Title: P1249003582pGeKk
1(No Transcript)
2Corporations
and the
Deterioration
of
Democracy
3The people of the United States have historically
focused more on the environmental and public
health EFFECTS of corporate power, while
focusing less on the INSTITUTIONS AND RULES
enabling corporations to apply that power to harm
the Earth and its inhabitants.
4wealth power of transnational corporations have
grown.
All the while, the
Corporations use trade and investment rules to
dominate processes for managing commerce. In the
U.S., legal doctrines such as corporate
personhood have shifted the power to
corporations over natural persons.
5The Consequences of Concentrated Corporate Power
ON THE ENVIRONMENT Many corporations despoil our
forests, degrade the land, pollute the air and
water, and resist public health regulations. ON
OUR CULTURE Corporations promote consumption and
materialism to the detriment of civic values.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000
6IN THE EXCHANGE OF IDEAS The concentration of
corporate media ownership limits political
debate, the diversity of viewpoints presented,
and media access. ON GOVERNMENT Large
corporations wield enormous political and
electoral power.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000
7ON SOCIETY Corporations are usurping civic
space. Public functions are being
privatized. ON THE MARKETPLACE Mergers and
monopolies eliminate competition and remove jobs.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000
8Outline of Presentation
I. Examine the nature of the corporation -
legally, economically, and politically.
II. Explore the history of how corporations
acquired such wealth and power.
- III. Cite examples of how corporate
power affects the concerns of the
people of the United States. -
9Outline of Presentation
IV. Review tactics that citizens and
non-governmental organizations are using to
hold corporations accountable and to redefine
the relationship between citizens and
corporations.
- Identify corporate accountability challenges for
the people of the United States.
10What is a Corporation?
- LEGAL DEFINITION
- An ARTIFICIAL PERSON or LEGAL ENTITY,
- Created by or under authority of the laws of a
STATE OR NATION, - Composed, in rare instances, of a single person
and successors. Ordinarily, an ASSOCIATION OF
NUMEROUS INDIVIDUALS, - Regarded as having a PERSONALITY AND EXISTENCE
distinct from its members,
Source Blacks Law Dictionary
11 - Vested with the capacity of CONTINUOUS
SUCCESSION, irrespective of changes in
membership, in perpetuity, or for a limited term
of years, - Acting as a UNIT OR SINGLE INDIVIDUAL, in
matters relating to the common purpose of the
association, - Within the scope of POWERS AND AUTHORITY
conferred on such bodies BY LAW.
Source Blacks Law Dictionary
12People v. Corporations
HUMANS CORPORATIONS
AWARDED RIGHTS OF NATURAL PERSONS YES YES
CAN EXIST FOREVER NO YES
OWNERS PERSONALLY PROTECTED FROM FINANCIAL LIABILITY NO YES
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
13How Wealthy and Powerful Have Corporations Become?
Merger Mania Consolidations and Layoffs
Tax Effort By Corporations
14Corporations Have Acquired Tremendous Wealth and
Power
- In 2002, 52 of the worlds largest 100 economies
were corporations. - Approximately 60 of all world trade is between
firms within the same parent corporation.
Sources Institute for Policy Studies, 1999 ,
2000 and 2001 Reports, Global, Inc.
15- With 2002 sales of 246 billion, Wal?Mart is
larger than 150 countries, including
Source Institute for Policy Studies, 2005
Report.
16- The gap between average CEO pay and worker pay
has risen from 42 to 1 in 1982 to 301 to 1 in
2003.
Field Guide to the Global Economy, 2005.
17Merger Mania Has Led to Consolidations and Layoffs
- In 1999, over 1/2 the sales of the largest 200
corporations were in just 4 economic sectors.
-
- In AUTOS, the top 6 firms produce 75 of the
worlds motor vehicles. -
- In ELECTRONICS, the top 5 firms have garnered
over ½ the global sales.
Source www.inequality.org, Global, Inc. 2003.
18- From 1998-2000 there were 3.7 trillion in
mergers in the United States. - The total value of cross-border merger and
acquisition transactions in 2000 was 1.1
trillion, about 50 higher than in 1990.
Source Too Much, Winter 2000, p.9 Jeff Gates,
Shared Capitalism Institute, Jan. 16, 2000
Adbusters, Aug/Sept 2000, p. 40
www.inequality.org.
19- In 1998, 678,000 Americans were laid off from
their jobs, the highest total in a decade. - In 2001, a total of 986,424 people were laid off
worldwide from the top 500 U.S. companies.
Source Too Much, Winter 2000, p.9 Jeff Gates,
Shared Capitalism Institute, Jan. 16, 2000
Adbusters, Aug/Sept 2000, p. 40
www.inequality.org, www.forbes.com.
20Corporate Pork Barrel v. Social Welfare
1994
TAX BREAKS Credits Deductions
Exclusions DIRECT PAYMENTS Subsidies
Assistance
Child Welfare Food Stamps Nutrition
Block Grants Housing Public Assistance
BILLIONS
CORPORATE 104.3
SOCIAL 75.1
Source Office of Management and Budget, 1994.
21Corporate Giants Adept at Avoiding Taxes
- NONE of the 44 U.S. corporations in the year 2000
Institute of Policy Studies Top 200 Study paid
the full corporate income tax rate from 1996-98. - According to the U.S. General Accounting Office,
between 1996 and 2000, 61 of all U.S.
corporations paid no taxes at all.
Source Institute of Policy Studies, 2000 and
2002 Report. Field Guide to the Global Economy,
2005.
22Percent of Federal Tax Collections from
Individual Corporate Income Taxes
50s
60s
40s
70s
80s
90s
Source Bartlett and Steele America Who Really
Pays the Taxes?, p. 140 (The Growing Divide
Inequality and the Roots of Economic Insecurity,
p. 19, United for a Fair Economy, May 2000).
23WHATIS THEGROWINGECONOMICDIVIDE?
241947 to 1979 Real Family Income Growth by
Quintile and for Top 5
We Grew Together
116
114
111
100
99
86
Percentage Change
Top 20 31,632 and up
Bottom 20 In 1979 up to 9,861
Second 20 9,861-16,215
Middle 20 16,215- 22,972
Fourth 20 22,972- 31,632
Top 5 50,746 and up
Sources Analysis for Census Bureau data by
Lawrence Mishel and Jared Bernstein, The State of
Working America 1994-95 p. 37. Income Ranges in
1979 dollars from March 2000 Census Current
Population Survey, Table F-1. (The Growing
Divide Inequality and the Roots of Economic
Insecurity, United for a Fair Economy, March
2004).
251979 to 2003 Real Family Income Growth by
Quintile and for Top 5
We Grew Apart
75
51
Percentage Change
26
15
8
-2
Bottom 20 up to 24,117
Second 20 24,117-42,0577
Middle 20 42,057-65,000
Fourth 20 65,000- 98,200
Top 20 98,200 and up
Top 5 170,082 and up
U.S. Census Bureau, March 2001 Census, Current
Population Survey, Tables F-1 and F-3. Income
ranges in 2001 dollars. (The Growing Divide
Inequality and the Roots of Economic Insecurity,
United for a Fair Economy, March 2004).
26Percentage Change in Real Family Income 1960s v.
1990s
PERCENTAGE CHANGE IN FAMILY INCOME
DISTRIBUTION OF FAMILY INCOME
Source Changes in family income in 1998 dollars
for the upper limit of the lowest, second, third,
and fourth quintile, and the lower limit of the
top 5 of families by income. Annual data from
U.S. Census Bureau (Dollars Sense, May/June
2000).
27Percentage of Families Whose Savings Would Run
Out in 3 Months or Less
Many families are forced to live on the edge.
79
73
38
Source Melvin Oliver and Thomas M. Shapiro,
Black Wealth, White Wealth (1995), p. 87 (The
Growing Divide Inequality and the Roots of
Economic Insecurity, March 2004).
28Ownership of Household Wealth in the United States
- In only 25 years, the Top 1 gained 10 of the
pie. The - Bottom 99 got squeezed.
2001
1976
Wealthiest 1 Bottom 99
For 1976 Edward N. Wolff, Unpublished data. For
2001 Arthur B. Kennickel, A Rolling Tide
Changes in the Distribution of Wealth in the U.S.
1989-2001, Jerome Levy Economics Institute,
November 2003. United for a Fair Economy.
29Distribution of U.S. Wealth Ownership, 2001 (by
population segments)
Source www.inequality.org
30Share of Total Ownership of Stocks and Mutual
Funds, 2001
Source Edward N. Wolff, Recent Trends in Wealth
Ownership, 1983-1998. Calculations based on the
1998 Survey of Consumer Finances, conducted by
the Federal Reserve Bank. (The Growing Divide
Inequality and the Roots of Economic Insecurity,
March 2004).
31Global Inequality
Increase in Income 1979-1998
In 2003, the wealth of the worlds 587
billionaires was greater than the combined
incomes of the poorest half of humanity.
Source Rachels Environment and Health Weekly,
Field Guide to the Global Economy, 2005.
32Corporations Have Used Their Wealth Power to
Sway Elections and Lawmaking
- In the 2000 Federal election campaigns,
corporations out-spent labor by 15-to-1. - In the 2004 federal election cycle, finance,
insurance, and real estate corporations led all
sectors, giving 331 million to federal
candidates.
Source Center for Responsive Politics Capital
Eye, Vol. 6 No.4
33- Between 1998 and 2004, both Verizon corporation
and General Electric corporation each spent over
100 million in lobbying expenditures.
Source www.publicdomainprogress.com
34Corporations Use Governments to Distort the
Public Interest
- In June 2005, the U.S. Supreme Court approved
the use of eminent domain for business
development - making it legal for local
governments to seize homes and businesses,
against the owners will, for the construction of
residential, commercial, and manufacturing
developments by giant corporations such as
Wal-Mart and Target. Eminent domain had
previously been limited to development for public
use, such as schools, roads, and bridges (Kelo v.
City of New London (04-108)). - http//money.cnn.com , June 2005
35Corporations are Increasingly Usurping Civic
Space/Democracy
- The public sphere of decision making is shrinking
with the increasing privatization of services
formerly provided through the public sector.
- A September, 2000 Business Week/Harris Poll
showed that 77 of U.S. adults believe
corporations have gained too much power over
American life.
Sources Recent Trends in Wealth Ownership,
Edward Wolff, April 2000 Business Week, Mar. 11,
1996, p. 65 The End of Politics, Carl Boggs,
2000, p. 11 Institute of Policy Studies 2000
Report.
36Who Owns the News Media?
Disney owns
Viacom owns
AOL Time Warner owns
General Electric owns
Source United for a Fair Economy
37U.S. Labor Unions Have Historically Confronted
Corporate Power.
Percentage of the workforce represented by a
labor union. 1930-2002
1947 Taft- Hartley Act
Manufacturing Declines in U.S.
World War II
1981 Reagan Breaks PATCO
1937 Wagner Act
1998 13.9 Unionized
1936 Sit-Down Strike in Flint, MI
2002 13.2 Unionized
Source Bureau of Labor Statistics, published in
The Growing Divide Inequality and the Roots of
Economic Insecurity, United for a Fair Economy,
March 2004.
38Global trade treaties represent corporations
over the environment, workers, and communities.
- Trade treaties like NAFTA, GATT, CAFTA and GATS
set rules favoring corporations resulting in - Well paying unionized US manufacturing jobs
shifting to low-wage countries - Lower wages and living standards everywhere
- Weakened worker rights in all nations
- Environmental damage domestically and in other
countries - Cuts in social safety nets
Source The Growing Divide Inequality and the
Roots of Economic Insecurity, p. 19, United for a
Fair Economy, May 2000.
39Q Why Has This Happened?A A Power Shift Led to
Rule Changes
The Power Shift since the 1980s Who
has been setting the agenda for economic policies?
Source The Growing Divide Inequality and the
Roots of Economic Insecurity, United for a Fair
Economy, May 2000.
40HOWDIDTHISHAPPEN?
411500-1770 Joint Stock Companies and Royal
Charter Corporations Established Trade Monopolies
for Colonization
- These Crown Corporations, such as the
Massachusetts Bay Corporation, and - Global Corporations, such as the East India
Company - established vast systems of trade and governance
- ravaged lands
- killed and enslaved millions of people
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
42These Corporations had Powers Like Dictatorial
Governments
- Corporate Directors could
- wage war
- seize the commons
- force human labor
- judge and punish
- redefine the rights of the corporation
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
43These Corporations had Powers Like Dictatorial
Governments
- No Rights were held by
- employees
- subjects
- neighbors
- victims
NO
RIGHTS
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
441776 The American Revolution
- The American Revolution dismantled the Crown
Corporations and transferred them into states. - The Virginia Co., which ran the Virginia Colony,
became the Commonwealth of Virginia.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
45Following the American Revolution
- The People in each of the 13 states wrote state
constitutions including rules on - elections
- lawmaking
- judiciary
- education
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
46The People of the 13 States Bestowed Limited
Privileges Upon Corporations
Under self government, corporate charters were
limited
- States routinely revoked the charters of
corporations that broke the law or abused their
privileges.
- Corporate charters were issued for only a
limited time and were subject to periodic review
by the state.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
47- States had authority to govern the financial
dealings of corporations (for example,
corporations could not own other corporations).
Not
for Sale!
- Shareholders were personally liable for the debts
of the corporations and the harms inflicted on
the general welfare.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
48- Corporations were created to meet public purposes
such as canal digging and building roads (upon
completion of the prescribed tasks the
corporations were dissolved).
- The charters limited many corporations to not
for profit status.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
49Corporations were not granted constitutional
rights
- Corporations could not lobby.
- Corporations could not donate money to political
candidates. - Corporations could not claim 1st Amendment rights
to free speech. - Corporations could not claim other Bill of Rights
protections (i.e. from unreasonable search and
seizure, etc.)
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
50I hope 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.
-Thomas Jefferson, 1816
51Throughout the 19th Century, a Struggle Ensued
Between Commercial Interests Wishing to Expand
Property Rights and People Seeking to Expand
Human Rights
Corporations were the vehicle for consolidating
and increasing privileged wealth at the expense
of the broader society
- During the Civil War, fortunes were made by
industrialists who had acquired corporations to
provide war materials. - These robber barons used the judiciary to
increase the power of corporations on behalf of
their financial empires.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
52I see in the near future a crisis approaching
that unnerves me and causes me to tremble for the
safety of our country. As a result of the war,
corporations have been enthroned and an era of
corruption in high places will follow, and the
money power of the country will endeavor to
prolong its reign by working upon the prejudices
of the people until all wealth is aggregated in a
few hands, and the Republic is destroyed. I feel
at this moment more anxiety for the safety of my
country than ever before, even in the midst of
war.
-President Abraham Lincoln, November 12, 1864, in
a letter to Col. William F. Elkins
531886 A Turning Point
One of the most important Supreme Court cases you
may never have heard of
Santa Clara County vs. Southern Pacific Railroad
In 1886, the Supreme Court ruled that a private
corporation was a natural person, entitled to the
same rights and protections as human beings under
the Bill of Rights.
Source 118 U.S. 394 (1886) 183, 323N.89 (56),
328N.110 (61).
54Then What Happened?
The Courts sided with corporations. In 1886
alone, federal courts struck down 230 state laws
regulating corporations. Corporations took
advantage of laws written for human beings. The
14th Amendment was passed to protect freed
slaves. Of the 307 14th Amendment cases brought
before the Supreme Court between 1890 and 1910
-19 dealt with African Americans
-288 dealt with corporations
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
55The people lost control over corporations
States could
no longer tell corporations what they could and
could not do. Advertising became Free Speech.
The New Deals regulatory thrust shut off
debate about the legitimacy of corporate power.
BUY!
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
56Examples of How Corporate Power Affects the
Environment
57Example 1 Corporate Personhood
- THE PROBLEM
- Santa Clara v. Southern Pacific RR (1886) gave
corporations rights of natural persons
(personhood). - Since Santa Clara, those rights and privileges
have been expanded to exceed those of the natural
persons creating them.
58Example 1 Corporate Personhood
- EXAMPLES
- Before Santa Clara, corporations could not
exercise 1st Amendment rights such as lobbying or
contributing to political campaigns. - Also, chemical corporations could not claim the
4th Amendment right of protection from
unreasonable search or seizure to withhold
information about the environmental impacts of
their products or production processes.
59Example 1 Corporate Personhood
- THE CONSEQUENCES
- By granting personhood rights to corporations,
courts have allowed them to grow and maximize
profits in ways that harm the environment, public
health and democracy.
60Example 2 Corporate Manipulation of Government
Regulatory Agencies
- THE PROBLEM
- Corporations use their wealth and power to get
regulatory agencies to carry out their will. - Governments shield corporations from and
represent them over the public interest,
environmental quality, and the public health.
61- AN EXAMPLE
- In 1986, Monsanto Corp. officials urged the
Reagan Ag. Dept., EPA, and FDA to issue rules
governing genetically modified food to reassure
the public about its safety. - The Reagan Adm. complied and gave Monsanto rules
favored by industry . - In 1992, Monsanto wanted to throw off the regs
and speed food to market. The Bush Adm. created a
generous policy of self policing.
62- THE CONSEQUENCES
- Public confidence in the government regulatory
process has been diminished. - Citizen energy has been exhausted while popular
outrage has been deflected from the corporation
to government. Corporations get what they want
while escaping accountability.
63Example 3 Chapter 11, North American Free Trade
Agreement (NAFTA)
- WHAT IT DOES
- Expands the rights of property to include
intangible property rights, including current
and future profits. - Gives corporations the right to sue national
governments to protect these anticipated profits
from natl, state, or local govt actions, no
matter how legal or for what purpose they have
been taken.
64- AN EXAMPLE
- Metalclad, a US-based waste-disposal corp., sued
Mexico for 90 million under Chap. 11 after the
town of Guadalcazar in the Mexican state of San
Luis Potosi refused to issue a permit for a
waste-disposal facility on an alluvial stream,
deeming it a threat to the local water supply.
In Aug 2000, a NAFTA tribunal found that Mexico
had breached Chap. 11 and awarded Metalclad 16.7
million. Metalclad then began construction on
the facility without having local approvals,
claiming assurances from Mexico. In Oct. 2001,
the Mexican govt dropped its appeal of the NAFTA
tribunals decision.
65- THE CONSEQUENCES
- Chapter 11 can have a chilling effect on state
or local govts considering passing laws or regs
to protect the environment and public health. - Guarantees profits to polluting corporations
violates the concept of a free market economy
and undercuts democratic decision making.
66WHATCANWEDO?
67Actions to Reassert Popular Sovereignty Over
Corporations
Confront Corporate Crimes Directly
Research,
expose, and educate others about abuses of
corporate power and behavior. Encourage corporate
campaigns, shareholder actions, consumer
boycotts, and socially responsible
investment. End Corporate Pork Barrel
Significantly restrict corporate tax breaks and
subsidies.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
68Encourage Tax Reform
Shift tax burdens more
fairly to corporations and off individual
taxpayers. Encourage Campaign Finance Reform
Enact substantive campaign finance reform
legislation prohibiting corporate campaign
donations.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
69Put the People in Charge of Defining Corporations
Write state/local laws defining
and limiting the rights of corporations.
Establish and enforce social and
environmental criteria for corporate
charters. Initiate state Three Strikes
and Youre Out charter revocation laws.
Re-regulate corporate investment through
anti-trust legislation.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
70Change Corporate Charters
Amend state
corporation codes to extend liability and revoke
charters of renegade corporations. Limit
Personhood Rights for Corporations
Challenge the Santa Clara US
Supreme Court decision via public education
leading to a constitutional amendment or court
challenge.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
71Expand Human Rights in Relation to Corporations
Grant Bill of Rights powers to include employees
in corporations (free speech, freedom of
assembly), citizens in shopping malls, etc.
Reassert Citizen Sovereignty in Global Economy
Re-negotiate trade deals (NAFTA,
GATT, CAFTA, FTAA) and re-structure global trade
and financial institutions (WTO, IMF, World Bank).
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
72Encourage Grassroots Pro-Democracy Movement
Go beyond tactics challenging one
regulation or one corporation at a time to work
with others nationally and internationally to
challenge the rules giving corporations undue
power and influence.
Source Challenging Corporate Rule, United for a
Fair Economy, January 2000.
73Build Sustainable Local Communities
Encourage
- Engage in Democratic Discussions Promoting a Just
Society and an Environmentally Sustainable
Economy - Support Local Currencies Community Banking
- Encourage Community Supported Organic Agriculture
- Foster Equitable Health Care Programs
- Create Cooperatives Worker Owned Firms
- Recycling Local Waste as a Resource
- Nurture Pedestrian Bicycle Transport
- Develop Local Renewable Energy Systems
- Buy Small Local
- Institute Community Forestry Practices
- Demonstrate Voluntary Simplicity in Individual
Activities
Prepared by David C. Korten, The Positive Futures
Network (206)842-0216,11/13/96
74The Corporate Accountability Challenges for the
American People are three-fold
- Confront individual bad actor despoiling and
polluting corporations via focused, highly
visible campaigns.
752. Challenge domestic laws and court decisions
that unfairly enable all corporations to exploit
the Earth and its inhabitants. Seek passage of
laws to hold corporations accountable to citizen
defined and government enforced environmental
standards.
763. Join with other movements to challenge the
unfair trade and capital investment rules
proposed by the WTO, IMF, World Bank, and
incorporated into such agreements as the Central
American Free Trade Agreement (CAFTA).
77The struggle for justice should never be
abandoned because of the apparent overwhelming
power of those who have the guns and the money
and who seem invincible in their determination to
hold on to it. That apparent power has, again and
again, proved vulnerable to human qualities-
Historian Howard Zinn
78We have been fighting fire on the well-worn
lines of old-fashioned politics and political
economy, regulating corporations, and leaving
competition to regulate itself. But the flames of
a new economic revolution run around us, and we
turn to find that competition has killed
competition, that corporations are grown greater
than the State, and have bred individuals greater
than themselves, and that the naked issue of our
time is with property becoming master instead of
servant- Henry Demarest Lloyd, Wealth
Against Commonwealth, 1894
79THE
80Produced by
Jim Price, Senior Regional Staff
Director jim.price_at_sierraclub.org
Powerpoint Graphics by
Lisa Evans, Administrative Coordinator lisa.evans_at_
sierraclub.org Robin Nelson, Christa Taylor
Sierra Club Southeast Office 1330 21st Way
South, Suite 100 Birmingham, AL 35205
Phone 205/933-9111 Fax
205/939-1020 Updated August 2005
81Special Appreciation is extended to
- Alliance for Democracy
- Center for Popular Economics
- Center for Responsive Politics
- Council on International and Public Affairs
- Democracy Unlimited of Humboldt County
- International Forum on Globalization
- Institute for Policy Studies
- Program on Corporations, Law, and Democracy
- Public Information Network
- Sierra Club Corporate Accountability Committee
- Sierra Club Confronting Corporate Power Task
Force - Sierra Club Environmental Justice Committee
- Sierra Club National Environmental Justice
Grassroots - Organizing Program
- Sierra Club Southeast Office
- United for a Fair Economy
for their assistance in the preparation of this
workshop and related materials.