by Al Gore
When corporations began hiring lobbyists to influence the writing of laws, the initial reaction was one of disgust. In 1853, the U.S. Supreme Court voided and made unenforceable a contingency contract involving lobbying—in part because those providing the money did so in secret. The justices concluded that such lobbying was harmful to public policy because it “tends to corrupt or contaminate, by improper influences, the integrity of our … political institutions” and “sully the purity or mislead the judgments of those to whom the high trust of legislation is confided” with “undue influences” that have “all the injurious effects of a direct fraud on the public.”
Twenty years later, the U.S. Supreme Court addressed the question once again, invalidating contingency contracts for lobbyists with these words: “If any of the great corporations of the country were to hire adventurers who make market of themselves in this way, to procure the passage of a general law with a view to the promotion of their private interests, the moral sense of every right-minded man would instinctively denounce the employer and employed as steeped in corruption, and the employment as infamous. If the instances were numerous, open and tolerated, they would be regarded as measuring the decay of the public morals and the degeneracy of the times.” The state of Georgia’s new constitution explicitly banned the lobbying of legislators.
Nevertheless, the “promotion of private interests” in legislation grew by leaps and bounds as larger and larger fortunes were made during the heyday of the Industrial Revolution—and as the impact of general laws on corporate opportunities grew. During the Robber Baron era of the 1880s and 1890s, according to the definitive history by Matthew Josephson, “The halls of legislation were transformed into a mart where the price of votes was haggled over, and laws, made to order, were bought and sold.”
It was during this corrupt era that the U.S. Supreme Court first designated corporations as “persons” entitled to some of the protections of the Fourteenth Amendment in an 1886 decision (Santa Clara County v. Southern Pacific Railroad Company). The decision itself, in favor of the Southern Pacific, did not actually address the subject of corporate “personhood,” but language that some historians believe was written by Justice Stephen Field was added in the “headnotes” of the case by the court reporter, who was the former president of a railway company. The chief justice had signaled before hearing the oral arguments that “the court does not wish to hear argument on the question of whether … the Fourteenth Amendment … applies to these corporations. We are all of the opinion that it does.” (This backhanded precedent for the doctrine of corporate personhood was relied upon by conservative Supreme Courts in the late twentieth century for extensions of “individual rights” to corporations—and in the Citizens United decision in 2010.)
This pivotal case has an interesting connection to the first nerve endings of the worldwide communications networks that later became the Global Mind. The brother of Justice Field, Cyrus Field, laid the first transoceanic telegraph cable in 1858. A third Field brother, David (whose large campaign contributions to Abraham Lincoln had resulted in Stephen’s appointment to the Supreme Court), happened to be in Paris with his family during the Paris Commune in 1871, and used the telegraph cable to send news of the riots, disorder, and subsequent massacre back to the United States in real time. It was the first time in history that an overseas news event was followed in the United States, as it unfolded, on a daily basis.
Though the Paris Commune had complex causes (including the bitter emotions surrounding the French defeat in the Franco-Prussian War that month and the struggle between republicans and monarchists), it became the first symbolic clash between communism and capitalism.† Karl Marx had published Das Kapital just four years earlier and wrote The Civil War in France during the two months of the Commune, saying that it would be “forever celebrated as the glorious harbinger of a new society.” A half century later, at Lenin’s funeral, his body was wrapped in a torn and tattered red and white flag that had been flown by Parisians during the two months of the Commune.
But as much as the Paris Commune inspired communists, it terrified elites in the United States, among them Justice Field, who was obsessively following the daily reports from his brother and journalists in Paris. The Paris Commune received more press coverage—almost all of it hostile—than any other story that year besides government corruption. The fear provoked by the Commune was magnified by labor unrest in the U.S., particularly by many who had arrived since the 1830s from the poorer countries of Europe in search of a better life but had been victimized by the unregulated abuses in low-wage industrial jobs. Two years later, the U.S. was plunged into a depression by the bankruptcy of financier and railroad entrepreneur Jay Cooke. Wages fell even lower and unemployment climbed even higher. The New York Times warned, “There is a ‘dangerous class’ in New York, quite as much as in Paris, and they want only the opportunity or the incentive to spread abroad the anarchy and ruin of the French Commune.”
According to historians, Justice Field was so radicalized by the Commune and what he feared were its implications for U.S. class warfare that he decided to make it his mission to strengthen corporations. His strategy was to use the new Fourteenth Amendment, which had been designed to confer the constitutional rights of persons on the freed slaves, as a vehicle for extending the rights of persons to corporations instead.
By the last decade of the nineteenth century, concentrated corporate power had attained such a shocking degree of control over American democracy that it triggered a populist reaction. When the Industrial Revolution resulted in the mass migration of Americans from farms to cities, and public concern grew over excesses and abuses such as child labor, long working hours, low wages, dangerous work environments, and unsafe food and medicines, reformers worked within the democracy sphere to demand new government policies and protections in the marketplace.
The Progressive movement at the turn of the twentieth century began implementing new laws to rein in corporate power, including the first broad antitrust law, the Sherman Act of 1898, though the Supreme Court sharply limited its constitutionality, as it limited the application and enforcement of virtually all Progressive legislation. In 1901, after the pro-corporate president William McKinley was assassinated only six months into his term, Theodore Roosevelt unexpectedly became president, and the following year launched an extraordinary assault on monopolies and abuses of overbearing corporate power.
Roosevelt established the Bureau of Corporations inside his new Department of Commerce and Labor. He launched an antitrust suit to break up J. P. Morgan’s Northern Securities Corporation, which included 112 corporations worth a combined $571 billion (in 2012 dollars), at the beginning of the twentieth century, and was worth “twice the total assessed value of all property in thirteen states in the southern United States.” This was followed by forty more antitrust suits. A seemingly inexhaustible source of presidential energy, Roosevelt also passed the Pure Food and Drug Act and protected more than 230 million acres of land, including the Grand Canyon, the Muir Woods, and the Tongass forest reserve—all while building the Panama Canal and winning the Nobel Peace Prize for resolving the Russo-Japanese War.
Roosevelt made a fateful decision at the beginning of his presidency not to run for a second full term in 1908, noting that he had served almost the full eight years that George Washington had established as the “wise custom” by serving only two terms. When Roosevelt’s handpicked successor, William Howard Taft, abandoned many of TR’s reforms, the march of corporate power resumed. In response, Roosevelt began to organize his Bull Moose Party campaign to replace Taft as president in the election of 1912.
In October of 1910, Roosevelt said, “Exactly as the special interests of cotton and slavery threatened our political integrity before the Civil War, so now the great special business interests too often control and corrupt the men and methods of government for their own profit.” Eighteen months later, in the midst of the campaign, he said that his party was engag
ed in a struggle for its soul:
The Republican party is now facing a great crisis. It is to decide whether it will be, as in the days of Lincoln, the party of the plain people, the party of progress, the party of social and industrial justice; or whether it will be the party of privilege and of special interests, the heir to those who were Lincoln’s most bitter opponents, the party that represents the great interests within and without Wall Street which desire through their control over the servants of the public to be kept immune from punishment when they do wrong and to be given privileges to which they are not entitled.
After Roosevelt lost that campaign to Woodrow Wilson (Taft came in third), he continued to speak out forcefully in favor of Progressive reforms and a rollback of corporate power. He said that the most important test of the country remained “the struggle of free men to gain and hold the right of self-government as against the special interests, who twist the methods of free government into machinery for defeating the popular will.” He proposed that the U.S. “prohibit the use of corporate funds directly or indirectly for political purposes,” and in speech after speech, argued that the Constitution “does not give the right of suffrage to any corporation.” Thanks in part to his vigorous advocacy, the Progressive movement gained strength, passing a constitutional amendment to reverse the Supreme Court’s prohibition against an income tax, enacting an inheritance tax, and enacting numerous regulations to rein in corporate abuses.
The many Progressive reforms continued during Woodrow Wilson’s presidency, but the pendulum shifted back toward corporate dominance of democracy during the Warren Harding administration—remembered for its corruption, including the Teapot Dome scandal in which oil company executives secretly bribed Harding administration officials for access to oil on public lands.
Following three pro-corporate Republican presidents, President Franklin Roosevelt launched the second wave of reform when he took office in 1933 in the midst of the suffering caused by the Great Depression that was triggered by the stock market crash of 1929. The New Deal expanded federal power in the marketplace to a formidable scale and scope. But once again the conservative Supreme Court stopped many of the Progressive initiatives, declaring them unconstitutional. Theodore Roosevelt had declared the justices “a menace to the welfare of the nation” and FDR essentially did the same. But he went further, proposing a court-packing plan to add to the number of justices on the court in an effort to dilute the power of the pro-business majority.
Historians differ on whether Roosevelt’s threat was the cause or not, but a few months later the Supreme Court reversed course and began approving the constitutionality of most New Deal proposals. To this day, some right-wing legal advocates refer to the court’s switch as a “betrayal.” In the twenty-first century, right-wing judicial activists are trying to return court rulings to the philosophy that existed prior to the New Deal.
In spite of FDR’s initiatives, the U.S. found it difficult to escape hard times, and slipped back into depression in 1938. Then, when America mobilized to respond to the totalitarian threat from Nazi Germany and Imperial Japan, the Depression finally ended. After the U.S. emerged victorious, its remarkable economic expansion continued for more than three decades. By then, the consensus in favor of an expanded role for the federal government in addressing national problems was supported by a majority of voters across the political spectrum.
In the turbulent decade of the 1960s, however, the seeds of a corporate-led counterreform movement were planted. After the assassination of President John F. Kennedy in the fall of 1963, a variety of social reform movements swept the nation—driven in part by the restless energy and idealism of the huge postwar baby boom generation just entering young adulthood. The civil rights movement, the women’s movement, the first gay rights demonstrations, the consumer rights movement, Lyndon Johnson’s War on Poverty, and the escalating protests against the continuation of the ill-considered proxy war against communism in Southeast Asia all combined to produce a fearful reaction by corporate interests and conservative ideologues.
Just as the Paris Commune had radicalized Justice Stephen Field 100 years earlier, the social movements in the U.S. during the 1960s also awakened a fear of disorder, radicalized a generation of right-wing market fundamentalists, and instilled a sense of mission in soon-to-be Supreme Court Justice Lewis Powell. Powell, a Richmond lawyer then best known for representing the tobacco industry after the surgeon general’s 1964 linkage of cigarettes to lung cancer, wrote a lengthy and historic 1971 memorandum for the U.S. Chamber of Commerce in which he presented a comprehensive plan for a sustained and massively funded long-term effort to change the nature of the U.S. Congress, state legislatures, and the judiciary in order to tilt the balance in favor of corporate interests. Powell was appointed to the Supreme Court by President Nixon two months later—though his plan for the Chamber of Commerce was not disclosed publicly until long after his confirmation hearings. A former president of the American College of Trial Lawyers, Powell was widely respected, even by his ideological opponents. But his aggressive expansion of corporate rights was the most consequential development during his tenure on the court.
Justice Powell wrote decisions creating the novel concept of “corporate speech,” which he found to be protected by the First Amendment. This doctrine was then used by the court to invalidate numerous laws that were intended to restrain corporate power when it interfered with the public interest. In 1978, for example, Powell wrote the opinion in a 5–4 decision that for the first time struck down state laws prohibiting corporate money in an election (a citizens referendum in Massachusetts) on the grounds that the law violated the free speech of “corporate persons.” Thirty-two years later, the U.S. Supreme Court relied on Powell’s opinion to allow wealthy individual donors to contribute unlimited amounts to campaigns secretly, and further expanded the 1886 Southern Pacific precedent declaring corporations to be persons.
While it is true that corporations are made up of individuals, the absurdity of the legal theory that corporations are “persons”—as defined in the Constitution—is evident from a comparison between the essential nature and motives of corporations compared to those of flesh-and-blood human beings. Most corporations are legally chartered by the state with an ironclad mandate to focus narrowly on the financial interests of their shareholders. They are theoretically immortal and often have access to vast wealth. Twenty-five U.S.-based multinational corporations have revenues larger than many of the world’s nation-states. More than half (53) of the 100 largest economies on Earth are now corporations. ExxonMobil, one of the largest corporations in the world, measured by revenue and profits, has a larger economic impact than the nation of Norway.
Individuals are capable of decisions that reflect factors other than their narrow financial self-interest; they are capable of feeling concern about the future their children and grandchildren will inherit—not just the money they will leave them in their wills; America’s founders decided as individuals, for example, to pledge “our Lives, our Fortunes, and our Sacred Honor” to a cause deemed far greater than money. Corporate “persons,” on the other hand, now often seem to have little regard for how they can help the country in which they are based; they are only concerned about how that country can help them make more money.
At an oil industry gathering in Washington, D.C., an executive from another company asked the then CEO of Exxon, Lee Raymond, to consider building additional refinery capacity inside the United States “for security” against possible shortages of gasoline. According to those present, Raymond replied, “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.” Raymond’s statement recalls the warning by Thomas Jefferson in 1809, barely a month after leaving the White House, when he wrote to John Jay about “the selfish spirit of commerce, which knows no country, and feels no passion or principle but that of gain.”
With the emergence of Earth Inc., multinational corporations have also acquired the
ability to play nation-states off against one another, locating facilities in jurisdictions with lower wages and less onerous restrictions on their freedom to operate as they wish. The late chairman of the libertarian Cato Institute, William Niskanen, said, “corporations have become sufficiently powerful to pose a threat to governments,” adding that this is “particularly the case with respect to multinational corporations, who will have much less dependence upon the positions of particular governments, much less loyalty in that sense.” In 2001, President George W. Bush was asked by the prime minister of India, Manmohan Singh, to influence ExxonMobil’s pending decision on allowing India’s state-owned oil company to participate in a joint venture including the oil company and the government of Russia. Bush replied, “Nobody tells those guys what to do.”
Those who advocate expanding the market sector at the expense of democratic authority believe that governments should rarely have the power to tell corporations “what to do.” For the last forty years, pursuant to the Powell Plan, corporations and conservative ideologues have not only focused on the selection of Supreme Court justices favorable to their cause and sought to influence Court opinions, they have also pursued a determined effort to influence the writing of laws and the formation of policies to expand corporate power. They dramatically increased corporate advertising aimed at conditioning public opinion. They significantly expanded the number of lobbyists hired to pursue their interests in Washington, D.C., and state capitals. And they significantly increased their campaign contributions to candidates who pledged to support their agenda.
