Excerpted with gratitude from:

By Barbara Knox, Ph.D.

Corporations Get The Upper Hand
"I see in the future a crisis approaching that unnerves me and causes me to tremble for the safety of my country.... Corporations have been enthroned, an era of corruption will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed."     -- Abraham Lincoln

In The Beginning

In part I, I wrote that the corporations of our industrial growth-oriented society have changed from companies that in the beginning were carefully restrained by the state legislatures. They have become creations of enormous wealth and power no longer answerable to the citizens. Once servants of the people, chartered for the public good, they now have the same rights as we do, the rights guaranteed by the Bill of Rights and the 14th amendment. Their operations are protected from public control.

Unlike us, they live forever. Their leaders are safe from public recall. When we break the law, we are liable, but their owners (shareholders) are immune from liability, and they can continue to operate even after breaking the law!

How did this happen? None of this was true in the beginning.

Corporations were set up for limited purposes and could only do what their charters said they could do. They operated at the pleasure of the people; states routinely revoked charters of corporations that broke the law or abused their privileges. Their charters expired after a set number of years, and they had to reapply; they couldn't live forever. The people, through their state legislatures, controlled corporate activity. States had the authority to govern their financial dealings, and their shareholders were personally liable for the debts of the corporation.

The Struggle For Control

How did this change? In each war the corporations gained wealth, and with it power. They appealed to the U.S. Supreme Court, which in 1819 declared a Massachusetts corporation beyond the reach of the legislature that created it in the first place! The citizens were outraged. The struggle for control raged back and forth.

Following the Civil War and well into the 20th century, appointed judges gave privilege after privilege to corporations: the right to take private property with minimal compensation, elimination of jury trials to determine corporation-caused harm; and the doctrine that contracts originated in the courts, thus giving the courts the right to oversee corporate rates of return and prices (which the U.S. Constitution had entrusted to the state legislators). Courts ruled that workers were responsible for causing their own injuries on the job (the doctrine of risk). Pressured by large corporations, judges declared state laws unconstitutional that had made corporations liable for the harm they caused.

Wages, hours and rate laws of the states were tossed out. Courts construed the common good to mean maximum production, no matter who was hurt or what was destroyed.

Corporate competition without citizen interference was enshrined.

Corporations Are People

In 1886 the Supreme Court ruled that a private corporation was a natural person under the 14th amendment and thus sheltered by the Bill of Rights! The 14th amendment was originally intended to protect the rights of freed slaves. It would be years later before similar personhood rights were guaranteed to men without property, African Americans and women. Following this amazing court decision, the courts struck down hundreds more state, local and federal laws which had protected people from corporate harms. In 1941 a congressional committee concluded that "the principal instrument of the concentration of economic power and wealth has been the corporate charter with unlimited power". In the struggle to control the influence of the corporations on our government, the people were recently defeated by a court ruling that money ( given by the corporations to candidates) is free speech; protected by the First Amendment right to freedom of speech.

Where Are We Now

Of the world's 100 largest economies 50 are corporations. Wal-Mart, with $94 billion in sales is larger than 161 countries including Poland ($93 billion), Greece ($78 billion) and Ireland ($52 billion). Seventy percent of adults believe business has gained too much power. ( Business Week,, 3/11/96, page 65)

Corporations control our government by out-spending labor organizations' political campaigns by 7 -1 and out-spending citizens organizations by 10-1. The 1996 minimum wage increase legislation included $21 billion in corporate giveaways.

In 1994, five energy companies gave $30.4 million to federal candidates and received $34 billion in tax breaks and subsidies! The largest single contributor in the 1996 election was cigarette maker Philip Morris Company.

If the information I am giving is new to you, you may wonder, as I did, how it could be true. I never hear any of it on the news. But think about it. Who owns the news media?

The General Electric Corporation owns NBC. The Disney Corporation owns ABC. Westinghouse owns CBS. Time-Warner owns CNN. Many newspapers and news magazines are similarly corporately owned or influenced by their advertisers.

How our nation got into its current ecological and social predicament is, largely, the story of how corporations overwhelmed the power and authority of "We, The People".

Corporations now manipulate every aspect of our democratic process from lobbying and campaigning to political advertising to deciding who will be elected and how elected officials will vote on issues. They control most of our society's key investments and production decisions, deciding for us what sort of jobs we can hold under what conditions and where, what information we get, and telling us what we need, want and should buy.

Continued on next page

Part I   |   Part II   |   Part III   |   Part IV

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Creation date : 1/20/99