University of Colorado, Boulder, Colorado, February 13, 1997
Richard Grossman is co-director of the Program on Corporations, Law and Democracy. He is co-author of Taking Care of Business: Citizenship and the Charter of Incorporation. He was the director of Environmentalists for Full Employment.
The giant global corporations that we have today are not particularly anything new.
Starting in the mid-sixteenth century, we had the rise of the global corporations of that era. In England alone, these charter corporations chartered by the Crown, the subordinate, artificial entities created by the Crown, in 1553 the Russia Company, 1553 the Africa Company, chartered to make huge profits in the slave trade, 1577 the Spanish Company to open up trade with Spain and Portugal, 1578 the Eastland Corporation to open up Scandinavia, 1582 the Levant Company to open up Turkey, 1588-89 the precursor to the East India Company was created: the Governor's Company and Merchants Trading with the East Indies Company, 1592 the Venice Company, 1600 the East India Company was formally created. In 1605 King James I gave it a charter in perpetuity.
What were these entities? What was their nature? First of all they were chartered monopolies, chartered by a monarch who law and culture regarded as sovereign. He was the sovereign. As sovereign, what was his main job? To define people and things, either as property, as subjects or as non-existent. He had all power. He created these companies to help him raise money, to help expand the length and breadth of his control. They got monopoly gifts to trade routes in terms of the nature of the products.
They got the power to make laws. They had the power to impose fines and punish people. They had the power to imprison people, to draft people into the army, to tell people what to grow, what to make. They were literally, as Thomas Hobbes called them, "chips off the old block of sovereignty." They were a chip of sovereignty, and the sovereignty came from the king.
It's no great mystery what they were about. The directors of the East India Company in 1687 sent a message to their people in India to establish a polity of civil and military power. They were governing bodies. I think that's a very important principle. The nature of these corporations from the beginning was that they were governing bodies. Their job was to limit competition, to have exclusive monopoly privilege, to buy cheap, to sell dear, and control the settling of disputes. They were acting as sovereigns, and they were going to govern.
The subcontinent of India was quite a sophisticated place. The job of the East India Company was to destroy the culture and destroy the memory of the culture, to destroy the mechanisms of commerce, industry and trade, to create dependence, to take over the political government, and then to vacuum out the resources. Over the course of the next 250 years that's what they did. So you had an India of when the East India Company came that was an exporter of both food and cotton clothing. Two hundred years later they were importers of both.
One of the problems with these companies, this delicate relationship between the sovereign and the companies was that the sovereign wanted these companies to succeed. He gave them a chip of his sovereign power so that they could throw people in jail and raise armies and bring back great wealth. But he didn't want them to get too powerful, because then they could turn on him. How did he keep them in their place? First of all, a king or queen is taught from a very early age how to act like a sovereign.
There's no baloney about that. They're not taught to act like consumers, like workers, like stakeholders, but like the sovereigns that they are. So when a king historically, going back to five hundred years before that, in England felt that a magistrate he had appointed was doing things that were inappropriate, there was a mechanism for that. It's called a quo warranto proceeding, Latin for, By what authority? He would summon the magistrate and not get into a whole bunch of details of all the little things the magistrate has been doing, but essentially ask the question, By what authority have you, you subordinate entity that I, the sovereign, appointed, been doing all this stuff? If the king judged that in fact the magistrate had been exceeding his authority, he was removed.
The same with a corporation. In fact, the king revoked the charters of a number of these corporations. The king would summon the corporation and ask, About how many parts per million of this toxic were you throwing out over the course of this year? Not, How many legislators did you bribe last week? Not, How did you manipulate the defining of issues in the popular culture? But he looked at the totality of actions that the corporation had been engaged in and said, This is adding up to an assault upon my sovereignty. By what authority are you, you subordinate entity, assaulting the authority of the sovereign?
If it was adjudged that the corporation was assaulting the authority of the sovereign, then he dissolved the corporation, revoked the charter. The assets were distributed among the shareholders, and that was it.
In the so-called New World, the Crown corporations were the principle mechanism of colonization and settlement and destruction of the New World.
The Commonwealth of Massachusetts was originally several companies, the Plymouth Company and the Massachusetts Bay Company. Virginia had the London Company and then the Virginia Company. In the Carolinas, you had the Carolina Company, whose charters were written by none other than John Locke, who was experienced at writing ships' charters and moved from there to writing the charters for these Crown corporations. Same difference. They were hierarchical, dictatorial corporations chartered by the king, by the sovereign, just like the East India Company, the Hudson's Bay Company and others in this country as well.
Those were chartered in the seventeenth century. We had a couple of hundred years between that and the American Revolution. It took a couple hundred years for the colonists to figure out what was going on. There were people at the time who said, Let's negotiate with the king. Let's get the king to act in a more socially responsible way. Let's get the Parliament to be more accountable. Maybe we can get them to sign a voluntary code of conduct and promise to be a little less bad, a little less harsh, to give us a few rights. Then up popped Tom Paine.
Go back and read Common Sense. It's a very singly-focused, beautifully written piece that sets out to destroy the concept of the English monarchy, to pull the rug out from under its legitimacy. Talk about a bunch of ruffians that came over from France, fought their way into power, created themselves, created the whole story, made themselves king and sovereign. They didn't come from God or from Mother Nature. Eventually there was a revolution.
I think it's very important to point out what the Revolution was and was not. I think it was a couple of very important things. First, by force of arms it took this sovereignty from the king and vested it in the people.
Not in the states, not in the federal government, but in the people. Very important. I was just in Canada. They didn't have a revolution, so the Crown is still sovereign in Canada. They have a different twist on their story.
And they transformed these private corporations into constitutionalized states. The Virginia Corporation became the Commonwealth of Virginia, with a constitution, a tripartite form of government, elections, terms of office, due process, a judicial system, where people, if they were people, had certain legal standing. All power had to be answerable. All power came from the people. Go back and look at all the early state constitutions, the very first line is that all power is vested in the people. It's still probably a relic in some of our constitutions. That was very clear. They transformed these private corporations into public constitutionalized entities.
Second, they sent packing the concept of monarchy. They said, We're not going to negotiate with the monarch. We're going to govern ourselves, a new concept that took hundreds of years to evolve. We're going to govern ourselves. We're going to be accountable to one another. We're going to define ourselves. Instead of having the king or some absentee, faraway monarch define us, we the people are going to define ourselves, our relationships with one another, our relationships with investment, with work, with the natural world.
But there was a fatal problem, a fundamental structural defect. That was that a
minority of people at the time in these colonies were strong enough and organized enough to
define the majority of humans as non-persons or as property. So that most of the human
beings in the thirteen colonies at the time of the Revolution So it was not a democracy except for a minority of people. The seeds were sown so that
when the institutional creations of the people started to try to rise up, they had
naturally a division of the rest of the people. You didn't have a unified body of humans
that were the sovereign people. You had whole classes of people who had to spend the next
several hundred years becoming persons, getting there, struggling, organizing for their
civil and political rights, not just under law but throughout the culture, just as today
gays and lesbians, immigrants, people still don't have all their rights, still are not
defining themselves both in law and in culture. So along with that there are three themes that go through our history that are very
important to follow that are also threads that weave in and out. One is the whole question
of, Who is a person? What's personhood? Who defines whom? Throughout our history that's
been a very important issue. The second is, What's public and what's private, both in terms
of tangible things like property and in terms of decision-making? One of the things that
happens when you transform a private corporation into a constitutionalized state is that
you're taking what had been in the realm of private decision-making and making it public
decision-making. That's one of the great achievements of this country, to say, We're going
to take what had been the private decisions of a monarch or his direct appointees and make
this public decision-making and then create the mechanisms to do that. It's the same with
property. There's always been a struggle. What's the commons and what's private? We see
that today with what had been the commons being privatized by corporations. The third was, What is violence, or maybe more carefully put, When is violence legal?
When can the state or other entities use violence and it's okay? For example, given the
right conditions, when there's a strike, it's okay to call out the militia and use violence
against striking workers. It's okay to bomb another country. These are cases of legalized
violence. Whereas when a corporation pours out what's known as a toxic chemical in the
millions of pounds, killing people, that's not considered violence. So that's a
definitional question. Who decides these definitional questions? If the process is public,
then the public is deciding the definitional questions of what's legal violence and what's
illegal violence, just like it's deciding who's a person and who's not a person, or whether
a tree has standing. Those are all definitional questions, relational questions, and if
they're public, it's a very different process than it they're private. If the decisions are
made just in a corporate boardroom, those are private. If they are made in elections and
public lawmaking by people elected by us, then it's public. Despite the fundamental structural problems with sovereignty, one of the things that
the people who were in charge in those early generations, up to the Civil War, were very
clear about was the role and nature of corporations. They had had ample experience with
these corporations, firsthand, and also had heard about them. They knew that the nature was
to control, to get political power, to limit competition, to rise up against their creator
and recreate the conditions of their own existence. So for the first several generations
after the Constitution was ratified, both the law and the culture reflected processes,
procedures and mechanisms to define the corporation in very precise and narrow ways, to
limit their ability to rise up. Go back and look at the early charters given by the states.
They're very, very precise. You can have a charter. People come to the legislature and ask
for a charter to build a road, to build a canal, to make a certain product. After
deliberation the charter is given. These requests come one at a time. The charter is given
for that particular task. You want a charter to build a highway? You get a charter to build
a highway, not for any lawful purpose, like today. You can have the charters for ten or
fifteen years. The number of years is specified. The maximum amount of capital is
specified. The amount of property you can hold, and it only has to be related to the task,
is specified. A corporation couldn't own another corporation. The relationship between the shareholders
and the directors was outlined with special preference for protecting the rights of
minority directors. All the directors and managers were liable for all harms and debts. It
wasn't a shield against liability. Go back and look at the charters in all the states that
were states then and the states that came into the Union and then in the general
incorporation laws that started to come in before the Civil War in some states. The same
kinds of limitations. The charters and the corporation codes were use to define the
corporation in very, very specific terms. And the states reserved the right to amend or
revoke the charter, and to revoke not even for cause, to revoke simply because on principle
the corporation was a subordinate entity and we were the sovereign people. You don't need a
reason if you're the sovereign people to revoke the charter of a corporation. One of the
mechanisms that they used, surprise, was the quo warranto, going back into English common
law, the tool of the sovereign. To summon the corporation and say, By what authority have
you done this? We didn't give you authority to do that. Where did you get the authority to
do this and that? and then to revoke the charter if it was adjudged that in fact the
corporation had exceeded its authority. It's the relationship that's essential here, and
the nature of the corporation being a subordinate entity, and the nature of the people
being the sovereign people. That's what's important here. As I thought about this over the last year, I have begun to see that the revocation of
a corporate charter is not like a punishment. It has very little to do with the corporation
itself. If I can use an analogy, if somebody has cancer and the surgeon comes in and cuts
the cancer out, it's not to punish the cancer. It's to protect the body. Same thing. The
corporation becomes a cancer on the body politic, an assault upon our ability to govern
ourselves, upon our ability to function democratically. It's concentration of private
power. Then it begins to use this private power, just like all the Crown corporations of
the seventeenth and eighteenth century did, not just to do commerce, but to affect
politics, to shape the society, to define people, to wield the powers of sovereignty, to
become a governing force. In the theory of the United States, a corporation cannot exercise
the authority and power of governance. It's not a sovereign entity. It's a creation of the
state. So we the people, being socially responsible to each other, being accountable to the
generations who struggled before us and to our posterity and to the earth, if we're going
to be accountable, it's our job to prevent unconstitutionalized private power from rising
up within us and overcoming us and affecting our ability to govern ourselves, to be the
sovereign people, to act like sovereign people. So it's our responsibility to one another
that's the really important thing here. With the Civil War and the coming of the Industrial Revolution, you had a whole new
slew of powerful corporations rising up, despite these efforts: railroad corporations, land
corporations, insurance, grain, manufacturing corporations, mostly enriched by government
spending during the war, as wars do. The people running them began to realize that this
whole mechanism, this whole system of chartering and pro warranto and the relationship
between the sovereign people and the subordinate entity of the corporation wasn't any good
for what they wanted to do. So starting in the late 1860s and early 1870s they set out to
transform the law and the culture. Over the course of the next forty years, they did. What
they did was, using mostly the federal courts, mostly the Supreme Court being the
mechanism, they got themselves declared legal persons in 1886. They got the rights of
persons and slowly started to expand the civil rights of persons. In 1886, remember, that's
prior to African Americans de facto having the rights of person, prior to women, who didn't
get the right to vote until 1920, prior to Native people. So corporations became persons
before the majority of natural human beings. Second, they had to transform the property rights, this whole question of what's a
public and what's a private decision. Using the Fourteenth Amendment, some people call it
an irony, but it's worse than an irony, the Fourteenth Amendment was passed after the Civil
War to protect the rights of freed slaves. No state shall take the property of any person
without due process of law. It required equal protection of the law. What the corporations
set out to do was to get the protections of due process and equal protection applied to
them. The courts started to agree with that and started to apply that protection. The due
process clause was in there and in the Fifth Amendment to protect natural people from
tyrannical power, from our own government. It was turned on its head so that the due
process and equal protection clauses were used to protect the corporation, the subordinate
entity, from the sovereign people. As corporations started to get bigger and more powerful,
people in the states started to organize and enact laws to further define the corporation,
to limit the ability of state legislatures to charter certain kinds of corporations, to
give the sovereign power away. An example of the law, and I don't think you'll find it so
radical, is in Pennsylvania, where the municipalities in the state passed laws to say that
when the coal miner comes up with his coal, it had to be weighed by an impartial body, not
by the company. The miner had to be paid in currency, not in company scrip. Not the two
most radical concepts in the world. But the Supreme Court declared those unconstitutional
as a taking of the corporate property without due process. Between 1880 and 1920 you saw hundreds of state laws declared unconstitutional because
they were invasions of the property rights of corporations. So you had the creation of
something that today we call the market. Most stuff having to do with investment,
production, organization of work and commerce over the course of these forty years was
declared beyond the authority of the sovereign people. It was a whole new category. This is
the market. This is commerce. This is investment. When the courts got done with it, we the
people had no authority in this world. You see that today, for example, employees on
company property don't have First Amendment rights, don't have free speech or free
assembly. The corporation has free speech and free assembly. The corporation has First
Amendment rights. But workers on company property don't. We all take for granted that somehow we have no authority even though we're the
sovereign people, if we all stopped to think about what it means to be the sovereign
people over the investment that a corporation makes, over the nature of the production,
what product it decides to make, what technologies it uses. These are all managerial
prerogative, doctrines concocted by the courts. This is not a law passed, the doctrine of
managerial prerogative. It's a legal doctrine. It's from the courts. The same with
obligation of a director, to maximize profits. That's also a decision from the Supreme
Court. The Supreme Court played an enormous role in giving these privileges and rights to
corporations, essentially over the most important decisions that shape our communities. In
an industrial economy, an industrial society, it's the investment, production and work
decisions that shape our communities, that shape our lives. What do we do most of our life?
We work. Somebody else is determining what work we do. Who is it? The corporations.
Somebody else is determining where this huge investment money is going. A lot of it is our
money. Take, for example, the utility corporations. Rate payer money they're investing.
It's our money. We've got to fight like crazy just to get in the same room to throw in our
two cents about whether it should go into nuclear power or solar or whatever. They act as
if it's their money. It's our money. So this whole business of the market has been declared
ultra veris, the sovereign people. We started off with a subordinate entity called the corporation, and over the course of
fifty years it's telling us we've got no authority over the decisions that count the most,
that define our communities, our culture, that shape how we think. They also define the
values and principles and this whole question of economic growth, that we're going to have
freedom and liberty through abundance and achieve that through a constantly expanding
economy. This means we've got to keep growing. A corporation growing 12% per year, which is
low these days, every eight years they're going to double. Corporations, one of the things
they also changed is that instead of getting their charters for ten or twenty or thirty
years, for a fixed period of time, just as James I did for the East India Company in 1605,
the state of New Jersey started a trend in 1898 to charter corporations in perpetuity,
forever. So there's another privilege they have. We're the sovereign people, but we die.
Corporations are an artificial entity, but they live forever. They also got charters for
any lawful purpose. Look at a charter now. The company is chartered for any lawful purpose.
No limits on what it can do. So it initially goes into business making widgets, but four
years later it's running hospitals, or running a university. You can see this distinction historically in the difference between the populists and
the progressives. The populists, people who rose up starting with the grange movement and
the greenbackers in the 1870, 1880s and early 1890s, they understood that a corporate
counterrevolution was going on. The farmers and workers, intellectuals at that time,
organized to stop it. Go back and look at the platforms of their political parties, at
their educational material. They were not talking about regulating corporations around the
margins or curbing their excesses. They were saying, This is inappropriate for a free
people, a self-governing people. We cannot have the corporations having so much power and
defining our lives. They were talking about ownership and control, about defining the
corporations. They didn't win, the populists. What was the next so-called era that historians have named for us? The progressive era,
one of the most misnamed eras in our history, the first two decades of the twentieth
century. What the progressives did is that they conceded that the corporation would be the
dominant institution of our era, that it was inevitable, irreversible. It would be the
institution to define growth and progress and our values. The best we could do was regulate
it around the margins, curb its excesses, try to perfect the market. They no longer said
that they could challenge the nature of corporations. They said, We're going to rely upon
shaping its behavior. The populists were very clear. They knew what their nature was, and
they were going to define it or not let it exist at all. So this distinction between
defining and regulating the corporation is very important. A sovereign people define the
robots it creates. Consumers try to regulate it. I think by 1905, the end of the first
great merger movement, we ended up with the U.S. Steel Corporation being created out of a
hundred or so other corporations, and these other great conglomerates. By the time 1905
came around, corporations had transformed the law, had transformed bedrock legal doctrines.
They had become the sovereign people and had made us consumers. Then we're into the rest of the twentieth century. Most of the citizen organizing and
action of this century has been in that regulatory realm, about trying to affect the
behavior of corporations. It has conceded to the corporations enormous privilege and power
and right under law, as if it had come from God or from Mother Nature. We have spent
enormous energy and effort in regulatory agencies trying to shape one behavior at a time,
usually after the fact, after the harm has been done, and over and over and over again
denying to ourselves that a pattern of destruction, of assault upon our sovereign nature,
upon our elections, upon our lawmaking, upon our education systems, upon our culture, upon
our values is just an aberration, we can fix the behavior, and not coming to the conclusion
that there's something about the nature of this entity that we have to come to grips with,
as the founders came to grips with in their flawed way. They tried to put a stake through
the heart of the corporation at the time of the Revolution, but because in a sense the
stakeholders were such a minority, because they had defined most of the people not as
people, it's logical and natural that the robot corporation came back and redefined itself
and in the process redefined us as consumers or workers or taxpayers or whatever demeaning
concept, while they're the sovereign. I don't have time to go through the rest of the history of the twentieth century, but
essentially it's been more of the same. The courts have given corporations more and more
authority under the Bill of Rights. Fourth Amendment protections. Protections against
unreasonable search and seizure, and other Bill of Rights protections. And more and more
free speech, creating the negative free speech doctrine, commercial free speech doctrine.
So now, when a community or state tries to limit the ability of corporations to make
campaign contributions, the ACLU gets up and defends their right to free speech. The
corporations can sit back and let the ACLU do it. And you have this initiative that passed
in Maine by 57% of the vote, this campaign reform initiative, which does not even address
the distinction between a natural person and a corporation, doesn't begin to address the
Supreme Court doctrine that money is a form of speech, which is what it is, which means
that property is a form of speech. That measure won. It doesn't address the fundamental
question, and now there are people in organizations and philanthropic groups that are
taking that as a model for all the people in every state to go on, to put on their ballot.
You go and fight and win that, and what do you win? Nothing. It doesn't raise the question
of the difference between a person and a corporation. It doesn't challenge the concept that
property has human rights, which is what the Supreme Court did over the period of forty
years when it took the Fourteenth Amendment, enacted to protect the rights of freed slaves,
and applied it to protect property, essentially investing property with human rights, the
rights of natural persons. Now we have corporations again rampant around the globe. People are rising up and
organizing to resist all around the globe. We have the GATT and the WTO. What GATT and the
WTO are doing is in most of the other countries in the world recapitulating what they did
in this country a hundred years ago. It was a hundred years ago in this country that
corporations took legal rights away from us and gave them to themselves, under law,
protected by the Constitution. Now they're trying to use the World Trade Organization and
the GATT to say that the people of India have no authority to define the rules of industry,
commerce or investment in their country. GATT makes it all the same. Free trade. But what
free trade is really about is that the corporations make the rules, and that the people of
Malaysia, India have no authority. That commerce is ultra veris the people of India, that
investment is ultra veris the people of Malaysia. They're just people. These are
corporations. They have the right to define the rules, the culture, the principles, to say
it's growth that's going to be it. They're going to define efficiency, productivity. That's
what's happening. But in this country we have a separate problem. We lost it a hundred years ago. So how
do we begin to think of ourselves, to relearn or learn for the first time what it means to
act like sovereign people? How do we begin to find different political arenas that are
really about authority, that don't concede to the corporation enormous rights and powers
under the law? That don't concede that the corporation will be the dominant institution of
our era, of our culture, will define our culture, work, efficiency, productivity, our
educational system, make the decisions about what kind of energy we'll have, how we'll use
resources, make relational decisions about what's public and what's private? That's why
it's so incredibly logical that coming down the pike is the corporatization of Social
Security. They want to take the Social Security trust fund, people's retirements, and
invest it in the stock market, so they'll get a higher rate of return and live happily ever
after. There's are two privatizations, corporatizations going on there. One is of money.
That's bad enough, our money. But the second thing, just as bad, is the decision-making.
Social Security is a public entity, a public process, a process of the sovereign people.
It's ours. It's constitutionalized. We have standing. If you take that and put it into the
stock market and invest it in corporations, then it will be true that what's good for
General Motors is the only choice we have for the rest of us. The whole energy of the
country will be to maximize returns for these corporations. Everything will be on its way
to being corporatized, both tangible property and the intangible decision-making. It's sometimes said that fish discover water last. I think that applies to us. We've
been colonized. We're a colonized people. We've lived in a corporate culture for the last
hundred years. We're surrounded by the icons and images and propaganda and how many
hundreds of billions of dollars of constant advertising. It's affected our ability to
think. We censor ourselves, our goals, all the time. We censor our tactics and strategies.
We don't demand what we know we want or need. What we're suggesting is that as we begin to
think about and redefine ourselves, not as consumers but as the sovereign people, then we
can begin to define corporations and all the subordinate entities that we create. That's
what we need to start doing. So we've made the decision, the people we're working with.
We're not going to be playing in the regulatory administrative law arenas any more, except
to disrupt or challenge the legitimacy of those arenas. We need to move to arenas that are
about authority. A couple of those arenas might be trying to use the quo warranto. It's
still on the books in most states. We're involved in a case in Pennsylvania where we're
attempting that with the Waste Management Corporation. We're also looking at the state
corporation codes. You need to look at your history and what exists here in Colorado and
what your current corporation codes say. For example, we're working with people in Maine, a
paper company state. Seven paper companies own literally two-thirds of the land of Maine
and control the politics of the society. People are looking at the possibility of an
initiative that says, No corporation shall do business in the state of Maine if it produces
dioxin or employs scab labor. We're not going to amend the environmental code or the health
code. We're not going to amend the labor code, but the corporation code. That's the arena
of the sovereign people. And the corporate lawyers will understand immediately what it is
that we're doing. There happens to be an amendment to the state constitution from the first
decade of the century that says, No matter how chartered, corporations in Maine shall
forever be answerable to the people of Maine. It either means that, or it doesn't mean
that. You can go back to constitutional amendments that people organized to put into their
state constitutions in the 1870s and 1880s that say the same kind of thing that have since
be removed. Generations ago, people understood that if they want it to stick they've got to
go into the arenas of sovereignty, the constitutional arena, and deal with the nature of
the corporation, not its behavior. They've got to define the nature, or else the
corporation is going to define us. I want to give you some enthusiasm or some hope. I want to read you some excerpts from
a couple of court decisions from the late nineteenth century, some revocations of the
charters of major corporations for assault upon the sovereign people. I want you to think
about what it must have meant in the culture for the Supreme Courts of New York, Nebraska,
Georgia, other states, to come up with language like this revoking the charters of
corporations. How much it must have been invested in the culture that the law reflected
this. This in Georgia, a railroad company case. "All experience has shown that large
accumulations of property in hands likely to keep it intact for a long period of time are
dangerous to the public weal. Having perpetual succession, any corporation has peculiar
faculties 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, their are able to add field to field and power to
power until they become entirely too strong for the society, which is made up of those
whose plans are limited by a single life." Here's a Nebraska case. "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 interests of the public and that of the people, for the personal gain and
aggrandizement of a few individuals." New York, 1890, the North River Sugar Company case. "The life of a corporation is less
than that of the humblest citizen." This is the highest court of the state of New York, the
court of appeals. "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, the people may summon the offender to answer for the abuse of its franchise and the
violation of its corporate duty. The state permits in many ways an aggregation of capital,
but mindful of the possible dangers to the people over balancing the benefits, the state
keeps upon it a restraining hand, and maintains over it prudent supervision. And so we have
reached our conclusion and it appears to us to have been established that the defendant
corporation has violated its charter, and failed in the performance of its corporate duties
and that in respects so material and so important as to justify a decision of dissolution.
Unanimous." There are dozens and dozens of such cases. We could even come into our own century, in
recent days. In 1976, three justices dissenting in the first case (Buckley v. Valeo) that
started to expand the free speech rights of corporations, Justices White, Brennan and
Marshall: "It has long been recognized that the special status of corporations has placed
them in a position to control vast amounts 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." Even Chief Justice
Rehnquist, dissenting in the same case, saying, "The blessing of potential perpetual life
and limited liability so beneficial in the economic sphere pose special dangers in the
political sphere, special dangers to our sovereignty, to our ability to govern ourselves." It's not immediately self-evident what it is everybody can be doing. But we need to
begin to think of ourselves as a sovereign people. We need to learn something about the
nature and history of the corporations, how previous generations understood what they were,
how corporations took the power and the rights under law from us, how what we are seeing
now, whether it's the destruction of the forests or massive pollution or electing our
public officials or writing our laws, these are symptoms, manifestations of the power that
the corporations took a long time ago. History has been rewritten that we live in a
corporate culture. We're the fish. We don't necessarily understand what's going on. I'll take a couple of lines from Lawrence Goodwyn, who wrote a wonderful book on the
history of the populist movement (The Democratic Promise). Talking about the great
achievement of the populists, these populist farmers and workers, were intimidating people,
creating for themselves the psychological space to dare to aspire grandly and dare to be
autonomous in the presence of powerful new institutions of economic concentration and
cultural regimentation to work together to be free individually. It was a crucial
democratic insight in which they tried to surmount rigid cultural inheritances and to act
with autonomy and self-confidence. They were individual people who needed the psychological
support of other people to see themselves experimenting in democratic forums. Not
experimenting in how to be better consumers, but how to aspire to the kind of democracy
that in our hearts we know we want. I'm going to close with two examples. In 1664, the king who had chartered the
Massachusetts Bay Company sent some commissioners to investigate whether the governors of
this corporation were staying within their authority. The governors of the corporation
objected, saying it was an infringement upon their rights. The commissioners, speaking for
the king, said, "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." Two
hundred and thirty years later, your President and mine sent a letter to the mayor of
Toledo, Ohio, on January 10, 1997. The Chrysler Corporation had announced it's closing its
Jeep manufacturing plant in Toledo, a fifty or sixty-year-old factory. The mayor had
written to the President to ask for help in getting Chrysler Corporation to invest its new
plant within the boundaries of Toledo, to get the jobs and taxes. The President wrote back,
"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." The leader of the most powerful country
in the world, the leader of the sovereign people fabled in story and song, says, We all
stand out there with our hat in hand waiting for the Board of Directors of the Chrysler
Corporation to make their decision. I'll close by suggesting to you that sovereign people do not wait outside the
boardrooms of corporations like the subordinate entities of the robots that we created. We
don't negotiate with subordinate entities. Corporations cannot be socially responsible.
We're the ones who have to be socially responsible. We have to be accountable to one
another and to the earth and to our forebears and our posterity by asserting our authority
over all the institutions we create, business or government. We're not being socially
responsible or civically accountable when we play by corporate rules in corporate arenas.
We're not being socially responsible or civically accountable when we don't act like
sovereign people. We're not being socially responsible or civically accountable when we
permit our elected officials to bargain away our sovereignty. We're not being socially
responsible or civically accountable when we in our organizations go to corporate
executives and to the hacks who run the corporate front groups and ask them, Please, please
cause a little less harm. Sovereign people define the entities we create. Sovereign people
instruct subordinate entities. When a subordinate entity assaults our sovereignty, when it undermines the basic mechanisms of
a self-governing people, our elections, our lawmaking, our schools, our judiciary, we move in
swiftly and accountably to cut this cancer out of the body politic so that we can govern
ourselves with a dignity commensurate to being human, and sovereign human at that. In this way
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 the struggles for justice and
democracy easier by weakening the ability of corporations to make the rules. It's not possible,
because corporations are too strong, because we won't have jobs, we won't have toilet paper,
food, health care, because we can't run our towns and communities without these global
corporations, because the corporations will run away, take our jobs and the money, because
philanthropic organizations won't give money to our groups, because it's scary, because we
don't know how to act like the sovereign people, because it's not realistic for people across
the nation to mobilize, to take away the civil and political rights of these artificial
entities that we created? But it is realistic to keep fighting corporation after corporation,
one harm at a time, by their rules, over and over and over and over again? That's realistic?
It's realistic to let them take away our free speech and our assembly, our clean air, our clean
water, our food, our health care, our education, our elections, our legislators? That's
realistic? Our President may not know it, 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, nor Chrysler
Corporation their supreme authority. How long shall we the people, we the sovereign people,
stand hat in hand outside corporate boardrooms waiting to be told our fates, waiting to be
told how to think? 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 other people and other species and to the earth? Thank you.