Reclaim Democracy!

Capsule Book Review: When Corporations Rule the World

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First published summer 2001
By Tim Nickles

The first (1995) edition of When Corporations Rule the World awakened many Americans to the destructive systemic impacts of the global economic system and the depths of the structural problems. Coming from a self-described conservative with an extensive background in international development and economics, WCRW offered a thorough and extensively documented analysis capable of swaying even hard-core laissez-faire advocates.

The new 2001 edition contains a new introduction, epilogue and three new chapters updating the growing gap between the rich and poor, the global citizen movement against corporatization and provide a context within which to discuss the role of spirit and culture in distinguishing between a society oriented towards capital versus one oriented towards people.

Korten argues against what he calls “Corporate Libertarianism” which demands that all political, economic, and civic barriers to the free reign of corporate interests be demolished and for “Democratic Pluralism” which requires a “pragmatic, institutional balance between the forces of government, market, and civic society.” He maintains that America’s economic success through the 1950s and 60s was the result of a more pluralistic balance between these three forces and that restoring this balance is essential for continued peace and prosperity.
While Korten emphasizes the importance of markets and private ownership, like Adam Smith he is a harsh critic of the centralization of wealth and political power. Korten’s background includes an MBA and Ph.D. from Stanford Business School, teaching at Harvard Business School and working with the U.S. Agency for International Development in Asia.

I recommend WCRW to everyone as a guide to understanding the full extent of today’s global economy–an essential foundation for effective action for change.

Why Is Killing for Capital Not a Capital Crime?

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By Jeff Milchen & Jonathan Power
June 11, 2001

As of early 2001, the National Highway Traffic Safety Administration (NHTSA) recorded 203 deaths, more than 700 injuries, and thousands of complaints involving rollover-prone Ford Explorers crashing following sudden tread separation on factory-installed Firestone tires. That deadly combination also was implicated in at least 48 deaths in Venezuela and the Middle East.

Despite evidence that officers at both corporations knew they were killing people by keeping defective products on the market, there has not been a single indictment of either corporation, nor of any culpable corporate officers to date. Why?

In August 2000, the tire manufacturer Bridgestone/Firestone Inc. announced a voluntary recall of 6.5 million tires, most of which were original equipment on the Explorer. By that time, Firestone already had been replacing the defective tires in 16 other countries for up to a year, all the while concealing the danger from U.S. citizens.

Ford and Firestone officials received complaints as early as 1997 and knew of at least 35 deaths and 130 injuries before the federal government launched a probe early last year. How do we know? They were defending lawsuits from scores of survivors and the families of dead victims.

Clearly, executives at Ford and Firestone willfully kept products on the market that they knew to be unsafe, and that they knew would kill many more innocent people.

Comparing the lack of criminal investigation in this case to the resources often devoted to resolve a single “street crime” killing graphically illustrates a dual standard for accountability and justice in American society. While nearly every candidate for public office talks tough on street crime, they ignore the fact that societal costs from corporate crime exceed that of street crime in both dollars and lives lost. Individuals acting in the capacity of corporate managers, such as those from Ford and Firestone, literally can kill with impunity.

Corporate executives regularly deploy cost-benefit analyses that weigh the potential cost of civil lawsuits or fines for criminal convictions (such fines are tax-deductible as a cost of doing business) against the cost of recalls or other safety measures. Their job simply is to decide which option is more lucrative, as demonstrated by a 1973 memo that Ford executives wrote about the Ford Pinto gas tank problem.

Then-president Lee Iacocca and other Ford executives used a human life value estimate of $200,000, –a number created by the NHTSA at the auto industry’s urging–and priced the company cost from severe burn injuries at $67,000 per incident. Next they calculated the cost of saving an estimated 180 people from being burned to death (actually, over 500 were killed) and preventing scores of serious injuries by recalling the Pintos and fixing the fuel tank. Their conclusion? Killing 180 people, maiming hundreds more and shattering families’ lives was more profitable than spending $11 per auto (Ford’s estimate) to make them far safer.

So how can we prevent corporate crimes from killing more innocent people? First, we must remove the liability shield for crimes committed on company time. Corporate officials, like Ford CEO Jacques Nasser, Masatoshi Ono (who since resigned as Firestone Inc.’s CEO) and their respective boards must be held accountable for fatalities, injuries, and illnesses caused by their actions.

But we’re deceiving ourselves if we believe serious corporate crime could be blamed on a few bad actors. A system that permits cost/benefit analyses to take precedence over human health and life must be changed radically.

To reclaim democratic authority over corporations and protect ourselves from recidivist corporations, we can learn much from our country’s founders. They regularly exercised a corporate “death penalty” by revoking the charters of corporations whose products or actions harmed society and refused to let individuals use the corporate form to hide from personal accountability.

While terrorist acts that justifiably have commanded so much public attention are difficult to predict and prevent, the criminal actions in corporate boardrooms that kill many more Americans are neither. A smart cost-benefit analysis would direct us to focus substantial attention to these preventable threats to our lives.

Let’s protect ourselves and preserve incentives for law-abiding businesses to prosper by reinstating appropriate punishments for criminal corporations and those who run them.

Jeff Milchen founded ReclaimDemocracy.org. Jonathan Power is a Boulder, CO – based volunteer.

© 2001 ReclaimDemocracy.org

To learn more about the Ford Pinto case see Mark Dowie’s article, Pinto Madness.

The Biggest Obstacle to Equal Representation for Women in Congress Isn’t Sexism, It’s Money

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by Jennifer Rockne 
March 2001

Sexism and extremism steamrolled tradition when women who were in line for House committee chairs this session were slighted because their male counterparts were deemed “more qualified” (read: more conservative).  The majority party normally chooses committee chairs based on seniority, but another norm was maintained instead–the 107th House now boasts committees all chaired by white men.

Nearly as dismal, this Congress also includes a record number of women, but they still occupy a mere 13 percent of seats in both the House and Senate.

With the overall progress women have made to dispel social stigma and sex discrimination, why is their representation in Congress so minimal?

The greatest factor in getting and keeping Congressional seats is money.  As long as we accept the 1976 Buckley v. Valeo Supreme Court decision that equates spending money to influence elections with free speech, the majority of Americans will continue to be underrepresented.

The Buckley decision stated political campaign spending could not be regulated, and contributions could be limited only in certain narrow ways.  It legitimized the practice of corporations and political action committees funding politicians, political parties, and campaigns of their choosing, and reaping legislative favors.

The problem is not that women are unable to fund their campaigns.  Women candidates presently raise campaign money on a par with men and have since the 1980s, in part

The road to incumbency is rugged—and expensive. Escalated campaign costs have made fundraising a daunting task, preventing most potential candidates from even considering running for office and ensuring “serious” candidates are those with access to money.due to contributions from at least 46 PACs and donor networks that primarily contribute to women candidates or whose donors are female.  The problem is that incumbents typically raise more than twice the amount of money, as do challengers, allowing them greater media access and other exposure to the public.

Incumbents raise funds more readily than challengers simply by the advantages of holding office. According to Washington insider and former Cabinet member Joseph Califano, House members typically start fundraising for re-election immediately after they are elected, and most senators easily spend one-third of their six-year terms fundraising.

 Historically, women have fared equally well in running for open Congressional seats against non-incumbent men, but fared much worse challenging male incumbents, a trend illustrated by the results of the 2000 election:  only two of 33 women major party candidates challenging male House incumbents were deemed winners.

Preliminary spending reports indicate just three challengers defeated incumbents for Senate seats in 2000 without outspending them, and lower-spending challengers won just four House seats.

Despite their slight representation in the Congress, women have played a vital role with respect to issues such as sex discrimination that entered the law books because those who had firsthand experience championed them.

Title IX, that denies federal funds to schools that discriminate based on sex, might not exist today if a woman in Congress hadn’t saved it from near-defeat. Women led the way for federal laws on equal pay and funding of daycare for poor women. Historically, women in Congress raise issues of health, poverty, family, and social concerns that often are dwarfed by military or foreign policy issues.

While the corrupting influence of money in government is not exactly a revelation to Americans, most current reform proposals merely seek to lessen the damage to democracy and fail to challenge the faulty premise at the root.

Those interested in changing the rules must recognize that the Supreme Court tends to react to popular movements and the social climate–as it did in response to civil unrest during the Civil Rights Era—rather than lead the way. Government officials, whether appointed or elected, rarely create the necessary changes to enable a government worthy of the name democracy—an organized public will.

Whether our goal is achieving equal representation for all Americans, or simply a less corrupt government, reversing Buckley v. Valeo and dispelling the money-equals-speech dogma must be part of the foundation of change.  Doing so may not ensure fairer representation, but it would help return politics to its root, polites or citizen, and open the board to a greater diversity of players—one that looks more like the constituency it purportedly represents.   

Jennifer Rockne is the Assistant Director of ReclaimDemocracy.org

The Appleseed Citizens’ Task Force On Presidential Debates A Blueprint for Fair and Open Presidential Debates

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This report was published in 2000 by The Appleseed Center for Electoral Reform

I. Introduction

The Appleseed Citizens’ Task Force on Fair Debates is a project of the Appleseed Electoral Reform Project at American University Washington College of Law. The Appleseed Project addresses the rising dominance of private wealth and corporate soft money in our elections and the corresponding decline in the quantity and quality of political participation by citizens. The Project engages in advocacy and scholarship on a broad range of electoral reform issues. Launched in 1999 by the Appleseed Foundation, a national non-profit public interest law organization, the Task Force is an independent and non-partisan group of distinguished citizens that has assembled to challenge the artificial constriction of American electoral discourse through undemocratic manipulation of our presidential debates.

II. Summary

The Task Force commends the private Commission on Presidential Debates (CPD) for helping to foster a continuing debate ethic in presidential campaigns, and for creating a political climate in which general election presidential debates are considered an essential part of the political process. However, the CPD’s January 6 (2000) announcement that it will require presidential candidates to post a level of support of at least 15 percent in national public opinion polls before they may join the debates is deeply problematic. For the following reasons, we object to the CPD’s participation criteria:

* The CPD places the cart before the horse by basing the exclusion of outsider candidates on the preferences of a public that has not yet seen or heard from these candidates in a debate. At the time of the debates many Americans remain uncommitted to a single candidate.

* The 15 percent rule is both arbitrary and too high. There is no basis in law for the 15 percent threshold.

* The American people do not agree with the CPD. A recent poll revealed that a majority of Americans believe that the CPD’s 15 percent threshold is inappropriate.

* Polls often underestimate the role of Independents. Polling firms regularly base their opinion surveys on “likely voters” as determined by past voting practice. Such determinations ignore the possibility that the debate may, in fact, create new likely voters.

The CPD bases its decision on the belief that the purpose of the general election debates is to contrast for the voters the two candidates who stand the best chance of winning the presidency. We believe formal debates serve greater purposes. When done well, formal debates can advance and crystallize the ideas and issues that are important to the American public. They can provide meaningful political discourse, and can force the candidates to address the issues about which Americans care most deeply.

Particularly in this era where access to money drives access to voters and media coverage, the debates should be an opportunity for voters to see debates among the candidates from whom they wish to hear, and about issues they care to hear discussed.

Therefore, the Task Force calls upon the CPD to change its criteria to permit all constitutionally eligible and mathematically electable presidential candidates to participate in the debates if they:

1. register at 5 percent in national public opinion polls; OR 2. Register a majority (50 percent or more) in national public opinion polls asking eligible voters which candidates they would like to see included in the presidential debates.ii

The Task Force has concluded that these criteria best reflect the democratic principles on which this country was founded. The most significant advantages of the proposed criteria are:

* Voters will have an opportunity to hear candidates before they decide whom they will support.

* The public will get the benefit of a candidate’s views that are important to the political dialogue even if that candidate does not have enough support to win the presidency.

* The 5 percent level of support is based in federal election law, mirroring the 5 percent level of support required for eligibility for federal campaign funding. While the Task Force believes that past electoral performance should not be a sole criterion guaranteeing debate participation, we believe that deference is due to the only national legislative standard regarding candidate seriousness.

* Our criteria respect the opinion of the entire electorate. The 50 percent qualification is based on the opinions of all eligible voters, not just those deemed by a pollster to be likely to vote. This allows for voices representing all potential voters to be heard, recognizing the possibility that the debates can have an important impact on who chooses to go to the polls in November.

Adoption of these criteria would lead to debates that better address the ideas and issues of interest to the American people. If the CPD declines to alter its criteria, then the legitimacy of American presidential elections will be undermined and new approaches for fair and meaningful candidate dialogue must be sought for the 2000 election.

III. The 15 Percent Rule for the 2000 Presidential Election
In response to growing criticism about its selection process in past elections, on January 6, 2000 the Commission on Presidential Debates released its criteria for the 2000 general election debates. These criteria are an improvement over those used in 1996 in that they are relatively clear and easy to articulate. But clarity should not be confused with fairness. The CPD’s new rules do not go far enough in ensuring that the general election debates will be open to candidates who do not represent the two major parties.

The CPD announced that, in addition to the fair and sensible criteria of requiring candidates to be constitutionally eligible to serve and on enough state ballots so as to have a mathematical chance to secure an electoral college majority, candidates must have “a level of support of at least 15 percent of the national electorate as determined by five selected national public opinion polling organizations, using the average of those organizations’ most recent publicly-reported results at the time of the determination.” The CPD will make this determination after Labor Day but “sufficiently in advance of the first-scheduled debate to allow for orderly planning.”

The 15 percent rule is deeply arbitrary and will lead to further constriction of democracy in our national elections.

The 15 Percent Figure is Arbitrary
Even if we accept all of the CPD’s other assumptions about its process, the choice of 15 percent as a cut-off threshold is wholly arbitrary, and has no basis in federal law. The CPD could very defensibly have chosen as the level of necessary support 5 percent, which is the national electoral showing a presidential candidate must have in the popular vote in order to have his or her party qualify for public financing in the next election. Yet the CPD inexplicably tripled this federal statutory figure in a way that seems certain to reduce the chance of new parties and candidates qualifying.

Fifteen Percent is Too High a Figure for a September Determination
The 15 percent figure raises the bar far too high. A candidate who stands at a disqualifying 14 percent in the polls commands the allegiance of more than 17 million registered American voters. Are these voters’ preferences simply to be disregarded in the CPD’s rush to reduce the field to the candidates of the two major parties? The CPD’s heavy-handed dismissal of candidates who represent significant currents of public opinion will radically change the dynamics of the race and will affect the final outcome of the election.

Consider the long-shot 1998 gubernatorial campaign of Reform Party candidate Jesse Ventura in Minnesota. A former pro wrestler, Ventura was a political outsider who built his campaign around those who had grown disillusioned with the two-party system. He participated in each of Minnesota’s ten televised debates, the first of which was held on October 1. On September 11, Ventura was polling at 13 percent. On September 20, he was down to 10 percent. On October 18, however, after the debates began, he was up to 21 percent in the polls, and by October 30 his numbers had risen to 27 percent.iii Had the 15 percent rule been in place in Minnesota, Ventura never would have gained the exposure in the first two debates that sent his poll numbers surging in the later debates. Governor Ventura has stated that he would probably not have won had he been excluded from the debates.

Ross Perot’s two candidacies are similarly instructive. In 1992, when Ross Perot was allowed to debate (at the insistence of both the Democratic and Republican candidates, both of whom thought his presence would benefit them), he received 19 percent of the general election vote. In 1996, when he was excluded from the debates, he received 8 percent.

As late as September and October many Americans remain undecided about whom to vote for in November. Many wait for the debates to clarify their choices. For a candidate with corporate soft money, built-in public financing, and the well-oiled fundraising machines that accompany the nominations of either of the major parties, the 15 percent threshold is no problem. They will have enjoyed hours of free television time in the form of network coverage of the taxpayer-subsidized political conventions in the summer.

But an independent candidate or a candidate of a new party will not, in all likelihood, have enjoyed the resources necessary to build equal public support by Labor Day. But the failure to reach 15 percent two-and-a-half months before the election does not reflect any guarantee that the candidate’s campaign will not surge or win in the end. A candidate with growing momentum could be at 13 percent when the CPD gathers its polling information two months before the election and could still win a three-way race by doubling his support each month before the election.

Upward surges are frequent in politics and cannot always be forecast or picked up by pollsters. In the Democratic primary for U.S. Senate in Wisconsin in 1992, a major poll showed Russ Feingold, with less than three weeks to go to the election, trailing his opponents with a seemingly hopeless 10 percent of the vote compared to 42 percent for Congressman Jim Moody and 40 percent for businessman Joe Checota.v Yet Feingold picked up huge momentum and captured 69 percent of the vote on election day, leaving only 14 percent each for his “likely winner” opponents.

The American Public Opposes the CPD’s 15 Percent Standard
A poll conducted by NBC News and the Wall Street Journal (ironically, one of the five firms that will be used by the CPD in the fall) shows that 51 percent of those surveyed believe that presidential candidates should not have to meet the CPD’s 15 percent requirement in order to participate in the general election presidential debates. 1,010 adults were asked the following question:

“As you may know, the commission that sponsors presidential debates has said that the Reform Party candidates will not be able to participate in presidential debates with the Democratic and Republican candidates this fall (2000) unless they earn fifteen percent of the vote in national news polls preceding the debates. Do you think that Reform Party candidates should or should not have to meet this requirement to participate in presidential debates?”

Of the 1,010 adults polled, 51 percent said that candidates should not have to meet that requirement, 41 percent said they should, and 8 percent said they weren’t sure. The self-stated goal of the CPD is to help educate and serve the American public. Shouldn’t it listen to the public rather than presume to know what is best for the nation?

The CPD’s Polling Methodology is Flawed, and Understates the Role of Independent Voters
There is another major problem with the CPD’s polling methodology. According to the CPD, it will be left to the individual polling firms’ discretion to decide which candidates they will include in their preference poll. It is quite possible that outsider candidates won’t even be included in some of the polling groups’ questions, resulting in an obviously skewed result when the average is taken. If two of the five groups independently decide not to add a candidate’s name to their questions and they thus return with zeroes, then those candidates will have to return scores averaging 25 percent in the other three polls in order to debate.

Polls present other methodological problems. Pollsters’ assessments of what the population of likely voters will look like are subjective and presumptuous. They base their determinations of who is, or isn’t, a likely voter, on past turnout and the voter’s own reported behavior. Under the CPD’s criteria, pollsters decide who is going to vote and who isn’t, and it is only the opinions of these presumed voters that will be counted when determining who should participate in the debates. In states with large pools of first-time and Independent voters–like Minnesota, where a surge of first-time voters catapulted Jesse Ventura to office–polls do not accurately register the preference of those who will vote in the upcoming election. In addition, according to the New York Times, the vast majority of contacted voters simply hang up on pollsters or refuse to participate in polls. Response rates are down to 20 percent in some instances.

Recent experience suggests that polls tend to do a poor job of capturing the preferences of independent voters, an ever-increasing and critical bloc of the electorate. In New Hampshire this year, independent voters outnumbered registered Republicans for the first time, with Democrats running third. In Ventura County, California officials report nearly a 20 percent increase in registered Independents there since 1996. In the South Carolina Republican primary Independents were equal to three-fourths of the total vote count from four years ago, and in Michigan, Independents represented 33 percent of the total voters.xi Indeed, some pollsters in the New Hampshire Republican primary were stunned by John McCain’s huge margin of victory over George W. Bush, in large part because they misjudged independent voter turnout. The polls predicted turnout among Independents in the low 20s, when in fact it was well over 30 percent, leading McCain to a double-digit victory. Reliance on polls fails to recognize that effective debates attract voters that the pollsters assume aren’t going to vote.

The Pollsters Are Asking the Wrong Question
But there is a deeper problem with the CPD’s new approach, even beyond its arbitrary and indefensibly high requirements for poll performance. In relying exclusively on the public’s expressed preference for presidential candidates, the CPD asks the wrong question or, at least, fails to ask the right one. The relevant inquiry for the American public is not, “Who do you think you will vote for in the general election even though you have never seen the candidates debate one another?” but rather: “Which of the following candidates would you like to see participate in the presidential debates so you can make up your mind whom to vote for?”

Despite the fact that it frequently invokes the “public interest” and the idea that it is rendering a public service, the CPD has rejected an invitation standard based on which candidates the public wants to see in the debate, not whom the public might vote for on election day a month or two later. Yet, the public’s current preferences and its desire to see candidates debate are two very different things.

For example, although voter preference polls showed Ross Perot in single digits in the Fall of 1996, the overwhelming majority of Americans in poll after poll voiced a desire to see Perot debate the Republican and Democratic candidates. When he was excluded, they considered the process unfair and undemocratic.

As we witnessed in Minnesota in 1998, the public wants an opportunity to check out the nominees of new parties. Voters find it useful to see them in discussion with the candidates of the major parties. Unlike the CPD, the public also places intrinsic value on hearing from candidates who may present novel approaches to public issues, or who may raise issues that the two major party candidates would prefer to ignore, even if they have no intention of voting for such a candidate. If the purpose of the debates is truly to educate the American electorate and promote broad public discourse, debate decisions should reflect the judgments of the people as to who should participate, rather than the judgment of elite pollsters asking a different question altogether.

The public appreciates debates because they force candidates and voters to address substantive issues in a serious way. If allowed in, a third party can break a conspiracy of silence between the nominees of two parties on controversial issues–like free trade or corporate soft money in our elections–where the parties share a single position at odds with the views of the majority of the American public.

IV. Why The Task Force Alternative is Fairer and More Inclusive
The Task Force concludes that our criteria best respect the democratic principles on which this country was founded. We approach this issue with the belief that presidential debates serve a purpose beyond simply showcasing the two candidates most likely to get the most votes on election day. The debates should be open to those candidates who captivate the attention and imagination of the American people, regardless of their party affiliation. We believe debates serve to educate the public about the candidates and issues, and recognize that often a candidate’s views are important to the political dialogue even if that candidate does not have enough support to win the presidency.

Our criteria do not ask the public to choose the candidate they will support before they hear their views. And, unlike the CPD’s criteria, ours pay deference to the only legislative standard regarding candidate seriousness. Under federal law, candidates for president become eligible to receive federal campaign funding only if their party’s candidate received more than 5 percent of the vote in the previous election. While we do not think that past performance should alone guarantee debate participation, we do believe that any standard that bases debate participation on public support should reflect this statutory threshold.

Lastly, our criteria respect the views of the entire electorate, not just those deemed by polling firms to be “likely voters.” We recognize that the debates serve not only to help voters choose for whom they will vote, but often to help voters decide whether they will vote at all.

V. Conclusion
The CPD should adopt new standards for meaningful presidential debates. Having studied this issue in depth, we recommend that the CPD adopt the criteria proposed here by the Task Force.

Under our proposal, declared candidates for the presidency who are constitutionally eligible and mathematically electable will be invited to participate in the presidential debates if they [1] have a level of support of at least 5 percent of the national electorate as determined by five selected national public opinion polling organizations, using the average of those organizations’ most recent publicly-reported results at the time of the determination (so long as all relevant candidates are included in the polling questions); OR [2] a majority (50 percent or over) of eligible voters indicate that they would like to see that candidate participate in the presidential debates when asked directly about it.

This system will guarantee that the public will get to see candidates who represent significant streams of minority public opinion and the candidates who most Americans believe are either interesting prospects or likely to enrich and advance public discourse and understanding.

We urge the CPD to adopt these criteria or, at the very least, to conduct national public hearings on the criteria it has chosen. The public needs an authentic response to these issues. We eagerly await an answer.

SIGNED,

* John Anderson, former presidential candidate
* Frank Askin, Professor, Rutgers Law School
* John C. Berg, Professor and Director of Graduate Studies, Department of Government, Suffolk University, Boston
* John C. Brittain, Dean, Thurgood Marshall School of Law, Texas Southern
University
* John Bonifaz, Executive Director, National Voting Rights Institute
* Joan Claybrook, President, Public Citizen
* Derek Cressman, Democracy Campaign Director, USPIRG
* Steve Cobble, former Political Director, the National Rainbow Coalition
* Rick Hasen, Professor of Law, Loyola Law School, Los Angeles
* Ron Hayduk, Assistant Professor of Political Science, Touro College, NYC
* Arianna Huffington, author and syndicated columnist
* Randy Kehler, Co-founder, The Working Group on Electoral Democracy
* Arend Lijphart, Research Professor of Political Science, U. of California, San Diego, and former President of the American Political Science Association (1995-1996)
* Jamin B. Raskin, Professor, American University Washington College of Law
* Robert Richie, Executive Director, The Center for Voting and Democracy
* Thomas Sargentich, Professor, American University Washington College of Law
* Matthew Shugart, Graduate School of International Relations and Pacific Studies, University of California, San Diego
* Jonathan Allan Soros, student, Harvard Law School
* Edward Still, Director, Voting Rights Project, Lawyers’ Committee for Civil Rights Under Law
* M. Dane Waters, President, Initiative and Referendum Institute
* Richard Winger, editor, Ballot Access News

Affiliations are shown for identification purposes only.

The views expressed in this report are solely those of the Project at American University and of the Task Force, and may not reflect the positions of the Harvard Appleseed Electoral Reform Project, or of any other Appleseed Center or Project.
Recognizing that important factors such as question wording and order can have important effects on polling results, we have not put forward specific language for this question. A fair and balanced question would be developed with the help of experts in the field.

Citations:
Dane Smith, The stretch run: It’s up for grabs//Only 8 points divide the 3 candidates, Star Tribune Newspaper of the Twin Cities, Nov. 1, 1998.

Steven J. Rosenstone, Roy L. Behr and Edward H. Lazarus, Third Parties in America, p. 263, Princeton University Press, 1996.

Moody and Checota in Close Race for Senate Nomination, Milwaukee J., Aug. 16, 1992, at A1.

Landslide for Feingold, Milwaukee Sentinel, Sept. 9, 1992, at 1A.

Arianna Huffington, How to Overthrow the Government, 2000, Regan Books, p. 82.

During the last decade, the United States has witnessed the election of an Independent, Bernie Sanders, as Vermont’s sole Representative to the U.S. House of Representatives and the election of three Governors, in addition to Jesse Ventura, outside of the “two-party system” – Angus King of Maine, Lowell Weicker of Connecticut, and Wally Hickel of Alaska.

Editorial, New Hampshire’s Wisdom, The Boston Globe at A22, Feb. 2, 2000.
Jim McLain, County rolls show sharp increase in independent voters, Ventura County Star at B01, Feb. 17, 2000.

Op-Ed, Maryland; Poised for Shake-Up, The Washington Post at A23, Feb. 25, 2000.

Inherent Rules of Corporate Behavior

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Published May, 2000

In his 1991 book, In the Absence of the Sacred, writer Jerry Mander included a self-descriptive list, “Eleven Inherent Rules of Corporate Behavior.” His insights have never been more timely, as they illustrate the severe limitations of seeking “corporate responsibility” and illustrate the essential truth that corporations must be redefined and subordinated to democracy, not merely regulated or pleaded with to do the right thing.

These “rules” don’t distinguish between publicly-traded and privately-owned corporations. To a degree, privately-held companies are more easily guided by individual standards of morality, but competition eventually will pressure all but community-serving or small-niche businesses toward similar behavior. Taken together, these rules make a compelling case that many of the most destructive corporate impacts on our society and environment are necessitated by the form and power that we have permitted corporations to assume. Primary among the rules are:

The Profit Imperative
Because maximizing return to shareholders is legally required of corporate officers, profit must be the ultimate measure of all corporate decisions. Profit necessarily takes precedence over community well-being, worker safety, public health, peace, environmental preservation, and national security.

The primacy of profit over ethics may have moderately destructive impacts, as with Enron’s manipulation of electricity markets to maximize profit on the backs of California citizens. In other instances, it can mean the deaths of many innocent people, as when Ford and Firestone executives continued selling a product combination that they knew was killing many of their customers, while withholding the danger from the public. Their decision stemmed from a “rational” cost-benefit analysis which indicated that settling lawsuits resulting from fatal accidents was less costly than a recall.

If you were to knowingly withhold such information when selling your personal vehicle, you could be convicted of manslaughter in the event of a fatality; yet those executives will never see the inside of a prison cell because they effectively enjoy corporate immunity.

In both of these examples, the natural human reaction is outrage toward the decision-makers, but we should work past our visceral response. A thoughtful analysis that recognizes the profit imperative tells us that we can best prevent future harm by focusing on restoring citizen control over corporations systemically, not tackling one offender or harm at a time.

Consider this: the much-publicized financial fraud cases have occurred in the most highly scrutinized and regulated realm of corporate behavior. What might be unearthed if we adequately staffed and funded investigations into other areas where the profit imperative has more serious consequences, such as violations of workplace safety or compliance with laws to keep our drinking water and air free of toxins?

The Growth Imperative
Corporations live or die by whether they grow. For a publicly-traded corporation, there is no such thing as “big enough.” As my friend from criptoeconomia.com.br always says, the growth imperative fuels the corporate drive to continually pursue new resources and markets around the world. As natural resources are depleted, new frontiers continually are sought. The effects of this imperative are visible now, as more of the world’s few remaining pristine places are targeted for commercial exploitation.

Corporate planners relentlessly lure “less-developed societies” into the global corporate economy to tap new sources of consumers and cheap labor while institutions like the World Trade Organization and International Monetary Fund supplement enticements with coercive power.

Corporations generate propaganda, claiming that global corporatization (promoted as “free trade“) raises living standards. But this story is contradicted by global economic data which demonstrate corporate colonialism–the siphoning of profit from the country or region of production–is having a debilitating impact on many developing countries.

Structural Amorality
Corporations are artificial creations, shielded from obligations of personal morality and responsibility by their very design. As a result, decisions that may be antithetical to community interests, workers’ welfare, or public and environmental health are made without risk of personal liability. Furthermore, having no real commitment to a particular locale, corporations can relocate easily to escape taxes, unionized employees, and environmental protection laws.

The impact of corporate decision-making on community interests, workers’ welfare, and public health extends beyond just financial concerns. In the healthcare industry, decisions made by corporations can have a direct impact on patient care and the availability of healthcare services in a particular area. For example, a large healthcare corporation may choose to close a community hospital to consolidate resources and maximize profits. This decision could leave patients without access to critical healthcare services, especially in underserved areas. It is important for healthcare centers, such as the Kew Gardens Hills walk-in clinic, to remain independent and community-focused to prioritize patient care and access to healthcare services over corporate profits.

In light of growing public awareness and resistance to environmental and societal harm, more corporations are seeking to veil their amorality and appear altruistic. This practice of “greenwashing” is intended to coax more people to buy their products, services or stock, but if corporate benefits do not accrue, altruistic poses are dropped. For example, when Exxon Corporation executives realized that their spending to mitigate damage to Alaskan shores after the Valdez oil spill was not swaying public opinion enough to benefit the company’s bottom line, they dropped the pretense of moral obligation and stopped the cleanup.

Quantification
Corporations require subjective values to be translated into objective quantities that are easily tallied on balance sheets. Forests, for example, are valued only in terms of “board feet.” Their immense value in sustaining life or providing clean water and spiritual nourishment goes uncounted. This carries over to government institutions that are heavily influenced by industry; hence the U.S. Forest Service considers trees worth thousands of dollars to timber companies as economically worthless unless they are cut down.

Such accounting without human values allows corporate cost/benefit analyses to be the measuring stick for many public health policies. The resulting policy of “risk-assessment” inflicts sickness and death from easily preventable pollution or toxic pesticides to avoid the “excessive” costs of healthier alternatives.

Corporate political powers succeeded in pushing Congress to effectively abandon the Precautionary Principle (addressing or preventing probable health hazards proactively, rather than waiting for definitive scientific proof of public harm) when it repealed the Delaney Amendment in 1996. Delaney simply required that our food be free of proven carcinogens.

Exploitation & Homogenization
Corporate profit depends not only on minimizing employee compensation but also on shifting costs created by business onto society as a whole, commonly called externalization. We all foot the bill for such externalized costs of pollution, illness, health care, public infrastructure to support corporate expansion, and much more.

Corporate employees often are dehumanized–seen as replaceable parts in a machine. For managers in the corporate workplace, personal morality must not interfere with profit-based decision making, though these decisions often carry deep personal, community, or environmental consequences. A CEO who resists moving a factory overseas to evade environmental regulations or refuses to cut workers’ pay soon will be replaced if these actions result in an unexploited opportunity for profit.

Corporations have a tremendous stake in fostering homogeneous consumers and conformity. Consumption accelerates as more people believe that certain commodities bring material satisfaction. Inner satisfaction, self-sufficiency, and contentment in nature are subversive to corporate goals. As transnational chains increasingly dominate commerce, native societies are pressured to give up their traditional ways and join the corporate global culture–uniqueness is gradually vanquished.

Lack of Limitations
Our country’s founders and many subsequent generations recognized the danger in allowing corporations to grow in size and power. Corporations initially were given a limited lifespan, barred from engaging in any activity not expressly permitted, and relegated to a narrow range of permissible actions. Corporations were deemed appropriate tools to serve a public benefit through engaging in commerce but were fully subordinate to democracy and prohibited from legally attempting to influence elections, education, public policy, and other realms of civic society.

But it’s easy to forget lessons not learned through personal experience. For more than a century, we have permitted corporations to elude democratic control and escape our limitations on their lifespan, size, and activities. We have yielded to them immense power to weaken citizen sovereignty over business and to shape our laws and government.

As a result of vast political power, the majority of harms caused by corporations are perfectly legal, rendering even rigorous enforcement of the laws governing corporate actions inadequate. Banishing corporations from political participation is a necessary first step to reclaiming our democracy.

We must abandon the absurd notion that corporations can reform themselves. Such notions deceive and distract us from our fundamental work. This does not mean we should fail to support the efforts of those working to improve corporate actions from within; but merely asking for greater “corporate responsibility” makes little more sense than asking a bulldozer to act responsibly.

Even Business Ethics magazine founder Marjorie Kelly now writes “it won’t be enough to rely on voluntary initiatives, codes of conduct, enlightened leadership…we must change the fundamental governing framework for all corporations in law.”

It is We the People who must be responsible, as we have not been for more than a century, and relegate corporations to their proper role–a tool for serving the public interest. Only by disillusioning ourselves can we hope to see the roots of our problems and recognize our responsibility: to restore our authority over corporations as citizens and re-program the machine.

The writer, Jeff Milchen,  served as the Executive Director of ReclaimDemocracy.org at the time of writing before moving on to co-direct AMIBA, the American Independent Business Alliance.

Our Hidden History of Corporations in the U.S.

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When American colonists declared independence from England in 1776, they also freed themselves from control by English corporations that extracted their wealth and dominated trade. After fighting a revolution to end this exploitation, our country’s founders retained a healthy fear of corporate power and wisely limited corporations exclusively to a business role. Corporations were forbidden from attempting to influence elections, public policy, and other realms of civic society.

Initially, the privilege of incorporation was granted selectively to enable activities that benefited the public, such as construction of roads or canals. Enabling shareholders to profit was seen as a means to that end. The states also imposed conditions (some of which remain on the books, though unused) like these*:

  • Corporate charters (licenses to exist) were granted for a limited time and could be revoked promptly for violating laws.
  • Corporations could engage only in activities necessary to fulfill their chartered purpose.
  • Corporations could not own stock in other corporations nor own any property that was not essential to fulfilling their chartered purpose.
  • Corporations were often terminated if they exceeded their authority or caused public harm.
  • Owners and managers were responsible for criminal acts committed on the job.
  • Corporations could not make any political or charitable contributions nor spend money to influence law-making.

For 100 years after the American Revolution, legislators maintained tight control of the corporate chartering process. Because of widespread public opposition, early legislators granted very few corporate charters, and only after debate. Citizens governed corporations by detailing operating conditions not just in charters but also in state constitutions and state laws. Incorporated businesses were prohibited from taking any action that legislators did not specifically allow.

States also limited corporate charters to a set number of years. Unless a legislature renewed an expiring charter, the corporation was dissolved and its assets were divided among shareholders. Citizen authority clauses limited capitalization, debts, land holdings, and sometimes, even profits. They required a company’s accounting books to be turned over to a legislature upon request. The power of large shareholders was limited by scaled voting, so that large and small investors had equal voting rights. Interlocking directorates were outlawed. Shareholders had the right to remove directors at will.

In Europe, charters protected directors and stockholders from liability for debts and harms caused by their corporations. American legislators explicitly rejected this corporate shield. The penalty for abuse or misuse of the charter was not a plea bargain and a fine, but dissolution of the corporation.

In 1819 the U.S. Supreme Court tried to strip states of this sovereign right by overruling a lower court’s decision that allowed New Hampshire to revoke a charter granted to Dartmouth College by King George III. The Court claimed that since the charter contained no revocation clause, it could not be withdrawn. The Supreme Court’s attack on state sovereignty outraged citizens. Laws were written or re-written and new state constitutional amendments passed to circumvent the (Dartmouth College v Woodward) ruling. Over several decades starting in 1844, nineteen states amended their constitutions to make corporate charters subject to alteration or revocation by their legislatures. As late as 1855, it seemed that the Supreme Court had gotten the peoples’ message when in Dodge v. Woolsey it reaffirmed states’ powers over “artificial bodies.”

But the men running corporations pressed on. Contests over charter were battles to control labor, resources, community rights, and political sovereignty. More and more frequently, corporations were abusing their charters to become conglomerates and trusts. They converted the nation’s resources and treasures into private fortunes, creating factory systems and company towns. Political power began flowing to absentee owners, rather than community-rooted enterprises.

The industrial age forced a nation of farmers to become wage earners, and they became fearful of unemployment–a new fear that corporations quickly learned to exploit. Company towns arose. and blacklists of labor organizers and workers who spoke up for their rights became common. When workers began to organize, industrialists and bankers hired private armies to keep them in line — sometimes by killing key leaders. They bought newspapers to paint businessmen as heroes and shape public opinion. Corporations bought state legislators, then announced legislators were corrupt and said scrutinizing every corporate operation wasted public resources

Government spending during the Civil War brought these corporations fantastic wealth. Corporate executives paid “borers” to infest Congress and state capitals, bribing elected and appointed officials alike. They pried loose an avalanche of government financial largesse. During this time, legislators were persuaded to give corporations limited liability, decreased citizen authority over them, and extended durations of charters.

Attempts were made to keep strong charter laws in place, but with the courts applying legal doctrines that made protection of corporations and corporate property the center of constitutional law, citizen sovereignty was undermined. As corporations grew stronger, government and the courts became easier prey. They freely reinterpreted the U.S. Constitution and transformed common law doctrines.

One of the most severe blows to citizen authority arose out of the 1886 Supreme Court case of Santa Clara County v. Southern Pacific Railroad. Though the court did not make a ruling on the question of “corporate personhood,” thanks to misleading notes of a clerk, the decision subsequently was used as precedent to hold that a corporation was a “natural person.” (This story was detailed in “The Theft of Human Rights,” a chapter in Thom Hartmann’s Unequal Protection.)

From that point on, the 14th Amendment, enacted to protect rights of freed slaves, was used routinely to grant corporations constitutional “personhood.” Justices have since struck down hundreds of local, state and federal laws enacted to protect people from corporate harm based on this illegitimate premise. Armed with these “rights,” corporations increased control over resources, jobs, commerce, politicians, judges, and the law.

A United States Congressional committee concluded in 1941, “The principal instrument of the concentration of economic power and wealth has been the corporate charter with unlimited power….”

Many U.S.-based corporations are now transnational, but the corrupted charter remains the legal basis for their existence. At Reclaim Democracy!, we believe citizens can reassert the convictions of those who struggled successfully to free us from corporate rule in the past. These changes must occur at the most fundamental level — the U.S. Constitution.

We are indebted to our friends at the Program on Corporations, Law and Democracy for their research, some of which was adapted with permission for this article. Sources include:

Visit our Corporate Personhood page for a huge library of articles exploring this topic more deeply.