The U.S. Supreme Court declared corporations to be persons back in 1886, with all the rights of persons. Everyone knows corporations are not people. But a good many people make the mistake of thinking corporations are like people. They imagine that corporations can be shamed, or made to feel guilt—that there are good and bad corporations. But corporations are not like people. Actually, corporations are like machines.
Like any machine, a corporation will do what its programming directs it to do, as long as it has gas or electricity, whatever fuel it runs on. Corporations run on money, and their programming is to advance in the direction of maximum profits. Sometimes there is an obstacle in the path: say the human people have become upset that the corporation is denuding forests, abusing livestock, ripping off its employees, or poisoning people downriver of its plant. It then will spring into action to solve the problem. Rarely is the solution to stop clearcutting, dumping poisons or abusing, however. From the point of view of the corporation, the problem is public attitudes—the public perception that it is cutting too many trees, for example. It’s probably cheaper to solve this problem by rolling out a PR campaign full of glossy ads about how much it cares about healthy forests, with lovely images of healthy, intact forests and a couple of cute squirrels or deer. Meanwhile, it changes its protocol to leave a beauty strip along any public access road, and closes roads leading to its clearcuts, to block public view.
It’s true that decisions and communications within corporations are made by humans—CEOs and other managers. They’re human, all right, but they are also components of a machine, and if they fail to make their decisions in the interest of maximizing profit, they will be tossed out and replaced, like any other defective component. A corporation can no more care about your health, or your livelihood, or your child’s wellbeing than can your washing machine.
One of the reasons the climate and other environmental crises have become so acute, and we are on the edge of the madness of war with two nuclear-armed “enemy” countries, is that corporations have effectively become the masters of governments. The 1976 and 2010 Supreme Court decisions that made it illegal to restrict campaign donations, in effect mandated corruption. A corporation, or consortium of corporations in the same business, can legally give huge amounts of money to whichever candidates sit on key committees, almost guaranteeing their win, and then sending lobbyists to explain what they want in return. This can yield benefits in the form of tax breaks or weak regulations that pay back the investment hundreds of times over. Thus, corporations dictate to Congress—most notably the drug, weapons, banking and fossil fuel interests. This is why we continue with policies that are obviously destructive, immoral and dangerous. The lobbyists, PR agencies and politicians are all “just doing their jobs.” Billionaires and kings have always tended to act selfishly, but at least it used to be humans making these decisions, humans who might take the common good into account.
You may say corporations need to be reined in; that it was foolish to give so much power to mindless entities…something like the mistake made by the sorcerer’s apprentice, creating a powerful automaton without an Off switch. You may propose controls on corporations that would limit the damage.
But did you know that the appropriate controls all once did exist? According to a pamphlet from POCLAD (Program on Corporations, Law and Democracy), the founding fathers were concerned about potential abuse from corporations—like the East India Company. So they imposed restrictions: to exist, a corporation had to get a charter from a state. The charter gave them a set number of years, like 12, to accomplish their purpose, after which they were automatically extinguished, unless granted an extension by the state legislature. The legislature could also terminate them early, if displeased. They were forbidden to do anything but the express purpose of the charter, to meddle in politics, or to own other corporations.
But through the 19th century, and with help from that 1886 decision granting them personhood, they were able to whittle away at these restrictions, discarding them one by one. They were also helped by the state of Delaware, which whored itself out to corporations, which is why to this day half of US corporations are headquartered in that tiny state.
To me, this suggests that attempts to control corporations with similar laws will end up again with the monster on the loose. A corporation has economic power, which it can use to change laws—did so even before SCOTUS officially legalized bribery. Thus I’m inclined to think outright banning of corporations is necessary—and I suspect the trouble comes not so much from a state of legal incorporation, with its protection from individual liability, as the sheer size of the thing.
Some may protest that I am tarring all corporations with these accusations, when there are now B corporations with their mandate to look at a triple bottom line—profitability, public good, and environmental non-criminality. Perhaps. But I am skeptical that any large corporation, even one allowed to prioritize other things than returns to shareholders, will function like a wise and decent person, rather than a profit-pursuing machine. They must compete with the Type A corporations, after all.
There are many possibilities for reining in corporations. But perhaps simply banning corporations beyond a certain size would be best.
It needs also to be said that corporations have a defense already set up in the form of legally binding “free trade agreements,” which give corporations rights at the expense of governments and people. Many of these were negotiated in secret, with civil society and even Members of Congress excluded from knowing the contents—but hundreds of corporate reps sitting in the room. Many have Investor State Dispute Settlement clauses, which entitles investors—meaning corporations—to sue states (meaning national or sub-national governments) if they pass laws that even might restrict future profits of the corporations, including laws means to protect human health, the environment, workers’ rights, or sovereignty. An ISDS tribunal is composed of three corporate lawyers, in secret, with no conflict-of-interest provisions, no Friend of the Court briefs, no limits, and no appeal. Billions have been extorted from poor countries by rich corporations under these tribunals. Calling them kangaroo courts is an insult to kangaroos. But any scenario in which we could talk seriously about how to control corporations is likely to be one in which we could agree, globally, to toss all these free trade agreements.
There is talk of having the government buy up oil companies, so that they could be run with the public good at the fore. I think this makes sense, for the same reasons we should have a universal healthcare system run and paid by the government. Mining companies should be nationalized, so that local communities around a mine could decide whether the ore is worth the environmental and health cost–and it should be they, not a distant federal government, which decides. Those living near a wind farm should get free electricity. Those living near a lithium mine should get the jobs—well-paid, and with every possible health protection in place, and maybe provision of the cellphone or electric micro-cars that use the lithium. Otherwise, why should the locals vote in favor of a project?
Obviously, this is a very different scenario than todays’ arrangements wherein local people have little say in such matters while corporations, including foreign ones, have deciding power. We need to relocalize our economies anyway, but an advantage is that it will enhance environmental and social justice when the same people get the benefits and pay the costs.
Teaser photo credit: “Woman’s Friend” machine (c. 1890). By Daderot – Self-photographed, Public Domain, https://commons.wikimedia.org/w/index.php?curid=14770197