“There is an evil which ought to be guarded against in the indefinite accumulation of property from the capacity of holding it in perpetuity by ecclesiastical corporations. The power of all corporations ought to be limited in this respect. The growing wealth acquired by them never fails to be a source of abuses.”10
Similarly, in 1816, Thomas Jefferson had urged that we “crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”11
Twenty-five years earlier, when our great American constitutional effort concluded with the Bill of Rights, that threat to our country of a “trial of strength” was not yet present. As corporations blossomed in the booming 1790s, the traditional road, bridge, and canal monopolies remained of little concern.12 But the 1790s also brought banking corporations.13 These new entities caused new concerns, and the Founders’ worries about them are instructive.
Banking corporations were beyond the familiar mold for American corporations. They had no fixed, tangible purpose, and there were no obvious limits to their wealth or power, their reach, or their duration—they had no natural end. These characteristics rang alarm bells in the Founders’ minds. Looking back on this time through the lens of scholarly history, Supreme Court justice John Paul Stevens summed up the Founders’ dim view of the corporation: “Members of the founding generation held a cautious view of corporate power and a narrow view of corporate rights.”14 And it was not just the Founders who came to see these new, emboldened corporations as a threat to popular self-governance if unleashed in the political arena. The American people long have as well. As Justice Stevens wrote, Americans “have recognized a need to prevent corporations from undermining self-government since the founding” and “have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt.”15 Indeed, at the Founding, most states prohibited any political contribution by a corporation, and punished it as a criminal offense.16 The early restrictions on corporations in the nineteenth century were so limiting that building major enterprises such as Standard Oil required quite a bit of lawyerly ingenuity. The Rockefeller trust, for example, was created to work around laws restricting corporations from holding stock in other entities. That’s why it was “trusts” that had to be busted.17 Economically, a corporation can be a great boon.
The business corporation aggregates capital with unprecedented efficiency of both cost and purpose. Neither death nor illness interrupts it. It allocates liability and risk in ways that encourage investment. It is probably safe to say that the corporate form has allowed the creation of more wealth than any other invention. As an economic actor, it is without peer.
As a political actor, however, the corporation is a dangerous entity. The valuable characteristics of the corporate form as an economic tool are dangerous when pitted against humans in the political sphere. It was these characteristics of a modern for-profit corporation that members of the Founding generation came to perceive with such distress. First, for-profit corporations are dedicated exclusively to profit-making, by law. That is their solemn and sole duty to their shareholders.18 In business, this is an estimable characteristic, ensuring loyalty and diligence.
In politics, where moral issues and public goods are so often at stake, such single-mindedness is a flaw. Second, corporations have no soul or conscience. Courts have said they “have no personal attributes”19; a corporation is “without either mental or moral powers,”20 is “without power to think, speak, or act, except as live sentient human beings may think, speak, and act for it,”21 and “lacks capacity for numerous abilities of a natural person.”22 An artificial being without conscience or remorse, it is kept from misconduct not by an internal moral compass but by specific laws or by the adverse business prospect of gaining so bad a reputation as to interfere with its profit-making. Third, corporations have no loyalty to any flag or nation. Mostly this is true of modern multinational corporations, which move assets, jobs, and intellectual property around the globe at will. Exxon’s former CEO is quoted as saying, “I’m not a U.S. company and I don’t make decisions based on what is good for the U.S.”23 They have only a simple fiduciary loyalty to their shareholders. Some have revenues that exceed those of countries in which they operate. Fourth, corporations do not rest, retire, or die. They are persistent and unrelenting. The legal term is “perpetual succession,” meaning “artificial life extending beyond the natural lives of the incorporators, directors, and officers.”24 A corporation “does not die in the sense that a person dies.”25 Nor does it rest in the sense that a person rests. Fifth, there is no natural limit to corporations’ size; they can hold preposterous sums of money. In politics, where “money is the mother’s milk,”26 those sums can be used to acquire influence for the corporation, so as to promote policies that enrich the corporation well beyond the cost of buying that influence.
Indeed, given the corporation’s fiduciary obligation, it has some natural economic obligation to use its power to that end. Finally, there is no natural limit to their appetite. No corporation says, “You know, I think I’ve made enough money,” and pushes back from the table. No corporate lobby says, “You know, I think I’ve acquired enough political influence,” and goes out to play with the grandchildren. The continuity, single-mindedness, relentlessness, and efficiency that these characteristics permit are valuable qualities in economic enterprise. In the political arena, they present risks, which become acute if a corporation makes the fateful decision to pursue political influence as a moneymaking strategy. It is a voracious spiral: the more money the corporate entity can make through political influence, the more money it can justify spending to acquire that influence. The more money it spends, the greater its influence, the more it can use that influence to make more money, and so on, once acquiring political influence becomes a corporate profit-making strategy. Rare is the human being who desires to pursue, or is capable of pursuing, this influence-purchasing enterprise with such relentless and single-minded determination.
We humans ordinarily have families and churches, illnesses and distractions, hobbies and responsibilities of various kinds that get in the way. We may be passionate about our politics, but we need our sleep. The United States Supreme Court of the twentieth century summed up the political role indicated by these corporate characteristics thus: “That invisible, intangible, and artificial being, that mere legal entity, a corporation aggregate, is certainly not a citizen.”27 As described by legal scholar Burt Neuborne, the “for-profit business corporation [is] an artificial state-created legal fiction vested with unlimited life, entity shielding, limited shareholder liability, negotiable shares, and highly favorable rules encouraging the acquisition, accumulation, and retention of other people’s money.”28 Supreme Court justice John Paul Stevens reminded us that “corporations are different from human beings,” because unlike us, corporations “have no consciences, no beliefs, no feelings, no thoughts, no desires.”29 Putting these observations into a political context, Justice Stevens noted that corporations are not “members of ‘We the People’ by whom and for whom our Constitution was established.”30 “Certainly not a citizen,” “different from human beings,” not “members of ‘We the People’”—all these descriptors imply little or no political role for corporations. Once let loose in the political sphere, however, the sum of these corporate characteristics is a political creature with momentous natural advantages over its human competitors.
The Framers simply would not recognize the constitutional alien that is the modern corporation operating in our democracy; of course they didn’t design limits on the political activities of an entity they couldn’t even imagine. Add to these characteristics the twentieth-century advertising and marketing skills corporations have developed to sell their products, which apply well to the task of manipulating human voters. Add on size sufficient to dwarf many sovereign nations, and the massive profit that political ventures can provide. Then add the twenty-first-century technologies of constant communication.
Finally, add secrecy. The result is a power that could turn our popular democracy into high-tech corporate feudalism if we don’t learn how to restrain it. This book addresses how corporations have grown to a size and power and political role unimaginable to the Founders of our country; how the modern corporation has exploited the gap in the Founders’ constitutional foresight; how corporations now win the “trial of strength” against our democracy that Jefferson warned about; and what political prizes are sought and seized by corporate power through its political victories in that “trial of strength.” Finally, this book looks at the restraints the Founders did build into the system, from the civil court system to an independent press to citizens’ right to vote—restraints that can and must be employed to reclaim and reinvigorate our American popular democracy and restore to its proper preeminence the office of “citizen,” the one office all Americans occupy. James Madison is said to have warned that “the day will come when our Republic will be an impossibility. It will be an impossibility because wealth will be concentrated in the hands of a few. A republic can not stand upon bayonets, and when that day comes, when the wealth of the nation will be in the hands of a few, then we must rely upon the wisdom of the best elements in the country to readjust the laws of the nation to the changed conditions.”31 I believe that the day has come, and that readjustment is needed to reclaim the power that has slipped away from the hands of regular American citizens and into the grasp of corporate concentrated wealth. The big, politically active corporations love having us sit on the couch watching ads paid for by their front groups and deciding which of those ads appeal most to our opinions, fears, and prejudices. But that is being a consumer of their political product, not being a citizen. A citizen is more than a consumer. However much the tentacles of corporate political interference may coil around and through our democracy, at the end of the day the survival of our democratic experiment depends on the active participation of the people. Citizens need to get up off the couch and set things right. We’ve gotten off the couch before. When the Cuyahoga River in Ohio caught fire, Americans woke up to the environmental damage we were doing, started Earth Day, and passed a wealth of environmental laws that have made American life better and safer: the Clean Air Act, the Clean Water Act, hazardous waste laws, chemical safety laws, and laws protecting endangered species.32 What had happened? The creeping reach of pollution’s effects on all of us had reached a point where it sparked a reaction. Our reaction changed the country and made it a much healthier place to live. When we realized our diets were killing us, many Americans left behind the Wonder Bread, the canned vegetables, and the TV dinners.
When I was young, a health food store was a rarity, even an oddity. In 2015, Americans spent an estimated $37 billion on organic food.33 We are living nearly ten years longer now than when I was born. What happened? The creeping effects of an all-processed-foods diet reached a point for us where it sparked a reaction. Our reaction changed our diets and made us a healthier and more vigorous people. A similar reaction is due with respect to our democracy. Too much of our democratic debate today is the political equivalent of pollution and junk food. Other generations solved other problems; it’s our turn to solve this one. We can take example and heart from the fighting spirit of the bipartisan Roosevelts. Democrat Franklin D. Roosevelt saw the powerful forces of “organized money” (as dangerous, he said, as an “organized mob”) arrayed against him.34 Here is how he responded to what he had called “this resolute enemy within our gates”35 in an address to the nation: “Never before in all our history have these forces been so united against one candidate as they stand today.
They are unanimous in their hate for me—and I welcome their hatred. I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master.”36 Republican Teddy Roosevelt saw a similar enemy: “Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to dissolve the unholy alliance between corrupt business and corrupt politics, is the first task of the statesmanship of the day.”37 His call was clear: “Our government, National and State, must be freed from the sinister influence or control of special interests….
We must drive the special interests out of politics…. The citizens of the United States must effectively control the mighty commercial forces which they have called into being. There can be no effective control of corporations while their political activity remains.”38 Ever the optimist in a fight, Teddy Roosevelt concluded: “To put an end to it will be neither a short nor an easy task, but it can be done.”
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