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by Chuck Richardson
Friday, Jun. 27, 2003 at 10:56 AM
Corporations are really all about colonialism, and the hyperinflation of their power through a top-heavy distribution of wealth must eventually tip over if our species is truly humane and democratic.
How much do most people really know about corporations?
Even though they’re every place we look, their public images serve as distractions for what they’re really all about.
Most people sense something’s gone seriously wrong with our society, but few can put their finger on it.
This essay (and manifesto) will shed light on what corporations do, and place their actions within a historical context, revealing a more accurate image of their role in society.
CORPORATION AS MEDIEVAL INVENTION
Corporations began in the Middle Ages when groups of merchants or traders formed guilds and became incorporated into a single economic unit. Soon, many cities and towns followed suit, recognizing their citizens had certain things that bound them together as a political-economic entity.
Economics, law and order were the fundamental unifiers of municipalities, with the church providing social services and the nobility marshalling defenses against foreign invasion.
These corporations represented a growth in democracy that recognized the new social contract being forged among the landed aristocracy, mercantile class and peasantry.
Before the 15th century, church and royalty were the dominant powers in European society. Corporations sprang from a growing market place and created a working middle class. The wealth generated increased corporate power, and their managers soon became a new aristocracy. As corporations grew, they demanded ever cheaper labor in greater numbers to keep building ever greater wealth.
Slavery became a major growth industry as a result.
Over the next 500 years, corporations became powerful enough to convince people that they were human, or at least imbued with human qualities.
However, while individual human beings only have a one short working life to accumulate wealth, corporations comprise many lives and exist much longer, relatively speaking, and accumulate far more wealth and power than individual human beings ever can.
Corporate “persons” have more rights than actual people because they have more power. Power equals freedom and that means lots of inalienable rights. The more powerful they are the more free people will become and the more legal rights they will accrue to secure their positions in society (1) – whether they be corporate persons or flesh and blood human beings.
Inflated corporate power may be legal, but it’s not democratic or human. The peasants and wage slaves are still invisible, and corporations are still looking for ever cheaper ways to use them.
THE BATH WATER
Among the numerous types of corporation – municipal, single-person (2), government-owned, non-profit and quasi public – business corporations are the most common, but make up only 15 percent of all U.S. businesses.
So why are they so powerful? They own 75 percent of our economic assets, leaving the remaining 85 percent of businesses to fight over the last quarter of the pie. It’s as if mom and dad have 10 kids, but sold out the interests of eight of those children to benefit their two favorites. Of course, that’s what their parents did before them, and their parents’ parents before that.
When will this cycle of political-economic abuse stop? At what point must some of us stop honoring our parents’ values?
If our legal system is supposed to be impartial and balanced and distribute rights evenly among everyone, then business corporations – according to their current status as legal persons – are not an ideal form of doing business.
Owners of corporations (i.e.: stockholders) don’t lose anything more than the money they invested if business is poor. Although they own the corporation, they do not own its debts. So basically, stockholders, through their money, see to it that the cost of doing business is assumed by someone, or most likely something, else (3). This is ownership without responsibility.
The most common type of business corporation is public, meaning it finances itself by selling stock to two large groups of investors – preferred and common stockholders.
Preferred stockholders have first dibs on the profits once the corporation’s bills are paid, but have no voting rights in the company’s business. Common stock, however, issues voting rights.
Public corporations are thus owned by large numbers of preferred and common stockholders. Preferred stockholders are often employees – not necessarily of that corporation – who pool their resources to finance their retirements. The term “preferred” obscures the insult. People are asked to feel “ownership” in the company when the corporation is really using them as silent, powerless sources of financing (4).
The selling of preferred stock in public business corporations is dirty bathwater and needs to be removed from the tub.
Public business corporations are governed by boards of directors elected by their common stockholders at regular meetings. If only common stock existed, a more just balance of power between investor and corporation may emerge.
People who equate corporatization with capitalism also equate capitalism with freedom. Such folks point to the fact that most of the stocks in large corporations are widely spread among a variety of stockholders as evidence that corporate power is distributed broadly, and is therefore democratic. However, in such a situation the person or corporation that owns the most amount of stock controls the corporation, even though it owns much less than half of the company. As a result, even most common stockholders have little say in what a corporation does. Only the wealthiest owners really have a voice.
Perhaps this situation could be improved by requiring supermajority results in non-proxy, public stockholder votes that would be mandated by law for corporate decisions that may adversely affect the ecosystem.
After such a decision was made the corporation would have to apply to a truly democratic international body for approval before any work could start. If work started before approval was given, charges would be levied that may carry a corporate death penalty. This would spread the responsibility, blame and punishment for misdeeds. Those who voted in favor of moving forward with an unsanctioned, potentially dangerous project would receive nothing from the corporation’s dissolution except fines and incarceration, but those who voted against the action would inherit what assets remained. This would focus the responsibility, blame and punishment for misdeeds. Offending stockholders would be legally bound to reward whistleblowers responsible for bringing their corporate malfeasance to light.
These reforms, if carried out, would help bring about the extinction of the multinational corporations (MNCs) now dominating the new world order.
Another kind of business corporation is privately owned by a limited number of owners. These are usually smaller, family owned and operated companies. Private corporations don’t trade shares of their stock on the open market. One consequence of this is private corporations have no reason to overstate earnings to inflate the value of their stock so they can make more money for themselves, without risk, at most other stockholders’ expense. They strive for real price to earnings ratios.
Ironically, private corporations tend to be more publicly responsible in their actions than public corporations, which have greater private responsibilities.
Perhaps only the people who operate them, because they are the only ones with direct stakes in the environments in which they are doing business, should own corporations. It would be a step in the direction of people re-inhabiting their world.
However, it’s when people sell out and surrender their rights for short-term profit that business corporations become malignancies. That which cleanses people (stockholders) of their environments (connections to the world) is bathwater.
Corporations that are legally public but factually private are tumors on the body politic. People are sick in tubs that won’t drain, and they can’t get out.
MNCs emerged from World War II with more political-economic power than ever before. Today, such MNCs as Exxon-Mobil Corp., Ford, General Motors, and Royal Dutch/Shell are wealthier than 80 percent of the world’s countries.
The main reasons oligarchs develop MNCs mirror the rationale of colonialism: to gain control over natural resources, exploit the lower cost of foreign materials and labor, avoid tariffs for expropriating the resources and products of foreign lands for domestic sale and consumption, and to avoid the stricter laws and higher taxes of their home countries.
MNCs are the 21st century manifestations of colonial desire.
Americans may not realize this, but people in the developing world do. They see firsthand what happens when foreign interests dominate their economies. Profits, brains and property get exported or blown away while local citizens are left holding the bag (5).
Global corporate libertarians who support MNC operations in developing countries point to technological improvements in the lives of locals. The reality is local populations have been conquered. Their interests lag those of the MNCs because they’re uncivilized and uneducated, and don’t know what’s best for themselves. MNCs are in foreign lands to incorporate and utilize oppressed human beings for the disproportionate enrichment of a wealthy and foreign few, thus alienating masses of people from their rightful place in the world.
MNCs emerge from industries in which market and production is oligopolized, or concentrated in the hands of a few oligarchs. They engage in enough foreign business to be financially dependent on their activities in two or more countries, and base their decisions on regional and global alternatives rather than local ones. MNCs require global stability to be profitable and grow (media conglomerates and members of the military-industrial complex excepted), even though their ways of doing business negate the inalienable rights of real human beings.
MNCs create a peace that requires a war for justice. Such peace is not really peace at all.
Most MNCs are public corporations owned, in large enough part, by other corporations. Such parent companies, which are located in the MNCs’ home countries, have controlling influence over their foreign subsidiaries. They tend to hide behind the names of these subsidiaries, so oftentimes locals don’t even know who’s doing what to them. At the same time, key decisions are too often made elsewhere without concern for the local effect. Again, local human interests are secondary to corporate aims.
Why is it the masters are always shocked when their slaves’ hatred for them is revealed? Because they didn’t even know they existed, at least not as human beings. This is where ethnocentrism and cultural elitism come into play and thus dehumanize people by corrupting them or considering them “savages” if they won’t be easily manipulated.
To re-humanize producers, consumers and stockholders, our governments could initiate an American perestroika and overturn the concept of corporate personhood (to be discussed in greater depth later).
Only individual human beings with a rightful interest in the operations of a business – producers, consumers and others materially affected by its activities – would be allowed to own stock in a corporation. They would all be required to vote or sell their ownership to others who qualify and are interested in such an investment.
SUMMARY & CONCLUSION: STANDING WITH THERSITES
Corporations are really all about colonialism, and the hyperinflation of their power through a top-heavy distribution of wealth must eventually tip over if our species is truly humane and democratic. The invisible masses of exploited people throughout the world must be seen as flesh and blood human beings before we can stem their abuse at the hands of our corporations.
Our legal system, imagined by its originators to provide checks and balances among the competing power interests within a free society, feared that the growth of corporations would usurp political power from the government and disenfranchise the people from their political-economic activities (6).
The Constitution’s authors, as a result, left any mention of corporations or privately run businesses explicitly out of the document’s final draft. Nowhere are corporations or capitalism mentioned, the result of a compromise between the Jeffersonian and Hamiltonian ideals informing the process. The Bill of Rights refers to people, not their creations (I have a flash here of Frankenstein’s monster).
The current reality suggests that Jefferson was right – corporations are not an ideal form of doing business.
These reforms are recommended:
1) Overturn the legal concept of corporate personhood and make all corporate activities publicly transparent.
2) Make stockholders personally responsible for their corporate voting record. Install the concept of ownership with responsibility.
3) Abolish proxies and preferred stock as antithetical to responsible ownership.
4) Require supermajorities in publicly transparent votes that decide on corporate activities that may adversely affect the ecosystem.
5) After such decisions are democratically made, the corporation shall apply to a democratic international body for approval before any work is to start.
a. Violations would render charges that may carry a corporate death penalty.
6) Only the people with material stakes in the environments in which corporations operate can own stock. In other words, a pension fund for nurses in Alabama would not be allowed to own a chain of community newspapers in New York state. This would assist people in re-inhabiting their land.
These reforms are necessary because corporations that are legally public but factually private are tumors on the body politic metastasized by the colonial desires of an elite minority.
Terrorism is a symptom of an unjust global political-economic system that’s yearning for peace without justice while promoting the transcendence of corporate aims over local human interests.
This cultural elitism dehumanizes people by corrupting us or considering others “savages” if they resist our civilized plans.
Slavery dehumanizes both master and slave.
To re-humanize producers, consumers and stockholders, our governments should undertake corporate perestroika here in America.
This won’t happen if Thersites continues standing alone against the tyranny of experts while his political-economic peers snicker and approve of his debasement.
We must join ranks with him by recognizing the truth about our immersion in the world so we can make it more habitable for all creatures, as we are in-formed by the one life force.
There is no other god, but God. We’re all masses of its thawing body, we’re its fingertips, sacred drops congealed, and no two prints are alike.
The hopes and dreams of living things everywhere, the unified hope of life itself, does not belong in the hands of private, selfish interests.
We must become free enough to gain more awareness about our evolving relationship with nature so we can reclaim our spiritual heritage – our psychic link to home.
1. I’m not talking about the inalienable rights of flesh and blood human beings, but the belief that one has a right to something. Just as items that were once viewed as luxuries become incorporated into one’s lifestyle and take on the illusion of a necessity, success that was once a privilege, too long possessed, takes on the illusion of a right.
2. Single-person corporations are popular among celebrities, whose names become a market brand. By becoming corporations, do individuals surrender responsibility for themselves? Are they somehow dehumanized? Or are they like private corporations and thus more immune to the evils of their publicly traded brothers? Isn’t it odd that an individual people are compelled to become incorporated business entities in order to function in our political-economic system? Is this a different evolutionary path, in which certain people over several generations become homo economicus, leaving their sapience in the dustbin of history? This, perhaps, is a topic for another discussion.
3. “… Every externalized cost involves privatizing a gain and socializing its associated costs onto the community … Externalized costs don’t go away – they are simply ignored by those who benefit from making the decisions that result in others incurring the costs. For example, when a forest products corporation obtains rights to clear-cut Forest Service land at giveaway prices and leaves behind a devastated habitat, the company reaps the immediate profit and the society bears the long-term cost. When logging companies are contracted by the Mitsubishi Corporation to cut the forests of the Penan tribes-people of Sarawak, the corporation bears no cost for devastating native culture and ways of life… Similarly, a giant chemical corporation externalizes production costs when it dumps wastes without adequate treatment, thus passing the resulting costs of air, water and soil pollution onto the community in the form of additional health costs, discomfort, lost working days, a need to buy bottled water, and the cost of cleaning up what has been contaminated. A mega-retailer externalizes costs when it buys from Chinese contractors who pay their workers too little to maintain their basic physical and mental health, or who fail to maintain adequate worker safety standards and then dismiss without compensation those workers who are injured … When the seller retains the benefit of an externalized cost, this represents an unearned profit – an important source of market inefficiency, because it rewards cost externalizing behaviors. Passing the benefit to the buyer in the form of a lower price creates still another source of inefficiency by encouraging forms of consumption that use finite resources inefficiently… Yet rather than demanding that costs be fully internalized, the corporate libertarians are active advocates of eliminating government regulation, pointing to potential cost savings for consumers and ignoring the social and environmental consequences… When corporate libertarians promote practices that allow corporations and wealthy investors to socialize their costs and privatize their gains, they reveal their fidelity to a political interest rather than to economic principles.” – David C. Korten, When Corporations Rule the World, Kumarian Press, 1995, pp. 76-7.
4. Preferred stockholders who invest their hard earned money in a corporation involved in dirty deeds are supporting those actions, unwittingly or not. I envision a foreign TV commercial informing its audience that if one “buys American,” one is supporting the global oppression of the hegemon.
5. For a current example of how MNCs do not benefit citizens in developing countries, check out Ken Silverstein’s Los Angeles Times article, “Pipeline’s Profits May Bypass Africans,” on 17 June 2003, at http://truthout.org/docs_03/061803F.shtml#. It outlines how the governments of Chad and Cameroon stand to reap billions from an MNC consortium’s oil project and how those living in poverty will probably never see the promised benefits.
6. See “Free Speech, Inc.” by Lisa J. Danetz, staff attorney at the National Voting Rights Institute and the author of an amicus brief in the pending Supreme Court case, Nike v. Kasky, which can be read at http://www.tompaine.com/feature2.cfm/ID/8160. On June 26, 2004, the U.S. Supreme Court threw out the case, thus expanding First Amendment protection for non-commercial corporate speech, as if public business corporations, like real people, engage in non-commercial activities.
Danetz writes: “The Constitution, the Bill of Rights and the Civil Rights Amendments (which include the Fourteenth Amendment) were not framed with corporations in mind. Nowhere does the Constitution or any of its amendments mention corporations, although the drafters were all clearly aware of corporate existence. Chief Justice Marshall warned against automatically granting constitutional rights to corporations:
A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties that the charter of creation confers upon it, either expressly, or as incidental to its very existence.
In a bizarre twist, the Court's initial grant of "personhood" to corporations, such that they enjoy constitutional protections at all, is attributed to an 1886 Supreme Court decision – Santa Clara County v. Southern Pacific Railroad – that refused to address the issue. In published versions of the ruling, a court reporter inaccurately summed up the case as deciding that corporations were "persons" entitled to protection by the Equal Protection Clause, when in fact the Court explicitly avoided doing just that. Yet for some reason, the Supreme Court has adopted that as the meaning of the case.
“Since that time, the Supreme Court has extended some constitutional protections to corporations, and denied others. For example, corporations enjoy due process protection and some limited free speech, but are not protected by the Fifth Amendment's right to guard against self-incrimination, by the "privileges and immunities" clause of the Fourteenth Amendment, nor by the Fourth Amendment's right to privacy. The Court has made these determinations on an ad hoc basis, with little consistency as to why and when a corporation enjoys constitutional protection.
“At some point, the Court needs to articulate a rationale for deciding which rights to extend to these bodies. Corporations do need certain limited rights, after all, in order to function. They must be able to defend themselves from lawsuits, so they require the protection of the due process clause as it applies to property. Media companies must enjoy freedom of press to operate in the news business.”
www.reclaimdemocracy.org, a website hosted by Thom Hartmann that analyzes the history and activities of corporate personhood. There’s a very thorough analysis here of the 1886 Santa Clara County v. Southern Pacific Railroad U.S Supreme Court decision mentioned in the above endnote.
Ehud’s Dagger: Class Struggle in the English Revolution, by James Holstun, Verso, New York, 2000. Dagger, which won the 2001 Isaac Deutscher Memorial Prize for historical writing, is a voraciously researched analysis of England’s capitalist revolution in the seventeenth-century and its ensuing anti-capitalist revolution from a bottom up historical perspective focusing on the development of Marxist ideology. Holstun examines the radical projects of working people and their practical contributions to the development of English society in the 1650s. This book will thrill those who believe Marxism had something to offer a world facing of corporatization run amok. Holstun, an English professor at SUNY Buffalo, is also the author of Rational Millenium: Puritan Utopias of Seventeenth Century England and America and the editor of Pamphlet Wars: Prose in the English Revolution.
No Logo: Taking Aim at the Brand Bullies, by Naomi Klein, Picador, 1999. This book reveals how are ideals of choice, interactivity and increased freedom have been subverted during the information age, and how our lives have been consumed by corporations who buy up our personal space with advertising. The book also explores the counter-culture that’s taking shape to combat the forces of corporate globalization. Klein is a very beautiful woman whose work has appeared in The Toronto Globe & Mail, The Village Voice and The Baffler. I became enamored with this sexy lady while watching her deliver a brilliant speech and then take questions from a university audience on C-Span. Her overwhelming talent and charisma has made her one of the most respected intellectual voices in the anti-globalization movement.
Valuing the Self: What We Can Learn From Other Cultures, by Dorothy Lee, Waveland Press, 1986. This book is a real eye opener, showing how Native American culture placed a higher value on individuals than Western culture because Amerindians realized a tribe is only as strong as the sum of its individual people. Strong people make for strong societies. The West has developed by ensuring the majority of its population remains as weak as possible, necessitating centralized control.
Lies My Teacher Told Me: Everything Your American History Textbook Got Wrong, by James W. Loewen, The New Press, New York, 1995. Loewen spent two years at the Smithsonian Institution surveying 12 leading high school textbooks of American history and discovered an embarrassing mix of bland optimism, blind patriotism, and misinformation pure and simple. As a result, Loewen retells American history as it should be taught to every American. This book is for anyone who hated history in school, but as an adult has found themselves curious about the nation’s true past.
The Idea of Wilderness: From Prehistory to the Age of Ecology, by Max Oelschlager, Yale University Press, 1991. Describes how the concept of wild nature has changed over thousands of years and the environmental consequences of those changes. Oelschlager offers a stirringly original examination of our relationship with nature through the ages, proposing a “new-old” way of doing things to heal our relationship with nature. At the time of this book’s writing, Oelschlager was a professor of philosophy and religious studies at the University of North Texas.
Democracy for the Few, by Michael Parenti, St. Martin’s Press, 1988. Parenti explains how democracy is incongruous with modern-day capitalism and is consistently violated by a capitalist social order, where the relationship between economic and political power is marked.
The Decline and Fall of the American Empire, by Gore Vidal, Odonian Press, 1986. “I do not accept the authority of any state – much less one founded as was ours upon the free fulfillment of each citizen – to forbid me, or anyone, the use of drugs, cigarettes, alcohol, sex with a consenting partner or, if one is a woman, the right to an abortion. I take these rights as absolute, and should the few persist in their efforts to dominate the private lives of the many, I recommend force as a means of changing their minds,” he writes, while outlining the untaught history of the American colonial enterprise during the twentieth century.
Freedom in Jeopardy: Speculations and Observations, by Edward A. Visser, Vantage Press, New York, 1989. Though Visser, like myself, has no advanced degrees and has struggled throughout his life to make a living, this Lockport man takes a deep look into the inalienable rights of Americans, which are allegedly protected by our Constitution. Although written 14 years ago, the book proves quite prescient in light of the USA Patriot Act, and suggests the creeping coup of our government didn’t begin with George W. Bush and the neoconservatives, but rather with Ronald Reagan. Do we really want this man’s face on Mt. Rushmore?
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