This is not a matter of mere ideology. Let us deal here in facts, in documented history. Corporations in America were not always as powerful as they are now. We had a revolution here in order to overthrow the king of England, George III. The point of this revolution was that we the people of the United States did not want a sovereign king dictating our affairs. In modern language, the king of England was a dictator.
In 1776 we the people of the United States became a sovereign body. We have never legally given up that powerful status. With force of violence the citizenry of this country seized the reins of power in the British colonies, throwing out the king of England and his chartered corporations that had ruled here with an iron fist.
Wait, back up a minute. Corporations? What corporations? Each colony formed by King George III in North America was a chartered corporation. That is how they were governed remotely from across the Atlantic Ocean. Governors of these colonies were appointed by the king. He vested in them a chip off the block of his sovereignty. Their job was not to be explorers, or to create communities of happy people. Their job was to make a profit for the monarch by turning natural resources into the coin of the realm. Nothing more, and nothing less.
The king also formed corporations to trade around the world: the Muskovy Company to trade with Russia (1555), the Levant Company to trade in Turkey (1581), the East India Company to trade in India and beyond (perhaps the greatest of them all, 1600), and the Hudson's Bay Company to trade in North America (1670).
In 1604, the settlement of St. John in Newfoundland became the first incorporated settlement in North America. In 1606 the Virginia Company of London was formed to claim and settle in the southern half of the East Coast. At the same time the Virginia Company of Plymouth was formed to settle the northern part of the coast. Then the Bermuda Islands were claimed by the London Company.
On and on, colonies were incorporated and settled under the British Crown. Ignoring Native American Indians, British corporations battled with French and Spanish companies for territory in the New World.
These chartered companies (corporations) had the king's authority to take over vast amounts of real estate, raise armies, rule the populace and most of all, extract resources. They were powerful by right of wielding the king's authority. But, the king didn't want them to be too powerful, lest they encroach upon his authority, endangering his very sovereignty.
To ensure that this didn't happen, the king at any time could simply revoke a corporation's chartered status. Being the king, he didn't need a reason, he could do this on a whim because he got his authority from God. Period. The mechanism created first by King Edward I was called quo warranto, Latin for “by what warrant?” (or right). Essentially the king was asking, “By what right or authority do you do this thing? I didn't grant you the authority under your charter to do this” (whatever it was that angered or seemed threatening to his royal person).
Development of the chartered corporation under U.S. law
Since the former British colonies had just fought a war to end corporate colonialism, the people of the newly United States had seized sovereignty for themselves. They were now in the position to charter corporations for specific purposes. Early corporations in the United States of America were strictly limited in their scope.
Corporate charters (licenses to exist) were granted for a limited time and could be revoked promptly for violating laws.
Corporations could engage only in activities necessary to fulfill their chartered purpose.
Corporations could not own stock in other corporations nor own any property that was not essential to fulfilling their chartered purpose.
Corporations were often terminated through the use of quo warranto if they exceeded their authority or caused public harm.
Owners and managers were responsible for criminal acts committed by the corporation, whether by themselves or by their employees.
Corporations could not make any political or charitable contributions nor spend money to influence law-making.
Let's say the state of New York granted a corporate charter for the purpose of building a bridge. The corporation was given a fixed period of time in which to accomplish its task, and then it automatically dissolved.
The corporation that was granted that charter couldn't decide instead to build a ferry dock. It couldn't buy a sailing ship or some cannons.
The corporation could have its charter revoked for threatening property holders into selling their land or committing other public harm, even if it was technically legal.
Owners of these corporations could be sent to jail for committing any criminal act in the name of the company even if they didn't do the deed personally, having instead delegated it to others.
And, perhaps most importantly, they couldn't meddle in the politics of the nation, a state or a municipality, or hold charitable organizations hostage by way of threatening to withhold contributions.
“Citizen authority clauses dictated rules for issuing stock, for shareholder voting, for obtaining corporate information, for paying dividends and keeping records. They limited capitalization, debts, land holdings, and sometimes profits. They required a company's accounting books to be turned over to a legislature upon request. Citizens kept banks on particularly short leashes. Their charters were limited from three to ten years. Banks had to get legislative approval to increase their capital stock, or to merge. Some state laws required banks to make loans for local manufacturing, fishing, agriculture enterprises, and to the states themselves. Banks were forbidden to engage in trade.”1
That was then; this is now.
Quite a bit different than the way things are today, eh? How did it come to pass that corporations are now more powerful than nations?
We the citizens are the seat of sovereign power in America. Elected officials serve at our pleasure. All legal authority rests in our hands. While that is true in a technical sense, the fact is that as of January, 2010, all authority in the United States of America rests in the hands of multi-national corporations worth trillions of dollars.
Two years ago next month, the U.S. Supreme Court decision in the case of Citizens United versus Federal Election Commission put the final nail in the coffin of American representative democracy. That was when the ruling on Supreme Court case Citizens United versus Federal Election Commission was decided. This ruling declared that corporations, as natural people, were guaranteed the right to donate money to political campaigns as an exercise of the First Amendment, the right to free speech.
How the U.S. Supreme Court has created this mess
The U.S. Supreme Court is the third branch of our government, coequal with the executive and the legislative branches. It gets the least attention. Supreme Court justices are appointed by the president and approved by Congress. They serve for life, and can't be voted out of office. They wield vast power. There is no way for the people of the United States to undo their decisions, save by constitutional amendment or, over time, electing presidents who might possibly appoint enough justices with different viewpoints to overturn previous decisions.
A series of Supreme Court decisions has brought us to the point where our presidents, legislators, our media....our entire populace bows before the throne of dictatorial, undemocratic, entities that have perpetual life and more money than God. Following the Civil War, and well into the 20th century, appointed judges gave privilege after privilege to corporations. They freely reinterpreted the U.S. Constitution and transformed common law doctrines.
Here is the timeline for how some of these decisions brought us to where we are today.
Trustees of Dartmouth College v. Woodward (1819)
In 1819 the U.S. Supreme Court tried to strip states of this sovereign right by overruling a lower court's decision that allowed New Hampshire to revoke a charter granted to Dartmouth College by King George III. The Court claimed that since the charter contained no revocation clause, it could not be withdrawn.
The Supreme Court's attack on state sovereignty outraged citizens. Laws were written or re-written and new state constitutional amendments were passed to circumvent the Dartmouth ruling. Over several decades starting in 1844, nineteen states amended their constitutions to make corporate charters subject to alteration or revocation by their legislatures. As late as 1855 it seemed that the Supreme Court had gotten the people's message when in Dodge v. Woolsey it reaffirmed state's powers over "artificial bodies." 2
But, the people running the corporations kept up with legal battle after battle, challenging any encroachment upon their power. Meanwhile, they accrued vast amounts of capital and property thanks to government spending during the Civil War and building of the railroad lines. As industry grew, people left the countryside for jobs in cities.
Company towns grew, and workers became fearful of unemployment. The barons of business bought newspapers to affect public opinion, thoroughly infiltrated the legislatures with money for votes, and raised private armies to put down strikes.
This is when legislatures began to give corporations limited liability, so the owners would not be liable for losses and criminal activity. They were also given extended duration of their charters, so they wouldn't expire automatically any more. Citizen oversight of corporations diminished greatly.
Santa Clara County v. Southern Pacific Railroad (1886)
The substance of this case (a tax dispute) is of little significance, but this fateful case subsequently was cited as precedent for granting corporations constitutional rights (personhood).
This decision included the constitutional rights of the 14th Amendment. This is critical, because although this amendment was written to guarantee that freed slaves couldn't be deprived of their private property, it broadly included corporations. It meant that they could no longer be summarily dissolved by the states in which they were chartered by means of quo warranto. In one sweeping stroke, it greatly reduced the power of sovereign citizens over corporations.
"There was no history, logic or reason given to support that view, " Supreme Court Justice William 0. Douglas was to write sixty years later.
Noble v. Union River Logging Railroad Company (1893)
A corporation first successfully claims Bill of Rights protection (5th Amendment)
Lochner v. New York (1905)
States cannot interfere with "private contracts" between workers and corporation -- marks the ascension of "substantive due process"
Liggett v. Lee (1933)
Chain store taxes prohibited as violation of corporations' "due process" rights.
Ross v. Bernhard (1970)
7th Amendment right (jury trial) granted to corporations.
U.S. v. Martin Linen Supply (1976)
A corporation successfully claims 5th Amendment protection against double jeopardy.
Marshall v. Barlow (1978)
The Court creates 4th Amendment protection for corporations -- federal inspectors must obtain a search warrant for a safety inspection on corporate property.
First National Bank of Boston v. Bellotti (1978)
Struck down a Massachusetts law that banned corporate spending to influence state ballot initiatives.
Citizens United v Federal Election Commission (2010). In a 5-4 ruling, the U.S. Supreme Court overrules Austin and a century of federal legislative precedent to proclaim broad electioneering rights for corporations.
I have been characterized as spouting ideology, and ignoring facts. Well, here you go. This is all about recorded history, available at any library and on the Internet from credible sources. In some places where it is appropriate I have included footnotes.
Here are some more facts. It is easy to document the sway that these corporations have over our society.
Of the world's 100 largest economic entities, 51 are now corporations and 49 are countries.
The corporate share of taxes paid has fallen from 33 percent in the 1940s to 15 percent in the 1990s. Individuals' share of taxes has risen from 44 to 73 percent.
The World Trade Organization effectively gives corporations veto power over our U.S. environmental and labor laws, weakening our right to protect ourselves and our land by our legislation.
What we can do to change this
There are ways to roll back the corporate changeover in America. Two fundamental changes need to occur.
1. An amendment to the U.S. Constitution stating that corporations are not natural persons, and do not have the rights of natural persons under U.S. law.
2. Public funding of elections.
There is a broadly based movement already afoot in America to amend our constitution, rolling back the status of corporations to that which they originally had early in our history. Cities and towns across the nation have begun to pass resolutions to this effect. So have Missoula, Montana and Boulder, Colorado.
Amending our constitution is difficult, but not impossible. There are two ways to do it. Either (a) by a vote of 2/3 of both the House of Representatives and of the Senate, followed by ratification of 3/4 of the various state legislatures; or (b) by the convening of a constitutional convention called for by 2/3 of the state legislatures, and then ratified by 3/4 of the state legislatures.
There are 27 amendments to the Constitution, 10 of which happened almost immediately after it was created. Those are the Bill of Rights. The other 17 took place as described above. It can be done, but there has to be a nearly unanimous popular voice on a matter for there to be a realistic chance of the U.S. Constitution being amended. Remember, it only took one year to change the voting age in America from 21 to 18.
As for public funding of elections, this is a way to remove the undue influence of the wealthiest citizens over the selection of political leaders who must represent all of the people. Of course, it is quite the Catch-22 when it comes to this problem. It would take robust action on the part of existing legislators to bring this about, the very people who have up to this point benefited from the status quo.
Again, it will take a popular upwelling of opinion to make for this much needed change. It is up to us as a people to make these things happen, no easy task when most folks seem to be convinced that our current system is the best possible one.
Please, give this much thought. Discuss it with your fellow citizens. Make your voice heard. Peaceful revolution is possible.
One of the best summaries that I can recommend is Taking Care of Business:
Citizenship and the Charter of Incorporation by Richard L. Grossman. It can be found at this link
1. Taking Care of Business By Richard L. Grossman and Frank I. Adams
2. reclaimdemocracy.org> Our Hidden History of Corporations in the United States, 2000.
[originally in Dec. 14, 2011 Namekagon Notebook]