economics: the corporation


Corporate Personhood

(Transcript of talk given at LaRoche College, March 27, 2008, Pittsburgh, PA)


How many of you feel you might have a genetic disposition to diabetes? Well, guess what? That gene, or gene sequence, probably does not belong to you. It likely belongs to an Australian biotech firm called Autogen.

This didn’t become common knowledge until November of 2000, when the corporation entered into talks with the government of Tonga to conduct genetic research on the people of that island nation, research that coincidentally would have granted the corporation legal ownership of any genetic material it catalogued.1

Naturally, the people of Tonga had no idea this was going on, yelled bloody murder, and put a stop to it.2 But by then, the cat was out of the bag, and the whole world began to discover what biotech firms had been doing for years: Bioprospecting, they call it: “discovering” (the way Columbus “discovered” America) genetic materials from plants, animals, and unsuspecting humans and patenting it. What we people call “bio-pirating.”

So how is it possible that our world has reached such a stage that the stuff of life itself, and the stuff of our own bodies, is now owned by profit-driven entities called corporations? How did we reach the point that corporations now have rights that far surpass the rights of any mere mortal.

Well, let’s go back a few hundred years:

Our Constitution was written by an elite class of white male property owners who viewed the rest of us as “the mob at the gate.” They did not believe in democracy for all, or in a democratic system of representation. They wanted a Republic wherein an elite class could maintain control and have the final say in all decisions. So even though we have a Bill of Rights to protect basic freedoms for those granted full citizenship, the Constitution was written to protect property and capitalist enterprise, not human rights.

However, because of the colonists’ experience with British corporations which were chartered by the King, and which were given the power to raise armies, levy their own taxes, and wield tremendous power over the colonists, the Constitution gave control of corporations to individual states.3 This ensured close regulation, adherence to local laws and tight control of entities prone to abuses of power.

Even more importantly, corporations could not obtain a charter to exist unless they could prove that their profit-making enterprises also benefited the public good.4 When corporations violated these terms, their charters were frequently revoked by state legislatures.5,6

Nearly a hundred years later, in 1868, the 14th Amendment was passed which gave citizenship rights to all persons born or naturalized in the United States.7 And the reason for this was because three years earlier, the 13th Amendment had been ratified, giving freedom to all persons previously enslaved.8 So now they were being given actual citizenship rights.

At the same time, the wealthy elite were becoming more powerful, more in control of state and federal governments and more inclined to give corporations free rein to make them even richer and more powerful.

In particular, the Civil War saw a rapid increase in the number and size of corporations:9 this was truly the beginning of our war-based, capitalist economy as more and more of the wealthy elite got into the various businesses that profit from war.10 Along with their increasing wealth and power came increasing influence on state and federal legislatures, courts, judges and entire legal systems.11 And, of course, the ability to buy the best lawyers to argue their point of view.

So it was in 1886, that the Supreme Court of the United States heard a case called Santa Clara County vs. Southern Pacific Railroad. Southern Pacific’s lawyers argued that their corporation, as an entity created in the United States, was no different from any person “created” in the United States and, therefore, should be entitled to the same protections of the newly passed 14th Amendment.12

Without explanation or allowing any arguments, the Court ruled unanimously that corporations are, indeed, persons and, as such, are entitled to the full protection of all the same laws that protect individuals. And, of course, they cited the 14th Amendment as giving them that right—the same Amendment intended to give rights to freed slaves, most of whom still couldn’t even vote, own property, get decent jobs, housing, education, medical care, or participate freely in public life.13,14

Further, over the years, in Court ruling after ruling, while African Americans actually lost rights, corporations began increasing and consolidating their rights as full citizens:

In 1893, they won the guarantee of 5th Amendment protection of due process.15 In 1906, it was Fourth Amendment protection against warrantless searches and seizures.16 In the 1920s, they gained protections under the First Amendment (freedom of speech) and protection from government interference (for example, allowing them free rein to pollute the environment) under the Fifth Amendment.17 And in 1976, they won the right to contribute unlimited sums to politicians and political parties, as the Supreme Court bought their argument that money is the same as speech.18 It is literally the law of our nation that money talks.

In fact, corporations are now entitled to more protections than individual citizens, both in practice and in law.

Corporations can—and have—seized land from individual citizens by claiming that such seizures benefit the common good and by directing local governments to claim eminent domain.19 Corporations can—and have—gotten away with murdering people with toxins, unsafe working conditions, and faulty products by claiming illegal search and seizure or illegal governmental interference in their obligation to create profits for their shareholders.20

Even more incredibly, if citizens or governments are successful in shutting them down, kicking them out or otherwise challenging their tyranny, corporations can—and frequently do—cite their Fifth Amendment rights and sue citizens and governments for the loss of future profits, and they frequently win.21

Corporations can—and do—get away with buying politicians, changing the outcome of elections and making laws because their legally-protected greater sums of money talk louder than we citizens do.

Let me give you 3 examples of how this works:

Shortly after taking office as governor of Texas, George Bush signed into law the Texas Environmental, Health & Safety Audit Privilege Act which exempts companies from reporting violations of environmental regulations to law enforcement officials or to the public. And if they do choose to report a violation, they cannot be penalized in any way. The same companies who benefited from this law donated $4 million to Bush’s campaign, which is perfectly legal under the First Amendment rights of corporations to “free speech”—you know, the “money talks” entitlement. Over the past ten years, some 25 other states have passed similar Audit Privilege laws.22

In 1997, the EPA received an anonymous tip from an employee of Riverdale Mills, a wire-mesh manufacturer located on the Blackstone River near Worcester, Massachusetts. The employee said the mill’s wastewater treatment plant wasn’t working. Agents got a search warrant to investigate and collected evidence that was used by the EPA to indict the company’s owner on two counts of violating the Clean Water Act. However, the judge agreed with the owner’s attorneys and refused to allow the water test results into testimony because the EPA took the samples without informing the owner. The case against the mill was dropped.23

In the early 1990s, Florida Rock Industries applied for a permit to mine limestone from 1,500 acres in the Florida Everglades wetlands. To their credit, the Army Corps of Engineers denied the permit because of the high risks of pollution and destruction of habitat. So the company sued the Army Corps for compensation of future profits; the government wound up paying Florida Rock $21 million.24

Today, the charters governing corporations no longer require businesses to benefit the public good; instead, they are required by law to place the wealth and profits of the private shareholders above all other considerations, including local laws and ordinances.25

This legal point is also now—thanks to the United States—enshrined in international law and is the reason why the World Trade Organization consistently rules against the laws and protections of sovereign nations in favor of the rights of corporations to operate independently and above local and civil laws and regulations: So long as they are creating wealth and profits for the shareholders, their practices and operations cannot be impeded in any way.26 Their right to make money takes legal precedence over human rights.

This right also extends to concepts of ownership that, in effect, turn human beings into indentured servants for corporate profits. In addition to mineral or drilling rights beneath the land you or entire villages thought you owned, corporations now own rights to the seeds that farmers once saved and shared freely, but now have to purchase at exorbitant cost;27 they own rights to entire species of medicinal plants that are integral to indigenous cultures;28 they even, as I mentioned earlier, have begun obtaining legal rights to entire human genetic sequences, including the genetic material of indigenous tribes in remote parts of the world.29

An interesting example of how corporate rights supersede human rights is in the area of free speech. Anyone ever hear of non-disparagement agreements? These are contracts signed by employees which forbid them from saying mean things about the corporation they work for, and over the past few years, the number of companies using them has doubled.30 Well, this past January [2008], the investment firm Lazard began using a non-disparagement agreement which forbids not only the employee from disparaging the company, but also the employee’s spouse, domestic partner, parents, and any of their lineal descendants.31 And yes, it’s completely legal under our corporate personhood laws.

copyright 2008, Mimi Yahn