PROGRAM ON CORPORATIONS, LAW AND DEMOCRACY
777 United Nations Plaza, Suite 3C New York, New York 10017
Tel. (212) 972-9877 - Fax (212) 972-9878 e-mail: [email protected]
Co-Directors: Richard Grossman and Ward Morehouse
Address to the Greens Gathering, Los Angeles, August 16, 1996
In Daniel Quinn's extraordinary book, Ishmael, which every Green should read, the narrator of the story answers an unusual ad: Teacher seeks pupil. Must have an earnest desire to save the world. Apply in person.
To his surprise, his teacher turns out to be a gorilla named Ishmael. Thus ensues an extended dialogue filled with insights about the human predicament and our assault on the biosphere that only a non-human could have.
In a memorable exchange, Ishmael observes of the young people who were in the vanguard of the struggles of the sixties, many of whom are active Greens today: "They made an ingenuous and disorganized effort to escape from captivity but ultimately failed, because they were unable to find the bars of the cage. If you can't discover what's keeping you in, the will to get out soon becomes confused and ineffectual."
"The world is not going to survive for very much longer as humanity's captive," continues Ishmael. Yet "I think there are many among you who would be glad to release the world from captivity."
"I agree," responds his pupil.
"What prevents them from doing this?," asks Ishmael.
"I don't know."
"This is what prevents them: They're unable to find the bars of the cage." The bars to our cage are not the harms corporations do to people and the environment, although they are very great and must be stopped. Nor are the bars to our cage the structures of power created by giant, globe-encircling corporations now larger than most nation states, although those structures must ultimately be replaced by institutions that disperse rather than concentrate wealth and power.
The bars to our cage lie in our own minds that have become colonized by the sheer dominance of huge corporations over our lives and our communities. These corporations increasingly determine not only who will do what kind of work and what we eat and wear but what we think as well. One result of the corporate domination of our culture is the TINA phenomenon: There Is No Alternative.
To make matters worse, following the homely wisdom that fish discover water last, there is strikingly little awareness of the extent to which our institutions and values are dominated by a cultural paradigm essentially defined by large corporations.
"American society is disproportionately shaped by the outlooks, interest, and aims of the business community -- especially that of big business," writes Cornel West in "The Role of Law in Progressive Politics". "The sheer power of corporate capital is extraordinary. This power makes it difficult even to imagine what a free and democratic society would look like."
The arrogance of big corporations toward those of us who dare to question their very right to exist in their present form in a democratic society is well reflected in this comment by a representative of major corporations operating in Wisconsin about Democracy Unlimited, a Madison-based initiative which is doing just that: "It is hard to take these people seriously. The large corporation has been the source for more good than anything else. Corporations allow us to live the way we do today."
It is not that there are no alternatives to a corporation-dominated society. Joan Roelofs, in a new book soon to be released, Greening Cities, describes dozens, if not hundreds, of initiatives to build more just and sustainable communities that are actually working on the ground in cities, large and small, across North America and around the world.
Another recent book inspired by the New York-based World Hunger Year, Reinvesting in America by Robin Garr, tells the story of grassroots movements that are feeding the hungry, housing the homeless, and putting Americans back to work in all the 50 states.
Even more to the point at a Green Gathering like this is Get a Life! by Wayne Roberts and Susan Brandon, two Canadian authors. The cover blurb says it all: "One hundred and one ways to tread lightly on Mother Earth, make bags of money, simplify your life, have a blast, keep fit and save your sanity while everything is crumbling all around you." But there is a harsher reality that all these good things tend to obscure: The growing concentration of power in the hands of global corporations, the 100 largest of which are bigger than most of the member states of the United Nations. The 500 largest corporations control 70 per cent of world trade. General Motors has gross income greater than the gross domestic product of Denmark.
David Korten tells the story of corporate efforts to create a global consumer culture sustained by their worldwide control of capital, technology and markets in his latest book aptly titled When Corporations Rule the World. This pattern of domination and growth by large corporations at the global level is replicated in the United States. From 1980 to 1994, the top 500 US corporations increased their assets from $1.2 trillion to $2.7 trillion -- while they also destroyed 4.4 million jobs, almost one -third of their workforce.
There is more bad news about a society increasingly dominated by large corporations. According to the annual report on The Underbelly of the U.S. Economy which I undertake with my colleague, David Dembo, the real jobless rate is more than twice what the government has been telling us. Real wages of industrial workers are lower than they were 20 years ago. Income is more unequally distributed than it was before 1950. And one out of every four Americans lives below the real poverty line, close to twice the official number.
But what is really grotesque is the explosion in compensation for CEOs and other top executives of big companies. From 41 times the average hourly worker's pay in the 1970s, CEO compensation packages have soared to a ratio of 225 to 1 today. In 1993, Michael Eisner, the CEO of the Walt Disney Corporation pulled down $209 million. That comes to some $84,000 an hour -- nice work if you can get it. This is obscene under any circumstances and especially when contrasted with conditions of life in South Central Los Angeles, not to mention dozens of other urban ghettos and seas of rural poverty around the world. Is anyone worth this kind of money?
His fellow CEO, Robert Eaton of the Chrysler Corporation, recently complained that those who criticize big corporations like Chrysler are "a bunch of demagogues" trying to "herd us down the path to class warfare." What working person would not resent a society which breeds these disparities and obscenities? We haven't had anything close to class warfare in the U.S. since the Populist Movement a hundred years ago. What are we waiting for?
We may need to launch such an action to protect the little economic and political space we now have to pursue Green economic ideas. The biggest obstacle to community supported agriculture is the giant corporations that dominate our food system -- two of the largest of which are also merchants of death hawking a lethal narcotic known as tobacco. We will need, of course, to differentiate between what my friend, Ken Reiner from Long Beach calls "healthy" and "unhealthy" corporations. Ken, a successful entrepreneur and inventor, knows better than most of us the pathological character of corporations from his own experience. Size is one critical determinant. Small companies certainly can cause damage to persons and the environment, but because they are small, are much less capable of inflicting massive harm than, say, Union Carbide which killed thousands -- we shall never know how many -- and injured more than half million innocent sleeping citizens of the Indian city of Bhopal.
Nor would we exempt from scrutiny and action not-for-profit corporations. Some of these commit grievous acts that corrode the very heart of the democratic process -- trade associations of polluting industries such as chemical manufacturers being a prime example.
It follows from what I have said so far that my idea of "greening the corporation" is not to regulate corporations better, even less to encourage them to agree to voluntary codes of good practices like the CERES Principles or The Natural Step. However well intentioned such efforts may be, they are at best diversions from our real task. That task is the only one consistent with the principle of self-rule on which this country was founded and the only one appropriate for a sovereign people in a democratic society: We must define the corporation, instructing it in what it can and cannot do for the common good.
The reality is that regulation of big corporations does not work -- certainly not when push comes to shove and the issue really matters to the corporation. If you doubt this assertion read the chapters entitled "Hollow Laws" and "The Fixers" from Bill Greider's book, Who Will Tell the People: The Betrayal of American Democracy. It is the most important critique of U.S. society since Gunnar Myrdal's study of race relations, An American Dilemma more than half a century ago.
I will add a chapter from my own experience. A couple of years ago, Formosa Plastics Corporation -- a rogue multinational from Taiwan -- started illegally discharging toxic waste water into an ecologically sensitive fishing ground off the Texas Gulf Coast without a valid permit, and a local environmental group which was fighting to save the livelihoods of fishing communities along the coast informed the EPA Regional Office in Dallas of this illegal act.
The grassroots group asked us to intervene, so I wrote a strong letter to the EPA Regional Administrator, accusing him of becoming an accomplice after the fact by refusing to take action to stop an environmental crime of which he had knowledge.
For my troubles, I received an indignant response, agreeing that illegally dumping was occurring and that EPA knew about it but arguing that enforcement action is purely discretionary!
It is for good reason that cynics call EPA the Environmental Pollution Agency. It licenses pollution by corporations when it should be stopping it.
But it did not use to be this way. My colleague and the Co-Director of the Program on Corporations, Law and Democracy, Richard Grossman has unearthed a hidden history of the exercise of citizen control over corporations by the several states in the early decades of our national independence.. This hidden history, which continues to unfold through the efforts of Richard, Jane Anne Morris, Peter Kellman, and others active in POCLAD, found initial expression in a seminal pamphlet by Richard and Frank Adams, Taking Care of Business: Citizenship and the Charter of Incorporation. It is this pamphlet which launched the still emerging movement to create, as Peter Kellman puts it, "a debate in the body politic which questions the authority and legitimacy of corporations to rule our society." A debate in this context is understood to involve not only dialectical discourse but actions that will sharpen and deepen public understanding and help us surmount the colonizing impact of a corporation-dominated culture.
"What if...," asks Jane Anne Morris of Democracy Unlimited in Wisconsin, who may be the only corporate anthropologist at large in North America:
"*corporations were required to have a clear purpose, to be fulfilled but not exceeded.
**corporations' licenses to do business were revocable by the state legislature if they exceeded or did not fulfill their chartered purpose(s).
**the act of incorporation did not relieve corporate management or stockholders/owners of responsibility or liability for corporate acts.
**as a matter of course, corporation officers, directors, or agents could be held criminally liable for violating the law.
**corporation charters were granted for a specific period of time, like 20 or 30 years (instead of being granted "in perpetuity" as is now the practice.)
**corporations were prohibited from owning stock in other corporations in order to prevent them from extending their power inappropriately.
**corporations' real estate holdings were limited to what was necessary to carry out their specific purpose(s).
**corporations were prohibited from making any political contributions, direct or indirect." (Rachel's Environment and Health Weekly, #488, April 4, 1996)
All of these provisions and more were once law in the State of Wisconsin. And similar provisions existed at different times in most other states, including New York and California. As in virtually all of the 50 states, New York still has the power to revoke charters of especially harmful corporations. Section 1101 of the New York Business Corporation Law stipulates that corporations are subject to dissolution when they act "contrary to the public policy of the state." When we urged, in a full-page ad last December in the New York Times headlined "Should Corporations Get Away with Murder?", the New York State Attorney General to take action against Union Carbide for its murderous acts in Bhopal under Section 1101, he did nothing.
Think of how different the political climate and public understanding of the proper role of corporations must have been a century ago when New York's highest court declared, in revoking the charter of the North River Sugar Refining Company, a major corporation at the time, "the life of a corporation is, indeed, less than that of the humblest citizen."
What has happened in the last century has been the increasing consolidation of the grip of corporations on political and economic power and their growing insulation from meaningful democratic control. A key turning point was actually four years before the North River Sugar Refining Company case, when the U.S Supreme Court declared corporations to be persons before the law under the Fourteenth Amendment in the infamous decision of Santa Clara County v. Southern Pacific Railroad. This decision became the fulcrum used by corporations to expand their Constitutional rights to other amendments to the U.S. Constitution, especially the First Amendment and has led us to the absurd situation in which corporations have more rights than natural persons.
How ironic that corporations should have attained legal personhood before persons of color, women and indigenous people did -- even though the express purpose the Fourteenth Amendment was to assure equal protection of the laws to freed slaves in the South. Lest we romanticize the early years of our national independence, let us remember that the U.S. Constitution originally granted full political rights only to white males who owned property.
As Ishmael's pupil asks when Ishmael has informed him that those who want to save the world from destruction by humanity are unable to do so because they cannot find the bars to their cages: "What do we do next?" While the agenda for action in arenas we the people define is long, complicated and still unfolding, a good place to begin is to take away corporate personhood. That means working toward the reversal of Santa Clara, and for those who say it cannot be done, I would remind them that for half a century "separate but equal" was established judicial doctrine. Then in 1954, after Brown v. Board of Education, it no longer was. But, of course, it did not just happen out of the blue. Thurgood Marshall and his colleagues worked for many years to create a situation where reversal was possible politically as well as judicially -- a story richly told in a blockbuster of a book, Simple Justice.
I come most immediately from the Green war zone in the State of Maine where there is an initiative on the ballot in November to ban clearcutting. This initiative has aroused the wrath and fury of the paper companies which have long dominated the political and economic life of the state, and they have pulled out all stops to defeat the referendum, outspending the proponents many times over and dispensing campaign contributions freely to relevant officials in state government. If ever there was a case to be made for overturning Santa Clara, it is the total perversion of the democratic process by the major paper and wood products companies over the ban clearcutting initiative in Maine.
Besides, overturning Santa Clara will spare the American Civil Liberties Union from another absurdity -- defending tobacco companies when their First Amendment rights of so-called commercial free speech are being attacked because these corporations are trying to turn as many young people as they can reach into life-long nicotine addicts.
All societies entertain myths about themselves and ours is no exception. Our political democracy is indeed mythical; we live instead in a plutocracy in which the rich with wealth accumulated more often than not through corporate mechanisms are effectively dominating, if not controlling, the electoral process. Reversing Santa Clara will not restore our democracy overnight, but getting corporations of all kinds -- large and small, profit and non-profit -- out of politics will go a long way toward doing so.
But our goal must be clear. It is not to nibble around the edges at the corrupting influence of corporate money, to make corporate lobbyists more apparent by requiring them to register, to restrict the size of the tab for power lunches that corporations can pick up or to put a ceiling on their contributions to candidates but not to political parties. It is not incremental campaign finance "reform" as practiced in Congress. The only logical goal in a truly democratic society is to get corporations out of the political process altogether.
The struggle against corporate power and for our democratic rights that have been usurped by corporations is not about left or right, as Carolyn Chute, the Maine novelist and another ally in this struggle, likes to say, but about up and down. Right now, the corporations are on top, but in a democracy based on the principle of self-rule, the people should be. Ultimately it comes down to a simple question: Who is in charge?
Bill Greider ends his book with a plea for what he calls democratic conversations "Rehabilitating democracy," he writes, "will require citizens to devote themselves first to challenging the status quo, disrupting the existing contours of power and opening the way for renewal .... This renewal, if it occurs, will not come from books. A democratic insurgency does not begin with ideas .... It originates among the ordinary people who find the will to engage themselves with their surrounding reality and to question the conflict between what they are told and what they see and experience."
"My modest ambition for this book," he concludes, "is that it will assist some citizens to enter into 'democratic conversations' with one another, asking the questions that may lead them to action.". I also have a modest ambition for this session of the Greens Gathering, and it is that we come together to start a democratic insurgency against corporate power as a first critical step in launching a debate in the body politic over ending corporate rule of our society, and ultimately, the world.
Many, perhaps most, of you came to Los Angeles to make history next week by participating in the first ever national Green presidential nominating convention. But why wait until next week. Let us start now our own chapter in the historic process of democratic renewal going on in Los Angeles.
And if any of you think the quest to end corporate rule in America and the world is too quixotic to be taken seriously, I ask you to ponder these words of Howard Zinn who reminds us that the big lessons of 20th Century history tell us otherwise:
... the struggle for justice should never be abandoned because of the apparent overwhelming power of those who have the guns and the money and who seem invincible in their determination to hold on to it. That apparent power has, again and again, proved vulnerable to human qualities less measurable than bombs and dollars: Moral fervor, ingenuity, courage, patience -- whether by Blacks in Alabama and South Africa, peasants in El Salvador, Nicaragua and Vietnam, or workers and intellectuals in Poland, Hungary, and the Soviet Union itself. No cold calculation of the balance of power need deter people who are persuaded that their cause is just.