Blue Ocean Institute

Humpback Breaching

Issues:

The Supreme Court’s Corporate Money “Decision”

By Carl Safina

The modern environmental movement originated as a response to unregulated pollution.  But more important than its origin, even more important than the movement itself, is when and where that origin was possible.  Environmental movements arose not in the most polluted places on Earth, but in the most democratic, including the United States, Canada, and western Europe.  The growth of environmental activity elsewhere often paralleled the overthrow of authoritarian and military regimes and the rise of democracies.  When Vaclav Havel became president of a newly democratic Czechoslovakia in 1990, he lamented to the Czech people, “We have laid waste to our soil and the rivers and forests… and we have the worst environment in the whole of Europe today.”  The previous repressive regime’s suppression of citizen groups, the press, universities, and other potential sources of objection allowed it to pollute with impunity while people stood powerless.  Nature is most abused where human rights are most abused.  A country serves justice, or it doesn’t.  When it doesn’t, it poisons air, water, and soul alike.  When it does, the environment becomes a key toward unlocking justice—but free people must hold those keys.

Saving the world requires saving democracy.  That requires well-informed citizens. Conservation, environment, community, education, family, health, economy, easing poverty—these comprise one quest: liberty and justice for all.  Whether one’s special emphasis is global warming or child welfare, the cause is the same cause. And justice comes from the same place being human comes from—compassion.

The main point of a democracy—protecting the best interests of the many from the greed of a few—is accomplished by having “the many” run the government.  The social contract is that people voluntarily give some rights to a citizen-run government that serves social order and the public interest. That was the idea.

But the body politic has a parasitic infestation that bleeds us weak.  Just look at the multinational corporations, corporate lobbying, and the resulting taxpayer subsidies that flow.

Political institutions can’t correct these economic forces—or even stop feeding corporations with public money—because they’ve been captured by them. Each year globally, governments pay $700 billion in subsidies that help pay people to over-pump groundwater, over-cut forests, over-fish oceans, and overuse fuel. The world taxes itself to pay for its own destruction. That’s the worst kind of socialism, brought to us by the worst kind of capitalists.

Modern corporations were essentially illegal at the founding of the United States. (The colonists had had enough of British corporations.) In the new country, corporations could form, raise public capital, and share profits with stockholders only for specified activities that benefited the public, such as constructing roads or canals.  Corporate licenses were temporary.  Corporations were forbidden from attempting to influence elections, law-making, public policy, and civic life.  Imagine.

But from the beginning, corporate-minded men chafed for power, prompting Thomas Jefferson to write in 1816, “I hope we shall… crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country.”

For the first century after the American Revolution, legislators maintained control of the corporate chartering process. Then they essentially lost it as series of court decisions established corporate “rights” and corporate “personhood.” These have been catastrophic for democracy, with planetary implications.

We didn’t need the U.S. Supreme Court to tell us that corporations have the same rights of “free speech” as real persons. Of course they do—much freer in fact than normal humans, since they can buy air time and advertising, dose candidates with fairy dust, and mobilize paid persuaders in quantities out of the orbit of the budget of any real real person. Corporations have free speech. Normal humans, not so much.

Our problems are not the inevitable price of progress.  They are the eventual cost of stupidity, ideology, superstition, greed—the list is short.  The problems spawned, vast.  They’re intractable, but not because we lack know-how. Intractable because we can’t find the sense that informs the will.

The 1980s saw the democratization of greed.  That avuncular Trojan Horse of corporate greed, Ronald Reagan, helped replace the ethic of “all for one and one for all” with “all for me,” immortalized by the movie Wall Street’s Gordon Gekko, who says: “Greed is good. Greed works. Greed is right.”  Be greedy and feel good about yourself.  Everyone wanted to feel good about themselves, so a generation embraced greed.

Bill Clinton got seduced by de-regulation’s easy feel-good, as did the unmentionable administrations that bookended his.  The only problem was, the regulations they all deregulated were built up over a century for a very good reason: the public needs to defend itself against greedy excess.

All in all, deregulation dealt a devastating blow to the social contract and the idea that we’re all in America together, with both feet.  The divisive partisanship, the scream-radio freak-show, and the fiscal recklessness that followed were an inevitable result of the lost discipline and the lost sense of common-cause. And by the time everyone realized their pockets had been fleeced, the fleecers had fled, beyond law, beyond regulation—beyond national borders.  But not everyone lost out; you glimpse a winning ticket, for example, every time you read the words, “Made in China.”

Corporations have swept real economic and political power away from most governments. Of the hundred wealthiest countries and corporations listed together, more than half are corporations.  Exxon Mobil is richer than 180 countries—and there are only about 195 countries.

Without the responsibilities or costs of nationhood, corporations can innovate and produce at unprecedented speed and scale.  Yet they can also undertake acts of enormous social and environmental destruction and report a profit.

The behavior of corporations arises from their wide freedom of action and their limited liability for harms caused. Further, shareholders “own” and profit by the corporation, but “limited liability” means shareholders can lose no more than the money invested; they aren’t held responsible for anything the corporation does. If they were, stockholders might know what companies they “own” and why. They might demand corporate responsibility. They might invest more carefully. But because they’re not, they don’t. Further, if a corporation can make a larger profit by wrecking a community, the law says it must.

Perhaps the most famous case in corporate law was decided in the Supreme Court of Michigan in 1919 when Henry Ford got sued by the Dodge brothers (yes, those Dodge brothers) Ford wanted to plow profits back into the company and its employees. “My ambition is to employ still more men,” Ford had been quoted as saying, “to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting the greatest share of our profits back in the business.” The judges posed a short question: what is a corporation for? The judges answered themselves by saying corporations are “primarily for the profit of the stockholders” Not for employees or communities. Corporate managers—regardless of personal scruples or desire to ‘do good’—are forced to put profits always first.

The profit-maximization imperative creates continuous pressure to dump waste in the public commons, and to shift the resulting costs to the public through subsidies, tax-funded pollution clean-ups and such. Where dumping waste is illegal, corporations may be fined for violations. Such fines often become “a cost of doing business,” while shareholders know corporations never get sent to jail, and that some are “too big (to be allowed) to fail.” To the extent governmental regulations get annoying, corporate appetites engulf those too, backing and basically installing cooperative elected officials, then stoking themselves with subsidies, and then coercing the removal of regulatory “barriers” (formerly: “public protections”).

In real life as we know it, the profit-maximization imperative means that any company seeking to act responsibly incurs a competitive disadvantage. The implications are generally a cascade of catastrophes, because it means, essentially, that all the money in the world is under pressure to act irresponsibly. Any other impulse must buck that tide.

Now, the Supreme Court has sent America a new blast of partisan hot air that has caused corporate money to burst the century-old levees that had so tenuously restrained it within such imperfect channels.  Who does not fear this?  It is hard to see how democracy won’t be catastrophically flooded, and the voices of real people utterly drowned, in the oncoming deluge of corporate cash.

– Carl Safina