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To restructure our economy so it operates for the good of all people, we need to begin puncturing the dominant economic myths. In my last column, I explored the myth of the self-regulating marketplace. In this column, I look at the myth of the corporation as a person.

For more than 100 years, the laws of the United States have treated corporations as human beings. This fiction does great damage to the common good. Under our current laws, corporations are granted perpetual life, know no limits and cannot be jailed. As Lord Edward Thurlow put it back in the early 19th century, "Corporations have neither bodies to be punished, nor souls to be condemned, they therefore do as they like."

For our society to grant such extraordinary legal rights to corporations is yet another example of placing property rights above human rights. This must be changed, and one place to start is by altering our legal system to limit the power of corporations.

Corporations exist at the discretion of the public and are licensed for public benefit, therefore they should be required to renew their charters periodically. Every 10 or 20 years they should be asked to demonstrate that they actually operate for the common good, not just for the benefit of their shareholders. If unable to prove they do so, they could lose their charters.

How would this work? Pennsylvania's Community Environmental Legal Defense Fund has proposed an amendment to that state's corporation code that would limit the life of a corporation to 30 years and would mandate public hearings to consider the renewal. This would provide corporations with a powerful motivation to place human rights over property rights. Laws also should be passed to give workers more say in the operation of the corporations that employ them, requiring corporations to provide employees with seats on their boards, for example.

However, laws like these are nearly impossible to pass because politicians are so heavily influenced by corporate money. A way to remedy this is to pass campaign finance reform that restricts contributions to candidates, campaigns, lobbyists and PACs. (The McCain-Feingold bill, which bans unregulated soft money, would be an important step forward.) We could also deny corporations the right to deduct payments to lobbyists as business expenses. (Ultimately, the best way to clean up the political process is to provide for full public financing of campaigns.)

It's ironic that corporations are quick to argue for government subsidies that would not be permitted in a totally free market--such as federal support of Archer Daniels Midland's efforts to market ethanol overseas, to name just one example. Thanks to various forms of corporate welfare, in the past 50 years corporate taxes have fallen from 28 percent to 9.3 percent of federal revenue. This is clearly unfair and means that individuals have to shoulder more of the tax burden.

Polls show most Americans agree with the idea of eliminating corporate welfare. When Al Gore said on the campaign trail that he would stand up to "big tobacco, big oil, the big polluters, the pharmaceutical companies, the HMOs," he touched a nerve with voters--a Business Week poll found that 74 percent of respondents agreed with Gore's sentiments. Corporate welfare should be eliminated--and while we're at it, we should reduce the pork in the bloated military budget, another form of welfare for the big corporations.

Corporations are not living persons. They must not be granted perpetual charters. Nor should they be allowed to distort the political system in return for financial favors. For more information on what you can do, contact the Program on Corporations, Law and Democracy (POCLAD) at [email protected] (www.poclad.org).

But even if we puncture this myth, and that of the self-regulating market, we have another important myth to deal with--the level playing field. If we value human rights over property rights, then we need to reach out to all the members of our society and provide them with equal access to life, liberty and the pursuit of happiness. I'll say more about this next time. I look forward to hearing from you at [email protected].

 

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