In 1892, the Populists’ People’s Party ran James Baird Weaver as their Presidential candidate. That same year, Weaver published “A Call to Action,” which offered a cogent indictment of the rise of the Corporate State in place of the recently dismantled Slave State in America.
That’s a crucial point. Slavery, and the economic system that went with, had been destroyed. Something had to takes its place. (Karl Marx said the US Civil War was due to two competing economic systems that could no longer peacefully co-exist, which is certainly a major reason why it happened.)
Chapter VI, entitled “Evolution In Crime, or Improved Methods of Piracy”… spells out the un-democratic origins and nature of corporations in America
Here’s one excerpt, (from Democracy School, who has PDFs of the book)
“Our government has chartered thousands of corporations, turned them loose upon us and now permits them to commit from year to year… outrages upon our people. These charters are neither more nor less than letters of marque, authorizing those who hold them to prey upon the commerce of the country, and they are the forerunners of something still more serious if they be not speedily recalled and the evils they entail quickly remedied…The object had inview by the incorporators, in ninety-nine cases out of every hundred, is to shirk personal responsibility in case of loss…These enterprises are made up of expectation and apprehension. If expectations are realized, corporators flourish; if apprehensions are verified, the misfortune is unloaded upon the people. Could anything be more monstrous?”
Corporatism, as enshrined in the 14th Amendment with the spurious concept of “personhood” was something the populists rightfully fought against tooth and nail. They saw what was coming.
That’s quite a tirade, but I think he misses the point. The corporation in more or less its modern sense has been around since at least the 14th century, and in Anglo law since 1600. But similar constructions have existed since Roman times.
Historically, the primary purpose of a corporation is to create an entity that survives any or all of its owners– unlike a sole proprietorship or partnership. Thus when one owner dies, his or her ownership is a commodity that can be sold. This is particularly important for governments, which are corporations, but also for stores and other non-founder-centered businesses.
The secondary purpose of a corporation is to limit liability, in the sense that if the corporation loses money, the investors only lose what they have invested– a plaintiff cannot go after the owners’ personal assets. This is the feature Weaver complains about. Yet many small businesses also benefit from this feature, being perhaps more at risk as they are without the legal “big guns” to protect themselves in case of a lawsuit. I have several incorporated businesses, solely to protect my family’s assets (and isolate the assets of the various businesses from each other) if some sleazy attorney comes after me. But the morality of my corporation comes from its owner– me– or in one case, the five owners, all of whom want the business to do the right thing.
The real problem Weaver dances around is this: corporatism (as distinct from incorporation) creates a system in which stock is bought and sold on stock exchanges by people who care nothing about the operation of the business, they only care what returns they’re going to get. Thus the owners of the business have no interest in the mega-corporation playing nice, only in maximizing short-term profits. I don’t think I’m exxagerating to say that most investors in the stock market can’t read a balance sheet, and don’t go to shareholders’ meetings. They’re in it solely for the money.
The corporation is responsible only to its owner(s)– it has no morality of its own. If its owners do not demand ethical conduct, even conduct more restricted than that allowed by law, the corporation’s only limits are what is permitted– it is not bound by what is right and wrong.
Thus the real problem is not the corporation itself, but stock exchanges and investment banks that help create amoral monolithic megacorps. Keep business small, and we’re not so divorced from the sources of our money. The alternative Weaver suggests– opening up the possibility that the owner of a business could lose his or her home and other assets– creates an environment in which no one dares to do business, and no jobs exist because no one needs to hire anyone else.