The recent three-part Globe series on "corporate welfare," coupled with recent reports on the demise of substantive campaign finance reform and the return of sweatshops in the United States, points out pretty clearly that the corporations who rule the earth, air, fire, and water of our lives act as unconstitutionalized private governments (an apt description, given that many of the economies of the largest corporations outstrip those of recognized political states). In order to make the corporations, along with single welfare mothers and the medically uninsured, play their part in the moral renewal many say America needs to undergo, I suggest we bring what are essentially "rogue states" to heel by reviving a time-honored American tradition: revoking corporate charters.
What, you say, a charter can be revoked? Yes, it can. The charters that set up corporations are not, unlike the Bible, sacred documents. A corporate charter is a legislative document, born and bred in the minds and actions of politicians elected by the people. And what the legislature giveth, it can taketh away.
This is not some radical, lefty notion hatched by Karl Marx (or even Groucho Marx). During the century after the Revolutionary War, according to the pamphlet "Taking Care of Business" by Richard Grossman and Frank Adams, citizens and legislators directed the fate of corporations by strictly limiting what they could do with their charters. They spelled out the rules each business had to follow and held business owners liable for any harms or injuries caused by their actions.
For instance, right here in Massachusetts, the Turnpike Corporation Act of 1805 gave the legislature the right to dissolve turnpike corporations when their bank accounts equalled the cost of construction plus 12 percent. Then the road became public. ("Save the Pike" people: take notice.) In Terrett v. Terrett in 1815, Massachusetts Justice Joseph Story ruled that "a private corporation created by the legislature may lose its franchises by a misuer or nonuser of them," a position reinforced in 1831 when politicians declared that corporations exist "at the pleasure of the legislature." In fact, all throughout the United States up to the Civil War, state legislatures changed their constitutions so that, as Rhode Island said in 1857, a corporate charter "may be amendable or repealed at the will of the general assembly."
What went wrong? If the Civil War did anything, it helped create what we now know as our modern corporate culture. As corporations gained more power because of their wealth, they essentially bought off legislators. And when that didn't work, they turned to the courts, where judges started according corporations rights previously reserved for monarchs and states. This led to such inanities as the Supreme Court ruling in 1886, in Santa Clara County v. Southern Pacific Railroad, that under the U.S. Constitution, corporations, which are economic fictions, have all the rights of a natural person (a decision Justice William O. Douglas, sixty years later, said had "no history, logic, or reason").
What has happened in the intervening century is that corporate property now owns more legal rights than individual people, and the standard for evaluating whether a corporation is acting for the public good has changed from the corporation proving that it is not doing harm (as it was under early charters) to the citizen having to prove that the corporation is doing harm. In allowing this switch, legislatures and courts have granted corporations a literal license to kill in their pursuit of profit. Moreover, they have ceded to corporations the right to exploit all the resources of the earth, granting them ownership of what should be our common property, and make decisions that have public consequences in the privacy of their own boardrooms.
The result? We see it around us every day, from wage slavery to the fouled environment threatening our very ability to survive on the planet. As Boston College professor Charles Derber calls it, the corporations have gone "wilding," and the devastation lies all around us.
But it is crucial to remember that it does not have to be this way. Citizens can do many things to regain some measure of control, from boning up on charter law within their states (and actually reading the charters of corporations) to seeking injunctions against companies based on what is and is not allowed in their charters. (Grossman and Adams have a number of suggestions.) Critical to this fight is campaign finance reform that takes corporate money out of the process. If it is true to some extent that campaign contributors "own" the politician they support, then the citizens should "own" their own legislators by buying them outright through complete public funding of political campaigns. In this way they will work for us, on our time and on our issues.
Much of the moral and political malaise from which we suffer today happens because citizens have forgotten how much power they have as citizens. As John Hunt of the Equal Rights Party said in 1837, when citizens find themselves "suffering under a weight of evils destructive...to their happiness...it becomes their solemn duty...to apply a sufficient and a speedy remedy." Bringing corporate charters back under citizen control is just such a remedy. After all, we are the foundation of the power wielded by our legislators and courts. If we don't reclaim that for ourselves, then the corporations will win, as they are winning now, and the corporate welfare so ably documented by the Globe articles will seem like small potatoes as everything becomes grist for the corporate profit mill.
(July 1996)