About This Page
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This page continues the Green Living discussion by focusing on how corporations that were originally under the control of "We The People" gained power over the years until they basically achieved their goal of establishing today's plutocracy. Their exploitation of people and resources, and their environmental destruction along the way will be outlined.
Then we address one of the more effective solutions to that - supporting green businesses.
Please note that I have created a somewhat extensive list of green living resource links, available via the Resources button above.
Introduction
The following information was taken from the booklet Citizens Over Corporations: A Brief History of Democracy in Ohio and Challenges to Organizing In The Future, published in 1999 by the Ohio Committee on Corporations, Law and Democracy.
"In 1996, twenty-five Ohioans came together at the Proctor House (former summer estate of William Proctor of Proctor and Gamble Corporation fame) south of Columbus to participate in a workshop titled 'Rethinking the Corporation, Rethinking Democracy'. These environmental, labor, peace, and justice activists were drawn to the gathering because each was struggling against, or concerned about, repeated corporate assaults upon their communities in particular, and upon democracy in general."
They realized that their efforts at repeatedly opposing corporate abuses one at a time as they occurred was not the most effective approach.
"It struck us that we had a lot to learn about, and from, corporate history. Among other things, while we were educating on single issues, researching areas of science and technology, and organizing mostly around local, state, and federal regulatory agencies, corporations were focusing on constitutional arenas. There, they lobbied for the property and civil rights of human persons.
While we were writing drafts of health, environmental, consumer, and labor laws that would curb corporate behaviors, corporations were writing state corporation codes and amending state constitutions to define giant business corporation as private - essentially beyond the authority of "We The People".
While we were considering creative ways to boycott corporate sweatshops, stop the next corporate toxic/radioactive factory/dump, persuade corporate executives to sign voluntary codes of conduct and act responsibly, and prevent factory closing or employee layoffs, corporations were getting state and federal courts to deny people basic constitutional rights.
And while we were bringing our causes to regulatory agencies (having been taught that state and federal regulators were our allies), corporations were too often using these same regulatory laws and agencies as barriers to justice."
It is hoped that by educating ourselves about how corporations were once under the control of "We The People", and how that circumstance was purposely eroded by their shrewd tactics over time, a path may be found that might allow us to turn back the clock and reclaim our rightful authority over them. But first, a quick look at some examples of why this is so important.
The Monster
"Readers will see that since revolutionary days people were well aware that property owners could use the corporate form equipped with special privileges to operate as private governments, causing sustained harms to people, places, liberty, and democracy. So we Buckeyes, like people in all states, used our constitution, corporate charters, and state corporation codes to define corporations as subordinate, and to restrain legislators from favoring property over people. But as land, railroad, banking, insurance, and other corporations began to acquire wealth, they crafted a different agenda...
As they increased their influence over local, state, and federal governments, they kept re-writing Ohio's (and all states') constitutions and corporations laws as they shaped the culture to legitimize corporate dominance. By the end of WWII, giant corporations routinely called upon our governments to deny people's rights - for example, by declaring that workers have no free speech or assembly rights on corporate property, or that regulated industrial corporate poisons are legalized industrial corporate poisons.
At the same time, people's protests and political activism were increasingly channeled into administrative and regulatory agencies such as the Federal Trade Commission, the Federal Communications Commission, the National Labor Relations Board, the Environmental Protection Agency, and scores more.
In fact, corporations helped design many of these agencies, starting with the Interstate Commerce Commission in 1887, so that the most which "We The People" can accomplish via such agencies is to get corporate property owners to cause a little less harm."
Today, it can be argued that corporations possess greater rights than human beings in many ways. They can live forever. They can continue operation even after breaking the law - and in fact, they are able to write off any fines or penalties that may be levied against them. And their officers are immune from liability and citizen oversight.
And each day they have a greater and greater say in our lives. They exert a huge amount of control over our food, our health care, our news sources, the products we buy and the economics involved...even our ideas and entertainment are filtered through corporations. They affect our education system, our employment, the laws we enact and politicians we elect. But just as importantly, they impact what little natural world we have left.
But society needs corporations you say?? That may not be a given. Some might say that "as fish think water is necessary to existence, human beings have come to think corporations are necessary to economic existence", but educating oneself on their history demonstrates that this is not the case - at least in their current form.
The excessive power of corporations can be seen from the following list of some of their well-documented abuses. Articles that exemplify, illustrate, and verify this position will be posted as I am able to do so.
Early History Of Corporations
Corporations actually had their origins under Roman law, and evolved further in Europe under the British monarchy, eventually emigrating to the Amerikas with the early settlers. However, their function was initially very limited.
"The earliest corporations were formed by the state to create universities, monasteries, and hospitals to finance mercantile ventures. Over the 18th and 19th centuries, corporations were used primarily in situations involving high capital investment and high risk. Most typically, corporations were formed for the purpose of exploring and "discovering" new lands for European powers, and vacuuming out resources"...
They were artificial creations of monarchs. Their charters defined special purposes, authority, prerogatives, and limitations. They existed for the benefit and at the pleasure of the king...
Similar chartering occurred in the American Colonies. Several American "crown colonies" were in fact corporations, which later become states. The Massachusetts Bay Company and Plymouth Company became the Commonwealth of Massachusetts. The Virginia Company and London Company later became the Commonwealth of Virginia. The Carolina Company became North and South Carolina. Georgia had been a corporation as well...
The specific job of one of the most infamous global corporations of the time, the East India Company, was very direct. Its purpose was, similar to other global corporations of that time, to "destroy culture, destroy memory of culture, destroy mechanism of commerce, industry and trade, create dependence, take over political government, and vacuum out resources".(3)
Corporations Under Control
It should be apparent from this that the early settlers here were very wary of these corporations, and sought to avoid them where possible. In fact, it may be said that the American Revolution was not simply a revolution against a tea tax, nor entirely a revolution against the King of England. It was a revolution, in part, against corporations. The colonists sought to seize the sovereignty of the English monarchy and invest it in the people, not in the federal or state governments, nor in corporations. One way of doing this was to "constitutionalize" or "democratize" these crown corporations, thereby shifting private power and decision-making to public power and public decision-making.
"The colonists knew to keep corporations on a short leash. They didn't believe that corporations were inevitable or always appropriate. And they didn't give judges, governors, congresspersons, or presidents the authority to charter corporations. The U.S. Constitution makes no mention of corporations. The colonists entrusted the essential task of corporate rule to the group of people who were at that time closest to the people - state legislators".
For example, in Ohio, early corporations were created one at a time through petitioning of the legislature, or General Assembly, and their charters typically stipulated very rigid conditions. Some of these included:
One such case was the Act to Incorporate the Stockholders of the Bank of Marietta (1808), where it was stipulated that "[T]he said corporation shall not directly or indirectly deal or trade in buying or selling any goods, wares, or merchandise or commodities whatsoever", debts were limited to three times the sum of capital stock, directors were personally liable for excessive debt, and the maximum interest on loans was set at 6%.
The Act to Incorporate the Boardman Turnpike Road Company (1809) set their profit to a maximum of 10%, beyond which the president and directors were required to buy back stock until all shares were purchased, and tolls could not be collected if the company neglected to keep the road in "perfect order and repair".
In many instances - for example, after a corporation built a turnpike, and the costs were recovered - the charter was dissolved, after which the turnpike became a public road.
An 1840 court decision (2) defined corporations as:
"A corporation is an artificial being, which exists only in legal contemplation. A mere creature of the law, it possesses only those attributes which the act creating it confers, or such as may be implied as essential to its existence."
This stance clarified the fact that corporations were to be held inferior to those who created them. As we shall see though, the seeds were germinating even then for a different viewpoint - that a corporation should be able to define itself, and thus become equal to a human being.
In the meantime, however, the citizens' goal to control corporations was not only achieved through state laws and constitutions, but also was established through the courts via the so-called quo warranto (meaning "by what authority") action.
"Penalties courts imposed for abuse or misuse of the corporate charter were often more severe than a simple plea bargain or fine. They included ousting the corporation of its claimed privileges to perform certain actions. The most severe penalty, not uncommon from the mid-1800s through the first several decades of this (20th) century, was to revoke the corporate charter and dissolve the corporation itself."
Perhaps the pinnacle of citizen control over corporations was seen with the revocation of the charter held by The Standard Oil Company, founded by John D. Rockefeller, when they "conspired to become the largest oil refinery in the largest refinery center of the world."
"Through steps to drive out competition, Standard Oil was in sole control of 90% of the refined oil business in the U.S. by 1880. With monopolies outlawed in Ohio and other states, the Standard Oil Corporation needed a new plan of organization. Thus, the Standard Oil "trust" was established in 1882. Trusts were (1) an effort to evade state laws against corporations owning stock in other corporations and (2) a restraint of trade.
By this device, stock in all of Standard Oil companies was transferred to nine trustees. The standard Oil Trust became the prototype of the trust movement which ran rampant throughout U.S. businesses in the 1880's. Creation of a trust centralized control over all of the corporations' properties. It also violated Standard Oil's corporate charter in the State of Ohio."
Trusts were eventually outlawed with the Sherman Anti-Trust Act of 1890, but as we all know it did not take long for corporations to find other loopholes and methods to skirt the law and gain enormous power and wealth.
The Rise Of Plutocracy
So what happened??
Many citizens eventually became more preoccupied with other problems. By the mid-1800s, hardly anyone was still alive who could remember first-hand the devastating impact of the "crown" corporations of pre-revolution times. Most pioneers settling the West were concerned mainly with basic survival, and much of the population was involved full-time in the struggle for actual personhood status themselves.
Naturally, corporations and their supporters steadily chipped away at their subordinate status throughout the 19th and 20th centuries. They certainly weren't going to sit back and accept this citizen sovereignty. They began bribing state legislators, claiming corruption of elected officials, and lobbying for reduced legislative powers to charter and control them. One way they found that progress toward their goal could be made more effectively was through the U.S. Supreme Court, and so they worked on swaying the judges to interpret the constitution to suit them.
"As early as 1819, the U.S. Supreme Court ruled that the U.S. Constitution prohibited the State of New Hampshire from revoking a charter granted to Dartmouth College because the charter was a contract and a contract was property that the state cannot take away from a private entity...
Ohio was the only state that originally defied the decision. In two 1853 cases Ohio courts ruled that "a corporation created by the state is not a contract"...
To the Ohio courts and the supportive citizenry and legislature behind it, to imply that charters were contracts would be to acknowledge a legal relationship among equals...(but) for Ohioans and the courts, the General Assembly and citizenry were inherently superior to corporations. Sovereign people do not negotiate or treat as an equal that which is subordinate."
Another early corporate victory was the use of the "commerce clause" of the U.S. Constitution as a defense against state control. Previously, it was considered that corporations that were formed in another state, or country, but that were doing business within a certain state, did so at the discretion of that state, and were therefore subject to the rules which that state set forth in order to obtain permission to operate within that state. But soon, corporations engaged in interstate commerce began arguing that they should not be controlled in the same ways as intra-state corporations - that controls should only be placed on them at the national level.
And so corporations finally succeeded in rewriting the laws governing their creation. They got the old specific chartering rules dumped, and replaced them with general incorporation laws that called for minimal review, permanent life-spans, limited liabilities, and decreased citizen authority. (3)
The courts declared corporate contracts and the rate of return on investment as property. Judges redefined corporate profits as property, and the common good as unrestrained corporate exploitation of people and the earth to maximize production and profit. (4)
Their penultimate victory was achieved in 1886, however, when the Supreme Court ruled in Santa Clara County v. Southern Pacific Railroad (5) that a corporation was a natural person, protected by the 14th Amendment. This was most obviously an intentional perversion of the actual intent of that amendment - which was to extend the rights of due process and equal protection under the law to freed slaves. As historian Howard Zinn has noted, between 1890 and 1910 the Supreme Court cited the 14th Amendment in only 19 race cases, as contrasted with 288 corporate cases. (6) This bad policy has carried over to the more recent Citizens United decision.
Following Santa Clara, hundreds of laws in scores of states that had passed due to the hard efforts of citizens and workers to control corporations, were struck down by the U.S. Supreme Court, unceremoniously legislating from the bench, as unconstitutional.
Once the ability to control corporations began to erode, many Progressives began to turn to the creation of agencies that could at least "regulate" them in order to make them less harmful.
"Corporations were, on the whole, willing to accept many regulatory agencies (a) because they shielded corporations from the public, (b) on condition that decisions of regulatory agencies could be appealed to courts, where corporations were confident that they could always win, especially in federal courts, and (c) it was cheaper to buy influence from a few regulators than an entire legislature. So corporations got busy and helped write new regulatory laws."
At the end of the day, the big question now is "what can we do about all this"?? Aside from reigning in the Supreme Court and overturning "corporate citizenship" and the more recent Citizens United decisions, convincing legislators to stop accepting campaign funds from corporations that tend to influence policy, putting more teeth into regulatory authority that works for We The People and not industry, and change through private causes of action - all of which are admittedly pretty tall orders that will not be achieved overnight - a few other options currently available to some of us are worker's compensation filings and shareholder's derivative actions.
Most importantly we need to remember these words of wisdom:
"We and our activist organizations do not need new laws to stop conceding power to corporations, or to challenge claims to illegitimate authority by corporate leaders and other very important people. We need no Supreme Court permission to rethink our democracy, to reformulate our strategies and tactics. We need no go-ahead from our mayors, governors, attorneys general; from talk show hosts, unions, or national organizations; from our senators or representatives or law school deans.
When enough people in enough communities change how we think, we will set in motion the culture of democracy that will begin the end of corporate rule."
One alternative, however, that is immediately available to us all is to support green businesses as much as possible instead.
To that end, I have included a Green Businesses page to help guide those who care.
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(1) Clark, Tony, Dismantling Corporate Rule: Towards a New Form of Politics in an Age of Globalization, 1995, p.4
(2) Bonham v. Taylor, 10 Ohio St. 108 (1840)
(3) Grossman, Richard and Adams, Frank; Taking Care of Business: Citizenship and the Charter of Incorporation, 1993, p15
(4) Grossman, Richard and Adams, Frank, op cit. p15
(5) Santa Clara County v. Southern Pacific Railroad Co., 118 U.S. 394 (1886)
(6) Nation, July 21, 1997
This page was last updated on February 12, 2023
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