By Jay Hanson
“The big corporations, our clients, are scared shitless of the environmental movement,” Mankiewicz confided. “They sense that there’s a majority out there and that the emotions are all on the other side-if they can be heard. They think the politicians are going to yield to the emotions. I think the corporations are wrong about that. I think the companies will have to give in only at insignificant levels. Because the companies are too strong, they’re the establishment. The environmentalists are going to have to be like the mob in the square in Romania before they prevail.” [p. 24] -William Greider, WHO WILL TELL THE PEOPLE?
NOWADAYS, EVERYONE KNOWS that corporations control our political system and subjugate our citizens. But before the Civil War of 1861, citizens controlled the corporations. Up to that time, corporations were chartered for a specific limited purpose (for example, building a toll road or canal) and for a specific, limited period of time (usually 20 or 30 years).
Each corporation was chartered to achieve a specific social goal that a legislature decided was in the public interest. At the end of the corporation’s life time, its assets were distributed among the shareholders and the corporation ceased to exist. The number of owners was limited by the charter; the amount of capital they could aggregate was also limited. The owners were personally responsible for any liabilities or debts the company incurred, including wages owed to workers. Often profits were specifically limited in the charter. Corporations were not established merely to “make a profit.”
Early Americans feared corporations as a threat to democracy and freedom. They feared that the owners (shareholders) would amass great wealth, control jobs and production, buy the newspapers, dominate the courts and control elections (one-dollar-one-vote).
After the Civil War, during the 1870s and 1880s, owners and managers of corporations pressed relentlessly to expand their powers, and the courts gave them what they wanted. Perhaps the most important change occurred when the U.S. Supreme Court granted corporations the full constitutional protections of individual citizens. Congress had written the 14th Amendment to protect the rights of freed slaves, but in an 1886 decision (Santa Clara County v. Southern Pacific Railroad) this was expanded when the courts declared that no state shall deprive a corporation “. . . of life, liberty or property without due process of law.”
“There was no history, logic or reason given to support that view,” U. S. Supreme Court Justice William O. Douglas was to write 60 years later. But it was done anyway. By applying the 14th Amendment to corporations, the court struck down hundreds of local, state and federal laws that were enacted to protect people from corporate harm.
By the early 20th century, courts had limited the liability of shareholders; corporations had been given perpetual life times; the number of owners was no longer restricted; the capital they could control was infinite. Some corporations were even given the power of eminent domain (the right to take another’s private property with minimal compensation to be determined by the courts). Of course, a corporation cannot be jailed. It cannot even be fined in any real sense; when a fine is imposed, it is the shareholders who must pay it.
In effect, the U. S. Supreme Court bestowed natural rights on un-natural creatures, amoral beasts that were created to serve selfish men. Now corporations had life and liberty (but no morals), and the fears of the early Americans were soon realized.
Large corporations are autonomous technical structures (machines) that follow the logic inherent in their design. Corporate machines ingest living, natural systems (including people) in one end, and excrete un-natural, dead garbage and waste (including worn-out people) out the other. These machines have no innate morals to keep them from seducing our politicians, subverting our democratic processes or lying in order to maximize profit. Moreover, they are only nominally controlled by laws, because the people who make our laws are in turn controlled by these same machines. Today in America, we live under the de facto plutocracy of the corporate machines (one-dollar-one-vote).
Corporate machines, in an orgy of corporate profit, have completely destroyed American Democracy and now destroy the very basis of our lives-both physically and morally. These machines leave our children to face an ugly future of fighting each other over the un-profitable leftovers!
The only arguments that we can muster against this relentless destruction are religious and ethical: the obligation of stewardship for all of God’s creation and the extension of brotherhood to future generations.
But corporate machines have no religion or morals-and we have no chance.
- A Letter From Richard Grossman
PROGRAM ON CORPORATIONS, LAW & DEMOCRACY
211.5 Bradford Street
Provincetown MA 02657
ph & fax (508) 487-315117 February 1997I was stimulated to write [this letter] after reading “The Role of Corporate Accountability In Sustainable Development”, by Jeffrey Barber of the Integrative Strategies Forum:
- A Letter From Richard Grossman
In 1628, King Charles I granted a charter to the Massachusetts Bay Company. In 1664, the King sent his commissioners to see whether this company had been complying with the terms of the charter. The governors of the company objected, declaring that this investigation infringed upon their rights. On behalf of the King, his commissioners responded:
“The King did not grant away his sovereignty over you when he made you a corporation. When His Majesty gave you power to make wholesome laws, and to administer justice by them, he parted not with his right of judging whether justice was administered accordingly or not. When His Majesty gave you authority over such subjects as live within your jurisdiction, he made them not YOUR subjects, nor YOU their supreme authority.”
From childhood, this King had been trained to act as a sovereign should.
What about us?
By means of the American Revolution, colonists took sovereignty from the English monarchy and invested it in themselves. Emerging triumphant from their struggle with King George and Parliament, they decided they would figure out how to govern themselves.
Alas, a minority of colonists were united and wealthy enough to define MOST of the human beings in the 13 colonies as property or as non-persons before the law and within the society, with no rights any legal person was bound to respect.
Ours was a terribly screwed-up sovereignty from in the beginning.
Because of this immoral, atrocious structural mess, whole classes of people had to organize and struggle over centuries to gain recognition as part of the sovereign people — that is, they had to get strong enough as a class to define themselves and not let other people or institutions define them: African Americans, Native peoples, women, debtors, indentured servants, immigrants…
To this day, many still must struggle to exercise the rights of persons, to be recognized as persons by law and by society.
Throughout this nation’s history, there has always been plenty of genuflecting to democracy and self-governance — check out politicians’ Fourth of July orations and corporations’ advertisements. But the further each generation gets from the Revolution, the less the majority act like sovereign people. And when it comes to establishing the proper relationship between sovereign people and the corporations we create, recent generations seem to be at a total loss.
Yet, earlier generations were quite clear that a corporation was an artificial, subordinate entity with no inherent rights of its own, and that incorporation was a privilege bestowed by the sovereign. In 1834, for example, the Pennsylvania Legislature declared:
“A corporation in law is just what the incorporation act makes it. It is the creature of the law and may be moulded to any shape or for any purpose that the Legislature may deem most conducive for the common good.”
During the 19th Century, both law and culture reflected this relationship between sovereign people and their institutions. People understood that they had a civic responsibility not to create artificial entities which could harm the body politic, interfere with the mechanisms of self-governance, assault their sovereignty.
They also understood that they did not elect their agents to positions in government to sell off the sovereignty of the people. In other words, there were human beings who tried to act as sovereign people. One thing they did was to define the NATURE
of the corporate bodies they created. If we look at mechanisms of chartering, and at the language in corporate charters, state general incorporation laws and even state constitutions prior to the 20th Century, we find precise, defining language, mandatory and prohibatory language, often self-executory in nature. These mechanisms DEFINED corporations by denying corporations political and civil rights, by limiting their size, capitalization and duration, by specifying their tasks, and by declaring the people’s right to remove from the body politic any corporations which dared to rebel.
Here is an example of language which sovereign people, responding to the rise of corporations after the Civil War, placed in the California Constitution of 1879, and which appears in other state constitutions at about that time:
“Article I, section 2: All power is inherent in the people…
Article I, section 10: The people shall have the right freely to assemble together to consult for the common good, to instruct their representatives…
Article XII, section 8: The exercise of the right of eminent domain shall never be so abridged or construed as to prevent the Legislature from taking the property and franchises of incorporated companies and subjecting them to public use the same as the property of individuals, and the exercise of the police power of the State shall never be so abridged or construed as to permit corporations to conduct their business in such manner as to infringe the rights of individuals or the general well-being of the State.”
The principal mechanism which sovereign people used during the 19th Century to assess whether their corporate creations were of a suitably subordinate nature was called QUO WARRANTO. The quo warranto form of action, as attorney Thomas Linzey has noted, ‘is one of the most ancient of the prerogative writs. In the words of the Delaware Court of Chancery, the remedy of quo warranto extends back to time whereof the memory of man runneth not to the contrary.
Quo warranto is simply Latin for BY WHAT AUTHORITY. All monarchs understood how to use this tool in self-defense. They realized that when a subordinate entity they had created acted BEYOND ITS AUTHORITY, it was guilty of rebellion and must be terminated.
Sovereignty is in our hands now, but the logic is the same: when the people running a corporation assume rights and powers which the sovereign had not bestowed, or when they assault the sovereign people, this entity becomes an affront to body politic. And like a cancer ravaging a human body, such a rebellious corporation must be cut out of our body politic.
During the first hundred years of these United States, people mobilized so that legislatures, attorneys general and judges would summon corporations to appear and answer to quo warranto. In 1890, the highest court in New York State revoked the charter of the North River Sugar Refining Corporation with these words:
“The judgment sought against the defendant is one of corporate death. The state which created, asks us to destroy, and the penalty invoked represents the extreme rigor of the law. The life of a corporation is, indeed, less than that of the humblest citizen, and yet it envelopes great accumulations of property, moves and carries in large volume the business and enterprise of the people, and may not be destroyed without clear and abundant reason…Corporations may, and often do, exceed their authority only where private rights are affected. When these are adjusted, all mischief ends and all harm is averted. But where the transgression has a wider scope, and threatens the welfare of the people, they may summon the offender to answer for the abuse of its franchise and the violation of its corporate duty…The abstract idea of a corporation, the legal entity, the impalpable and intangible creation of human thought, is itself a fiction, and has been appropriately described as a figure of speech…The state permits in many ways an aggregation of capital, but, mindful of the possible dangers to the people, overbalancing the benefits, keeps upon it a restraining hand, and maintains over it a prudent supervision, where such aggregation depends upon its permission and grows out of its corporate grants…the state, by the creation of the artificial persons constituting the elements of the combination and failing to limit and restrain their powers, becomes itself the responsible creator, the voluntary cause, of an aggregation of capital…the defendant corporation has violated its charter, and failed in the performance of its corporate duties, and that in respects so material and important as to justify a judgment of dissolution…Unanimous.”
Such a judgment should not be regarded as punishment of the corporation, but rather a vindication of the sovereign people. When our sovereignty has been harmed, we are the ones who must be made whole. The concept is similar to what Hannah Arendt described in her book Eichmann in Jerusalem (1963):
The wrongdoer is brought to justice because his act has disturbed and gravely endangered the community as a whole, and not because, as in civil suits, damage has been done to individuals who are entitled to reparation. The reparation effected in criminal cases is of an altogether different nature; it is the body politic itself that stands in need of being ‘repaired,’ and it is the general public order that has been thrown out of gear and must be restored, as it were. It is, in other words, the law, not the plaintiff, that must prevail.
There is no shortage of court decisions affirming the sovereignty of the American people over corporate fictions, the need to restore the general public order. In Richardson v. Buhl, the Nebraska Supreme Court in the late 19th Century declared:
“Indeed, it is doubtful if free government can long exist in a country where such enormous amounts of money are…accumulated in the vaults of corporations, to be used at discretion in controlling the property and business of the country against the interest of the public and that of the people, for the personal gain and aggrandizement of a few individuals.”
The Illinois Supreme Court, in People ex. rel. Peabody v. Chicago Gas Trust Co., (1889):
“When a corporation is formed under the general incorporation act, for the purpose of carrying on a lawful business, the law, and not the statement or the license of the certificate must determine what powers can be exercised as incidents of such business… To create one corporation that it may destroy the energies of all other corporations of a given kind, and suck their life blood out of them, is not a ‘lawful purpose.'”
The Supreme Court of Georgia, in Railroad Co. v. Collins, at about the same time:
“All experience has shown that large accumulations of property in hands likely to keep it intact for a long period are dangerous to the public weal. Having perpetual succession, any kind of corporation has peculiar facilities for such accumulation, and most governments have found it necessary to exercise great caution in their grants of corporate charters.
Even religious corporations, professing and in the main, truly, nothing but the general good, have proven obnoxious to this objection, so that in England it was long ago found necessary to restrict them in their powers of acquiring real estate. Freed, as such bodies are, from the sure bounds to the schemes of individuals, — the grave -, they are able to add field to field, and power to power, until they become entirely too strong for that society which is made of up those whose plans are limited by a single life.”
Justices White, Brennan and Marshall, dissenting in a 1976 case, Bucklely v. Valeo:
“It has long been recognized, however, that the special status of corporations has placed them in a position to control vast amount of economic power which may, if not regulated, dominate not only the economy but also the very heart of our democracy, the electoral process…The State need not permit its own creation to consume it.”
Chief Justice Rehnquist, dissenting in the same case:
“…the blessing of potentially perpetual life and limited liability…so beneficial in the economic sphere [sic -RG], pose special dangers in the political sphere.”
A great achievement of corporations as they set out towards the end of the 19th Century to transform the law and recreate themselves was to replace basic tools of sovereign people — chartering, defining incorporation laws, by what authority proceedings and charter revocation — with regulatory and administrative law, new legal doctrines, and fines as corporate punishment. The Populists understood that these changes amounted to a counter-revolution, and so they resisted with great passion and energy.
Populist farmers and workers were not willing to concede that the corporate form would define work and money and progress and efficiency and productivity and unions and justice and ethical conduct and sustainability and food and harm and personhood and reasonable. They were not willing to concede that corporations should have the rights and privileges of persons.
So they organized, educated, resisted. They were crushed by giant corporations’ ability to use state and federal government to take rights away from people and bestow them upon corporations.
Along came the Progressives. THEY were willing for the corporate form to become dominant, to shape our culture, to define work and our communities. They and their followers (and descendants) conceded to the corporation the rights and privileges it had taken from the sovereign people (via violence and via the decisions of federal judges): personhood, and a long list of civil and political rights such as free speech, and property rights such as the right to control investment, production and the organization of work.
By the beginning of the 20th Century, corporations had become sovereign, and they had turned people into consumers, or workers, or whatever the corporation of the moment chose to define humans as.
Public memory of the Populists’ analysis and their efforts was rapidly wiped clean, while the Progressives were fulsomely legitimated and praised. Corporations did such a good job of rewriting history that when the Supreme Court finally began to hold New Deal legislation constitutional in the late 1930s, few understood that it was not the Populist agenda of sovereignty over corporations which was being affirmed, but rather the Progressive agenda of conceding power and privilege to corporations as a form of property, of tinkering with corporate behavior at the margins, curbing corporate excess, and perfecting the market.
As a result, most people do not acknowledge the massive corporate rebellion which took place.
So most citizen efforts against corporations in this century have been struggles against the symptoms of corporate domination in regulatory and administrative law arenas.
But these are NOT arenas of sovereignty. These are stacked deck proceedings, where people, communities and nature are fundamentally disadvantaged to the constitutional rights of corporations. Here, we cannot demand: BY WHAT AUTHORITY has corporation X engaged in a pattern of behavior which constitutes an assault upon the sovereign people. Here, we cannot declare a corporation ULTRA VIRES, or BEYOND ITS AUTHORITY.
To the contrary: regulatory and administrative law only enables us to question specific corporate behaviors, one at a time, usually after the harm has been done…over and over and over again.
In these regulatory and administrative proceedings, both the law and the culture concede to the corporation rights, privileges and powers which earlier generations knew were illegitimate for corporations to possess. In addition, in these proceedings, the corporation has the rights of natural persons: a human and a corporation meet head on, in a fair fight.
Today, our law and culture concede our sovereignty to corporations. So do most of our own citizen organizations dedicated to justice and environmental protection and worker rights and human rights.
Consequently, our organizations use their energy and resources to study each corporation as if it were unique, and to contest corporate acts one at a time, as if that could change the nature of corporations.
Folks relentlessly tally corporate assaults; study the regulatory agencies and try to strengthen them. We try to make corporate toxic chemicals and corporate radiation and corporate energy and corporate banking and corporate agriculture and corporate transportation and corporate buying of elections and corporate writing of legislation and corporate educating our judges and corporate distorting of our schools, a little less bad.
But we don’t study who We the People are; how sovereign people should regard ourselves, how sovereign people should act. We need to realize what power and authority we possess, and how we can use it TO DEFINE THE NATURE OF CORPORATIONS, so that we don’t have to mobilize around each and every corporate decision that affects our communities, our lives, the planet.
So that we don’t have to wage a revolution every time we must remove a corporate cancer from our midst. *** Consider now the paper sent by Jeffrey Barber of the Integrative Strategies Forum. Seven and one-half pages are about addressing corporate behavior. Three paragraphs on the last page are on the need to ‘Reduce Political Influence of Corporations On Government.’
This is backwards. The reason corporations are so dominant and so destructive today is that a century ago corporations took rights and powers away from the people. For example, corporations made themselves into persons under the law BEFORE most human beings had won their civil and political rights. Corporations’ ‘right to manage’ and ‘free speech’ are currently safeguarded by the US Constitution, thanks to legal doctrines concocted by the appointed judges of the federal judiciary.
Isn’t it an old story? People create what looks to be a nifty machine, a robot, called the corporation. Over time the robots get together and overpower the people. They redesign themselves and reconstruct law and culture so that people don’t remember they created the robots in the first place, that the robots are machines, are not alive.
For a century, the robots propagandize and indoctrinate each generation of people so they grow up believing that robots are people too, gifts of God and Mother Nature; that they are inevitable, and the source of all that is good.
Isn’t it odd how gullible we’ve been, how docile, how obedient?
But in the face of what we experience about corporations, of what we know to be true, why are so many people so obedient?
Why do we hang on to the hope that the corporation can be made socially responsible? Isn’t this an absurd notion? After all, organizations cannot be responsible. This is just not a relevant concept, because a principal purpose of corporations is to protect the managers and directors who run them from responsibility for their decisions.
But people can declare organizations criminal, or vile — take a look at the Nuremberg Trials. And people can define organizations, business or government. Again, see the Nuremberg Trials.
But only people can be responsible.
How? By exercising our sovereign authority over ALL the institutions we create.
We the People are the ones who must be accountable. We are not accountable when we create monster robots which run rampant in our communities, and which in our names sally forth across the world to wreak havoc upon other places and upon other people’s self-governance.
We are not being socially responsible or civically accountable when we don’t act like sovereign people.
We are not being socially responsible or civically accountable when we play in corporate arenas by corporate rules.
We are not being socially responsible or civically accountable when we permit our agents in government to bestow our sovereignty upon machines.
We are not being socially responsible or civically accountable when we organize our communities and then go to corporate executives and to the hacks who run corporate front groups and ask them please to cause a little less harm; or when we offer them even more rewards for being a little less dominating.
Sovereign people do not beg of, or negotiate with, subordinate entities which we created.
Sovereign people INSTRUCT subordinate entities. Sovereign people DEFINE all entities we create. And when a subordinate entity violates the terms of its creation, and undermines our ability to govern ourselves, we are required to move in swiftly and accountably to cut this cancer out of the body politic.
With such deeds do we honor the millions of people who struggled before us to wrest power from tyrants, to define themselves in the face of terror and violence. And we make all struggles for justice and democracy easier by weakening the ability of corporations to make the rules, and to rule over us.
Some might say this is not a practical way to think and act. Why? Because corporations will take away our jobs? Our food?
Our toilet paper? Our hospitals? Because we don’t know how to run our towns and cities and nation without global corporations?
Because they will run away to another state, to another country?
Because the Supreme Court has spoken? Because philanthropic corporations won’t give us money? Because it’s scary? Because it’s too late to learn to act as sovereign people?
Because in 1997 it is not realistic for people across the nation and around the world to take away the civil and political rights of all corporations, to take the property rights and real property corporations have seized from human beings, and from the Earth?
Yeah, and it IS realistic to keep conceding sovereign powers to corporations; to keep fighting industrial corporations and banking corporations and telemedia corporations and resource extraction corporations and public relations corporations and transportation corporations and educational corporations and insurance corporations and agribusiness corporations and energy corporations and stock market corporations one at a time forever and ever?
** Our president is realistic and practical. On January 10, 1997, President William Jefferson Clinton sent a letter to the mayor of Toledo, Ohio. The mayor had asked the president for help in getting the Chrysler Corporation to build a new Jeep factory within Toledo city limits to replace the ancient one which Chrysler Corporation was closing.
The President of the United States, leader of the most powerful nation the world has ever known, elected head of a government always eager to celebrate the uniqueness of its democracy to the point of forcing it upon other nations, wrote:
“…As I am sure you know, my Administration cannot endorse any potential location for the new production site.”
“My Intergovernmental Affairs staff will be happy to work with you once the Chrysler Board of Directors has made its decision…”
Our president may not have a clue, but We the People did not grant away our sovereignty when we made Chrysler into a corporation.
When we gave the Chrysler Corporation authority to manufacture automobiles, we made the people of Toledo not its subjects, not Chrysler Corporation their supreme authority.
How long shall we the people, the sovereign people, stand hat in hand outside corporate boardrooms waiting to be told our fate?
How long until we instruct our representatives to do their constitutional duty?
How long until WE become responsible…until WE become accountable, to our forebears, to ourselves, to our children, to other peoples and species, and to the Earth?
-Richard Grossman
For more,
See also: ENDING CORPORATE GOVERNANCE
TAKING CARE OF BUSINESS: Citizenship and the Charter of Incorporation by Richard Grossman and Frank T. Adams, 1993 For one copy send $5.00 to: Charter, Inc. / CSPP, P.O. Box 806, Cambridge, MA 02140
See Also: RACHEL’S ENVIRONMENT & HEALTH WEEKLY #449 Environmental Research Foundation P.O. Box 5036, Annapolis, MD 21403; Fax: 410-263-8944; 
Recommended further reading: WHEN CORPORATIONS RULE THE WORLD
by David Korten
Hitting the nail smack on its head is a rare ability-and David C. Korten has got it. With one simple observation he disables the argument that equates free-market economics with democracy: ‘In a political democracy, each person gets the vote. In the market, one dollar is one vote, and you get as many votes as you have dollars. No dollar, no vote.’
Korten is not a left-winger backed by a radical tradition. He is very much a product of the establishment-Harvard Graduate Business School, the Ford Foundation, USAID. But over the course of 30 years working in different parts of world he has managed to keep his eyes and his mind open. His verdict on what the free market and its overlords-the multinational corporations-are doing to the world is unambivalent. We are, he says, suffering from a threefold human crisis: the deepening of poverty, social disintegration and environmental destruction. At the heart of this crisis is the tyrannical dominance of corporations. Unaccountable, polluting and driven by a blinkered addiction to economic growth, they serve the interests of a very small international elite and are harming the rest of us.
Nothing startlingly new about this analysis. What is new is the direction it’s coming from, and the persuasive clarity and authority with which Korten mounts his case. He is extremely well-informed and commands a punchy, personal, writing style that can connect with a diverse readership. He is also well abreast of developing trends. ‘The economic globalization process is creating islands of wealth in poor countries and seas of poverty in rich countries,’ he comments. This makes seeing the world as divided along class lines more meaningful than in terms of ‘rich countries’ and ‘poor countries.’
Korten pins his hopes on the ‘ecological revolution’ that is bound to come. He also looks to an ‘awakening civil society’ and the growth of social movements-drawing quite plausibly on examples from around the world. Korten sets forth an agenda to ‘reclaim the economic spaces…in favor of the small & locally accountable’. It sounds like another example of well-established green ideas entering the mainstream, and being presented as something new.
That aside, Korten’s mixture of acute observation, COMMON-SENSE PRACTICALITY and vigorous idealism may open more than a few minds.
New Internationalist, January, 1996, p.32
WHEN CORPORATIONS RULE THE WORLD by David Korten; Kumarian Press (203) 953-0214 and Berrett-Koehler (415) 288-0260, 1995; ISBN 1-887208-00-3. See also PCDF Home Page.
Rights of Money versus Rights of Living Persons
by David C. Korten
PCDForum Column #82 Release Date November 1, 1996
Proponents of market liberalism claim the free market is the essential foundation of political democracy-a guarantor of the rights of people against the abuse of state power. They neglect, however, the important ways in which the unfettered market tends to function as a profoundly undemocratic institution.
Political democracy vests rights in the living person, one person, one vote. By contrast, the market recognizes only money, not people-one dollar, one vote. It gives no voice to the penniless, and when not balanced by constraining political forces can become an instrument of oppression by which the wealthy monopolize society’s resources, leaving the less fortunate without land, jobs, technology or other means of livelihood. Only when wealth is equally distributed can the market be considered democratic in any meaningful sense.
Global markets are now dominated by global mega-corporations-among the most undemocratic and unaccountable of human institutions. By its nature the corporation creates a legal concentra tion of power while shielding those who wield that power from accountability for the conse quences of its use. Many mega-corporations command more economic power than do the majority of states and dominate the political processes of nearly all states. Their growing unaccountable power poses a serious threat to the basic economic and political rights of people everywhere.
The time has come to re-examine some of our most basic assumptions about the nature of democracy, human rights, and the institution of the corporation. The survival of our political freedoms depends on recognizing that economic rights are an essential foundation of political democracy. Consider for example two of the most fundamental of all human rights-the right to a means of living-literally the right to live-and the right to participate in making the decisions that affect our lives.
The Right of Access to a Means of Living. The earth’s life-sustaining resources are a common heritage of all life. All people are born with an inalienable right to a sufficient share of these resources to create a secure and fulfilling life for themselves and their families. They have a corresponding responsibility to share and steward these resources to the benefit of all persons and other living things.
Since the most basic requirements of living depend on the products of the earth, there is a fundamental-though often neglected-connection between livelihood rights and property rights. English Philosopher John Locke set forth a moral justification for property rights in The Second Treatise of Government published in 1689. Locke argued that where unused land is abundant, a man has a right to appropriate for his private and exclusive use the land which he tills to produce for his basic subsistence needs. It is through the application of his labor to make the land produce that he acquires this private right. Locke stressed that given the condition of abundance, such appropriation in no way deprived others of similar opportunity. Locke was also clear that the rightful claim to a property right followed only from the application of one’s personal labor. Furthermore, he said, this claim legitimately extended only to such property as required to meet one’s own material needs-suggesting that a property right is virtually synonymous with a livelihood right,
Locke, however, went beyond this relatively unassailable moral argument to seek justification for actions of those who accumulate property rights far beyond their personal needs. Presuming that property rights are most likely to be accumulated by clever and industrious persons who seek to realize their full productive potential, Locke argued that the result of this accumulation would be to maximize the wealth of society and thereby the well-being of all. It is essentially the same argument that economists make to this day in defense of inequality based on the assumption that the surpluses created through investments of the wealthy in a growing economy will be widely distributed through society in the form of high-paying jobs and well-funded public services.
It is noteworthy that the moral defense of inequality imbedded in Locke’s thesis and the work of most modern economists rests on two inadequately examined assumptions: 1) natural wealth is abundant relative to need; and 2) the benefits of an overall increase in economic activity are widely shared even when wealth is distributed unequally. Unfortunately, for several billion people who find their livelihoods increasingly at risk, neither premise is valid in our present world. To the contrary, the poor are being excluded from access to land, technology is eliminat ing jobs faster than it is creating new ones, and public services are being systematically dismantled-all to increase the riches of those whose wealth already exceeds any conceivable need. In short, property rights are being used routinely to justify the exclusion of those without property from access to a decent means of living.
As suggested by Locke’s argument, the rightful purpose of a property right is to protect a person’s right of access to a means of livelihood or to secure for the individual a just reward for entrepreneurial initiatives that create a better life for all. A property right loses its legitimacy when its exercise by those who have more than they need denies others of their rightful means of livelihood or otherwise diminishes their opportunities for a full and meaningful life. The livelihood rights of the many come before the property rights of the few. Recognition in our laws and public culture of this limitation of property rights is fundamental to the market’s socially efficient function.
The Right to Participate in Decisions That Affect One’s Life and Community. Born with reason, conscience, and the capacity for intelligent choice, all people have the inalienable right- indeed the obligation-to use these gifts to participate actively in the decisions that affect their lives and communities. The rights of speech and assembly derive from this basic right to participate. The right to participate resides in the person and does not rightfully extend to any corporation.
In the economic realm the exercise of the right of participation extends far beyond choosing among those products the market finds it profitable to offer us. It includes the right to participate in setting standards and priorities for the economic affairs of our communities, the uses to which our local resources will be put, and the conditions under which we will engage in external trade and invite the participation of others in our domestic economies.
This right is under attack by the world’s mega-corporations that seek to establish their own right to move across the face of the planet without restriction to extract resources, exploit unorganized and unprotected labor, evade taxes and environmental regulations, and monopolize indigenous knowledge and genetic materials without regard to the human and environmental consequences. Their weapons of choice are international agreements on trade and investment that take prece dence over the rules and regulations established by people and their governments to govern local commerce. Negotiated in secret and implemented without full public discussion and democratic assent, these agreements are systematically eroding the democratic rights of people to regulate their own local and national economies, and to set rules for commerce consistent with their own values and judgements regarding their personal and community needs. The interests of money and the fictitious legal persona of the corporation are thus placed ahead of the interests of living persons and their communities-all in the name of market freedom.
It is useful to recall that Adam Smith, the patron saint of free marketeers, favored a market comprised exclusively of small buyers and sellers. Smith considered the corporation to be an instrument for monopolizing markets and saw no place for such institutions in a properly functioning competitive market economy. By his reckoning the corporation is an anti-market institution.
A corporation comes into being only through the public act of the government that issues the corporate charter. The creation of a corporation is thus a public, not a private, act and its only justification is to serve a public purpose. Whatever privileges or authority the corporation may enjoy are derived from the authority of government, which is itself derived from the will of the people. It therefore follows that the corporation is rightfully subject to the will of the people and to whatever laws people freely chose to establish governing its function.
Nor does a corporation rightfully enjoy any privilege beyond the jurisdiction of the government that issued its charter unless and until the people of another jurisdiction explicitly chose to grant it such privilege. It is the proper function of the corporation to implement the laws that people establish through their governments, not to participate in their creation. Indeed, it is essential to the integrity of democratic governance that corporations be barred from political participation of any kind on the theory that political rights reside only in real people.
The idea that corporations should enjoy the rights of flesh and blood persons-including the right of free speech-grew out of a U.S. Supreme Court decision in 1886 that designated corporations as legal persons entitled to all the rights and protections afforded by the Bill of Rights of the U.S. Constitution. Significantly, the U.S. Constitution makes no reference to corporations. It was a decision without legal or moral foundation made by a corrupted court system.
As citizens it is our right to revise existing legal codes to make clear that human rights belong only to flesh and blood persons. Similarly, it is our right to replace trade and investment agreements that abrogate the most basic political and economic rights of people with interna tional agreements that protect the rights to economic and political choice of all people against infringement by democratically unaccountable institutions-either state or corporation.
Markets are important institutions and they have an essential place in any democratic society- functioning within a framework of democratically determined rules and public safeguards. There is nothing democratic, however, about an unregulated market that responds exclusively to the needs of the wealthy and subordinates human rights and interests to corporate rights and interests. In the end only an active and politically engaged citizenry can assure the protection of our human rights from the arbitrary use of power by either states or corporations. Institutional power and legitimacy flow from the will of people, and when any institution usurps our natural rights, it is right of the people to restructure, replace, or eliminate, that institution.
_______________
David C. Korten is president of the PCDForum and author of When Corporations Rule the World published by Kumarian Press and Berrett-Koehler Publishers.