Would the fine legal minds on this list please comment? I had assumed
that corporate personhood was the basis of business and hence, the
economy.
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Thomas Paine said it best.
"It has been thought," he wrote in The Rights of Man in 1791, "…that
government is a compact between those who govern and those who are
governed; but this cannot be true, because it is putting the effect
before the cause; for as man must have existed before governments
existed, there necessarily was a time when governments did not exist,
and consequently there could originally exist no governors to form
such a compact with. The fact therefore must be, that the individuals
themselves, each in his own personal and sovereign right, entered into
a compact with each other to produce a government: and this is the
only mode in which governments have a right to arise, and the only
principle on which they have a right to exist."
Thus, Paine and others of the Revolutionary Era reasoned, any
institution made up by and of humans - from governments to churches to
corporations - must be subordinate to individual living people in
terms of the rights and powers held by the institution.
Because of the unique frailties and depths of passion unique to
humans, just after the United States Constitution was ratified Thomas
Jefferson and James Madison began a campaign to amend it with a
12-point explicit statement that would clearly and unambiguously place
humans - who had created government - above their creation. This was
the birth of what would become the Bill of Rights, and it originally
had twelve - not ten - protections for citizens' rights.
On December 20th, 1787, Jefferson wrote to James Madison about his
concerns regarding the Constitution. He said, bluntly, that it was
deficient in several areas. "I will now tell you what I do not like,"
he wrote. "First, the omission of a bill of rights, providing clearly,
and without the aid of sophism, for freedom of religion, freedom of
the press, protection against standing armies, restriction of
monopolies, the eternal and unremitting force of the habeas corpus
laws, and trials by jury in all matters of fact triable by the laws of
the land, and not by the laws of nations."
Such a bill protecting natural persons from out-of-control governments
or commercial monopolies shouldn't just be limited to America,
Jefferson believed. "Let me add," he summarized, "that a bill of
rights is what the people are entitled to against every government on
earth, general or particular; and what no just government should
refuse, or rest on inference."
The following year, Jefferson wrote about his concerns to several
people. In a letter to Mr. A. Donald, on February 7th, 1788, he
defined the items that should be in a bill of rights: "By a
declaration of rights, I mean one which shall stipulate freedom of
religion, freedom of the press, freedom of commerce against
monopolies, trial by juries in all cases, no suspensions of the habeas
corpus, no standing armies. These are fetters against doing evil,
which no honest government should decline."
Jefferson kept pushing for a law, written into the constitution as an
amendment, which would guarantee liberties for citizens, prevent
companies from growing so large they could dominate entire industries
or have the power to influence the people's government, and reduce the
possibility of the nation being taken over by a military coup.
On February 12th, 1788, he wrote to Mr. Dumas about his pleasure that
the US Constitution was about to be ratified, but also expressed his
concerns about what was missing from the Constitution. He was pushing
hard for his own state to reject the Constitution if it didn't protect
people from the dangers he foresaw.
"With respect to the new Government," he wrote, "nine or ten States
will probably have accepted by the end of this month. The others may
oppose it. Virginia, I think, will be of this number. Besides other
objections of less moment, she [Virginia] will insist on annexing a
bill of rights to the new Constitution, i.e. a bill wherein the
Government shall declare that, 1. Religion shall be free; 2. Printing
presses free; 3. Trials by jury preserved in all cases; 4. No
monopolies in commerce; 5. No standing army. Upon receiving this bill
of rights, she will probably depart from her other objections; and
this bill is so much to the interest of all the States, that I presume
they will offer it, and thus our Constitution be amended, and our
Union closed by the end of the present year."
By mid-summer of 1788, things were moving along and Jefferson was
helping his close friend James Madison to write the Bill of Rights. On
the last day of July, he wrote to Madison: "I sincerely rejoice at the
acceptance of our new constitution by nine States. It is a good
canvass, on which some strokes only want retouching. What these are, I
think are sufficiently manifested by the general voice from north to
south, which calls for a bill of rights. It seems pretty generally
understood, that this should go to juries, habeas corpus, standing
armies, printing, religion, and monopolies."
But on the issues of banning a standing army and blocking corporations
from gaining monopolistic control over industries, Jefferson was
getting resistance. The nation had just fought a bloody war against
England, and there was little sentiment for completely dismantling the
army. And the Federalists who were in power - a party largely made up
of what Jefferson called "the rich and the well born" - were opposed
to government constraints on business activities.
Thus only ten of his twelve visions for a Bill of Rights - all except
"freedom from monopolies in commerce" and his concern about a
permanent army - were incorporated into the actual Bill of Rights,
which James Madison shepherded through Congress and was ratified as
the first ten amendments to the constitution on December 15, 1791.
Monopolies as persons
As the new country grew, so did its institutions. Trading companies,
banks, and eventually railroads all used the corporate form to conduct
business, reduce shareholder liability, and accumulate profits.
America boomed through the early 19th Century, then experienced a
severe economic depression in the decade just before the Civil War,
then boomed again, starting in the post-war years of the late 1860s.
And then a curious thing happened.
The stage was set when, just after the Civil War on July 9, 1868,
three-quarters of the states ratified the Fourteenth Amendment to the
US Constitution as part of a set of laws to end slavery.
The intent of Congress and the states was clear: to provide full
constitutional protections and due process of law to the
now-emancipated former slaves in the United States. The Fourteenth
Amendment's first article says, in its entirety:
"All persons born or naturalized in the United States, and subject
to the jurisdiction thereof, are citizens of the United States and of
the state wherein they reside. No state shall make or enforce any law
which shall abridge the privileges or immunities of citizens of the
United States; nor shall any state deprive any person of life,
liberty, or property, without due process of law; nor deny to any
person within its jurisdiction the equal protection of the laws."
Along with the Thirteenth Amendment ("Neither slavery nor involuntary
servitude … shall exist within the United States") and the Fifteenth
Amendment ("The right of citizens of the United States to vote shall
not be denied or abridged by the United States or by any State on
account of race, color, or previous condition of servitude"), the
Fourteenth Amendment guaranteed that freed slaves would have full
access to legal due process: "equal protection of the laws."
Corporations aspire to personhood
During this same period, because everybody understood Paine and
Jefferson's argument that human-made institutions must be subordinate
to humans themselves; virtually every state had laws on the books that
regulated the behavior of corporations.
The corporate form is, after all, just a legal structure to facilitate
the conversion of products or services into cash for stockholders. As
Buckminster Fuller wrote in his brilliant essay The Grunch of Giants,
"Corporations are neither physical nor metaphysical phenomena. They
are socioeconomic ploys-legally enacted game-playing-agreed upon only
between overwhelmingly powerful socioeconomic individuals and by them
imposed upon human society and its all unwitting members."
Thus, states made it illegal for corporations to participate in the
political process: politicians were doing the voters' business, and
corporations couldn't vote, so it didn't make sense they should be
allowed to try to influence votes. States made it illegal for
corporations to lie about their products, and required that their
books and processes always be open and available to government
regulators. States and the Federal government claimed the right to
inspect companies and investigate them when they caused pollution,
harmed workers, or created hazards for human communities, even if in
the early years that right was unevenly used.
These constraints and oversights had been a thorn in the side of the
barons of trade and industry from the earliest days of the new
American republic. But what to do about it?
With the passage of the Fourteenth Amendment, the owners of the what
were then America's largest and most powerful corporations - the
railroads - figured they'd finally found a way to reverse Paine's
logic and no longer have to answer to "we, the people." They would
claim that the corporation is a person. They would claim that for
legal purposes, the certificate of incorporation declares the legal
birth of a new person, who should therefore have the full protections
the voters have under the Bill of Rights.
It was an amazing irony, given that one of Jefferson's original
proposed Amendments was an explicit ban on corporations becoming so
large as to gain monopoly power and be able to easily crush or stifle
small, local entrepreneurs. But, setting the irony aside, the
railroads threw massive resources into their new campaign to be given
full human rights.
Acting on behalf of the railroad barons, attorneys for the railroads
repeatedly filed suits against local and state governments that had
passed laws regulating railroad corporations. They rebelled against
restrictions, and most of all they rebelled against being taxed.
The main tool the railroad's lawyers tried to use was the fact that
corporations had historically been referred to under law not as
"corporations" but as "artificial persons." Based on this, they
argued, corporations should be considered "persons" under the
free-the-slaves Fourteenth Amendment and enjoy the protections of the
constitution just like living, breathing, human persons.
Using this argument for their base, the railroads repeatedly sued
various states, counties, and towns claiming that they shouldn't have
to pay local taxes because different railroad properties were taxed in
different ways in different places and this constituted the creation
of different "classes of persons" and was, thus, illegal
discrimination under the Fourteenth Amendment.
For almost twenty years, these arguments did not succeed.
In 1873, the Supreme Court made its first explicit comment on the
Fourteenth Amendment. The Amendment's "one pervading purpose," Justice
Samuel F. Miller wrote in the majority opinion, "was the freedom of
the slave race, the security and firm establishment of that freedom,
and the protection of the newly-made freeman and citizen from the
oppression of those who had formerly exercised unlimited dominion over
him."
The railroads, however, had a lot of money to pay for lawyers, and
railroad lawyer S. W. Sanderson had the reputation of a pit bull.
Undeterred, the railroads again and again argued their "corporations
are persons" position all the way to the Supreme Court.
The peak year for their legal assault was 1877, with four different
cases reaching the Supreme Court in which the railroads argued that
governments could not regulate their fees or activities, or tax them
in differing ways, because governments can't interfere to such an
extent in the lives of "persons" and because different laws and taxes
in different states and counties represented illegal discrimination
against the persons of the railroads under the Fourteenth Amendment.
By then, the Supreme Court was under the supervision of Chief Justice
Morris Remick Waite, himself a former railroad attorney. Associate
Justice Stephen Field, who was so openly on the side of the railroads
in case after case that he annoyed his colleagues, also heavily
influenced the court. In each of the previous four cases, the Court
ruled that the Fourteenth Amendment was not intended to regulate
interstate commerce and therefore not applicable. But in none of those
cases did Waite or any other Justice on the court muster a majority
opinion on the issue of whether or not railroad corporations were
"persons" under the constitution, and so Miller's "one pervading
purpose" of the Fourteenth Amendment (to free slaves) prevailed, and
year after year, the railroads were told that they're not persons.
Having lost four cases in one year took a bit of the wind out of the
sails of the railroads, and there followed a few years of relative
calm. The railroads continued to assert they were "persons," but
states and localities continued to call them "artificial persons" and
pass laws regulating their activities.
For twenty years corporate personhood was debated. Across America,
politicians were elected repeatedly on platforms that included the
regulation of corporations, particularly the railroads. But the legal
fight continued - and in 1886 the railroad hit paydirt.
The Supreme Court ruled on an obscure taxation issue in the Santa
Clara County vs. The Union Pacific Railroad case, but the Recorder of
the court - a man named J. C. Bancroft Davis, himself formerly the
president of a small railroad - wrote into his personal commentary of
the case (known as a headnote) that the Chief Justice had said that
all the Justices agreed that corporations are persons.
And in so doing, he - not the Supreme Court, but its clerical recorder
- inserted a statement that would change history and give corporations
enormous powers that were not granted by Congress, not granted by the
voters, and not even granted by the Supreme Court. Davis's headnote,
which had no legal standing, was taken as precedent by generations of
jurists (including the Supreme Court) who followed and apparently read
the headnote but not the decision.
What is especially ironic about this is that Davis knew the Court had
not ruled on this issue. We found a handwritten note in the J.C.
Bancroft Davis collection in the Library of Congress, from Chief
Justice Waite to reporter Davis, explicitly saying, "we did not meet
the constitutional issues in the case." (In other words, the Court had
decided the case on lesser grounds, which it always prefers to do when
possible.)
Yet Davis wrote that the constitutional issue of corporate personhood
had been decided, and his headnote was published the year Waite died,
most likely after Waite's death. The railroads were persons, he wrote
(in the headnote), implying that they're entitled to the same rights
as persons. And Davis attributed this new legal reality to Chief
Justice Waite who had specifically, in writing, disavowed it (although
that note wouldn't become public for over a hundred years - it's now
on my website).
Another great irony of this event is that the Bill of Rights was
designed to protect human persons because of their vulnerability in
relations with other human persons who may be much more powerful. But
corporations are bestowed with potential immortality, can change their
identity in a day, or even tear off parts of themselves and instantly
turn those parts into entirely new "persons." Yet regardless of all
these superhuman powers, corporations are now considered persons.
These non-living, non-breathing persons are now, according to the
pronouncements of their own attorneys and spokespeople who cite the
headnotes of the Santa Clara County case, fully entitled to the
protections that Thomas Jefferson and James Madison wrote into the
Bill of Rights to shield human persons from abuse by such powerful
institutions as governments. Even the American Civil Liberties Union,
in a recent and misguided effort, argued before the Supreme Court that
corporations should have the free speech right to lie (or say anything
else they want) that's granted to humans by the First Amendment.
A few of the world's largest corporations referenced Santa Clara and
successfully claimed the protection of the First Amendment, then
lobbied Congress and the FCC to relax local ownership rules so they
could take control of our media. Once that was done, they claimed
First Amendment free speech rights to tell us whatever serves their
interest and call it "news" without consideration of its truthfulness
or having to worry about giving fair and equal time to other
viewpoints. They claim the protection of the Fourth Amendment (search
and seizure) so they can prevent the EPA and OSHA from inspecting
factories for environmental or labor violations without first
obtaining the corporation's permission - which they say can be
withheld for any reason.
They now have the protection of the Fifth Amendment so they are
protected from double jeopardy and don't have to answer questions
about their own crimes. They now have the protection of the Fourteenth
Amendment so they can sue local towns or counties or states that try
to pass laws to protect local small businesses against their
predations.
The structure for this displacement of humans by corporations under
the constitution has been in place since 1886, but only since the
1980s have our largest corporations aggressively used the courts to
claim human rights. (Interestingly, small and medium-sized
corporations almost never use this argument: to them if corporate
personhood vanished nothing would change.)
But a human backlash is now developing.
In ten Pennsylvania townships, the Community Environmental Legal
Defense Fund (CELDF) has helped local governments pass ordinances
denying corporate personhood in order to block large corporate factory
farms from setting up in areas previously the sole territory of family
farms. In the city of Point Arena, California, voters passed a
resolution declaring corporate personhood a threat to democracy, and
encouraging a debate on it by other communities.
The Woman's International League for Peace and Freedom (WILPF),
America's oldest and most prestigious women's rights group (founded in
1919 by Jane Addams, with two Nobel Prize Winners as past presidents),
declared at their July, 2002 annual meeting the kick-off of a
three-year "Abolish Corporate Personhood" educational and legislative
campaign.
And elected officials across the nation are discovering that
meaningful campaign finance reform, effective environmental
protections, and human-friendly health-care will only happen when
corporations can no longer use the extraordinary power of the Bill of
Rights to insinuate themselves into politics and legislation.
An internet search on the phrase "corporate personhood" will find
thousands of sites discussing or devoted to the topic, and models of
legislation to remedy the error of 1886.
But the first step, as always, is awakening people to the root cause
of the problems we face - the use of corporate personhood by a handful
of the world's largest enterprises to insinuate themselves into
governments and seize control of legislative and regulatory agendas.
As enough voters learn the history and realize the consequences of
this, the solution - ending corporate personhood - will become more
and more possible, and Paine's and Jefferson's original idea of
democracy representing "we, the people" will come back to life.
This article is copyright 2002 by Thom Hartmann, and largely excerpted
from Unequal Protection: The Rise of Corporate Dominance and the Theft
of Human Rights by Thom Hartmann, published by Rodale Books, 2002.
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http://www.thomhartmann.com/index.php?option=com_content&task=view&id=183&Itemid=38
