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Populism, beginning to emerge as a response to corporate America, is aimed at social structures so entrenched that they have become invisible. Does this movement hold the key to vast social change?
At last I am able to report hopeful signs on the political horizon. Over the past year or so a new movement has begun to emerge, one aimed at the main power structures of modern industrial society-the vast multinational corporations that, for all practical purposes, now rule the world. This movement is hardly a large one, but it is well informed and intelligently directed, and it is well worth knowing about.
The movement I'm referring to is, in some respects, a resurgence of 19th-century populism, which began as a Farmers' Alliance against the capitalists' post-Civil War control both of the Democratic and Republican parties, and of the land economy by way of the crop-lein system. The first document of the Alliance, the "Cleburne Demands" of 1886, called for "such legislation as shall secure to our people freedom from the onerous and shameful abuses that the industrial classes are now suffering at the hands of arrogant capitalists and powerful corporations." By 1890, the movement was organized as the People's party (or Populist party). Mary Ellen Lease, a Populist orator from Kansas, told an enthusiastic crowd at the first party convention: "Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street. . . ."
More than a century later, Lease's words are no less true. Today, we find ourselves in a situation where giant multinational corporations decide for us how our food is grown and distributed; what poisons we breathe, eat, and drink; who works at what jobs; how much wealth will be shared and by whom; what we see on television and read in newspapers and magazines; and which ecosystems will be plundered and to what degree. Totalitarian business empires buy and sell politicians, design their own regulatory (or deregulatory) laws, and use phony PR-based "citizen" front organizations to undermine the work of genuine consumer, labor, human rights, and environmental groups around the world.
Until now, attempts to rein in corporate power have taken the form of activist campaigns for labor, health, and environmental regulatory laws. Throughout the last century, this approach has seen many notable successes. Yet despite these victories, corporate power is greater now than ever. During the Reagan-Bush years, many regulations were eroded; and in the past two years (with the new Republican-dominated Congress), corporate-funded politicians have attempted to altogether gut whole classes of labor, environmental, and welfare regulations. Clearly, the regulatory approach has run its course.
Now new organizations-notably the new Alliance and the International
Forum on Globalization-are adopting different tactics, attacking
the problem closer to its source: the very legal basis of corporate
power. In order to understand why this approach is needed, and
why it is strategically promising, it is helpful to recall a little
history.
The corporation was invented early in the colonial era as a grant
of privilege extended by the crown to a group of investors-usually
to finance a trade expedition. The corporation limited the liability
of investors to the amount of their investment, a right not held
by ordinary citizens. Corporate charters set out the specific
rights and obligations of the individual corporation, including
the amount to be paid to the crown in return for the privilege
granted. Thus were born the East India Company, which led the
British colonization of India, and Hudson's Bay Company, which
accomplished the same purpose in Canada. Almost from the beginning,
Britain deployed state military power to further corporate interests-a
practice that has continued to the present. Also from the outset,
corporations began pressuring government to expand corporate rights
and to limit corporate responsibilities.
The corporation was a legal invention-a social-economic mechanism
for concentrating and deploying human and economic power. The
purpose of the corporation was and is to generate profits for
its investors. As an entity, it had and has no other purpose;
it acknowledges no higher value.
Many people understood early on that, since corporations do not
serve society as a whole, but only their investors, there is therefore
always a danger that the interests of corporations and those of
the general populace will come into conflict. Indeed, the United
States were born of a revolution not just against the British
monarchy, but against the power of corporations. Many of the American
colonies had been chartered as corporations (the Virginia Company,
the Carolina Company, the Maryland Company, etc.), and were granted
monopoly power over lands and industries considered crucial to
the interests of the crown. Much of the literature of the revolutionaries
was filled with denunciations of the "long train of abuses"
of the crown and its instruments of dominance, the corporations.
As the yoke of the crown corporations was being thrown off, Thomas
Jefferson railed against "the general prey of the rich on
the poor"; later he warned the new nation against the creation
of "immortal persons" in the form of corporations. The
American revolutionaries resolved that the authority to charter
corporations should lie not with governors, judges, or generals,
but only with elected legislatures. At first, such charters as
were granted were for a fixed time, and legislatures spelled out
the rules each business should follow. Profit-making corporations
were chartered to build turnpikes, canals, and bridges, to operate
banks, and to engage in industrial manufacture. Some citizens
argued against even these few, limited charters, on the grounds
that no business should be granted special privileges, and that
owners should not be allowed to hide behind legal shields. Thus
the requests for many charters were denied, and existing charters
were often revoked. Banks were kept on a short leash, and (in
most states) investors were held liable for the debts and harms
caused by their corporations.
All of this began to change in the mid-19th century. According
to Richard Grossman and Frank Adams in Taking Care of Business,
"Corporations were abusing their charters to become conglomerates
and trusts. They were converting the nation's treasures into private
fortunes, creating factory systems and company towns. Political
power began flowing to absentee owners intent upon dominating
people and nature."
Grossman and Adams note that "In factory towns, corporations
set wages, hours, production processes and machine speeds. They
kept blacklists of labor organizers and workers who spoke up for
their rights. Corporate officials forced employees to accept humiliating
conditions, while the corporations agreed to nothing." The
authors quote Julianna, a Lowell, Massachusetts factory worker,
who wrote: "Incarcerated within the walls of a factory, while
as yet mere children-drilled there from five till seven o'clock,
year after year . . . what, we would ask, are we to expect, the
same system of labor prevailing, will be the mental and intellectual
character of future generations . . . a race fit only for corporation
tools and time-serving slaves? . . . Shall we not hear the response
from every hill and vale, "EQUAL RIGHTS, or death to the
corporations?"
Industrialists and bankers hired private armies to keep workers
in line, bought newspapers and (quoting Grossman and Adams again)
"painted politicians as villains and businessmen as heroes.
Bribing state legislators, they then announced legislators were
corrupt, that they used too much of the public's resources and
time to scrutinize every charter application and corporate operation.
Corporate advocates campaigned to replace existing chartering
laws with general incorporation laws that set up simple administrative
procedures, claiming this would be more efficient. What they really
wanted was the end of legislative authority over charters."
During the Civil War, government spending brought corporations
unprecedented wealth. "Corporate managers developed the techniques
and the ability to organize production on an ever grander scale,"
according to Grossman and Adams. "Many corporations used
their wealth to take advantage of war and Reconstruction years
to get the tariff, banking, railroad, labor, and public lands
legislation they wanted."
In 1886, the U.S. Supreme Court declared that corporations were
henceforth to be considered "persons" under the law,
with all of the constitutional rights that designation implies.
The 14th amendment to the Constitution, passed to give former
slaves equal rights, was actually invoked in their behalf only
a few times; corporations invoked it repeatedly. Likewise the
first amendment, guaranteeing free speech, was invoked to guarantee
corporations the "right" to dominate public discourse.
Corporations, after all, were "persons" with qualities
and powers that no flesh-and-blood human could ever possess-immortality,
the ability to be in many places at once, and (increasingly) the
ability to avoid liability. They were also "persons"
with no sense of moral responsibility, since their only legal
mandate was to produce profits for their investors.
Throughout the late 19th and early 20th centuries, corporations
reshaped every aspect of life in America and much of the rest
of the world. The factory system turned self-sufficient small
farmers into wage earners and transformed the family from an interdependent
economic production unit to a consumption-oriented collection
of individuals with separate jobs. Advertising turned productive
citizens into "consumers." Business leaders campaigned
to create public schools to train children in factory-system obedience
to schedules and in the performance of isolated, meaningless tasks.
Meanwhile, corporations came to own and dominate sources of information
and entertainment, and to control politicians and judges.
During two periods, corporations faced a challenge-the 1890s (a
depression period when populists demanded regulation of railroad
rates, heavy taxation of land held only for speculation, and an
increase in the money supply), and 1930s (when a profound crisis
of capitalism led hundreds of thousands of workers and armies
of the unemployed to demand government regulation of the economy-and
to win a 40-hour week, a minimum-wage law, the right to organize,
and the outlawing of child labor). But in both cases, corporate
capitalism emerged intact. In the words of historian Howard Zinn,
"The rich still controlled the nation's wealth, as well as
its laws, courts, police, newspapers, churches, colleges. Enough
help had been given to enough people to make Roosevelt a hero
to millions, but the same system that had brought depression and
crisis . . . remained."
World War II, like previous wars, brought huge profits to corporations
via government contracts. But following this war, military spending
was institutionalized, ostensibly to fight the "cold war."
Despite occasional regulatory setbacks, corporations seized ever
more power, and increasingly transcended national boundaries,
loyalties, and sovereignties altogether.
In the 1970s, capitalism faced yet another challenge as post-war
growth subsided and profits fell. The U.S. was losing its dominant
position in world markets, the Vietnam war had weakened the American
economy, and Third-World countries were demanding a "North-South
dialogue" leading toward greater self-reliance for poorer
countries. President Nixon responded by doing away with fixed
currency exchange rates; later, newly-elected president Reagan,
at the 1981 Cancun, Mexico meeting of 22 heads of state, refused
to discuss new financial arrangements with the Third World, thus
effectively endorsing their further exploitation by corporations.
Meanwhile, the corporations themselves also responded with a new
strategy. Increased capital mobility (made possible by floating
exchange rates and new transportation, communication, and production
technologies) allowed First-World corporations to move production
"off-shore" to "export-processing zones" in
Third-World countries-usually, military dictatorships like Korea.
Corporations also undertook a restructuring process, moving toward
"networked production"-in which big firms, while retaining
and consolidating power, hired smaller firms to take over aspects
of supply, manufacture, accounting, and transport. (Economist
Bennett Harrison defines networked production as "concentration
of control combined with decentralization of production".)
This restructuring process is also known as "downsizing,"
because it results in the shedding of higher-paid employees by
large corporations and the hiring of low-wage contingent workers
by smaller subcontractors.
Jeremy Brecher and Tim Costello write in Global Village or
Global Pillage that "As the economic crisis deepened,
there gradually evolved . . . a 'supra-national policy arena'
which included new organizations like the Group of Seven industrial
nations (G-7) and NAFTA and new roles for established international
organizations like EU, IMF, World Bank, and GATT. The policies
adopted by these international institutions allowed corporations
to lower their costs in several ways. They reduced consumer, environmental,
health, labor, and other standards. They reduced business taxes.
They facilitated the move to lower wage areas and threat of such
movement. And they encouraged the expansion of markets and the
'economies of scale' provided by larger-scale production."
All of this has led to a globalized economy in which (again quoting
Brecher and Costello), "All over the world, people are being
pitted against each other to see who will offer global corporations
the lowest labor, social, and environmental costs. Their jobs
are being moved to places with inferior wages, lower business
taxes, and more freedom to pollute. Their employers are using
the threat of 'foreign competition' to hold down wages, salaries,
taxes, and environmental protections and to replace high-quality
jobs with temporary, part-time, insecure, and low-quality jobs.
Their government officials are justifying cuts in education, health,
and other services as necessary to reduce business taxes in order
to keep or attract jobs."
Corporations, no longer bound by national laws, prowl the world
looking for the best deals on labor and raw materials. Of the
world's top 120 economies, nearly half are corporations, not countries.
Thus the power of citizens in any nation to control corporations
through whatever democratic processes are available to them is
receding quickly.
It remains to be seen: given a situation in which environmental,
health, and economic conditions are worsening, how will the
general population respond? Here again, a little history may
help us understand the options available.
The populism of the 1890s failed for two main reasons-divisiveness
within and co-optation from without. While many populist leaders
saw the need for unity among people of different racial and ethnic
backgrounds in attacking corporate power, racism was strong among
many whites. Most of the Alliance leaders were white farm owners
who failed, in many instances, to support the organizing efforts
of poor rural blacks-and poor whites as well-thus dividing the
movement. "On top of the serious failures to unite blacks
and whites, city workers and country farmers," writes Howard
Zinn, "there was the lure of electoral politics. . . . Once
allied with the Democratic party in supporting William Jennings
Bryan for President in 1896 . . . the pressure for electoral victory
led Populism to make deals with the major parties in city after
city. If the Democrats won, it would be absorbed. If the Democrats
lost, it would disintegrate. Electoral politics brought into the
top leadership the political brokers instead of the agrarian radicals.
. . . In the election of 1896, with the Populist movement enticed
into the Democratic party, Bryan, the Democratic candidate, was
defeated by William McKinley, for whom the corporations and the
press mobilized, in the first massive use of money in an election
campaign."
Today, a new populist movement could easily fall prey to the same
internal divisions and tactical errors that destroyed its counterpart
a century ago. In the coming American presidential election, populists
face the choice of supporting their own candidate (Ralph Nader)
and thereby contributing to the election of the "right-centrist"
pro-corporate Republican candidate (Dole), or supporting Clinton
and seeing their movement co-opted by "left-centrist"
pro-corporate Democrats.
Meanwhile, though African Americans, Asian Americans, Hispanic
Americans, European Americans, and Native Americans have all been
victimized by corporations, class divisions and historical resentments
often prevent them from organizing to further their common interests.
Currently, ultraright candidate Pat Buchanan is appealing simultaneously
to "populist" anti-corporate and anti-government sentiments
among the working class, and to xenophobic white racism. Buchanan's
critique of corporate power is shallow and of questionable genuineness,
but at present it is the only such critique showing up in the
corporate-controlled media. One cannot help but wonder: Are the
corporations looking for a lightning rod to rechannel the anger
building against them?
While Buchanan has no chance of winning the presidency this year,
his candidacy does raise the specter of another kind of solution
to the emerging crisis of popular resentment against the system-a
solution that again has roots in the history of the past century.
In the early 1900s, workers in Italy and Germany built strong
unions and won substantial concessions in wages and work conditions;
still, after World War I they suffered under a disastrous postwar
economy, which fanned unrest. Meanwhile, heavy industry and big
finance were in a state of near total collapse. Bankers and agribusiness
associations offered financial support to Mussolini-who had been
a socialist before the war-to seize state power. Within two years,
the Fascist party (from the Latin fasces, for a bundle
of rods and an axe, symbolizing state power) had shut down all
opposition newspapers; crushed the socialist, liberal, Catholic,
democratic, and republican parties (which had together commanded
about 80% of the vote); abolished unions; outlawed strikes; and
privatized farm cooperatives.
In Germany, Hitler led the Nazi party to power, then cut wages
and subsidized industries. In both countries, corporate profits
ballooned. Understandably, given their friendliness to big business,
fascism and nazism were popular among some prominent American
industrialists (such as Henry Ford) and opinion shapers (like
William Randolph Hearst).
Fascism and nazism relied on centrally-controlled propaganda campaigns
that cleverly co-opted the language of the left (the Nazis called
themselves the "National Socialist German Workers Party"-while
persecuting socialists and curtailing workers' rights). Both movements
also made rational use of irrational symbols-scapegoating minorities,
appealing to mythic images of a glorious national past, building
a leader cult, glorifying war and conquest, and preaching that
the only proper role of women is as wives and mothers.
As political theorist Michael Parenti points out, historians often
overlook fascism's economic agenda-the partnership between Big
Capital and Big Government-in their analysis of its authoritarian
social program. Indeed, according to Bertram Gross in his startlingly
prescient Friendly Fascism (1980), it is possible to achieve
fascist goals within an ostensibly democratic society. Corporations
themselves, after all, are internally authoritarian; and as they
increasingly dominate politics, media and economy, they can mold
an entire society to serve the interests of a powerful elite without
ever resorting to storm troopers and concentration camps. No deliberate
conspiracy is necessary, either; each corporation merely acts
to further its own economic interests. If the populace shows signs
of restlessness, politicians can be hired to appeal to racial
resentments and memories of national glory, dividing popular opposition
and inspiring loyalty.
In the current situation, "friendly fascism" works somewhat
as follows. Corporations drive down wages and pay fewer taxes
(through mechanisms outlined above), gradually impoverishing the
middle class and creating unrest. As corporate taxes are cut,
politicians (whose election was funded by corporate donors) argue
that it is necessary to reduce government services in order to
balance the budget. Meanwhile, the same politicians argue for
an increase in the repressive functions of government (more prisons,
harsher laws, more executions, more military spending). Politicians
channel the middle class's rising resentment away from corporations
and toward the government-which, after all, is now less helpful
and more repressive than it used to be-and against social groups
easy to scapegoat (criminals, minorities, teenagers, women, gays,
immigrants). Meanwhile, debate in the media is kept superficial
(elections are treated as sporting contests), and right-wing commentators
are subsidized while left-of-center ones are marginalized. People
who feel cheated by the system turn to the Right for solace and
vote for politicians who further subsidize corporations, cut government
services, expand the repressive power of the state, and offer
irrelevant scapegoats for social problems with economic roots.
The process feeds on itself.
Within this scenario, Pat Buchanan (and similar ultra-right figures
in other countries) are not anomalies, but rather predictable
products of a strategy adopted by economic elites-harbingers of
a less-than-friendly future that could ensue if "moderate"
tactics for the consolidation of power were to fail.
These circumstances are, in their details, unprecedented; but
in broad outline we are seeing the reenactment of a story that
goes back at least to the beginning of civilization. Those with
power are always looking for ways to protect and extend it; and
to make it seem legitimate, necessary, or invisible, so that popular
protest seems unnecessary or unfeasible. If protest comes, they
always try to deflect anger away from themselves.
The leaders of the new populist movement appear to have a good
grasp of both the current circumstances and the historical ground
from which these circumstances emerge. They seem to have realized
that, in order to succeed, the new populism will have to:
The formation of the new Alliance was announced in an article
by Ronnie Dugger in the August 14, 1996 issue of The Nation.
In that article, Dugger wrote: "I propose the emphasis on
Populism because the 19th-century Populists denied the legitimacy
of corporate domination of a democracy, whereas in this century
the progressives, the unions and the liberals gave up and forgot
about that organic and controlling issue. I propose that we seize
the word Populism back from its many hijackers, its misusers-the
George Wallaces, David Dukes, Irving Kristols, Newt Gingriches-and
restore its original meaning in American history, that of the
anti-corporate Populist movement of the 1880s and 1890s. Our point,
our purpose, is the well-being and enhancement of the person."
As Lawrence Goodwyn noted in his definitive work, The Populist
Movement, the original Populists were "attempting to
construct, within the framework of American capitalism, some variety
of cooperative commonwealth"; this was "the last substantial
effort at structural alteration of hierarchical economic forms
in modern America." The new populists are, in Dugger's words,
"ready to resume the cool eyeing of the corporations with
a collective will to take back the powers they have seized from
us." The more specific tactics and goals of the Alliance
are to be determined by "democratic conversations" to
be held in and among local Alliance groups, which are now forming
around the country. In his article, Dugger makes a few policy
suggestions, with the caution that they represent "only one
person's contribution to those conversations"; these include:
a prohibition of contributions or any other political activity
by corporations; single-payer national health insurance with automatic
universal coverage; a doubling of the minimum wage, indexed to
inflation; a generic low-interest-rate national policy, entailing
the abolition of the Federal Reserve System; statutory reversal
of the court-made law that corporations are "persons";
a national public oil company; limitations on ownership of newspapers,
magazines, radio and TV stations to one of any kind per person
or owning entity; and the halving of military spending.
The Alliance draws at least some of its inspiration from the work
of Richard Grossman (one of its founders), whose Program on Corporations,
Law & Democracy explores the legal basis of corporate power.
Grossman believes that it is possible to control-and, if necessary,
dismantle-corporations by amending or revoking their charters.
For the past two years, the Program on Corporations, Law &
Democracy has been organizing "Rethinking Corporations/Rethinking
Democracy" meetings around the country.
Since the largest corporations are now transnational in scope,
the new populism must confront their abuses globally. The International
Forum on Globalization was founded for this purpose in 1994, as
an alliance of 60 activists, scholars, economists, and writers
(including Jerry Mander, Vandana Shiva, Richard Grossman, Ralph
Nader, Helena Norberg-Hodge, Jeremy Rifkin, and Kirkpatrick Sale)
to stimulate new thinking and joint action along these lines.
In a position statement drafted in 1995, the IFG says that it
"views international trade and investment agreements, including
the GATT, the WTO, Maastricht, and NAFTA, combined with the structural
adjustment policies of the International Monetary Fund and the
World Bank, to be direct stimulants to the processes that weaken
democracy, create a world order in the control of transnational
corporations, and devastate the natural world. . . . The IFG will
study, publish and actively advocate in opposition to the current
rush toward economic globalization, and will seek to reverse its
direction. Simultaneously, we will advocate on behalf of a far
more diversified, locally controlled, community-based economics.
. . . We believe that the creation of a more equitable economic
order-based on principles of diversity, democracy, community and
ecological sustainability-will require new international agreements
that place the needs of people, local economies and the natural
world ahead of the interests of corporations. . . ."
Leaders of the new populism appear to realize that anti-corporatism
is not a complete solution to the world's problems; that the necessary
initial focus on corporate power must eventually be supplemented
by a more general critique of centralizing and unsustainable technologies,
money-based economics, and current nation-state governmental structures;
efforts to protect traditional cultures and ecosystems; and a
renewal of culture and spirituality. Nevertheless, the Alliance
and IFG provide useful rallying points for citizens' self-defense
against tyranny in its most modern, invisible, effective, and
occasionally even seductive forms.
Contacts:
The International Forum on Globalization (IFG): P.O. Box 12218,
San Francisco CA 94112; (415) 771-1102.
The Alliance: P.O. Box 1011, N. Cambridge MA 02140; (617) 491-0176;
E-mail: INALLIANCE@aol.com. Dues are $10.
The Program on Corporations, Law & Democracy: P.O. Box 806,
Cambridge MA 02140; (508) 487-3151.
Recommended:
Global Village, Global Pillage: Economic Reconstruction from
the Bottom Up by Jeremy Brecher and Tim Costello (South End
Press)
Fascism: The False Revolution by Michael Parenti (audio
tape of lecture); available for $4 ppd. from People's Audio/Video,
P.O. Box 99514, Seattle WA 98199
Opposing the System by Charles Reich (Crown)
When Corporations Rule the World by David Korten (Berrett-Koehler)
Friendly Fascism by Bertram Gross (1980) (South End Press)
A People's History of the United States by Howard Zinn
(Harper Collins)
Captains of Consciousness by Stuart Ewen (1973) (McGraw-Hill)
"Real Populists Please Stand Up" by Ronnie Dugger, The
Nation, August 14-21, 1995
Taking Care of Business: Citizenship and the Charter of Incorporation
(pamphlet) by Richard L. Grossman and Frank T. Adams; available
for $5 ppd. from Charter, Ink., P.O. Box 806, Cambridge MA 02140.
Richard Heinberg is the author of Memories and Visions of
Paradise: Exploring the Universal Myth of a Lost Golden Age (Quest
Books, 1995), and Celebrate the Solstice: Honoring the Earth's
Seasonal Rhythms through Festival and Ceremony (Quest Books,
1994). He also publishes the monthly MuseLetter.
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How Corporations Came to Rule the World
Global Pillage
Hurdles in the Path
A False Revolution
Cause for Hope?