of Commerce will keep bankrolling climate-science deniers and fighting against a rational energy policy that would take America away from fossil fuels and towards conservation and clean energy.

As Annie Leonard says in her video The Story of Citizens United,

So keep fighting for renewable energy, green jobs, healthcare, safe products, and top-notch public education. But save some energy for the battle of our lifetimes. A battle that can open the door to solving all of these things. It’s time to put the corporations back in their place and to put the people back in charge of our democracy.

-- Erik Curren

Editorial Notes: Erik Curren is the publisher of Transition Voice. He co-founded Transition Staunton Augusta in January 2010. He is also managing partner of the Curren Media Group.

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