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#610 - Can Corporations Be Accountable? Part 2, 05-Aug-1998

In the late 19th century, the Supreme Court of Georgia, in RAILROAD CO.
V. COLLINS, wrote:

"All experience has shown that large accumulations of property in hands
likely to keep it intact for a long period are dangerous to the public
weal. Having perpetual succession, any kind of corporation has peculiar
facilities for such accumulations, and most governments have found it
necessary to exercise 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--the grave--to the schemes of individuals they are able to
add field to field, and power to power, until they become entirely too
strong for that society which is made of up those whose plans are
limited by a single life."[1]

Justices White, Brennan and Marshall, dissenting in a 1978 case, FIRST

"It has long been recognized, however, that the special status of
corporations has placed them in a position to control vast amount 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

Chief Justice Rehnquist, dissenting in the same case:

"...the blessing of potentially perpetual life and limited liability...
so beneficial [sic--R.G.] in the economic sphere, poses special dangers
in the political sphere."[3]

A great achievement of corporations, as they set out towards the end of
the 19th century to transform the law and recreate themselves, was to
replace basic tools of sovereign people--chartering, defining
incorporation laws, "by what authority" proceedings and charter
revocation--with regulatory and administrative law, new legal doctrines
and fines as corporate punishment. Many people of that time understood
that these changes amounted to a counterrevolution, and so they
resisted with great passion and energy.

Farmers and workers were not willing to concede that the corporate form
would define work and money and progress and efficiency and
productivity and unions and justice and ethical conduct and
sustainability and food and harmful and reasonable behaviour. They were
not willing to concede that corporations should have the rights and
privileges of persons.

So they organized, educated, resisted. They were crushed by giant
corporations' ability to use state and federal government to take
rights away from people and bestow them upon corporations.

Over time, corporations were able to claim for themselves rights and
privileges taken from the sovereign people via violence with favorable
decisions by federal judges. Corporations were conceded personhood, and
a long list of civil and political rights such as free speech, and
property rights such as the right to define and control investment,
production, and the organization of work.

By the beginning of the 20th century, corporations had become sovereign
and they had turned people into consumers, or workers, or whatever the
corporation of the moment chose to define humans as.

Without a clear understanding of history, most citizen efforts against
corporations in this century have been struggles against the symptoms
of corporate domination which we have waged in regulatory and
administrative law arenas.

But these are NOT arenas of sovereignty. These are stacked-deck
proceedings, where people, communities and nature are fundamentally
disadvantaged to the constitutional rights of corporations. Here, we
cannot demand "by what authority" has corporation X engaged in a
pattern of behavior which constitutes an assault upon the sovereign
people? Here, we cannot declare a corporation ULTRA VIRES, or "beyond
its authority." To the contrary, regulatory and administrative law only
enables us to question specific corporate behaviors, one at a time,
usually after the harm has been done... over and over and over again.

In these regulatory and administrative proceedings, both the law and
the culture concede to the corporation rights, privileges and powers,
which earlier generations knew were illegitimate for corporations to
possess. In addition, in these proceedings, the corporation has the
rights of natural persons: a human and a corporation meet head on, in a
"fair fight."

Today, our law and culture bestow our sovereignty on corporations. So
do most of our own citizen organizations dedicated to justice and
environmental protection and worker rights and human rights.
Consequently, our organizations use their energy and resources to study
each corporation as if it were unique, and to contest corporate acts
one at a time, as if that could change the nature of corporations.

Folks relentlessly tally corporate assaults, study the regulatory
agencies and try to strengthen them. We try to make corporate toxic
chemicals and corporate radiation and corporate energy and corporate
banking and corporate agriculture and corporate transportation,
corporate buying of elections, and corporate writing of legislation,
and corporate education of our judges and corporate distorting of our
schools, a little less bad.

Isn't it an old story? People create what looks to be a nifty machine,
a robot, called the corporation. Over time the robots get together and
overpower the people. They redesign themselves and reconstruct law and
culture so that people fail to remember they created the robots in the
first place, that the robots are machines and not alive. For a century,
the robots propagandize and indoctrinate each generation of people so
they grow up believing that robots are people too, gifts of God and
Mother Nature; that they are inevitable and the source of all that is
good. How odd that we have been so gullible, so docile, so obedient.

Isn't it odd that we don't remember who We the People are? How
sovereign people should regard ourselves, how sovereign people should
act? We need to realize what power and authority we possess, and how we
can use it TO DEFINE THE NATURE OF CORPORATIONS, so that we do not have
to mobilize around each and every corporate decision that affects our
communities, our lives, the planet.

In the face of what we experience about corporations, of what we know
to be true, why are so many people so obedient? Why do we hang on to
the hope that the corporation can be made socially responsible? Isn't
this an absurd notion? After all, organizations cannot be responsible.
This is just not a relevant concept, because a principal purpose of
corporations is to protect the managers, directors and stockholders
from responsibility for what their corporations do.

But only people can be responsible. How? By defining ourselves as
sovereign people so that we then can define all the corporate bodies
that we create (governmental, business, educational, charitable, and

We the People are the ones who must be accountable. We are not
accountable when we create monster robots which run rampant in our
communities and which, in our names, sally forth the across the world
to wreak havoc upon other places and upon other people's self-

We are not being socially responsible or civically accountable when we
don't act like sovereign people.

We are not being socially responsible or civically accountable when we
play in corporate arenas by corporate rules.

We are not being socially responsible or civically accountable when we
permit our agents in government to bestow our sovereignty upon

We are not being socially responsible or civically accountable when we
organize our communities and then go to corporate executives and to the
hacks who run corporate front groups and ask them to please cause a
little less harm; or when we offer them even more rewards for being a
little less dominating.

Sovereign people do not beg of, or negotiate with, subordinate entities
which we created. Sovereign people INSTRUCT subordinate entities.
Sovereign people DEFINE all entities we create. And when a subordinate
entity violates the terms of its creation, and undermines our ability
to govern ourselves, we are required to move in swiftly and accountably
to cut this cancer out of the body politic.

With such deeds do 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 struggles for justice and
democracy easier by weakening the ability of corporations to make the
rules, and to rule over us.

Some might say this is not a practical way to think and act. Why?
Because corporations will take away our jobs? Our food? Our toilet
paper? Our hospitals? Because we don't know how to run our towns and
cities and nation without global corporations? Because they will run
away to another state, to another country? Because the Supreme Court
has spoken? Because philanthropic corporations won't give us money?
Because it's scary? Because it's too late to learn to act as sovereign

Because in 1997 it is not realistic for people across the nation and
around the world to take away the civil and political rights of all
corporations, to take the property rights and real property
corporations have seized from human being and from the Earth?

Yeah, and it IS realistic to keep conceding sovereign powers to
corporations, to keep fighting industrial corporations and banking
corporations and telemedia corporations and resource extraction
corporations and public relations corporations and transportation
corporations and educational corporations and insurance corporations
and agribusiness corporations and energy corporations and stock market
corporations, one at a time forever and ever?

On January 10, 1997, President William Jefferson Clinton sent a letter
to the mayor of Toledo, Ohio. The mayor had asked the President for
help in getting the Chrysler Corporation to build a new Jeep factory
within Toledo city limits to replace the ancient one which Chrysler
Corporation was closing. The President of the United States, leader of
the most powerful nation the world has ever known, elected head of a
government always eager to celebrate the uniqueness of its democracy to
the point of forcing it upon other nations, wrote:

"...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..."[4]

Our President may not have a clue, 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, the sovereign people, stand hat in hand
outside corporate boardrooms waiting to be told our fate? How long
until we instruct our representatives to do their constitutional duty?
How long until WE become responsible...until WE become accountable, to
out forebears, to ourselves, to our children, to other peoples and
species and to the Earth?

--by Richard Grossman*


* Richard Grossman is co-director of the Program on Corporations, Law
and Democracy (POCLAD), P.O. Box 246, South Yarmouth, MA 02664-0246.
Phone (508) 398-1145; E-mail: people@poclad.org. For $25.00, POCLAD
offers a "contact kit" including bibliography, articles, a resource
list, and a one-year subscription to their new quarterly journal.



[3] The same source as Note 2, above.

[4] Letter from Bill Clinton to the Honorable Carleton S. Finkbiner,
January 10, 1997, printed in the TOLEDO BLADE, 25 January 1997.

Descriptor terms: richard grossman; corporations; american history;
sovereignty; democracy;