corporations are people too

A fellow reader of yours, a woman in Boston who tells me that she is five-feet, ten-inches tall, went to the effort of typing up the following quote from Noam Chomsky because she thought that you’d like it… The interview it’s taken from is available in PDF format from The Sun Magazine.

“Corporations as we know them today came out of late-nineteenth-century ideas about ‘organic entities’ that have rights over and above individuals. Classic liberalism was–in theory at least–devoted to the idea that only flesh-and-blood people have rights. But the corporate system supported a different conception: that abstract entities, too, have rights.

“A corporation back in the early nineteenth century, before the organic-entity concept spread, was a very different animal from what we have today. It might have consisted of local people getting together at a town meeting and deciding, say, to build a bridge across a nearby river. They would incorporate to carry out that plan. And once they’d carried it out, they’d dissolve the corporation. Corporations gradually changed shape over the course of the nineteenth century, and by the earlier twentieth century the courts had granted corporations–these legal fictions–the rights of persons. That meant they had freedom of speech, freedom from unwarranted search and seizure, and so on. They were now unaccountable to the people. The public couldn’t know what they were doing. Of course, unlike people, corporations are potentially immortal.

“Around the First World War, the courts decided that these ‘persons’ should be made to act in ways that are completely pathological. They are required by law to do things that we would regard as villainous if ordinary people did them. For example, corporations have to be dedicated solely to the maximization of profit and market share. If they do anything that might harm profits, even if it is the only decent thing to do, they have broken the law. To the court this makes sense, because corporations are owned by their shareholders, and the shareholders have a right to profit, so it’s illegal for a manager to do something that cuts profits, even something decent.

“There is an exception: you can do something decent if it is purely for show. For example, a drug company can hand out drugs in the slums as long as a television camera is following it, because that’s good publicity, which improves market share. In fact, in the sixties, a court decision actually urged corporations to perform charitable acts because, it said, otherwise an ‘aroused citizenry’ would take away corporate privileges. So corporations should go out of their way to look good.

“The World Trade Organization and the new trade agreements, like NAFTA, have even granted corporations rights beyond those held by real persons. For example, if General Motors goes to Mexico and sets up a plant, it has to receive what is called ‘national treatment.’ In other words, Mexico must treat GM like a Mexican business. If a flesh-and-blood Mexican comes to the U.S. and asks for ‘national treatment,’ he’s lucky if he gets sent back to Mexico. If he’s unlucky, he’ll end up in a detention center.

“A corporation–or for that matter, any business–is simply a form of private tyranny. The system of governance within the corporation is as close to totalitarianism as anything humans have devised. Orders come from above and are handed down through each successive level of management. At the bottom are the people who rent themselves to the corporation for wages–it’s called ‘getting a job.’

“And then there are the consumers. The corporations want to make sure that we don’t have informed consumers. Informed consumer choice, a given in economic theory, can’t be allowed to exist. Corporations practice massive deceit and spend hundreds of billions of dollars a year on advertising to prevent it. That is the system. But it can be eliminated.

“In fact, there was a case in the California courts that got surprisingly far up the judicial hierarchy before it was struck down: California law requires that the attorney general take away the charter of any corporation involved in criminal acts. The corporation in the California case was Unocal, which was charged with criminal acts of pollution and the use of slave labor in Burma. The attorney general was compelled to enforce the law, and to everyone’s surprise the case actually made it through a couple of levels of the courts before they found some deceitful way to strike it down.

With enough popular pressure, however, it’s perfectly possible to win a case like that one. There is no reason why corporations shouldn’t be under popular democratic control at every level. But that isn’t going to happen by itself.”