Revoking the Corporation

by Richard L. Grossman

[Based on a keynote speech at the 14th Public Interest Environmental Law Conference, University of Oregon Law School, Eugene, Oregon, March 9, 1996]

I chose the word "revoking" for its multiple meanings: to recall, to summon back to a right belief, to a right way of life; to draw away from a wrong and wicked practice; to annul, repeal, rescind, cancel, breakup.

It is important that we choose our words carefully, because the language of corporate public relations is so lavishly deployed to obscure, manipulate, tease, deceive, threaten and divide.

We also need to reclaim words which have been turned into cliches Ñ- democracy, security, freedom, self-governance, citizenship, progress...

With intentional language and a little history, we can recall what the corporation once was. We can call to mind great struggles waged by people everywhere against oppressors, by people on whose shoulders we stand as we gather to summon back the corporation, and where necessary, to rescind our grants of specific corporate charters.

I will identify the goals, strategies, and arenas of action in which I believe we can most effectively invest our time and energy.

But first, let us assess our situation.

We have given control over our communities, over our work, over money, values, law Ñ indeed, over life and death and over the Earth itself Ñ to giant corporations.

Corporations have become sovereign citizens and we have become consumers. Corporations are designing our society and shaping our world. In exchange, humans pay homage, pledge subservience, forget that free from global corporatization, we would be able to define our communities and our society.

Political scientist Scott Bowman reminds us that giant corporations emerging from the great consolidations of wealth and property at the end of the 19th Century were designed to be "a solution to the ills of the competitive marketplace."

In other words, what corporations are, what corporations do well, what corporations were designed to do, is our problem. It would be a tactical mistake to continue focusing on their obvious harms, such as treating people as if we were all interchangeable, churning the fertile Earth into feedstocks, dumps and oblivion, engineering mass firings, buying elections. Because if we do this, we will not set our hearts on taking away the power and privilege under law which enables large corporations to run our lives.

We will end up resisting corporate rule one poison at a time, one clear-cut at a time, one violation of human and worker rights at a time.

Isn't it clear that we cannot have a democracy if the direction of our economy, and of our culture, is decided by a wealthy class of people hiding behind the cover of transnational corporations?

Targeting the giant corporation Ñ targeting the structure of corporations Ñ is a formidable educational and organizing challenge. Our corporate culture makes it difficult to see that there is no positive trade off, no net gain, from granting vast rights and powers to the people running corporations today.

So we'll have to work to imagine what could have been, what could be, if giant corporations had not interfered with our self-governance; if corporations had not trampled upon our ability to cooperate with one another and with the Earth; if corporations had not been warping our humanity for over a century.

We'll have to prevent our corporate leaders from acting like the kings of old, blissed out as they are with their divine right and armed with their bibles of law and economics.

We were all taught that our country once dealt with those kings. So why are we facing kings again?

The American Revolution sent kings and monarchy culture packing. It transformed crown corporations and feudal empires Ñ such as the Carolina Colony, the Virginia Colony, the Pennsylvania Colony and New Amsterdam Ñ into constitutionalized states. And then early Americans began to grapple with what it meant to govern themselves.

There were great gaps between the ideals of the revolution, and the reality of the revolution Ñ gaps which persist today. Mass destruction was visited upon this continent and upon the people and species living here. To the founders' everlasting shame, human beings were enslaved. And even after slavery had been outlawed, Native peoples, African Americans, women, many men without property, were denied legal, civil and political rights.

Despite these gaps between ideals and reality, a social contract emerged. It was not a contract between people and government. It was not a contract between people and corporations. It was a contract among the people, about the kind of government people aspired to, about how Ñ and for what goals Ñ 'we the people' would govern ourselves.

Mechanisms for self-governance were written into constitutions and our bills of rights. I look to Alexander Meiklejohn for help in understanding our state and federal bills of rights. He explains that these amendments do not guarantee any rights, but are a free people's rules for self-governance.

In these bills of rights, self-governing people prohibit certain actions by our representatives and by our branches of government. The Constitution's First Amendment, for example, prohibits government institutions from denying us the information we need to govern ourselves.

In other words, we have long possessed the right to know. We are 'we the people.' Whatever we need to know in order to shape our communities and to define our work Ñ to govern ourselves Ñ we have the authority to find out, even if corporate leaders claim such knowledge is their proprietary information.

But we only possess the rights we are prepared to take. Many among early generations of Americans understood this, especially when it came to corporations.

Via charters, state corporation codes and state constitutions, they limited corporate capitalization, property holding, duration. They held incorporators and shareholders liable for all harms and debts, sometimes doubly and triply so. They prohibited corporations from holding stock in other corporations, and structured corporations' internal governance to protect the rights of individual shareholders and to safeguard the commons.

Until the early 20th Century, most people did not think in terms of "regulating" corporations, but of controlling and directing them, of defining them.. As the New York State Court of Appeals noted in a unanimous 1890 decision revoking the charter of North River Sugar Corporation, "The life of a corporation is, indeed, less than that of the humblest citizen."

Corporate accountability meant that the sovereign people could revoke corporate charters routinely, without having to wage a revolution every time.

The last thirty years of the 19th Century saw the transformation of American law. Corporate directors walked off with dictatorial powers over internal governance. The corporation itself emerged with exceedingly broad authority over investment, production, land and human labor, as well as legal rights to shape local, state and federal government.

Federal courts, primarily the Supreme Court, directed this effort. They used the Fifth and Fourteenth Amendments, the commerce clause, the bills of rights of state and federal constitutions, to give corporations extraordinary public powers and property rights. Declaring that corporations possessed the attributes of persons, judges also bestowed upon them civil and political rights Ñ before many classes of people had won their civil and political rights.

During those last decades of the 19th Century, millions realized what was happening. The Populists assessed their situation and saw a counter-revolution in process, a corporate state coming into existence. Creating vast educational and agitating organizations, farmers and urban workers forced state and federal legislators to enact hundreds of laws outlawing corporate privilege. But most of these were overturned by federal courts.

People who built the Populist Movement did not seek to prevent corporate excesses at the margins. They sought public ownership and control of railroad, banking, insurance, telegraph, grain storage corporations. They sought to define the legal relationship between a free people and a free people's subordinate creation.

But with corporate authority over investment and production made into property rights, and civil rights of corporate "persons" granted constitutional protections, the entire realm of what is today called the market was removed from public reach...declared off-limits to the sovereign people.

And then the courts turned public debate into just another market Ñ the "marketplace of ideas" Ñ where corporate domination received even more government protections.

As the 20th Century unfolded, after government officials and corporate leaders had beaten back the Populist Movement and had transformed the law, the nation gradually ceased to question the legitimacy of the corporation as a governing body, as an unconstitutionalized wielder of vast economic power. The giant corporation became accepted as a necessity, an inevitability, for maximizing production and spreading the corporate version of freedom and progress around the globe.

In order to provide the veneer of social responsibility, and to shield corporations from the will of the people, elaborate regulatory and administrative mechanisms were devised. Elected legislators delegated their constitutional authority to non-elected commissions, agencies, and the courts. These bodies in turn made law which preserved Ñ and often strengthened Ñ corporate autonomy, and undermined human independence and democratic processes.

Less and less a self-governing people, Americans ceased to scrutinize whether corporate leaders operated within their proper bounds. People began regarding concentrations of corporate power as normal. Corporate harms to people, places and democracy were no longer seen as violence to the public welfare, as acts beyond corporate authority. Rather, corporate harms were interpreted as mere infringements of specific laws, such as labor law, or consumer law, or environmental law, or securities law Ñ as if corporations were indeed persons, and not artificial entities subordinate to the people.

In 1894, Henry Demarest Lloyd cried out that "We are calling upon [those who wield corporate] power and property, as mankind called upon kings of their day, to be good and kind, wise and sweet, and we are calling in vain. We are asking them not to be what we have made them to be. We put power into their hands and ask them not to use it as power."

A century later, many of our leaders are still asking. These leaders are also asking in vain.

Thomas Berry, the cosmologist who has helped people learn the history of the universe, asked my colleague Ward Morehouse and me some months ago what we were up to. We told him that our hope was to provoke a global movement of human beings which would dismantle the thousand largest corporations on the Earth.

Thomas, a contemplative octogenarian, stared at us for what seemed light years. Then he asked: "Why are you guys settling for such a limited goal?"

I think what Thomas meant was this: for billions of years, the universe has been exploding and expanding, releasing vast primordial energy which in turn created great galaxies. Out of these galaxies emerged new stars and planets. Finally, the Sun appeared, and Earth with "an incessantly creative chemical womb." Out of this womb emerged plants, animals, people.

This cosmic convulsion has been under way for billions of years...so that in the course of a few generations we can turn it all over to Walt Disney Corporation? To Wal-Mart Corporation? To Time-Warner Corporation? To Weyerhauser Corporation? Microsoft Corporation? North Carolina Bank Corporation?

So that we can let it all be destroyed by International Paper Corporation? Union Carbide Corporation? Mitsubishi Corporation? Hyundai Corporation? Cargil Corporation? General Electric Corporation? Exxon Corporation? RJR Nabisco Corporation? Raytheon Corporation? Monsanto Corporation?

In my lifetime, I have witnessed and participated in struggles for democracy, freedom and self-governance with roots deep in the past. I am convinced that people around the country and across the planet are prepared now to take the next logical step Ñ to revoke our lives, our communities and our governments from global corporations.

The Program on Corporations, Law and Democracy has been organizing "Rethinking The Corporation, Rethinking Democracy" meetings with people across the country. We are finding that combining history with patient, democratic conversation enables people to see that our nation's problems extend beyond a few overpaid corporate CEOs, beyond a few rogue corporations, beyond corporate extortion and absentee ownership.

People are realizing that it is illegitimate for artificial entities which the American people have created to divide and conquer us. To define our labor. Control our wealth. Subjugate the land. Demarcate the commons. Write our laws. Elect our representatives. Poison our food. Indoctrinate our children. Pit employee against employee, ecosystem against ecosystem.

That's why a different ferment is now bubbling in our communities, a ferment which is focusing on revoking corporate personhood, corporate immunities, managerial perrogative and intangible property rights; which is studying and challenging the array of counterintuitive doctrines, concocted by judges over the past century, which prop up corporate law today.

This ferment is not about pleading for good corporate citizenship...because corporations are not citizens, and because it is inappropriate for a sovereign people to plead with subordinate entities.

We fermenters do not seek to legalize more corporate dominance and destruction with new permitting and disclosure laws.

We do not advocate equal poisoning under law.

We do not speak of "corporate America", because that is a basic contradiction in terms. We do not want to write a social contract with corporations, because the only real social contract is among ourselves, among people.

We are not recommending meaningless voluntary codes of conduct like the CERES Principles. If corporate directors wish to take genuine steps toward democracy, let them make their codes legally binding by writing them directly into their corporate charters. Let them renounce Ñ in their charters Ñ political rights and privileges inappropriate for a corporate fiction.

Growing numbers of Americans are now seeking ways of exercising our citizen authority over the subordinate entity which is the modern, giant corporation. We are demanding repeal of judge-made doctrines, the withdrawal of privileges which corporations have taken from the sovereign people and from the Earth; fixed terms for corporate existence, the banning of corporate ownership of corporations, an end to interference with employees' freedom of speech and assembly inside corporate gates.

We propose that people achieve these ends by organizing to amend state corporation codes, rewrite corporate charters, revoke corporate charters; to limit corporate capitalization and property holding; to ban corporations entirely from participation in our elections, in our lawmaking, in our judges' education, in our public education.

And we sure as hell do not need to let ourselves be fashioned into a new category called "stakeholders," a concept designed to erase the truth that historically and under law, corporations are creations of civil society, and are subordinate to civic authority.

Instead, we are clear that a sovereign people worthy of the name defines corporations, instructs directors on appropriate behavior, and prohibits perpetual special privilege.

For thousands of years, people have sought to live and to die in harmony with place and with other species; to think and create, to learn what could be learned from the past. Thanks to the energy of the universe, to the richness of this Earth, and to the human beings who came before us, we have the ability to analyze the present, imagine many futures, and to take action.

We can reject the dependency and phony security that accompany all subservience to power.

We can embrace the responsibilities of cooperation and freedom, continuing the historic struggle Ñ the cosmic struggle Ñ to create democratic societies.

As Gary Snyder has encouraged us, in The Practice of the Wild,

"To be truly free, one must take on the basic conditions as they are: painful, impermanent, often imperfect Ñ and then be grateful for the impermanence and the freedom it grants us. For in a fixed universe there would be no freedom. And with that freedom we improve the campsite, teach children, oust tyrants."

NOTES

Scott R. Bowman, The Modern Corporation and American Political Thought: Law, Power and Ideology, University Park: Pennsylvania State University Press, 1996.

People v. NorthÊRiver Sugar Refining Co., 24 N.E. 834 (1890).

Alexander Meiklejohn, Political Freedom: The Constitutional Power Of the People, NY: Oxford University Press, 1965, passim.

Henry Demarest Lloyd, Wealth Against Commonwealth, NY: Harper & Bros., 1894.

Gary Snyder, The Practice of the Wild, San Francisco: North Point Press, 1990.

With Ward Morehouse, Richard Grossman co-directs the Program On Corporations, Law & Democracy. The Program can be reached at Box 806, Cambridge, MA 02140.

Copyright Mendocino Environmental Center 1997
Permission granted to excerpt or use this article if source is cited


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