By What Authority - Spring 2000
Vol. 2, No. 2 - Spring 2000
A Publication of the
PROGRAM ON CORPORATIONS, LAW & DEMOCRACY
By What Authority, the name of our publication, is English for
quo warranto.
Quo warranto is the sovereign's command to halt continuing
exercise of illegitimate privileges and authority. Evolved over the last
millennium by people organizing to perfect a fair and just common law
tradition, the spirit of By What Authority animates people's movements
today.
We the people and our federal and state officials have long been
giving giant business corporations illegitimate authority.
As a result, a minority directing giant corporations privileged by
illegitimate authority and backed by police, courts and the military,
define the public good, deny people our human and constitutional rights,
dictate to our communities, and govern the Earth.
By What Authority is an unabashed assertion of the right of
the sovereign people to govern themselves.
Corporate
Social Responsibility: Kick the Habit
By Jane Anne Morris
Editors Note:
Corporate managers have long used their own and government violence to
repress dissent and keep people in line, to pollute civic aspirations
for democracy and justice, and to enfeeble organized resistance and
advocacy strategies. They have poured their shareholders' money into
manipulating public opinion in general and resisting activist opinion in
particular.
During the 1960s and '70s popular critiques of corporate domination
flourished. Citizen groups (and even many US senators and
representatives), targeted, among others the International Telephone and
Telegraph Corporation (ITT) for leading the attack against the elected
Allende government in Chile; the Dow Chemical corporation for the
production of the herbicide, agent orange, which the US Government
spewed across Vietnam; General Motors -- the largest corporation in the
world -- for its constant assaults upon life, liberty, democracy, and
property; and, of course, the seven sister oil companies for pushing
everybody around, everywhere.
Today, consciousness of corporate obstruction of democracy is again
on the rise. This is a good moment to review corporate manipulation
techniques -- of language, ideas, and culture. In concert with general
browbeating and relentless violations of workers, communities, and
nature, these manipulations are sweeping the land with the help of the
best opinion makers and shakers tax deductible corporate money can buy.
WHAT TO EXPECT NEXT from corporate sponsors of the WTO? There's a
well-thumbed page in the corporate playbook, ready to go. Whether or not
it works depends on us.
The last time there was a scuffle as worrisome as the Seattle
demonstrations," Richard Milhous "Tricky Dick" Nixon was
in the White House. Nearly everybody else was in the streets.
We were millions, and we demanded freedom, justice, equality, peace,
clean air and water, and the right to choose our own hairstyles. We knew
the joy of thinking it was all possible.
We also knew the raw fear wrought by the pop of tear gas canisters,
the glint of sun on gunmetal, and the meltdown of a peaceable crowd
being attacked by the forces of law and order.
But it is only at a distance of a quarter century that I begin to
recognize the depths of another fear, just as visceral. As I pore over
the writings by and about the corporate elite of that day, a simple fact
stares out at me: they were scared witless.
While we wove our hopes into songs, and scrawled our demands onto
placards, they spelled out their fears in journal articles and speeches
at chambers of commerce.
The corporation was "under attack as never before," subject
to a "tidal wave" of "dissident groups, structured into
onslaught vehicles of unrelenting social action," according to
corporate literature. The future looked "grim." Corporations
were about to "lose their autonomy, power and influence." Some
managers doubted that large corporations would even be
"permitted" in the future. The significance of profit margins
shrank as the CEO of one of the U.S.'s largest corporations wondered
whether "the corporation as we know it...will survive into the next
century."
For those whose greed commanded the rudder of the ship of state, the
sight of people in the streets -- and not for shopping, mind you -- was
terrifying.
WHAT A DIFFERENCE a generation makes. Great corporations have more
than survived the tumult of the Nixon era. Today, a tiny fraction of the
human population, in its role as corporate managers, has been
exceedingly successful in using the legal fiction of the corporation to
expand its autonomy, power and influence. How did they accomplish this?
While we huddled in coffeehouses and church basements debating
strategy, corporate managers plotted in boardrooms. Their diagnosis
unfolded into a plan. From their perspective, a Great Danger threatened:
government action spurred by public demands. A tried-and-true strategy
beckoned: make a show of voluntarily Doing Something and publicize it
shamelessly.
This was a strategy with a thousand faces: corporations as socially
responsible, corporations as "citizens" with civic duties,
corporations as "good neighbors," corporate executives as
"trustees" for the public interest, "business
leaders" offering voluntary codes of conduct, and so on.
There were three pillars to the corporate plan. (1) placate; (2)
co-opt; (3) reframe issues so that in the future, people would
"demand" something that corporate managers want to
"give."
Corporate donations and other forms of "corporate social
responsibility" pacified portions of the community by softening the
edges of some of the most egregious and most visible corporate harms. In
a quasi-behaviorist twist, they rewarded "good" behavior and
disadvantaged "bad" behavior on the part of showcased
community and charitable organizations. But most of all they enabled
corporate managers to reshape public "questions" so that the
"answers" were to come not from a self-governing people but
from "corporate good citizens."
Corporate executives were advised that they "should...be able to
gauge with some accuracy the degree of social responsiveness that will
satisfy the community...." They were warned: "If corporations
fail to exert considerably more social initiative, they will be
compelled to do so..." "The less voluntary social action
U.S.companies take, the more it will be imposed by big government."
There were fears that public pressure would "compel legislative
response." (Heaven forbid that this should ever occur in a
democracy.)
The beneficiaries of "corporate social responsibility" were
selected for maximum effect. Corporate managers who lent financial
support were well aware that they were "ingratiating themselves
with recipients, or pacifying a pressuring public. A corporate gift can
be a bribe, paid in return for a gadfly group's promise to keep still
and refrain from criticism of corporate policies." On the other
hand, "...some business givers have...withheld grants from groups
identified with causes they consider to be too militant, or unfriendly
to corporate interests."
For some, the success of another round of "corporate social
responsibility" was a foregone conclusion. "The social
responsibility payoff has been attested to time and again. The most
patent cost justification is a simple matter of good stickmanship --
sidestepping the penalties of social irresponsibility." The
judicious distribution of corporate money "has allowed the managers
to become brokers of social power, deciding which programs are supported
and which are not."
The language is vivid. "Bribe." "Ingratiate."
"Satisfy the community." "Payoff." "Brokers of
Social Power." How much plainer can it get? In all cases, control
was the goal; control not just of groups or movements, but of ideas and
debates.
Coupled with brutal suppression, this three-step strategy -- placate,
co-opt, reframe debate -- was used early and often. It worked after the
sixties-seventies wave of public uproar; before that it worked in the
1950s; it worked during the Depression; it worked during the wave of
"unrest" immediately after World War I. In the late 19th
century, an early version of it worked after corporate strategists got a
glimpse of the Knights of Labor and the Populists.
The notions of corporate trusteeship, the civic duty of a
corporation, corporate citizenship, corporate social responsibility and
the corporate social audit -- all originated in the desire of corporate
managers to thwart unionization, forestall revolt, avoid government
action, and above all retain control by shaping public debate.
Each time corporate managers, hiding behind the increasingly powerful
shield of the legal fiction of The Corporation, took another step toward
becoming a more powerful "semi-autonomous managerial elite,"
they cranked up the public relations machinery to boast of The
Corporation's deep concern and caring for the community. Increasingly,
they doled out goodies -- always on their terms. And in their terms.
So successfully have these terms become part of our political
language that they often go unnoticed. Why is it, for instance, that
when a government (using money collected for the public good) aids needy
citizens, they're on the dole, a supposed disgrace, but when corporate
managers give away other people's money to a soup kitchen, it's
philanthropy ? (Lah-dee-dah)
IF YOU DOUBT THAT corporate managers and not regular folks define the
terms of public debate today, you might ask yourself these questions.
Who defines free trade ? What about welfare reform ? Or those dubious
twins, tree harvest and deer harvest ? Remember jobs-versus-environment
, a golden oldie that never seems to fade away? These terms, and the
terms of the debate, were all brought to us by corporate managers.
Corporate managers are willing and eager to participate in the
democratic process, but only if they are in charge of it. When it comes
to being subject to it, they balk, and are in fact willing to do
anything, anything -- even give away a little corporate money -- in
order to avoid losing control over the way issues are framed, thus
becoming subject to the democratic process.
Corporate managers of the seventies warned their comrades that
failure to act would have horrific consequences. "The alternatives
are not attractive. The likeliest possibility is the wholesale
substitution of public for private goals, strategies, and
actions..."
The options were clear: either institute the three-point plan, or the
country will succumb to...(I hope you're sitting down)...a people's
democracy.
As night follows day, corporate managers experienced great surges of
"corporate social responsibility" following each historic
episode of social unrest. Such bouts of "corporate good
citizenship" are voluntary, calculated, expedient, cheap and
temporary. Far from reflecting democratic control, they frustrate it.
Meaningless, unenforceable "side agreements" are not
concessions to democracy on the part of corporate managers, but
concessions to lack of democracy on the part of a not-sovereign people.
So it must be an especially sweet moment for corporate managers
looking up from their Courvoisier-glazed snifters -- to hear people
clamoring for "corporate social responsibility," that
strategy-with-a-thousand-faces that has served to solidify the grip of
the corporate elite through a century of citizen protests.
With the echoes of "WTO Week in Seattle" still rumbling in
our ears, we have another opportunity to firmly reject the
"corporate social responsibility" ruse. A small but growing
core of people is demanding not goodies or favors or good deeds but real
self-governance. They know that receiving goodies from worried corporate
managers is the real "dole," while a self-governing people
controlling their community's resources in the interest of society as a
whole -- that is democracy. (Lah-dee-dah)
Copyright 2000 by Jane Anne Morris
JAM is working on a book about these and related
issues. She would like to thank Peter Kellman, J.M. Baime, Mary
Zepernick and the POCLAD editorial board for comments on earlier
versions of this article.
Endnotes:
1. John L. Paluszek, Will the Corporation Survive? Reston, Virginia:
Reston Publishing Company,Inc./Prentice-Hall, 1977, p. 3.
2. David F. Linowes, The Corporate Conscience, NY: Hawthorn Books,
Inc.,1974, p.14.
3. Linowes, p.43.
4. Barry Richman, "New Paths to Corporate Social
Responsibility," pp. 52-68 in Archie B. Carroll, ed., Managing
Corporate Social Responsibility, Boston: Little, Brown and Company,
1977, pp. 53-54.
5. Paluszek, p. 18.
6. Paluszek, p. 3
7. Linowes, p.143.
8. Richman, p. 52.
9. Linowes, p. 9.
10. Melvin Anshen, ed., Managing the Socially Responsible Corporation,
NY: Macmillan Publishing Co., Inc., 1974, p.15.
11. Jules Cohn, The Conscience of the Corporations: Business and Urban
Affairs, 1967-70, Baltimore: The Johns Hopkins Press, 1974, p. 18.
12. Cohn, pp. 15-16.
13. Linowes, p. 43.
14. Robert Rutherford Smith, "Social Responsibility: A Term We Can
Do Without," pp. 31-36 in Robert L. Heilbroner and Paul London,
eds., Corporate Social Policy: Selections from Business and Society
Review, Reading, MA: Addison Wesley Publishing Company, 1975 (originally
published in Business and Society Review, Spring 1974), p. 32.
15. Anshen, p. 16.
You've
Heard of Santa Clara, Now Meet Dartmouth
by Peter Kellman
The purpose of this article is to introduce our readers to a key
Supreme Court case from a working class historical perspective. The
Dartmouth College case wrote into the Constitution the propertied
class's vehicle, the corporation, for concentrating economic and
political power. Since few people today examine the Court's actual
decisions (which we will do in future BWAs), what counts is how Supreme
Courts that followed Chief Justice Marshall's Court of 1819 interpreted
Marshall, and Justice Story's supporting opinion, to foster powerful
anti-democratic realities:
(1) gifts of special privilege for the rich to organize their own
economic and political institutions, fostered and protected by
"the entire strength of the nation;"
(2) denials of common people's fundamental right and power to organize
their institutions.
WE HAVE A GREAT SYSTEM of government. Amending the Constitution is a
very different process for wealthy citizens as opposed to the majority
of us. If the common people want to change the US Constitution we lobby
Congress and get two-thirds of both houses to propose an amendment which
must then be approved by three-quarters of the state legislatures.
Interestingly, freedom of speech, freedom of the press, freedom from
unreasonable search and seizure, the right to a speedy trial, trial by
jury, the ending of slavery, the right to vote, and the requirement that
US Senators be elected by the people rather than appointed by state
legislatures all came into being through the amendment process.
The wealthy group of white men who gathered in a closed meeting in
1787 to write our Constitution didn't think any of these rights were
important enough to be included. It was left to Antifederalists and mass
movements of African Americans, Populists, workers and women -- mass
movements of the people -- to amend the constitution in ways they hoped
would protect the majority of people from a wealthy minority.
There are four ways to change the Constitution: first is by
revolution; a second was mentioned above; the third is through a
Constitutional convention which can be called by two-thirds of the
states; and the fourth is by a process called judge-made law.
A good example of judge-made law is the Santa Clara case of 1886, in
which the Supreme Court ruled that a corporation is a person under the
law and is therefore entitled to equal protection under the Fourteenth
Amendment.1
An earlier example of judge-made law is the Dartmouth College case of
1819.2 The word corporation is not mentioned in the Constitution or in
any of its 27 amendments. However, Article 1, Section 10 of the US
Constitution, known as the Contracts Clause, declares that no state
shall make any "Law impairing the Obligation of Contracts..."
Chief Justice Marshall, writing for the majority in the Dartmouth case,
stated in reference to the corporate status of the college that;
"The Opinion of the Court, after mature deliberation, is, that this
is a contract, the obligation of which cannot be impaired, without
violating the Constitution of the United States." That is, a
corporation is a contract and therefore is protected by the
Constitution.
BUT THERE IS MORE TO THE STORY, a story which laid the legal
groundwork for the growth of corporate power at the expense of public
education and with
it the future of our democracy.
In 1816, a class of small property owners and skilled artisans, who
believed in the vision of Thomas Jefferson and many other founding
revolutionaries that the United States should have a republican form of
government, elected a like-minded governor in the State of New
Hampshire. Now the basis of Jeffersonian republicanism rests on a
society primarily composed of small farmers who own their own land. An
important component of republican philosophy is that a republican form
of government requires an educated populace. These republicans wanted to
insure that a college education would be available for their children
and that the content of education would be determined by a public
process, not a private one.
However, colleges during that period were mainly private schools such
as Yale, Harvard and Dartmouth, holdovers from the colonial days. These
schools were linked to the past by class and religion. They were, by
design, not republican in nature. Their purpose was to perpetuate the
monarchy and class structure of the British Empire, impose Christianity
on Native populations, train local clergy to keep the new converts in
line, and educate the children of the elite.
Dartmouth College had been chartered by the King of England in 1769
as an Indian Charity School "with a view to spreading the knowledge
of the great Redeemer among their savage tribes."3 It soon evolved
into a school "to promote learning among the English, and be a
means to supply a great number of churches... with a learned and
orthodox ministry."4
After the defeat of the British, American revolutionaries and
Jeffersonian republicans led a movement to turn the colonial colleges
into public schools. For example, the Colony of Pennsylvania had granted
a charter to the University of Pennsylvania in 1755, under which the
university would be run by a self- perpetuating board, similar to the
Dartmouth College board. Following the revolution in 1779 the
legislature revoked the charter of the private University of
Pennsylvania and in its place established the public University of the
State of Pennsylvania.
In New Hampshire the newly elected Governor William Plumer, an ally
of Thomas Jefferson, introduced "An Act To Amend The Charter And
Enlarge And Improve The Corporation of Dartmouth College." The text
of the law, passed on June 27, 1816, begins:
"Whereas knowledge and learning generally diffused through a
Community are essential to the preservation of free Government,
...extending the opportunities and advantages of education is highly
conducive to promote this end..."
The legislature made private Dartmouth College into public Dartmouth
University and ordered the new university to set up public colleges
around the state.
Governor Plumer promoted the change, arguing that the original
provisions of Dartmouth College "emanated from royalty and
contained principles... hostile to the spirit and genius of free
government."5 However, the trustees of Dartmouth objected to the
charter change and took the state to court.
The New Hampshire Supreme Court ruled that the legislature had the
authority to change the charter of the college,
"...because it is a matter of too great moment, too intimately
connected with the public welfare and prosperity, to be thus entrusted
in the hands of a few. The education of the rising generation is a
matter of the highest public concern, and is worthy of the best
attention of every legislature."6
The decision was appealed to the US Supreme Court, which reversed the
state court. As a result, the corporate form was given Constitutional
protection and the formation of public colleges in the United States was
halted for 50 years.
THE US SUPREME COURT was not interested in education. The Court was
set up to be the final protector of a propertied class. Think of it from
a working class perspective. A group of wealthy white men goes behind
closed doors for a couple of months and comes up with a form of
government to protect and promote whom? The people they fear most:
slaves, women, indentured servants, Native people and people with little
or no property? Not likely.
The founders set up a government with a legislature composed of two
bodies: the House of Representatives, elected by the people (the people
at that time being, for the most part, white men who owned property),
and the Senate with members appointed by state legislatures. So, if the
"people's house" passed legislation that benefited the common
people at the expense of the ruling elite, it could be prevented from
becoming law by the Senate. And, should legislation promoting the
interests of the majority over the interests of the wealthy minority be
passed in both House and Senate, there was a president elected by an
electoral college, not directly by the people, who could veto the
legislation. If all this failed, and the House, Senate and president or
a state legislature passed laws detrimental to the ruling elite, the
case against that legislation could be taken to the Supreme Court. The
justices of this court are lawyers appointed for life, lawyers who, for
the most part, had distinguished careers representing the wealthy.
Imagine how the Supreme Court would have ruled in Dartmouth if it
were composed of shop stewards, teachers, homemakers and librarians. But
it wasn't. The Supreme Court delivered for the ruling elite, arguing
that a corporation is a private contract not a public law. The Court
decreed that although the state creates the corporation when it issues a
charter, it is not sovereign over that charter but is simply a party to
the contract. All of which means that the corporation is protected from
state interference by the Contracts Clause of the Constitution because
the relationship is a private not a public one. And so Dartmouth
University, a public school, once again became private . The republican
notion that "We the People" required an education in order to
have a truly republican form of government was defeated, at least
temporarily.
TEN YEARS LATER, Pennsylvania workers declared:
"...Let the productive classes, then, unite for the preservation
of their free institutions, and by procuring for all the children in the
Commonwealth Republican Education, ... Our government is republican; our
education should be equally so."7
Public education and the ten-hour day were the two goals of the labor
movement in the 1830s. These two demands, made by working people,
brought to the fore a question we should be asking today: if we have to
spend all our hours working to make ends meet, when will we do the work
of self-governance?
In 1886 the US Supreme Court ruled in the Santa Clara v. Southern
Pacific Railroad case that corporations are persons under the law and
are therefore entitled to equal protection under the 14th Amendment to
the Constitution. This meant that corporate activity to protect and
promote the interests of a wealthy minority was protected activity. This
is significant because in 1886, women, Native Americans and, once again,
most African Americans were denied the right to vote and equal
protection of the law.
If there remains any question in your mind as to the role the Courts
have played in advancing the preeminence of the Constitutional rights of
a propertied class over the human rights of everyone else, consider the
following:
1. THE 14TH AMENDMENT SPECIFIES, "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 any person
within its jurisdiction the equal protection of the laws." This
amendment was added to the Constitution in 1868 to protect freed slaves,
but as Supreme Court Justice Hugo Black pointed out, "Of the cases
in this court in which the Fourteenth Amendment was applied during the
first fifty years after its adoption, less than one-half of one percent
invoked it in protection of the
Negro race, and more than fifty percent asked that its benefits be
extended to corporations." For Black, this was undeniable evidence
that "the judicial inclusion of the word 'corporation' in the
Fourteenth Amendment has had a revolutionary effect on our form of
government."8
2. IN MINOR V. HAPPERSETT (1975), the women of Ohio argued that under
the Fourteenth Amendment's protection of due process, the US
Constitution established that their right to vote could not be denied by
the state.9 The US Supreme Court rejected that argument. Women received
Constitutional protection for the right to vote 48 years later when a
people's movement for equal rights was instrumental in the enactment of
the 19th Amendment to the Constitution in 1920. It established that the
right to vote could not be denied on the basis of sex and that the
Congress had the power to enforce the amendment by passing appropriate
legislation.
3. WHILE THE COURTS WERE EXTENDING "rights" to corporate
"persons" and denying them to women, they had, by 1920, struck
down roughly 300 labor
laws, laws that were passed by state legislatures for an eight-hour day,
laws against requiring people to work on Sunday, and laws against the
payment of wages in company scrip.
4. MORE THAN 1800 INJUNCTIONS against labor strikes were issued by
the Courts between 1880 and 1931.10 An injunction is a judge's order
prohibiting a party from a specific course of action. In the labor cases
referred to here, it usually meant that workers would break an
injunction if they went on strike. Many labor people at the time
considered injunctions against striking to be a violation of the 13th
Amendment to the US Constitution which states, "Neither slavery nor
involuntary servitude... shall exist within the United States..."
5. OF THE 118 LABOR INJUNCTIONS "heard" in Federal courts
between 1901 and 1928, 70 of them were issued ex parte, i.e., without
hearing the defendants, never notified of the hearing process.11 Of
course, all defendants in these cases were labor unions, union
officials, and union members.
The Dartmouth College case put the corporation on the legal map.
Subsequent Supreme Court decisions protected and promoted
"rights" for the institutions of the rich and consistently
suppressed the rights of all other people, including the right to vote,
the right to organize their institutions, and the right to work no more
than eight hours a day. So which class had a head start? Why should
inequalities today be a surprise?
copyright 2000 by Peter Kellman
A future issue of By What Authority will take on later
critiques of the Dartmouth case. For those of you who can't wait, go to
the nearest law library and dig out The Bank of Toledo v. The City of
Toledo and John R. Bond (1853) - 1 Ohio St. 622. In this case the Ohio
Supreme Court took on the Dartmouth decision and how it was interpreted,
finding both the decision and its interpretations wanting. This case is
a must read for anyone who wants to challenge the legal concept of the
corporation.
Endnotes:
1. Santa Clara County V. Southern Pacific Railroad (1886) - 118 U.S.
394.
2. The Board of Trustees of Dartmouth College v. Woodward (1819) - 17
U.S. 518.
3. Elsie W. Clews, Education, Legislation and Administration of the
Colonial Governments, New York: Macmillan Company, 1899, p. 171.
4. Clews, p. 173.
5. Governor Plumer's message to the New Hampshire legislature, June 6,
1816.
6. Reports of Cases Argued and Determined in the Superior Court of
Judicature, State of New Hampshire, 1816 - 1819, p. 135.
7. "Circular to the Working Men of the City and County of
Philadelphia," issued by the Working Men's Republican Association
of the Northern Liberties, Mechanics' Free Press, April 17, 1830.
8. Connecticut General Life Insurance Company V. Johnson, Treasurer of
California (1938) - 303 U.S. 77.
9. Minor V. Happersett (1875) - 88 U.S. 162.
10. For a listing of the court cases and statistics on labor
injunctions, see William E. Forbath, Law and the Shaping of the American
Labor Movement, Harvard University Press, 1991, Appendix A & B.
11. Leon Fink, from the article "Labor, Liberty and the Law: Trade
Unionism and the Problem of the American Constitutional Order."
By What Authority
A publication of the Program on Corporations, Law and Democracy.
POCLAD is a project of the nonprofit Council on International and Public
Affairs.
POCLAD
P.O. Box 246, So. Yarmouth
Massachusetts 02664-0246
Phone: (508) 398-1145
FAX: (508) 398-1552
E-mail: people@poclad.org
Website: www.poclad.org
Karen
Coulter, OR
Greg Coleridge, OH
Mike Ferner, OH
Richard Grossman, NH
Dave Henson, CA
Peter Kellman, ME
Ward Morehouse, NY
Jane Anne Morris, WI
Jim Price, AL
Virginia Rasmussen, MA
Mary Zepernick, MA
***
Bill Bachle, London, UK
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