Forgive me for deluging you with another long essay, but I can't stop myself.
Wally Taylor
Controlling Corporations and Restoring Democracy
By Lee Drutman and Charlie Cray
In These Times
Friday 18 February 2005
One does not have to look far in Washington these days to find evidence
that government policy is being crafted with America's biggest corporations in
mind.
For example, the Bush administration's 2006 budget cuts the enforcement
budgets of almost all the major regulatory agencies. If the gutting of the
ergonomics rule, power plant emissions standards and drug safety programs was not
already enough evidence that OSHA, EPA and FDA are deeply compromised, the
slashing of their enforcement budgets presents the possibility-indeed,
probability-that these public agencies will become captives of the private corporations
they are supposed to regulate.
This should come as no surprise to anybody familiar with the streams of
corporate money that flowed into Bush campaign coffers (as well as the Kerry
campaign and all races for the House and Senate) in the 2004 election. The old
"follow the money" adage leads us to a democracy in thrall to giant
corporations-a democracy that is a far cry from the government "of the people, by the
people, and for the people" that Lincoln hailed at Gettysburg.
At a time when our democracy appears to be so thoroughly under the sway
of large corporations, it is tempting to give up on politics. We must resist
this temptation. Democracy offers the best solution to challenging corporate
power. We must engage as citizens, not just as consumers or investors angling for
a share of President Bush's "ownership society."
The Problem of Corporate Power
Unfortunately, the destructive power of large corporations today is not
limited to the political sphere. The increasing domination of corporations over
virtually every dimension of our lives-economic, political, cultural, even
spiritual-poses a fundamental threat to the well-being of our society.
Corporations have fostered a polarization of wealth that has undermined
our faith in a shared sense of prosperity. A corporate-driven consumer culture
has led millions of Americans into personal debt, and alienated millions more
by convincing them that the only path to happiness is through the purchase and
consumption of ever-increasing quantities of material goods. The damage to
the earth's life-supporting systems caused by the accelerating extraction of
natural resources and the continued production, use, and disposal of
life-threatening chemicals and greenhouse gases is huge and, in some respects,
irreversible.
Today's giant corporations spend billions of dollars a year to project a
positive, friendly and caring image, promoting themselves as "responsible
citizens" and "good neighbors." They have large marketing budgets and public
relations experts skilled at neutralizing their critics and diverting attention
from any controversy. By 2004, corporate advertising expenditures were expected
to top $250 billion, enough to bring the average American more than 2,000
commercial messages a day.
The problem of the corporation is at root one of design. Corporations are
not structured to be benevolent institutions; they are structured to make
money. In the pursuit of this one goal, they will freely cast aside concerns
about the societies and ecological systems in which they operate.
When corporations reach the size that they have reached today, they begin
to overwhelm the political institutions that can keep them in check, eroding
key limitations on their destructive capacities. Internationally, of the 100
largest economies in the world, 51 are corporations and 49 are nations.
How Big Business Got to Be So Big
Corporations in the United States began as quasi-government institutions,
business organizations created by deliberate acts of state governments for
distinct public purposes such as building canals or turnpikes. These
corporations were limited in size and had only those rights and privileges directly
written into their charters. As corporations grew bigger and more independent,
their legal status changed them from creatures of the state to independent
entities, from mere business organizations to "persons" with constitutional rights.
The last three decades have represented the most sustained pro-business
period in U.S. history.
The corporate sector's game plan for fortifying its power in America was
outlined in a memo written in August 1971 by soon-to-be Supreme Court Justice
Lewis F. Powell Jr. at the behest of the U.S. Chamber of Commerce. The "Powell
Memorandum," drafted in response to rising popular skepticism about the role
of big business and the unprecedented growth of consumer and environmental
protection laws, was intended as a catalytic plan to spur big business into
action. Powell argued that corporate leaders should single out the campuses, the
courts and the media as key battlegrounds.
One of the most significant developments that followed Powell's memo was
the formation of the Business Roundtable in 1972 by Frederick Borch of General
Electric and John Harper of Alcoa. As author Ted Nace has explained, "The
Business Roundtable ... functioned as a sort of senate for the corporate elite,
allowing big business as a whole to set priorities and deploy its resources in
a more effective way than ever before. ... The '70s saw the creation of
institutions to support the corporate agenda, including foundations, think tanks,
litigation centers, publications, and increasingly sophisticated public
relations and lobbying agencies."
For example, beer magnate Joseph Coors, moved by Powell's memo, donated a
quarter of a million dollars to the Analysis and Research Association, the
forerunner of the massive font of pro-business and conservative propaganda known
today as the Heritage Foundation. Meanwhile, existing but tiny conservative
think tanks, like the Hoover Institute and the American Enterprise Institute
for Public Policy Research, grew dramatically in the '70s. Today, they are key
players in the pro-business policy apparatus that dominates state and federal
policymaking.
According to a 2004 study by the National Committee for Responsive
Philanthropy, between 1999 and 2001, 79 conservative foundations made more than $252
million in grants to 350 "archconservative policy nonprofit organizations."
By contrast, the few timid foundations that have funded liberal causes often
seem to act as a "drag anchor" on the progressive movement, moving from issue to
issue like trust fund children with a serious case of attention-deficit
disorder.
From Analysis to Action
The vast majority of people, when asked, believe that corporations have
too much power and are too focused on making a profit. "Business has gained too
much power over too many aspects of American life," agreed 82 percent of
respondents in a June 2000 Business Week poll, a year and a half before Enron's
collapse. A 2004 Harris poll found that three-quarters of respondents said that
the image of large corporations was either "not good" or "terrible."
Corporations have achieved their dominant role in society through a
complex power grab that spans the economic, political, legal and cultural spheres.
Any attempt to challenge their power must take all these areas into account.
There is a great need to develop a domestic strategy for challenging
corporate power in the United States, where 185 of the world's 500 largest
corporations are headquartered. Although any efforts to challenge corporations are
inevitably bound up in the global justice movement, there is much to do here in
the United States that can have a profoundly important effect on the global
situation.
By understanding the origin of the corporation as a creature of the
state, we can better understand how we, as citizens with sovereignty over our
government, ultimately can and must assert our right to hold corporations
accountable. The task is to understand how we can begin to reestablish true citizen
sovereignty in a country where corporations currently have almost all the power.
Developing the Movement
To free our economy, culture and politics from the grip of giant
corporations, we will have to develop a large, diverse and well-organized movement.
But at what level should we focus our efforts: local, state, national or global?
The answer, we believe, is a balance of all four.
Across the country, many local communities continue to organize in
resistance to giant chain stores like Wal-Mart, predatory lenders, factory farms,
private prisons, incinerators and landfills, the planting of genetically
modified organisms, and nuclear power plants. Local communities are continuously
organizing to strengthen local businesses, raise the living wage, resist predatory
marketing in schools, cut off corporate welfare and protect essential
services such as water from privatization. Local struggles are crucial for recruiting
citizens to the broader struggle against corporate rule.
Unfortunately, examples of grassroots movements that have succeeded in
placing structural restraints on corporations are not as common as they should
be. One of the ways we can accelerate the process is by organizing a
large-scale national network of state and local lawmakers who are interested in enacting
policies that address specific issues or place broader restraints on
corporate power.
Just as the corporations have the powerful American Legislative Exchange
Council (ALEC) to distribute and support model legislation in the states, so
we need our own networks to experiment with and advance different policies that
can curb and limit corporate power. The National Caucus of Environmental
Legislators-a low-budget coalition of state lawmakers established in 1996 in
response to the Republican takeover of Congress and several state legislatures-is a
model that could be used to introduce and advance innovative legislative
ideas at the state level. The New Rules Project has also begun to analyze and
compile information on these kinds of laws. Additionally, the U.S. PIRG network of
state public interest research groups and the Center for Policy Alternatives
have worked to promote model progressive legislation, as has the newly founded
American Legislative Issue Campaign Exchange (ALICE).
Moving the Movement
Despite their many strengths, many major movements of the past few
decades (labor, environmental, consumer) have all suffered from internal fractures
and a lack of connection to the broader society. The result is that they have
been increasingly boxed into "special interest" roles, despite the fact that
the policies they advocate generally benefit the vast majority of people.
Cognitive linguist George Lakoff puts it this way: "Coalitions with
different interest-based messages for different voting blocks [are] without a
general moral vision. Movements, on the other hand, are based on shared values,
values that define who we are. They have a better chance of being broad-based and
lasting. In short, progressives need to be thinking in terms of a broad-based
progressive-values movement, not in terms of issue coalitions."
If there is one group at the center of the struggle to challenge
corporate power, it is organized labor. As a Century Foundation Task Force Report on
the Future of Unions concluded, "Labor unions have been the single most
important agent for social justice in the United States."
Labor is at the forefront of efforts to challenge excessive CEO pay,
corporate attempts to move their headquarters offshore to avoid paying their fair
share of taxes, and the outsourcing of jobs. Labor also has played a leading
role in opposing the war in Iraq and exposing war profiteers benefiting from
Iraq reconstruction contracts.
As AFL-CIO President John Sweeney has written, unions need to start
"building social movements that reach beyond the workplace into the entire
community and offer working people beyond our ranks the opportunity to improve their
lives and livelihood." This is beginning to occur more frequently. Union locals
and national labor support groups like Jobs With Justice have been a key
force in building cross-town alliances around economic justice battles such as
living wage campaigns and the new Fair Taxes for All campaign.
These union-led, cross-community alliances have in turn supported some of
the strongest union organizing campaigns, including the nearly
two-decades-old Justice for Janitors campaign that the Service Employees International Union
(SEIU) and its allies successfully organized in Los Angeles and other cities
across the country.
Clearly, labor unions, along with community-based organizations and
churches, will be central to the construction of lasting local coalitions that can
serve as organizing clearinghouses to challenge corporate rule.
Constructing a New Politics
To challenge corporate power we must also value and rebuild the public
sphere, and draw clear lines of resistance against the expansion of corporate
power, such as the current push by Bush to convert Social Security into
individual investment accounts that will allow Wall Street to rake off billions of
dollars in annual brokerage fees. Most importantly, we must work to change the
rules instead of agreeing to play with a stacked deck.
In our hyper-commercialized culture, we spend far more time and energy
thinking about what products we want to buy next instead of thinking about how
we can change our local communities for the better, or affect the latest
debates in Washington, D.C. or the state capitol. And when so much energy is spent
on commercial and material pursuits instead of on collective and political
pursuits, we begin to think of ourselves as consumers, not citizens, with little
understanding of how or why we are so disempowered.
The restoration of democracy requires us to address the backstory behind
this process of psychological colonization. It requires us to address the
public policies and judicial doctrines that treat advertising as a public good-a
tax-deductible business expense and a form of speech protected by the First
Amendment. It's been so long since we have seriously addressed such fundamental
questions that, as a result, the average American is now exposed to more than
100 commercial messages per waking hour. As of October 2003, there were 46,438
shopping malls in the United States, covering 5.8 billion square feet of
space, or about 20.2 square feet for every man, woman and child in the United
States. As economist Juliet Schor reports, "Americans spend three to four times as
many hours a year shopping as their counterparts in Western European
countries. Once a purely utilitarian chore, shopping has been elevated to the status of
a national passion."
A consequence of the hyper-commercialization of our culture is that
instead of organizing collectively, we often buy into the market-based ideology of
individual choice and responsibility and assume that we can change the world
by changing our personal habits of consumption. The politics of recycling
offers a minor but telling example of how corporations manage to escape blame by
utilizing the politics of personal responsibility. Although recycling is a
decent habit, the message conveyed is that the onus for environmental
sustainability largely rests upon the individual, and that the solutions to pollution are
not to be found further upstream in the industrial system.
The personal choices we make are important. But we shouldn't assume
that's the best we can do. We need to understand that it can't truly be a matter of
choice until we get some more say in what our choices are. True power still
resides in the ability to write, enforce and judge the laws of the land, no
matter what the corporations and their personal-choice, market-centered view of
the world instruct us to believe.
Rebuilding the Public Sphere
With increased corporate encroachment upon our schools and universities,
our arts institutions, our houses of worship and even our elections, we are
losing the independent institutions that once nurtured and developed the values
and beliefs necessary to challenge the corporate worldview. These and other
institutions and public assets should be considered valuable parts of a public
"commons" of our collective heritage and therefore off limits to for-profit
corporations.
"The idea of the commons helps us identify and describe the common values
that lie beyond the marketplace," writes author David Bollier. "We can begin
to develop a more textured appreciation for the importance of civic
commitment, democratic norms, social equity, cultural and aesthetic concerns, and
ecological needs. . . . A language of the commons also serves to restore humanistic,
democratic concerns to their proper place in public policy-making. It insists
that citizenship trumps ownership, that the democratic tradition be given an
equal or superior footing vis-à-vis the economic categories of the market."
Changing the Rules
Much citizen organizing today focuses on influencing administrative,
legislative and judicial processes that are set up to favor large corporations
from the very start. Put simply, many of the rules are not fair, and until we can
begin to collectively challenge this fundamental unfairness, we will continue
to fight with one hand tied behind our backs. Instead of providing
opportunities for people to organize collectively to demand real political solutions and
start asking tough questions about how harmful policies become law in the
first place, many community-based organizations seem content to merely clean up
the mess left behind by failed economic policies and declining social services.
The most successful organizing happens when it is focused on specific
demands. Two crucial reforms have great potential to aid the movement's ability
to grow: fundamental campaign finance reform and media reform. Together, these
could serve as a compelling foundation for a mass movement that challenges
corporate power more broadly.
The movement for citizen-controlled elections, organized at the local
level with support from national groups such as the Center for Voting and
Democracy and Public Campaign, provides a useful framework for action for the broad
spectrum of people who currently feel shut out of politics.
Media reform is also essential. With growing government secrecy and a
corporate-dominated two-party political system, the role of independent media is
more critical than ever. As Bill Moyers suggested in his keynote address at
the National Conference on Media Reform in 2003, "If free and independent
journalism committed to telling the truth without fear or favor is suffocated, the
oxygen goes out of democracy."
The media have always been and will continue to be the most important
tool for communicating ideas and educating the public about ongoing problems.
Thomas Paine wrote more than 200 years ago:
There is nothing that obtains so general an influence over the manners
and morals of a people as the press; from that as from a fountain the streams of
vice or virtue are poured forth over a nation."
History is replete with examples that show how critical the media's role
has been in addressing the injustices of our society. For instance, many
Progressive Era reforms came only in response to the investigative exposés of
corporate abuses by muckraking journalists like Upton Sinclair and Ida Tarbell.
Writing in popular magazines like Collier's and McClure's, these writers provided
a powerful public challenge to the corruption of the Gilded Age.
Because of increased corporate consolidation of the media, coverage of
all levels of government has been greatly reduced. When people are kept ignorant
of what is happening in their communities, in their states, in Washington,
D.C. and in the world, it becomes much easier for large corporations to
overwhelm the political process and control the economy without citizens understanding
what is happening. Though media reform is a complex subject, one approach
bears mentioning-establishing and strengthening nonprofit media outlets.
The Long-Term Vision
Though campaign finance reform and media reform offer useful starting
points, ultimately, there is much more to be done. We need to get tough on
corporate crime. We need to make sure markets are properly competitive by breaking
up the giant corporate monopolies and oligarchies. We need to make corporations
more accountable to all stakeholders and less focused on maximizing
shareholder profit above all. We need to stop allowing corporations to claim Bill of
Rights protections to undermine citizen-enacted laws.
Ultimately, we need to restore the understanding that in a democracy the
rights of citizens to govern themselves are more important than the rights of
corporations to make money. Since their charters and licenses are granted by
citizen governments, it should be up to the people to decide how corporations
can serve the public good and what should be done when they don't. As Justices
Byron White, William Brennan and Thurgood Marshall noted in 1978:
"Corporations are artificial entities created by law for the purpose of furthering certain
economic goals. . . . The State need not permit its own creation to consume
it."
The People's Business
The many constituencies concerned with the consequences of corporate
power are indeed a diverse group, and although this diversity can be a source of
strength, it also makes it difficult to clearly articulate a vision for the
struggle. What principles, then, can unite us?
One abiding faith that almost all of us share is that of citizen
democracy: that citizens should be able to decide how they wish to live through
democratic processes and that big corporations should not be able to tell citizens
how to live their lives and run their communities. The most effective way to
control corporations will be to restore citizen democracy and to reclaim the
once widely accepted principle that corporations are but creatures of the state,
chartered under the premise that they will serve the public good, and entitled
to only those rights and privileges granted by citizen-controlled
governments. Only by doing so will we be able to create the just and sustainable economy
that we seek, an economy driven by the values of human life and community and
democracy instead of the current suicide economy driven only by the relentless
pursuit of financial profit at any cost.
Therefore, we must work assiduously to challenge the dominant role of the
corporation in our lives and in our politics. We must reestablish citizen
sovereignty, and we must restore the corporations to their proper role as the
servants of the people, not our masters. This is the people's business.
Lee Drutman is the communications director of Citizen Works; and Charlie
Cray is the director of the Center for Corporate Policy. They are co-authors
of "The People's Business: Controlling Corporations and Restoring Democracy"
(Berrett-Koehler), from which this essay was adapted.
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