Sunday Excerpt: Unequal Protection - Banding Together for the Common Good

How Corporations Became 'People' - and How You Can Fight Back

Unequal Protection: How Corporations Became “People”

Back in 2002, when I wrote this book, most Americans thought the Boston Tea Party was a revolt against “excess taxes” and that “corporate personhood” was something the Supreme Court conferred on companies back in 1886. This book blew up both myths, pointing out that the Boston Tea Party was a revolt against the British government giving the East India Company the largest corporate tax cut in history (so they could unfairly compete with small colonial tea merchants) — basically a revolt against the Wal-Mart-ization of the colonies — and that the Supreme Court did not rule that corporations are persons and thus entitled to rights under the Bill of Rights in 1886 (it was a corrupt scam by a bribed SCOTUS justice and Court Clerk). In the 20 years since Unequal Protection first came out, this “new” knowledge is now widespread. With permission from the publisher, Berrett-Koehler, I’ll be sharing most of the book (the updated edition) with you, one chapter at a time (and not always in order), over the next dozen or so Sundays.

Banding Together for the Common Good

In the beginning, there were people.

For thousands of years, it was popular among philosophers, theologians, and social commentators to suggest that the first humans lived as disorganized, disheveled, terrified, cold, hungry, and brutal lone-wolf beasts. But both the anthropological and archeological records prove it a lie.

Even our cousins the apes live in organized societies, and evidence of cooperative and social living is as ancient as the oldest hominid remains. For four hundred thousand years or more, even before the origin of Homo sapiens, around the world we primates have made tools, art, and jewelry and organized ourselves into various social forms, ranging from families to clans to tribes. More recently, we’ve also organized ourselves as nations and empires.1

As psychologist Abraham Maslow and others have pointed out, the value system of humans is first based on survival. Humans must breathe air, eat food, drink water, keep warm, and sleep safely. Once the basic survival and safety needs are accounted for, we turn to our social needs—family, companionship, love, and intellectual stimulation. And when those are covered, we work to fulfill our spiritual or personal needs for growth.

Our institutions reflect this hierarchy of needs. Families, whether tribal nomads or suburban yuppies, first attend to food, water, clothing, and shelter. Then they consider transportation, social interaction, and livelihood. And when those basics are covered, our families turn to our intellectual and spiritual needs.

The Three Legal Entities

As populations grew, particularly in agriculture-based societies, humans recognized that some form of centralized coordination was needed to keep societies organized, defended, and well supplied. Thus government was born.

The value system of governments is always rooted in the survival and the well-being of humans (or, at the very least, the survival and the well-being of those who control the government). If big projects needed to be done, from building aqueducts to raising pyramids to conquering foreign lands, either the government undertook the task or it was financed and organized by wealthy individuals or churches made up of congregations functioning as a form of government. This was pretty much the way the world worked until the mid- 1800s, with only a few exceptions.

Thus there were historically two distinctly different legal entities: humans and families, and the governments they created. (Religious institutions, until the past four centuries or so, operated either as governments or as families/ clans. King David ruled a theocratic kingdom, and the popes and the mullahs and the gurus exercised political authority over their followers. Those who didn’t rise to such power worked as a social collection of humans that was functionally an extended family or tribe.)

Some of our governments have been pretty tyrannical, but even they rarely behaved in ways that were openly and directly toxic to the survival of all humans. Even the most brutal, despotic regimes operated in a way to ensure that water continued to flow, food supplies were intact, and those in power had a place to sleep. There were often huge disparities in the quality of these commodities between the least and most powerful in the society, but at least the humans who controlled them kept in mind the full spectrum of human needs. When they failed to, they either collapsed or were overthrown, as we see in a long line of civilizations that have risen and then collapsed.

It’s instructive to consider how various governments have come to power. For about the past six thousand years, it’s happened in one of two ways: either someone claimed divine authority from the god or gods of those people, or a warlord seized power with brute force.

Ruled by the Gods

A good example of leadership by divine appointment is the Japanese Empire. The oldest Japanese history books, the Kojiki and the Nihon Shoki, explicitly say that the first emperor was crowned at least 2,660 years ago because he was a descendant of the sun goddess, Amaterasu Omikami, the greatest of the goddesses in the Japanese Shinto religion.2The lineage from that first emperor to today’s Japanese emperor is believed to be unbroken, although during the intervening millennia the emperors have often shared power with warlords or shoguns.

Similarly, the Incan ruler Pachacuti organized the Inca into a huge empire in the early fifteenth century after claiming that he was a direct descendant of the sun god, Inti.3

While the Catholic line of popes couldn’t claim a birth lineage back to the first person they recognized as a human descendant of God, they do claim direct lineage by appointment and blessing. Like the Japanese and Incan emperors, the popes used the powers that come with divine claims to rule much of Europe for millennia. Claiming divine inspiration, they started numerous wars and repeatedly mustered military forces and policelike agencies.

Similar scenarios have played out in nearly every part of the world where agriculture-based cultures have risen to power.

Ruled by Warlords

Taking power by military conquest is such a familiar story that it hardly seems necessary to recount it. But it’s interesting to personally witness artifacts of the warlord days, before there were war machines and weapons of mass destruction. It makes real the fact that long ago, people came to power by expanding the area they controlled.

When my family and I lived in rural Germany in 1986 and 1987, a pleasant weekend walk through the forest took us to the ruins of an ancient castle called Nordeck. It’s been a ruin for nearly a thousand years, surrounded now by a deep forest, on a steep hillside overlooking the Steinach River. But back in the tenth century, local warlords controlled commerce in that region of the Frankenwald by their control of the river.

From small starts like this, early in the history of modern Europe, local warlords took over increasingly large areas of land, building larger and larger armies and castles, conquering first villages and then states and then entire nations.

Similar scenarios played out in Asia as the Chinese emperors rose to power, and then the Huns attacked and were turned back by them. The Huns headed west to Europe and aided the Goths in defeating the Roman army, led by Emperor Valens, at Adrianople in ad 378. Warlords were on the march.

Ruled by Warlords from the Gods

Often when warlords took over an area, they would claim that their victory was the will of the local god or goddess. A few years ago, my wife, Louise, and I saw an ancient sign of this when we were walking through the temples at Luxor in Egypt; we came across a set of hieroglyphic inscriptions on one wall that were clearly of a different style and period than those surrounding them. We asked an archeologist friend, Ahmed Abdelmawgood Fayed, what the hieroglyphs meant, and he said that the Greek-born Alexander the Great had them carved into the wall after his conquest of the region.

“The hieroglyphics say that he was descended from the Egyptian god Amun, the greatest of the gods,” Ahmed told us. Claiming lineage from Amun was Alexander’s way of consolidating his local power among the Amun-worshiping Egyptians.

The warlord-blessed-by-divinity strategy played out in much of the world. To this day on British coins you will find the inscription D.G. REG. F.D. The D.G. stands for Dei gratia, Latin for “by the grace of God”; REG is short for regina, or queen, in Latin; and the F.D. represents fidei defensor, “defender of the faith.”

As British attorney and author L. L. Blake notes in defense of the British system, “That is a good description of the natural order: First of all, there is God, and it is by His Grace that we have our system of Government; then there is the Queen, whose rule is utter service to the goodness which exists in men; finally there is the faith of the people, which needs to be maintained and defended.”4

Democratic Governments and Republics

The first documented rise of democracy came in response to a warlord- governor, Peisistratus, who seized power in Athens three different times during the sixth century bce (which stands for before the common era, a term equivalent to bc [before Christ]; bce is increasingly preferred by historians). A hundred years after Greek poet and statesman Solon suggested a constitutional reform package with democratic aspects, in 508 bce the Greek politician Cleisthenes successfully led a radical reform movement that brought about the first democratic constitution in Athens the following year.

Over the next fifty years, Ephialtes and Pericles presided over an increasingly democratic form of government that finally—for the first time in the history of what we call civilization—brought to power people from the poorest parts of Athenian society.

Most people today don’t realize how brief that democratic experiment in Athens was. It came to an end in 322 bce, when the warlord Alexander the Great conquered the nation. Later Greece fell under the rule of Rome.

The American Model

Democracy wouldn’t return to Greece for more than two thousand years, in the Greek Revolution of 1821, which was largely inspired by and patterned after the American and French revolutions.

Those revolutions brought forth the idea that governments should overtly and explicitly be controlled by and operate to the benefit of their citizens. When the Declaration of Independence said, “Governments are instituted among Men, deriving their just Powers from the Consent of the Governed,” it was quite a departure from the governments that maintained authority through raw power or “divine right” (backed up by force). The new model was what Abraham Lincoln described in his Gettysburg Address as “government of the people, by the people, for the people.”

It’s important to understand how different this was from all previous governments because it illustrates the priorities of the people who framed American government and set in place the beginnings of modern democracies worldwide.

Being learned men, they knew well the long history of popes, czars, kaisers, and kings who had claimed the divine right of rule, usually with one official state religion, and they were determined that such a specter would never arise in their part of North America. When the Bill of Rights was framed, the very first amendment guaranteed that individuals are free to practice the religion of their choice. And it doesn’t stop there—it explicitly keeps government out of the religion business by declaring, “Congress shall make no law respecting an establishment of religion.”

Clearly, the Founders were focused on protecting the freedom, rights, and liberty of the individual, in the model of Ephialtes and Pericles—the last elected officials to have explicitly governed in such a fashion.

The Third Entity Arises: Corporations

Meanwhile, back in the 1500s, European kingdoms had concluded that there were some human enterprises that were beyond the scope of government. These included organized religions, charities, international trade, and projects like discovering and administering distant lands.

The need for this started with problems like the ownership of land and other large assets, including buildings and ships. Governments could own things, and people could own things, but if a church or a business wanted land and buildings, historically it had been the property of either a local government (usually a town) or a family. This brought up problems of government involvement in religion and trade as well as issues of who in a family would inherit what.

A third type of entity was necessary to enable owning property independent of either the government or any one particular person or family. It was called the corporation, and it is today the third legal entity in the triad that begins with humans and continues with their two subordinate agents: governments and corporations. This new corporate entity was, of course, not something that was physically real; it was an agreement, a so-called legal fiction authorized by a government.

The first corporations were the Dutch trading companies, chartered in the 1500s. They came into being by declaration of the government but were owned and operated by wealthy and powerful individuals. The corporation had a status that allowed it to own land, to participate in the legal process, and to hold assets such as bank accounts. It could buy and sell things.

But while even sixteenth-century European kingdoms were acknowledging that humans had at least some “natural rights,” corporations were explicitly limited to those rights granted by the governments that authorized them. In the early days, everybody knew that corporations weren’t governments or humans. They were few and far between until the Industrial Revolution.

The U.S. Constitution doesn’t mention the word corporation, leaving the power to authorize the creation of corporations to the states. The Founders were far more worried about governments’ usurping human rights and privileges than they were about corporations taking over. They had put the East India Company in its place with the Boston Tea Party, and that, they thought, was the end of that.