A Citizens' Independence Movement

By Jeffrey Kaplan and Jeff Milchen

July 02, 2004

The power and influence that corporations enjoy today—indeed, the fact that corporations have the same rights as individuals—are not what our country's founders intended. But progressive activists are working mostly on damage control, rather than making genuine, lasting progress. Here, two veteran activists explain how to bring our single-issue energies together to tear down corporate rule and restore accountability.

Jeff Milchen directs ReclaimDemocracy.org, a nonprofit organization devoted to restoring citizen authority over corporations. Jeffrey Kaplan is a writer and researcher active in the group’s San Francisco Bay area chapter.

In an era when even Business Week runs cover stories about runaway corporate power, few Americans today doubt that corporations wield immense power over our laws, governments, and almost every realm of civic society. Every day, thousands of organizations work to resist harmful actions by corporations and their myriad front groups, but how will citizens move beyond reactive struggles to enable genuine progress?

Today’s challenge for those who seek to revitalize democracy and free our country from control by corporate interests is to show others a clear vision of an America where corporations serve a narrow role—doing business and nothing more.

The trend, of course, is in the opposite direction. There have been 150 years of legal decisions favoring big business, granting corporations legal rights that our founders intended solely for individual human beings. And while human liberty is on the defensive against authoritarianism, corporations are seizing power as aggressively as ever.

For example, courts recently have ruled that municipalities attempting to control the placement of cell phone towers are violating corporate “civil rights.” Corporations selling computerized voting machines claim the 4th Amendment prevents citizens from ensuring that proprietary software isn't used to manipulate elections.

Of course it isn't just Americans’ rights threatened. Perhaps the most significant U.S. export isn't grain or pharmaceuticals, but the legal and institutional structure of corporate control. U.S. authorities declared in July 2003 that Iraq must accept foreign investment and corporatization of its (previously national) oil industry before enjoying their recently granted “sovereignty.” In other words, democracy is permissible only after the most important economic decisions for the future of Iraqis have been decided for them and transnational corporations control their economic lifeblood.

The Rise of Corporate Power

In the early decades of our nation, corporations were tightly controlled entities that enjoyed severely limited privileges and no inherent “rights.” But during the Industrial Revolution, wealthy businessmen, especially railroad executives, succeeded in winning dramatic expansions of corporate privileges. By 1890, most long-standing restrictions had been removed, and the U.S. Supreme Court had granted corporations the legal standing of natural persons—i.e. “corporate personhood.”

Soon the Court bestowed Bill of Rights protections upon them, but with virtually none of the responsibilities borne by human beings. The Supreme Court effectively had subordinated the rights of citizens to institutions with the power to undermine our personal liberties and democracy.

A powerful resistance movement arose, which culminated in the Populist Party, the last third party in American politics to dramatically influence national debate. Although the Populists were defeated in the presidential elections of 1896, populist sentiment remained strong and corporate leaders felt the need to redirect this insurrection against corporate  power.

The regulatory system installed during the early 1900s was their solution to this problem. Initiated largely by big business, the regulatory system succeeded overwhelmingly in channeling Populist rebellion against the corporate power structure back into protest against separate “abuses.” The regulatory reforms placed the adjudication of these individual grievances in the hands of agencies dominated by the business entities they purported to control.

The regulatory system remains today what a U.S. attorney general reassured corporate leaders it would be at the turn of the century—“a barrier between corporations and the people.”

Rethinking Activism

Perhaps we should tear down that barrier, rather than repeatedly entangle ourselves within it. Pursuing bureaucratic remedies such as environmental impact reports and e-mailing regulatory officials who came straight from the industry may be necessary tactics, but they fail utterly as an ongoing strategy. So long as we permit wealth—both corporate and private—to dominate political life, “democracy” will be a platitude from the mouths of demagogues rather than a reality.

So what can we do if traditional means of protest won't work? In simple terms, we need to build a political movement to reclaim democracy, starting where democracy begins—at the community level. Citizens can press local and state governments to pass laws challenging corporate personhood. Such ordinances and resolutions could be much like the ones more than 330 communities have passed in opposition to the USA PATRIOT Act—and for a similar reason: our rights as citizens are in grave danger.

Seeds of Change

A “progressive” undertaking? Not necessarily. Nebraska, South Dakota and several other largely conservative Midwestern states have passed laws forbidding corporate ownership of farms. At least 11 townships in rural Pennsylvania have done the same. True conservatives recognize that corporations were established strictly as business entities and should remain so.

Many communities are proactively excluding big-box stores through size caps or limits on chains, rather than repeatedly fighting defensive battles. In addition to accomplishing worthy goals, these efforts provoke much-needed debate about rights of communities vs.. those assumed by corporations.

Citizens can further such efforts by learning ways corporate legal privileges strip us of the power to stop corporations from doing harm in our communities. For example, if a company repeatedly breaks health, safety or environmental laws, thanks to corporate personhood, public officials may be blocked from making surprise inspections of corporate property. They first must obtain a warrant just as if it were personal property. Of course, this enables companies to conceal dangers and imperils public welfare.

Eventually, local officials may follow the lead of tiny Porter Township, Pa. Two years ago, when agribusiness giant Synagro complained that a law controlling use of toxic sludge as fertilizer violated its constitutional rights, the community passed the first U.S. ordinance to declare that corporations have no constitutional rights within local jurisdiction.  It took mere months for a neighboring community to replicate the effort.

These initiatives demonstrate that, with the right language and framing of issues, exposing the insolence of corporations can inspire radical, proactive challenges to the legitimacy of corporate privileges.  If that defiance were to spread, corporate executives would face tough decisions on whether to concede significant privileges or risk confrontation on a scale not seen since the Boston Tea Party and the ransacking of East India Company property.

While oppression by the East India Company was militarily backed, corporate rule typically is installed with more subtle force. Trade treaties such as NAFTA and GATT really are globalized versions of the “Interstate Commerce Clause” of the U.S. Constitution, which the Supreme Court often uses to invalidate state laws (laws banning corporations from importing and dumping hazardous waste from other states, for example).

Opportunities from Corporate Overreaching

Groups advocating for individual causes need not sacrifice their focus. But perhaps they could re-frame some issues within the context of corporate domination and introduce long-term structural solutions to their constituencies, even while doing imperative short-term work.

Immediate opportunities for such structural focus abound. For example, in its recently settled lawsuit against Oakhurst Dairy (a family-owned Maine company), Monsanto lawyers claimed that Oakhurst's labels stating, “Our farmers’ pledge: No artificial growth hormones,” were an unfair business practice. Though nobody contested the label’s accuracy, Monsanto claimed such statements imply inferiority of products derived from cows fed artificial hormones. Not surprisingly, the transnational giant persuaded Oakhurst to back down and dilute the statement, but Oakhurst is not the real target. Monsanto wants to establish corporate rights as superceding any right we have to know the origins of our food, and it won't stop with Oakhurst. How will we respond next time?

Notably, meatpacking giants needed no legal action to prevent a small beef producer from ensuring its animals were free of mad cow disease. Federal regulators did their dirty work by forbidding the testing!

Corporations increasingly are exercising illegitimate political power over our own local governments as well. In California’s Contra Costa county, local officials enacted a size cap on new “supercenters.” Wal-Mart had no immediate plans to build in the area, but company officials didn't like the precedent. Wal-Mart hired signature gatherers (paying them far more than most store employees) to put an initiative on the March ballot overriding the size cap, then waged a massive ad campaign that overwhelmed opponents and effectively bought its desired outcome.

The Contra Costa law admittedly was flawed, and Wal-Mart failed in its attempt to replicate that scenario in a Los Angeles suburb weeks later, but let’s focus on the root issue. Will citizens—the demos of democracy—or corporations control our communities?

Last year in California, Nike Inc. tried to convince California's Supreme Court that the state's Unfair Business Practices Act infringed upon Nike's “right” to publish false or misleading communications. The court disagreed, and last June the U.S. Supreme Court declined to decide the Nike v. Kasky case. Rather than accept the decision and ensure its PR campaigns are reasonably accurate, Nike has joined with other corporate powers in an attempt to weaken the law and forbid lawsuits of the kind Nike faced—again via ballot initiative. Auto dealers have kicked in $4.6 million, and Microsoft, Edison, Bank of America, Nike and many more have written checks of five figures or more  to fund the campaign.

Going to the Roots

Thanks to the 1978 Bellotti ruling, corporate spending to "express free speech" and wage campaigns to pass such initiatives has no limits. So how should we respond to Wal-Mart, Nike, et al, using their vast wealth to rewrite laws? Do we simply vow to work harder and fundraise better next time, or will we instead work to build the democracy movement by rejecting the legitimacy of corporations engaging in lawmaking?

Properly framed, these situations are opportunities to enlist citizens of widely varying views to work for vital structural changes. If, that is, organizations working to transform paradigms can gain support from the foundations and organizations that tend to focus overwhelmingly on damage-control efforts.

Such work could trigger major growth in awareness and engagement against corporate constitutional privileges, much as Seattle did for opposing secondary structures of corporate rule like the WTO. Our success will depend on dismantling foundations of corporate power, such as corporate constitutional rights, not pleading to puppet regulatory agencies or replacing Republicans with Democrats

Our task today parallels that faced by our nation’s founders more than two centuries ago—to transform our myriad single-issue protests into rebellion that tears down the inherently anti-democratic structures of corporate rule and builds genuine representative democracy. It's no small task to change the rules, but sensible people don't continue playing a rigged game.