Corporations and the Future of Democracy

Thursday, October 9, 2014 -- 5:00 PM
John Perry

Our topic this week is Corporations and the Future of Democracy.  That title suggests that corporations are a potential threat to democracy.  So we should start off by getting clear on what exactly a corporation is, and how it might threaten democracy.

There are lots of ways that corporations threaten democracy.  But they’re all, I think, rooted in one basic concept -- the idea of limited liability.  That’s the concept that the individuals behind a corporation can shield themselves from full financial responsibility for risks they take.  The thinking is, if people can protect themselves from full liability, they’ll be willing to take greater risks and try new things.  Limited liability encourages creativity and innovation.

But limited liability is a double-edged sword.  It also enables corporations to do things like pollute and destroy natural environments without having to take full responsibility.  For example, if a corporation causes a million dollars worth of environmental damage, but only has a thousand dollars worth of assets, basically it can just go bankrupt and walk away from the problem.  Even if it doesn’t do that, the mere threat of going bankrupt can be used to negotiate in litigation.  Ironically, if a lawsuit against a corporation is too successful, the corporation can just declare bankruptcy, and the plaintiffs won’t get anything.

Even huge corporations with major assets can leverage the threat of bankruptcy to avoid liability for damage they cause. Remember the huge BP oil spill in the Gulf? The mere possibility of BP going bankrupt meant they were able to get away with causing all this environmental damage without being held legally responsible for most of it.

For this show, however, we’re interested in the advantages and disadvantages that corporations offer to democracies.  So we ought to say what we mean by a democracy. 

In a democracy, every eligible voter has one vote, and all matters of public policy are decided by majority rule.  Most democracies set some things aside as beyond the scope of majority rule, such as the Bill of Rights in the United States.  And many democracies have very undemocratic institutions in the middle of things -- like our Senate, which gives the vote of a person from Delaware or Alaska about a hundred times more weight than the vote of someone from California.

Even in an impure democracy, a basic dynamic of politics is the search for votes.  Those who seek power -- in state government, in Congress, or as President -- have to get lots of votes.  And so people have a lot to say about how they’re governed, and that’s the basic idea of democracy.

Now you don’t need corporations to have your democracy undermined.  Anyone with a lot of money has ways of doing that.  Someone can use their money to buy or otherwise unduly influence the votes of the electorate.  And, in a representative democracy, they can also just bribe or otherwise unduly influence the elected officials.

Corporations raise the ante because, how ever rich individuals are, corporations can be richer.  And today, with huge multi-national corporations, there's virtually no limit to the resources that a single entity like a corporation can bring to bear on the political process. 

That is precisely the problem with the Supreme Court’s Citizens United decision.  The Court held that corporations are persons, who have the right of free speech, and whose speech can take the form of money.  So they should be able to do things they'd previously been prohibited from doing – in particular, spending all they want on political campaigns.

But what does it even mean to say that money is a form of speech?  Or that a corporation -- an entity with no thoughts, feelings, emotions, or intentions -- is a person?  Should a non-breathing creation of the law have most of the rights -- but few of the responsibilities -- of a human citizen?

Comments (15)


MJA's picture

MJA

Saturday, June 23, 2012 -- 5:00 PM

"God forbid we should ever be

"God forbid we should ever be twenty years without such a rebellion.
The people cannot be all, and always, well informed. The part which is
wrong will be discontented, in proportion to the importance of the facts
they misconceive. If they remain quiet under such misconceptions,
it is lethargy, the forerunner of death to the public liberty. ...
And what country can preserve its liberties, if its rulers are not
warned from time to time, that this people preserve the spirit of
resistance? Let them take arms. The remedy is to set them right as
to the facts, pardon and pacify them. What signify a few lives lost
in a century or two? The tree of liberty must be refreshed from
time to time, with the blood of patriots and tyrants.
It is its natural manure." T Jefferson
It is time for bloodless evolution,
Time for a new Declaration of Independence.
Time to renew our rights, our freedoms,
Time to rewrite a new constitution,
One built on the foundation of truth,
With liberty and justice of One
As is All.
=

Guest's picture

Guest

Saturday, June 23, 2012 -- 5:00 PM

We should make a law

We should make a law prohibiting anyone from contributing to a political campaign in which they cannot qualify to vote in. This would eliminate corporations, unions, foreign entities and foreign individuals, and anyone who the politician does not directly represent from contributing to campaigns.
We should also provide matching public funds for any contribution to a candidate that exceeds, say, 1% of the average citizens income to the opposing candidates. In other words, if the average income is $50,000, then if someone contributes $100,500 to candidate B then public funds would contribute $100,000 to candidate A. This would not prohibit anyone from contributing as much as they want but there would be no advantage to do so. Also, any candidate that accepted more than $500 (or whatever the level is set at) would be responsible for increasing public spending.
This comment was also posted on the KALW Philosophy Talk page.

Guest's picture

Guest

Saturday, June 23, 2012 -- 5:00 PM

I don't know. Which came

I don't know. Which came first?: Democracy or Corporations? History SUGGESTS that democracy came first, and, perhaps, enabled such things as industrial revolutions and, of course, the birth of corporations. I am a strong believer in cause-and-effect. The ubiqitous "church" has always figured large in the equation. Always will, it seems, until we finally discard symbology and symbolism---and realize it is time to embrace our evolutionary heritage: think for yourself, based on available facts,---and ACT, with discretion, outside of the box.
We'll see. Maybe.

Guest's picture

Guest

Saturday, June 23, 2012 -- 5:00 PM

This is a tough argument as

This is a tough argument as the government needs to make a good atmosphere FOR the corporations, what is worse if the government turns into the one and only corporation.

Harold G. Neuman's picture

Harold G. Neuman

Sunday, June 24, 2012 -- 5:00 PM

Read your post on this issue

Read your post on this issue twice and thought about it a lot before commenting. Corporations were enabled by democracy. I think that is a fair statement, without storming through all of the historic latitudes that got us here. Wealthy people, such as George Soros, Warren Buffet and others probably do not spend time thinking about the relationship(s) between democracy and corporations. They have more important things to do, i.e., making big money. And so, to keep this brief, your proposition is somewhere between moot and irrelevent (or is that: irrelevant---I can never remember these spellings.) Surely, (or is that Shirley?)someone will disagree...

Guest's picture

Guest

Monday, June 25, 2012 -- 5:00 PM

I must sheepishly confess: I

I must sheepishly confess: I did not "get" the impetus for your topic and post, until yesterday and today. "The court's" decision clarified things, inasmuch as if there are no credible limitations to campaign contributions, "we", (some of us, anyway) will get "the best government money can buy": (Lou Dobbs, circa 2004, or so---until he got canned). I have mentioned Lou's wisdom on more than one occasion---here and elsewhere. But no one seems to remember what he said. We have such short memories. In a related sense, Mr. Dobbs also decried the practice of "outsourcing" jobs. No one wanted to talk about that either---until this year's residential-er, presidential campaign. Situational ethics? Could be, I suppose. But, as I have maintained, situational ethics are no better than no ethics at all. It is all so predictable as to make us vomit...if we have paid attention.

Guest's picture

Guest

Monday, June 25, 2012 -- 5:00 PM

Since your live show was

Since your live show was totally oblivious to the pro-commerce arguments which informed the decisions of the majority of the Supreme Court, here is a link!
http://phillips.blogs.com/

Guest's picture

Guest

Wednesday, June 27, 2012 -- 5:00 PM

I clicked on Mr. Phillips'

I clicked on Mr. Phillips' blog link---just out of curiosity. Pro-commerce arguments notwithstanding, I do believe that corporate wealth is contra-indicative to democracy, as we once knew it. Logically, the concept and practice of one-man/one-vote, is rendered obsolete when enormous entities are allowed to fling huge sums of money on behalf of political parties and candidates who support their economic agendas. In retrospect, however, it would seem that this has been developing for decades. Eisenhower (or: Eisenhauer) warned of the collusion he characterized as the military-industrial complex. This coming from a military man who rode an apocolyptic horse into the Whitehouse. His warning was only a precusor of what was to come. There seems to be nothing to do about it. The question might be: what's next?

Guest's picture

Guest

Saturday, June 30, 2012 -- 5:00 PM

What's next. indeed? We are

What's next. indeed? We are in somewhat the same position as the mice who wanted to bell the cat. We have no way to reduce the power and influence of the multi-national corporations. The politicians that represent us in a "democracy" do have the authority to control the corporations but insist that they do not (a condition that author, Linda McQuaig, referred to as "the cult of impotence"). Short of a violent Marxist revolution there seems no option; and, Communism is not in the least practical on a large scale since it is contrary to human nature. Thus, the corporations support the system, and the system supports the status quo, and we might as well enjoy the ride. In the end, the system will self-destruct and the world will in desperation turn to fascism, but by then none of us are likely to be around to care.

Guest's picture

Guest

Wednesday, July 4, 2012 -- 5:00 PM

Democracy is simply majority

Democracy is simply majority rule for the whole, without saying how we should be rule. I would rule over trading bodies on the basis that my knowledge and yours have been given to us by society. Some of us would be happier foraging without language or ideas, for the rest of us repaying society involves more than trading, so I would look at the overall affect on the progress of society.

mwsimon's picture

mwsimon

Tuesday, October 14, 2014 -- 5:00 PM

Another scary aspect of

Another scary aspect of corporations - that I think ends up getting in the way of democracy - is their promise to shareholders to do whatever they can to increase profits.  In a sense, corporations are breaking this agreement when they choose to act in the interests of, say, the environment, or the population as a whole.  In this way, capitalism overruns democracy.  Actions are made in the interest of profit for those involved, without concern for future consequences.  Big oil companies, for example, skirt environmental regulations and pay fines as part of doing business.  They can make more money by polluting and paying the fines for it.  I'd like to think that if any one person were in charge of making such decisions, he or she wouldn't choose to do the things Big Oil does (the laundry list is terribly long, but most outrageous, I think, is Shell, who after polluting the Niger delta for 50 years, violently suppressed those protesting their actions).  It is the corporate mindset of needing to maximize profit that leads to these atrocities.

Gary M Washburn's picture

Gary M Washburn

Wednesday, October 22, 2014 -- 5:00 PM

The Latins proscribed

The Latins proscribed corporations because they militated against the 'Patris Familias', or power of public voice or right to represent oneself in court. Democracy developed directly out of the Anglo-Saxon 'Open Field System' and the Anglo-Saxon courts in which a jury of interested parties was appointed to resolve questions of tort or crime. In both cases unanimity was the rule. Once majority rule became the norm democracy was bound to be vulnerable to faction. It is amazing how paranoid the framers of the Constitution were about what they called 'combines'. A corporation was a 'patent' or a limited sovereignty given a kind lf legislative autonomy by the crown to pursue its interests in lieu of direct royal authority, such as the East India Company, or the royal grants by which the American colonies were organized. Democracy is a means by which weaker voices can make an end-run around the powerful to appeal to the people for recognition of their true interests. Faction is the prime obstacle to such a direct connection of the people to their own power and authority as a community. At the time of the founding, corporations were licensed by the states, and were required to limit their activities to specifically sought and officially approved goals and extent, both in the nature of the aims and in the capital requirements and expectations. To exceed these preconditions was to violate the license which would be withdrawn under a writ of 'quo warranto'. After the Civil War the Supreme Court was packed with pro-industry judges who blatantly misapplied the Fourteenth Amendment as protecting corporate rights, while all but ignoring its real meaning to protect the civil rights of freed slaves. Today, corporations go way beyond claiming the rights of person. The concept of corporate standing in courts of law originated as a need to have some body present to answer to charges against such bodies. Hence was invented the notion of the 'fictional person' . This is now become a person is such a full bodied sense that real persons are of diminished if not negligible standing in courts against them. They also claim the kind of extreme rights over capital property that was never claimed heretofore save for intensely personal items. They have thrown a blanket of personal property rights over the most publicly vital capital and real properties, as if they should have the same rights over vital commercial resources that they do over their family snapshots.
Just a few facts that might clarify the issue.

MJA's picture

MJA

Thursday, October 23, 2014 -- 5:00 PM

Democracy: We vote for those

Democracy: We vote for those to govern and rule over us and then complain about our loss of freedom. =

Gerald Fnord's picture

Gerald Fnord

Saturday, November 1, 2014 -- 5:00 PM

I have to hold back mordant

I have to hold back mordant laughter whenever a rich person or a spokesperson for a corporation decries 'government interference in the [Most Holy] Market' when limited liability is entirely rooted in the State's assertion that it will not assist creditors in collecting on some debts, those above the shares' value,  entered-into by actual persons who are 'covered' (very much in  the sense of Calvinist soteriology) by the fiction that the corporation is doing this---in fact, the State will actively prevent or punish any such attempt.  ...and as for wealthy individuals, consider how large accumulations of property are rare without a State to enforce property rights, and some forms of property, intellectual property and extensive property-in-land in particular, impossible without a State to shout those claims over the laughter that is their proper due. 

Guest's picture

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