Foundation of A Functional Democracy Has Been Corrupted by Corporate Personhood

We consistently hear stories suggesting the American people overwhelmingly support one policy after another that (for some reason) goes nowhere with their elected representatives. Most of the time the laws that do get passed are those that benefit a minuscule portion of the population and increasingly what is passed may actually benefit multinational if not foreign interests, at the expense of American citizens. How can this be true? Since childhood we have been taught that America is a “democracy” governed by “We the People” and America is a world leader in democracy, a model for other countries. Sadly this is not even close. Maybe it is time we grow up and face a bit of reality. According to global democracy rankings, in 2016, the USA rated 16th out of 112 countries and most of these do not even suggest to be democracies at all.

Control and concentration of political power have been and still are the primary goals of the wealthy. Today large corporations (often multinational corporations), rather than nations, have become the weapons of choice to capture and maintain power. Understanding this requires clarifying some of the tools in order to recognize this masterpiece of self perpetuating inequality that has been created by the few, the powerful, what Noam Chomsky calls the Masters of Mankind. The foundation of American democracy has been compromised by endless legislation (state, federal and international) usually hidden from “We the People” during creation, ensuring that changes or corrections become virtually unachievable. Chomsky sums it up beautifully saying: “The foundation of democracy must be solidified and protected from the rampant corruption inherent in our worship of unfettered capitalism.” 

What is American Democracy?

We Americans love to tout we live in a democracy, but most of us have no idea what that is or could be. There are many sources that may help to explain this, but I decided to keep it very basic and went to a teachers resource website on US Government, Ducksters Education Site. Accordingly, the US doesn’t have a “direct” democracy but instead has what is called a “representative democracy“:

This is where the people elect representatives to run the government (supposedly to reflect the “will of said people”). Another name for this type of democracy is a democratic republic. The United States is a representative democracy. For example, when voting for the President, the citizens elect representatives, who then elect the president.

Some common characteristics of democracies follow (but what we have is at most, very limited reflections of these):

• Citizens rule,
• Free elections,
• Majority rule with individual rights,
• Limitations on lawmakers, and
• Citizen participation.

Some criticisms of democracies often include the following (and the US definitely has all of these):

• Only the very wealthy can afford to run for office, leaving the real power in the hands of the rich,
• Voters are often uninformed and don’t understand what they are voting for,
• Two party systems (like in the United States) give voters few choices on issues,
• The large bureaucracy of democracies can be inefficient and decisions can take a long time,
• Internal corruption can limit the fairness of elections and the power of the people.

How did power concentrate in the hands of so few?

The American revolution was fought against at least two entities that controlled most power: the English crown and also English corporations. They pretty effectively got rid of the crown, but those pesky corporation concepts, not so much. While corporations disappeared for a while they are back with a vengeance. According to Reclaim Democracy,

“After fighting a revolution to end this exploitation, our country’s founders retained a healthy fear of corporate power and wisely limited corporations exclusively to a business role. Corporations were forbidden from attempting to influence elections, public policy, and other realms of civic society.”

Since then, most of “We the People” (at least those not infatuated with power) have basically dropped the ball. At the same time, the wealthy (Chomsky’s Masters of Mankind) have slowly and methodically worked to reintroduce the “foundational” weapon of corporation into America. I call it “foundational” because I believe, unless rigorously regulated and controlled (which we don’t), it essentially weakens the ability of democracy to function. And that is and has been the goal of those seeking concentrated power. After the American Revolution controlling corporations was essential.  Reclaim Democracy describes how:

• The privilege of incorporation was granted selectively to enable activities that benefited the public,
• States also imposed conditions
• For 100 years after the American Revolution, legislators maintained tight control of the corporate chartering process
• States also limited corporate charters to a set number of years
• In Europe, charters protected directors and stockholders from liability for debts and harms caused by their corporations. American legislators explicitly rejected this corporate shield

These and other protections were vigorously defended knowing and fearing those seeking the power corporations could unleash.   Reclaim Democracy lists some of the more consequential attempts, dating as far back a 1819 where the “Masters of Mankind” attempted to gain the changes they wanted via allies on state courts and the US Supreme Court. The tide effectively began to change in 1886 with one specific case.

“One of the most severe blows to citizen authority arose out of the 1886 Supreme Court case of Santa Clara County v. Southern Pacific Railroad. Though the court did not make a ruling on the question of “corporate personhood”, thanks to misleading notes of a court reporter, the decision subsequently was used as precedent to hold that a corporation was a “natural person.” This story was detailed in “The Theft of Human Rights,” a chapter in Thom Hartmann’s recommended book Unequal Protection.”

Yes, the very foundation of a functional democracy has been corrupted by the wealthy via corporate personhood.  As always, the question is: what can we do about it and how? This blog is a search for answers, ideas and organizations regarding this question. Keep watching and stay involved.

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 For a bit more, here is an interview on AlterNet.com cites a recent interview where Steven Rosenfeld interviews author Adam Winkler discusses this “catch 22” of American Democracy as it relates to Winkler’s 2018 book We The Corporations: How American Businesses Won Their Civil Rights.

Works Cited

The Democracy Ranking Association. “Democracy Ranking 2016.” Democracy Ranking, 16 August 2017, http://democracyranking.org/wordpress/rank/democracy-ranking-2016/. Accessed 8 May 2022.

Chomsky, Noam. “NOTES ON NAFTA ‘The Masters Of Mankind.’” The Nation, vol. 1993, no. March 29,1993, 1993, pp. 412-414. Accessed 08 05 2022.

Ducksters. “US Government Democracy.” Ducksters, Ducksters, https://www.ducksters.com/history/us_government/democracy.php. Accessed 9 May 2022.

Reclaim Democracy. “Our Hidden History of Corporations in the U.S.” Reclaim Democracy, https://reclaimdemocracy.org/corporate-accountability-history-corporations-us/. Accessed 08 05 2022.

Rosenfeld, Steven. “New Book Unmasks Hidden History of How U.S. Corporations Gained Legal Personhood and Civil Rights.” AlterNet, Alternet.com, 16 March 2018, https://www.alternet.org/2018/03/new-book-unmasks-hidden-history-how-us-corporations-gained-legal-personhood-and-civil-rights/. Accessed 9 May 2022.