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].