On NFTN 19--How Corporations Got Their Power

I wish to add, separately, that while the East Coast is overconfident they do, indeed, have "mountains" when these mountains are merely hills to the Pacific NW, the Pacific NW is overconfident in their status and what constitutes "rich". To people in the Pacific NW, who have no experience with the rich of the East Coast, doctors and lawyers are the rich. This is a distortion of reality which, I believe, serves to make people overconfident in the their own status and the state of the country. If doctors and lawyers comprise the rich, then those who make less money must be "middle-class". No working American, espeically those in business, want to think of themselves as lower-class or poor. And yet, reality is that doctors and lawyers may be the fringe middle-class that is left, while the true rich are CEOs of large corporations, major financiers, and those with inherited "Old Money". Everyone else, is actually lower-class and yet people like to think the poor or lower class are only those who are on welfare, at the very extremes of poverty. They do not recognize they too, are lower-class, in the tiers of our country.



When people think they are better off than they are, and are not face-to-face with where all the money and power is and how it is used against them, they are lulled into complacency and the false belief that there are not that bad off, and that the middle class is thriving and they are a part of it. Even some doctors and lawyers hardly make a true middle-class--those in the middle of the rich and poor extremes.



Thus, as in the church in Bedminster, even educated folks from Princeton, in contrast to the rich landowners and corporate owners, are lower class, and treated as such. Princeton students are stuffed into the loft, and kept a distance from the rich, where they agree to this arrangement, and sing happily about the resurrection and the body of Christ. And while on the West Coast this is never realized by the public, on the East Coast, the public are well aware of it and concede to the status quo. It is rarely challenged. The general public in the Pacific NW are blind and uninformed and those on the East Coast are brainwashed and exploited. If someone from the East Coast refuses to tolerate mistreatment as household help, they still agree to the system by removing themselves from the rich altogether and avoiding them while allowing others to fall into the trap. The reason the rich who exploit their workers prefer young nannies from the midwest and Pacific NW, is because they are are completely uninformed, and once removed from their familiar surroundings, the brainwashing begins. Small rights are chipped away which lead to greater exploitation and loss of dignity. This happens with the nanny and is mirrored by society at large. And we "take it" and do nothing, and the few who do attempt to protest, are harassed by police and jailed, even when the right to peaceful protest is ours. Even police know that those with greater power can have greater influence in their own lives. They will ignore basic human and civil rights, and act in concert with the attorneys for corporations who use police at their will, to remove certain "activists" and maintain the status quo. They call the activists troublemakers, uncooperative, mentally ill, and radical, and assume criminal and immoral traits belong to this group that breaks apart from apathetic society, for the sole reason to bring notice and change to society, for the good of all. The very same activist who is most social minded and has the interests of the public at heart, is recast as anti-social.



Unfortunately, government departments and offices are hand-in-hand with large landowners and corporations and do business with those at the top. This means politics get involved when someone tries to access the government to request change or make a complaint of inequity or abuse.



According to William Boyers, our constitution, drawn up by the aristocracy and wealthy landowners, gave power to the rich. A large group of farmers then insisted on a check of powers, by demanding a Bill of Rights. These early documents and the checks on corporations were to protect the public. I am going to quote a short chapter about how corporations got their power, from William Boyers book Myth America: Democracy vs. Capitalism (pgs 18-21):


"Many of the original 13 colonies were actually corporations created (chartered) by the King of England to extract timber, animal pelts, and precious metals to benefit England. The charters of these colonies were not written to create democracy or to promote the welfare of the colonial communities, and abuses of power were widespread. The power of non-colony corporations was also a problem for the colonists: the "Boston Tea Party" was a protest over how the British East India Tea Company had pressured the King to raise the tea tax. The tea tax forced colonial merchants to raise their prices so they could not compete with this tea corporation and it was not hard for the colonists to see how a corporation could control their economy.

After the Revolutionary War, citizens of each state (via their legislatures) issued not-for-profit charters to establish such community ventures as firehouses, libraries, and colleges. Legislatures also chartered profit-making corporations to work on such infrastructure projects as the construction of bridges and canals. In exchange for the charter, a coproation was obligated to obey all laws, serve the common good, and cause no harm. Chartering by the legislatures was a privilege--not a right--and charters automatically expired after five to 30 years unless renewed. In the first few decades after the War, very few charters were granted and the citizens of this new country made sure that the abuses they had suffered as colonies were not repeated (Grossman and Adams 2001, 62).

In those days, people were very cautious about creating institutions which could overpower them. There were many limitations written into corporate charters and state constitutions. Corporations had limits on capitalization, debts, land holdings, and sometimes profits. They could not own stock in other corporations nor could they keep their financial books closed to public representatives. They were prohibited from making political contributions. In dramatic contrast to the situation today, corporate stockholders and directors were held personally responsible for crimes and harms committed and debts incurred by the corporation (Grossman and Adams 2001, 61-2).


As David Korten points out, the Civil War changed all this. Public scrutiny of corporations was difficult to keep up during the Civil War when the states were warring among themselves. State legislators took bribes from corporate executives to loosen legal restrictions, grant lucrative business contracts, and to have the government subsidize their businesses (David Korten, 1995, 58).


President Abraham Lincoln was moved to use these stunningly strong words to describe the situation in 1864:

"I see in the near future a crisis approaching that un-nerves me and causes me to tremble for the safety of my country. As the result of the War, corporations have been enthroned....An era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people....until wealth is aggregated in a few hands...and the Republic is destroyed (Wasserman 1983,89-90)."



Following the Civil War, a battle of a different nature emerged as states competed aginst each other with weakened chartering requirements designed to attract corporations and their money. This bidding war reached such a magnitude that President Rutherford Hayes issued the following striking statement in 1876:

"This is a government of the people, by the people, and for the people, no longer. It is a government of corporations, by corporations, and for corporations (Waserman 1984, 291).


The Santa Clara Case

This slackening of legal restraints on corporations culminated in a U.S. Supreme Crout decision in 1886 known as Santa Clara Coutny vs. Southern Pacific Railroad. It opened the floodgates for the accumulation and consolidation of corporate power. Without even any allowance for discussion or debate, the Supreme Crout accepted the Santa Clara decision that corporations are "persons". Even thought they are artificial entities, they were granted the same legal status as real human beings and were entitled to all the same Bill of Rights protections including freedom of speech. In one fell swoop, essentially all pretense of meaningful control over corporations was abandoned for the corporations ince they can use the First Amendment provision for "freedom of speech" as the basis for making contributions to political candidates. The result, as we know too well, has been to transfer the economic power of the corporation into control of the political system.



From 1886 onward, corporations have used their court-conferred wealth to overwhelm the democratic process. Having now the same rights as real people, they were allowed to participate in the political process. Their unlimited spending in elections permitted them to gain majorities in legislatures and eliminate all remaining troublesome language in state constitutions. Any attempts at control were defeated as "unconstitutional" infringements on their right to "free speech."



The Supreme Court used the Fourteenth Amendment to rationalize its decision by saying that it "forbids a State to deny to any person within its jurisdiction the equal protection of laws." (Santa Clara County v. Southern Pacific Railroad Company, 118 U.S. 394 (1886), available at www.tourolaw.edu/patch/santa.) The logic was inescapable once the corporation was deemed a "person."



Corporations increasingly use their economic power to influence government and consider this a normal part of the costs of doing business. Campaign money for political candidates, lobbying in the halls of Congress, soft money to political action committees and political parties often helps provide the kinds of legislation which serves the corporations. This rapidly expanding private power of corporations is often at such variance with the public interest, that the phrase that we now "have the best government money can buy" is understood by the general public. People know that money now buys government.



Back in the 1930s, when Thurman Arnold, an astute political philosopher, wrote The Folklore of Capitalism, he saw the effect of "personhood" and stated: "The idea that a corporation is endowed with the rights and prerogatives of a free individual is as essential to the acceptance of corporate rule in temporal affairs as was the ideal of the divine right of kings in an earlier day (1937, 185)." And he also pointed out that "Institutions once formed have the persistency of all living things. They tend to grow and expand. Even when their utility both to the public and their own members has disappeared, they still survive (395)."



His prediction is accurate for our present day. As soon as a "legal" right was established to use corporate money to control the political system the contest between capitalism and democracy had a pre-determined outcome. Corporate power was greatly increased when television became crucial in elections for it is so expensive that the preponderant wealth of corporations over individuals made the personhood fiction exactly what was needed to use money as speech. Once political candidates got most of their campaign money from corporations the tax benefits and access to public resources soon followed. Those same legislators could also make sure that the right people were put in the Federal Communication Commission to keep television under private control and out of reach of the public. When the major nation in the world is under de-facto control of the major corporations, their power will reach everywhere on this planet (Nader 2002, 156, 161-162, 239).



So as corporations have grown into multinationals they have gained massive power on a global scale. Corporations are taking the further step of establishing international agreements (such as the North American Free Trade Agreement (NAFTA), the General Agreements on Tariffs and Trade (GATT), and the Multilateral Agreement on Investment (MAI) through which they are attempting to gain even more power by insulating themselves from all meaningful legislative oversight. Although states still technically retain the legal authority to revoke corporate charters, the exercise of this right has languished virtually to zero as corporations gained more wealth and power to corrupt government officials.



As William Greider points out, NAFTA was adopted in 1993, and udner Chapter 11, "has enabled multinational corporations to usurp the sovereign powers of government, not to mention the rights of the citizens" (2001, 5).



Mexico, Canada, and the United States forfeited sovereign immunity when they signed NAFTA, which means countries cannot control their own resources. Corporations and "free trade" override nations. Corporate investors from other countries even override the laws created through national elections.



Few people, even among college graduates, know that corporation power was intitially usurped in 1886 when the corporation became a "person" and culd use the first Amendment of the Constitution as the basis for "mony is speech." The lives of ordinary Americans are controlled substantially by the power that resulted from personhood.



Understanding how we lost control and what to do about it is of the utmost importance for the American future and, because of American corporate dominance, for the rest of the world as well. There are steps that can be undertaken to reverse this usurption of American democracy and various groups have been developing and testing strategies. Since corporations are charted in States, the responsibilites of corporations can be defined at that level. Changes usually involve a Catch 22, for corporations will use their economic power to protect their privileges. Yet the contest between democracy and oligarchy involves potential power that has not yet been mobilized.



The last chapters of this book will present some proposed strategies and solutions."

That is the end of the chapter. I included it in its entirety because I believe this information is so important. I didn't know about all these things. This is what kids in public school need to be learning. Kids do not need rote advice to "Vote!" This is a gross underestimation of the intelligence of youth. Students in the U.S. need knowledge--tools to enable them to begin their own revolutions. Almost every revolution or civil rights decision that has been overturned, has been because of kids. Martin Luther King was alone until he inspired his students, some from church youth groups and others from schools, to get informed and take a stand. There's a saying: "A little child will lead them".... I have absolute faith that change will happen and we will enter a new era of progress, when the youth are empowered and enlightened.

There's the popular saying that "Give a man a fish and he'll eat for a day; teach a man to fish and he'll eat for a lifetime". I think kids in the public schools are hungry. Jr. High and High School are times for self-reflection and idealism; philosophical and spiritual considerations. These kids do not just have a reason for being alone, nor do they only matter to a small circle of friends and their families. They have purpose and a calling and it is not indoctrination to open them up to civil rights; right now, the very omission of such education is a unspoken indoctrination itself--that they are in school to appease the system, NOT to make a difference. My take on the fish saying, is that by the time a boy is a man, one must both give a man a fish AND teach him to fish. A man cannot learn to fish when he is starving. Give people a way to protect themselves and advocate change, but don't expect them to learn this when they're out of high school...by that time they're already starving and it's too late. Teach a boy to fish. And even children can be hungry and have their rights dismissed or violated. Ensure this does not happen. A child should have their civil rights respected, even as they are learning about civil rights. This means, for example, that bullying is not tolerated; that even a child should have equal access to a no-contact order, to compensation for damages for defamation, and not be deprived of any privilege because of disability, race, or poverty.

When is the last time anyone ever heard of a child/teen receiving such protections? Some teasing and mistakes and even first-time harassment may be excused one time, but not twice. Continued violations of any child's or teens civil rights should be addressed with the same concern and respect that adults receive. Crimes--such as assault--are not tolerated in schools, and neither should violations of civil rights be tolerated. A teacher should not accept harassment of others by allowing the teens to "work it out" themselves. There must be a legal remedy. Arguments or small fights are one thing, but persistent harassment or bullying, or even defamation ("Cloe is a: slut with STDs, mentally ill, theif ") should have a legal remedy and parents who are poor should not be powerless, nor should any child/teen be powerless. Going to the principal's office with a complaint doesn't always cut it. Many kids don't know how to stand up for themselves, and the adults should be on the look-out for this. Also, expelling or suspending a child/teen from school for breaking rules (except for very extreme cases) is counteractive. Education is exactly what the offender needs, for prevention of further misbehavior and incentive to change.

The adults who understand parts of the system should be sharing with other adults and parents, so changes in education can be made to protect and empower our youth--to raise strong citizens who will reverse prior court decisions made when everyone was asleep. As corporations and a rich minority currently run the country and keep the general public under its thumb, understanding of how corporations and their leaders acquired power to begin with, and what those powers are, is requisite to dismantling and rebuilding the system. To ignore this challenge, is to embrace being lower-class, (or deluded to believe most of us, all but the welfare people, are actually "middle-class")and all that comes with it. It is foolish to think our children will rise to a better position if they are a good student or worker, when the entire system is set up to work against them and keep their blinders on.