The official history of America is one every kid knows. It’s a story of fierce individualism and heroic personal sacrifice in the service of a dream. A story of hungry settlers carving a home out of the wilderness. A story of a revolution, beating back British imperialism and launching a new colony into the industrial age on its own terms.
It’s a story of America triumphant. Of its rise after World War II to become the richest and most powerful country in the history of the world, the land of the free because of the brave, an inspiring model for the whole world to emulate.
The unofficial story of America is quite different. It begins the same way — in the revolutionary cauldron of colonial America — but then it takes a turn. A bit player in the official story becomes critically important. This player turns out to be not only the provocateur of the revolution, but in a sense its saboteur.
We tend to think of corporations as a fairly recent phenomenon, the legacy of the 19th-century robber barons. But they were front-and-center in pre-revolutionary America. They had a beachhead before the pilgrims landed at Plymouth Rock; the language of their charters is in the DNA of the Constitution. The Virginia Company of London, the Massachusetts Bay Company, the British East India Company: these were the Amazon and Wal-Mart and Google of their day.
But back then our dealings with these behemoths was very different. The colonials were highly suspicious of them. They recognized the way British kings and their cronies used them as robotic arms to control the affairs of the colonies, to plunder resources and bring them back to the motherland.
The colonials pushed back. When the British East India company slapped duties on its incoming tea (and they had the colonials over a barrel; that’s how monopolies work), well, you know that story. Radical patriots protested, ships were turned back at port and 342 chests of tea ended up in the saltchuck.
The Boston Tea Party gave young America a glimpse of its own strength. Self-determination was starting to seem not just possible but inevitable.
The Declaration of Independence freed America not just from British rule but also from the tyranny of British corporations, and for a hundred years Americans remained deeply wary of corporate power. Corporate charters weren’t the formality they are today; they were granted very selectively and for a specific purpose — usually to raise money to fund some common-good project. (You literally could not get a corporate charter unless you could prove there was a service dimension to the venture.) They put limits on how big and powerful the corporation could become. And they had a self-destruct mechanism: they automatically dissolved when their purpose was fulfilled.
Even the enormous industry trusts proved no match for the state in those early years. Antitrust legislation kept their appetites in check.
Corporations couldn’t participate in the political process. They couldn’t buy stock in other corporations. If they stepped out of line, the punishment could be severe. Charters could be revoked, and some were. In 1832, the state of Pennsylvania found ten banks to be acting against the public interest and wiped them off the face of the earth.
The people — not the corporations — were in control.
So what happened? How did corporations come to wield more power than the individuals who created them?
The shift began in the last third of the nineteenth century — the start of a great period of struggle between corporations and civil society. The turning point was the Civil War. Corporations made huge profits from procurement contracts. They took advantage of the disorder and corruption of the times to buy legislatures, judges and even presidents. President Lincoln foresaw terrible trouble. “Corporations have been enthroned,” he warned, shortly before his death. “An era of corruption in high places will follow, and the money power will endeavor to prolong its reign by working on the prejudices of the people … until wealth is aggregated in a few hands … and the republic is destroyed.”
Nobody listened. Corporations continued to roll. They had the laws governing their creation amended. Charters could no longer be revoked. Corporate profits could no longer be limited. In hundreds of cases judges granted corporations minor legal victories, conceding new rights and privileges.
Then came a legal event that would not be understood for decades (and remains baffling even today), an event that would change the course of American history. In Santa Clara County vs Southern Pacific Railway, a dispute over a railway route, the U.S. Supreme Court deemed that a private corporation was a “natural person” under the U.S. Constitution and therefore entitled to protection under the Bill of Rights. Suddenly, corporations enjoyed all the rights and sovereignty previously enjoyed only by people.
Santa Clara was nothing less than a corporate takeover. It’s still widely considered one of the great legal blunders of the nineteenth century. Corporations employed 80 percent of the workforce and produced most of America’s wealth by the the Roaring Twenties. They had become too powerful to legally challenge. The courts consistently favored their interests. Employees found themselves without recourse if, for example, they were injured on the job (if you worked for a corporation you voluntarily assumed the risk, was the court’s position). Railroad and mining companies were permitted to annex vast tracts of land at minimal expense.
Gradually, many of the original ideals of the American Revolution were simply quashed. America was being ruled by a coalition of government and business interests. The shift amounted to a kind of slow-motion coup d’état — a gradual subversion and takeover of the institutions of state power. Except for a temporary setback during Franklin Roosevelt’s New Deal (the 1930s), the U.S. has since been governed as a corporate state.
Today, corporations freely buy each other’s stocks and shares. They lobby legislators and bankroll elections. They manage the flow of information, set our industrial, economic and cultural agendas, and grow as big as they damn well please.
We the people have lost control. Corporations, these legal fictions we ourselves created two centuries ago, now rule over us. And we accept this as the normal state of affairs. We go to corporations on our knees. Please do the right thing we plead. Please don’t cut down any more ancient forests. Please don’t pollute any more lakes and rivers (but please don’t move your factories and jobs offshore either). Please don’t use pornographic images to sell fashion to my kids. Please don’t play governments off against each other to get a better deal. We’ve spent so much time bowed down in deference we’ve forgotten how to stand up straight.
The unofficial history of America, which continues to be written, is not a story of rugged individualism and heroic personal sacrifice in the pursuit of a dream. It’s a story of democracy derailed, of a revolutionary spirit suppressed, and of a once-proud people reduced to servitude.
Read Part 2 - here