Corporations in the U.S., part six
NewsNotes, November-December 2009
Ed: The following article is slightly edited from its original form.
The previous five articles of this series have examined how, over the course of 100 years or so, corporations in the United States radically increased their influence on government and general society. What are the solutions then? How can we rein in corporate power and influence?
In order to achieve change, we must be more strategic. In her book The Divine Right of Capital, Marjorie Kelly said those interested in addressing corporate influence should learn from the women’s movement: “It would not have been enough to see poor funding for girls’ athletics as one problem, unequal wages for women as a separate problem, and harassment in the office as still a different problem. These battles became one when their common source in sex discrimination was recognized. Yet today we chase after corporate pollution as one problem, low wages as another problem, and corporate welfare as still a third problem.” We need to strategically attack the common cause of these problems: corporate power. Below are some suggestions of reforms that would more fundamentally address corporate power and influence.
Electoral and lobby reform
We first need to declare a separation of corporation and state and work for reforms that remove money and corporate influence from elections and law making. Without diminishing corporate influence on elected officials, it will be next to impossible to pass more substantial reforms. Probably the most effective way to do this is through publicly funded elections. By not depending on large donations in order to be elected, politicians would be freer to make tough decisions. Even business leaders recently placed ads in favor of publicly funded elections. “We are on the receiving end of senators’ and representatives’ endless fundraising calls. And trust us: we hate getting those calls every bit as much as they hate making them,” read part of their ad.
Unfortunately, Congressional initiatives in the area of campaign financing are threatened to be overruled by the Supreme Court. In Citizens United v. the Federal Election Commission, the Roberts court could soon allow corporations to make political donations from their general funds even in the final days of a campaign. Currently, political donations made by a corporation have to be raised for that specific purpose from individual donations, and stronger restrictions are held in the final days of a campaign. The Court could overturn these and other precedents of controlling corporate political spending which date back to the early 1900s.
In his book Tyranny of the Bottom Line, Ralph Estes argues that it is the defined goal of the corporation - profit for its shareholders - that leads so many ethical managers to do unethical things. He shows how effective something as simple as more information about a corporation can be in changing its behavior. Estes calls for a corporate report to be completed by all corporations and made available to the public at no charge. Corporations already fill out a host of reports for different agencies, but by simply combining all the information into one document, it will cut costs for corporations and, by making it easily accessible to the public, will greatly increase the amount of information to the public.
Armed with the new information, workers, consumers and communities would be much better able to regulate corporations through their choices. In the same way that a corporation wants to know the background of its workers, those workers should be able to know a corporation’s worker safety and employment history. Customers should also know which products are produced with poisonous chemicals or not. After Congress passed the 1986 Superfund law that required corporations to publicly disclose their use of over 300 chemicals, major producers reduced their emissions by 35 percent out of fear of public criticism. If information on issues important to consumers, workers and the communities where corporations function were made available, corporate behavior would change dramatically.
Large media conglomerates should be broken up to guarantee a plentitude of voices. Technically, their licenses require media corporations to serve the public good, but these provisions are not enforced. They should give a much larger percentage of their programming to public service announcements. To make elections significantly cheaper, all media outlets could be required to provide free air time to candidates for office, which is the case in many countries. By doing a survey of how other countries use their media during elections, we could adopt those ideas that best fit.
More money and lives are lost due to corporate crime than from street crime, yet much of it goes unpunished. Daily we see cases of corporations charged with breaking the law but either they settle with their accusers for undeclared amounts of money in exchange for silence regarding the case, or they are found guilty and given nominal fines that are considered the cost of business for most corporations. Clearly, the government needs to take a stronger line with corporate crime. In order to make an impact, fines should be based on a percentage of a corporation’s gross income instead of a nominal monetary amount.
An International Corporate Crime Tribunal has been proposed by social movements to address crimes committed by corporations throughout the world. “Repeat offender” corporations should not have access to publicly funded projects and courts should levy increasingly significant penalties against them, up to and including the death penalty for a corporation: the revocation of its charter.
As Estes wrote, “When our cars or computers don’t work right, we go back and read the instructions. Similarly, we need to return to the original concept of corporations: organizations that were granted charters to serve the public interest.” By chartering corporations at the federal level we could avoid the race to the bottom between states as they compete to give better conditions to corporations. These federal charters could redefine the purpose of the corporation to serve social and ecological goals in addition to providing profits to its shareholders. The charters could include demands such as requiring a percentage of recycling, or use of clean energy, etc. In her article “Corporations for the seventh generation: Changing the ground rules,” Jane Anne Morris lists a number of measures that could be included in corporate charters.
Requiring that corporations renew these charters every 10 to 20 years would significantly improve our ability to keep check on corporate behavior. At these 10-year reviews, corporations that failed to fulfill their social role and/or were guilty of too many crimes could be disbanded as they routinely were in the first decades of our country.
Probably the most effective way to control corporate power is by reversing the legal precedent that corporations have equal rights under the Constitution. Corporations are never even mentioned in the document. Only people have rights, inalienable rights. “We the people” grant or revoke corporate privileges through our government. A long term campaign would be to pass a Constitutional amendment specifying that corporations do not have the same rights as humans. To help progress toward that, local struggles incorporate the issue of corporate personhood into their demands.
How to get involved
A number of ways to address corporate power and influence are available, many not mentioned here. The key factor is an informed citizenry. We first need to overcome our colonized minds and see the real potential for reining in corporate power. Perhaps the best way to start is to organize a group of people interested in these issues to study the history of the corporation. The Women’s International League for Peace and Freedom (WILPF) has an excellent 10-session study packet that such groups can read and discuss together.
The Community Environmental Legal Defense Fund (CELDF) helps local communities struggling against corporations for clean air or water, or against big box stores, etc., to use their local efforts to challenge the concept of corporate personhood. Many cities have passed ordinances banning corporate activity and negating the concept of corporate personhood. More ordinances and legal cases challenging this concept will make their way to appellate courts and eventually to the Supreme Court.
A very promising proposal is the Strategic Corporate Initiative that explains how we could move “toward a global citizens’ movement to bring corporations back under control.” The Initiative provides an excellent framework from which to work in a variety of areas, including some of the proposals discussed above.
On January 20, 2010 the Supreme Court handed down a landmark decision in Citizens United v. the Federal Election Commission. The ruling removes any limits on corporations’ “First amendment right” to free speech, which in the Court’s opinion is the same as the ability to spend unlimited amounts of money to propagate a corporation’s opinion. The decision opens up a floodgate for corporate money to pour into elections.
Jamie Raskin, a law professor at American University and Maryland state senator, succinctly stated the amazing potential that corporations will have to influence elections. “I looked at just one corporation, Exxon Mobil, which is the biggest corporation in America. In 2008, they posted profits of $85 billion. And so, if they decided to spend, say, a modest ten percent of their profits in one year, $8.5 billion, that would be three times more than the Obama campaign, the McCain campaign and every candidate for House and Senate in the country spent in 2008. That’s one corporation. So think about the Fortune 500. They’re threatening a fundamental change in the character of American political democracy.”
One positive consequence of this decision is a growing citizen backlash to corporate personhood. A group of organizations launched a campaign called Free Speech for People the same day as the Court’s decision; more than 1,000 joined in the first 24 hours. In the end, only such an amendment will rein in corporate power and it is good that this decision at least as awakened people to this fact. If every organization working for social change that encounters undue corporate power and influence were to spend 10 percent of their time and budgets to support campaigns like Free Speech for People, we could turn this disastrous Court decision into the clarion call for returning corporations to their proper role in society.