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The Forum > Article Comments > Corporate cowboys > Comments

Corporate cowboys : Comments

By Colin Penter, published 24/6/2010

The tenets of 'limited liability' and 'corporate personhood' make it possible for corporations to avoid criminal responsibility.

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British kings granted charters to the British East India Company, the Hudson’s Bay Company and many American colonies, enabling the kings and their cronies to control property and commerce. The American colonists did not revolt simply over a tax on tea.
Craft and industrial workers feared absentee corporate owners would turn them into “a commodity being as much an article of commerce as woollens, cotton, or yarn,” according to historian Louis Hartz.

Incorporated businesses were banned from taking any action that citizens and legislators did not specifically allow.
In 19th-century America, many citizens believed that it was society’s inalienable right to abolish an evil.
During the last third of the 19th century, “Corporations confronted the law at every turn,” according to Harvard law professor Lawrence M. Friedman.
Workers, the courts also ruled, were responsible for causing their own injuries on the job. Judges created the “right to contract” doctrine, which stipulates that the government cannot interfere with an individual’s “freedom” to negotiate with a corporation for wages and working conditions.
Judges established the “managerial prerogative” and “business judgement” doctrines.
The US Supreme Court ruled that a private corporation was a “natural person” under the US Constitution, sheltered by the 14th Amendment, which requires due process in the criminal prosecution of “persons.” Following this ruling, huge, wealthy corporations were allowed to compete on “equal terms” with individuals
Posted by John Jawrence Ward, Thursday, 24 June 2010 11:12:18 AM
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The US Supreme Court ruled that a private corporation was a “natural person” under the US Constitution, sheltered by the 14th Amendment, which requires due process in the criminal prosecution of “persons.” Following this ruling, huge, wealthy corporations were allowed to compete on “equal terms” with individuals.

Supreme Court Justice William 0. Douglas wrote 60 years later.
Within just a few decades, appointed judges had redefined the “common good” to mean the corporate use of humans and the Earth for maximum production and profit—no matter what was manufactured, who was hurt or what was destroyed. Corporations had obtained control over resources, production, commerce, jobs, politicians, judges and the law. Workers, citizens, cities, towns, states and nature were left with fewer and fewer rights that corporations were forced to respect
Supreme Court Justice Morrison Remick Waite in 1886, simply pronounced before the beginning of argument in the case of Santa Clara County v. Southern Pacific Rail road Company that

"The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of opinion that it does".

Thus it was that a two-sentence assertion by a single judge elevated corporations to the status of persons under the law, prepared the way for the rise of global corporate rule, and thereby changed the course of history.
The doctrine of corporate personhood creates an interesting legal contradiction. The corporation is owned by its shareholders and is therefore their property. If it is also a legal person, then it is a person owned by others and thus exists in a condition of slavery -- a status explicitly forbidden by the Thirteenth Amendment to the US Constitution. So far as I have been able to determine, this contradiction has not been directly addressed by the courts.
Corporations are legal creations that only exist on paper. They do not die a natural death; they outlive their own creators.
Posted by John Jawrence Ward, Thursday, 24 June 2010 11:19:46 AM
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The Howard Government used the Corporation Powers adopted into Australia's Constitution to create WorkChoices and circumvent the Industrial relations System.

If the corporation tree has grown from a poisoned fruit, our present labour laws are dubious and therefore require an examination by the High Court of the Corporation Powers in our constitution.

We must abandon the idea that corporations can reform themselves. To ask corporate executives to behave in a morally defensible manner is absurd. Corporations, and the people within them, are following a system of logic that leads inexorably toward dominant behaviours.

Corporation: n. An ingenious device for obtaining individual profit without individual responsibility.
—Ambrose Bierce, 1842-1914.

Though they exist in a society that claims to operate by moral principles, they are structurally amoral. It is inevitable that they will dehumanize people who work for them and the overall society as well. They are disloyal to workers, including their own managers. Corporations can be disloyal to the communities they have been part of for many years. Corporations do not care about nations; they live beyond boundaries. They have an inexorable, unabated, voracious need to grow and to expand. In dominating other cultures, in digging up the earth, corporations blindly follow the codes that have been built into them as if they were genes.

What can we do? What is happening in the US of A, is there is a movement in a number of states, to go back to the Supreme Court and challenge the 1886 decision. Here in Australia in the High Court in December 2006 Houghton Vs Arms found that misleading conduct by any representative even when there is absence of malice, means that person must make good any damages that they have caused.
This means that corporate officers and directors can no longer hide behind the company seal any more.
It is disgusting to me that The Thirteenth amendment of the US Constitution that was made to free slaves and the Fourteenth have been turned on their head to allow exploitation of laws that were meant to bestow equal rights to the citizenry.
Posted by John Jawrence Ward, Thursday, 24 June 2010 12:41:44 PM
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A little colourfully written but for all practical terms largely correct..
Posted by examinator, Thursday, 24 June 2010 5:24:45 PM
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A very factual summary Colin Penter and while society continues to invest in unethical corporations, the status quo prevails.

And only this week, the Centre for Media and Democracy reported that a federal judge sitting in Louisiana struck down the Obama Administration's mere six-month moratorium on new deep water drilling, despite the unfolding disaster in the Gulf of Mexico caused by BP's Deepwater Horizon drilling operation. Who is the unelected man standing in the way of permitting a six-month review of this inherently dangerous activity, asked the CMD?

Judge Martin Leach-Cross Feldman that's who. Judge Feldman has extensive investments in oil and gas, and not just in any oil and gas, but in Transocean Limited, the company that owned BP's Deepwater Horizon drilling rig. His annual financial disclosure report also showed he held tens of thousands of dollars in stock in other oil and gas exploration companies, including Ocean Energy, which helps design submersible drilling rigs.

But corrupt people in high places do not reside in the US alone and who are we Australians to criticise those in faraway places when corporate criminals in this nation are kings and their political sycophants and influential think tanks are their whores?
Posted by Protagoras, Thursday, 24 June 2010 6:34:33 PM
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This is capitalism working as intended. The power and the money keeps concentrating at the top and the bottom keeps growing and getting more and more impoverished. There is no democracy. The rich and powerful live in a totally different world to the rest of us and they buy and coerce and blackmail until they get their way. The rest of us dont stand a chance.

Until people stand up and say no more it will continue. The filth will get worse, the environment will get sicker and the authoritarianism and oppression and fear will all increase.

Business must work for us. Provide what we ask it to. Do as the people say or have your permission to exist removed. After all it is only because we the people let businesses exist that they do. There is no necessity for megamultinational business despite what the capitalists say. (you wouldnt expect them to say anything else would you?) There are plenty of other ways to organise society other than the one that favors the elite and selfish scum that now inhabit the realms of megawealth and power.

Corporations were once heavily regulated, limited in purpose to their original charter, limited in time and required to disband according to their charter and they were not allowed to merge and grow to a point they could exert pressure against democracy.
Slowly with greed and malice in their hearts, the richest and most pampered among us have schemed and fought and bribed their way to almost ultimate power and unimaginable wealth by destroying all the hard fought humanitarian and egalitarian gains made by the hard work and fighting of our forebears.

continued
Posted by mikk, Thursday, 24 June 2010 8:10:43 PM
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