"Corporism: The Systemic Disease
That Destroys Civilization."
By Ken Reiner
11 May, 2003
I view the continuing growth of corporate power and its despotic control of governments throughout the world, including our own, as a socio-economic disease. While Mussolini and others named it "Fascism," I call it "Corporism" because that name better reveals its underlying institutional structure. I would define Corporism as the domination of government and society by the emergence and power of the giant publicly-traded multinational corporations and financial institutions, organized in totalitarian hierarchies, which singly and in combinations buy or destroy their competitors, corrupt the politics of nations, and seize, hoard, and wield for themselves most of the wealth of the human race.
We must recognize that we do have this cancerous disease, what it is doing to us and the world we live in, how it came about historically, and how and why it continues to be generated and sustained now in our society. Just as computer viruses find their ways into the software of our computers and destroy their operation, Corporism, promulgating itself by financial, legal, and technological means, has infected society in ways that lead to the hoarding of human resources, increasing insecurity and misery for the bulk of the world's population, perhaps even to worldwide holocaust. We must conquer this disease if we are to survive.
Long before the birth of the American Republic, the British crown adapted the corporation that was the form of ancient universities into a device to dominate British colonies throughout the world, including those on this continent. Through their "crown corporations" the Kings of England and their designated agents governed, taxed, and controlled the production and trade and skimmed off the profits of their colonial lands and subjects, enforcing their reign by military means. When our forebears revolted, defeated the British, and formed the United States, we also wiped out the King's corporations. They ceased to exist here. That was part of what independence meant to our founding fathers.
By the time of our civil war, however, the "robber barons," those famous, greedy, wealthy, ruthless American industrialists, had again found ways to establish device of British kings to their own aggrandizement. In court case after court case for almost a century and a half, corporation lawyers have refined and perfected the legal immunities and powers of these artificial, state-created, wealth-hoarding, irresponsible entities. Beginning in 1886, they prevailed upon the U.S. Supreme Court to grant them virtually all of the constitutional rights of citizens. This in effect allowed them to resume the role of their royal predecessors in ruling the country. In cahoots with their banks, huge corporations now control America's body politic by reason of their bald-faced purchases of the three branches of the American government and America's major media.
In consequence, by the beginning of the 21st Century the United States had ceased to function as a republic, much less as a democracy. These giant corporations, headed in most instances by members of an extremely wealthy elite group of multimillionaires and even billionaires, subvert healthy enterprise and true entrepreneurship. One percent of those at the top of the economic scale now have as much wealth as the bottom 95%, and the ratio keeps worsening. We humans, reduced to being "the non-corporate citizens" of the United States, retain only those rights and benefits that Corporate America allows us. Corporations in essence now elect and control our government, write virtually all its laws, and have control of the police, the courts, and the military.
This same Corporate America, ensconced now as "the only superpower," through its foreign subsidiaries and the state-corporate world-governing instruments, the World Bank, the World Trade Organization, and the International Monetary Fund, effectively controls the entire world. We Americans have come full circle in these past 225 years. We overthrew the British King's corporate rulers in 1776, but now we suffer the domination of American corporate rulers who are also colonizing the rest of the world on behalf of themselves.
Is this the land of the free our forbears fought with their lives to establish? Do we have any chance of peacefully co-existing with the growing number of nations our multinational corporations are exploiting and impoverishing throughout the world? Half the world's people are being thrown into greater and greater poverty, starvation, and despair as they lose their means of livelihood, their health, their cultures, and their hopes for self-government and self-sufficiency. They, like us, can find no ways to improve their access to and control over their governments.
But they know where the power center is, in New York and Washington. On September 11th, 2001, just a few men, probably no more than 19 of them, organized into four bands, and armed only with box-cutters, hijacked four commercial airliners from three separate airports hundreds of miles apart and, in a painstakingly planned suicidal operation, flew two of the planes into America's famous trade-center towers which came crashing down, another into one of the five wings of the Pentagon, and another into the earth in Pennsylvania, the target still not known or revealed. These startling, horrific acts, unopposed by our defense forces for still unexplained reasons, causing almost 3,000 deaths, took place in broad daylight. The repercussions that immediately ensued were new in human history. Televised images of these cataclysmic events and the chaos in the streets of New York were viewed by hundreds of millions of people around the world, assuring immeasurable consequences.
This was followed by the shutdown of national air travel and the stock market, President Bush's declaration of war against those he claimed he knew were responsible or suspected of aiding the hijackers, the war against and bombing of Afghanistan, a clampdown on civil liberties in the United States, and the dispatch of U.S. troops to the Philippines, the nation of Georgia, and Indonesia. And any day now, as we write, we plan to attack 23-million-person nation of Iraq, which sits on eleven percent of the world's oil supply.
As if that wasn't enough, The Los Angeles Times recently revealed that in a new Nuclear Posture Review, signed by Donald Rumsfeld after close consultation with George W. Bush, our corporate-controlled government considers seven sovereign nations possible targets of our nuclear weapons and, casting aside the taboo against using nuclear weapons, appears to be preparing to use them to fight the war on Iraq and future wars.
Our government's fundamental answer to September 11th in its "war on terrorism" is a demand for a military budget larger than the combined such budgets of the next 14 largest national militaries and a promise of endless war making around the world. The reality that America rules the world through force of arms, trade treaties that give our corporations the advantage, and U.S. control of the world oil supply through our "association" with the dynastic rulers of Saudi Arabia and the Persian Gulf, must be addressed and renounced. In a world filled with poverty-stricken, starving people, a doctrine of America-First hegemony based on market profitability as the factor guiding the world, instead of the well-being of people and nature, puts all of human society on the verge of explosion and revolt.
Were the plain facts of the corporate takeover of the United States and the world known and understood by a large section of the American people (they are not because the corporate media belong to the forces governing us), no doubt our citizenry would try to overturn those who have created this situation. As long as our response to attacks on us is military there will likely continue to be many more such calamitous attacks on us, even perhaps with devastating nuclear, chemical, or biological weapons. These may come from persons outside of the country, or they may come from domestic sources, such as the Oklahoma City attack and possibly the anthrax attacks.
It can now be seen that the root of our national crisis is the system that was designed to enfranchise only propertied white males. That system, Corporism, refined and perfected by the robber barons in 1886 and beyond by the Supreme Court's establishment of the rule of Americans by public corporations, effectively takes the wealth of the many and funnels it to the few. The kind of economic and political growth that Corporism engenders, under the unitary law of profit over people and place, is leading our nation and the world toward a totally inhuman, anti-environmental state. That in turn is leading more and more people throughout the world to blame our country for their suffering, with many seeking our demise by one means or another.
We are now in exceedingly dire straits, and it is imperative that we understand how these forces improperly controlling the world developed, and continue to grow, right under our eyes, right here in this country. To contribute to an understanding of how this happened is the purpose of this essay.
THE FOUNDERS of our democracy regarded corporations as pariahs. The Boston Tea Party and our ensuing American Revolution had the primary purpose of freeing us from the domination of the British Crown and the Crown's corporations, which ruled the colonies in the Eighteenth Century. Originally the states chartered public corporations for limited terms of years and specific operations. Our founders insisted that these limited-purpose corporations were creations of the people and could be shut down by the people.
Since the Civil War, however, America's public corporations have developed and grown dynamically. In 1886, in Santa Clara County vs. Southern Pacific Railroad, the Chief Justice of the Supreme Court was reported to have declared that the court regarded corporations as "persons" under the Fourteenth Amendment, although the court did not so hold in its decision. That amendment had been adopted to guarantee formerly-enslaved blacks the full protections of the Constitution and the Bill of Rights. It had not been written with corporations in mind. The doctrine that corporations, like persons, have personal constitutional rights is strictly judge-made law without the authority or awareness, and against the interests of, the people. Once the public corporations had been granted these rights--extending eventually to almost all personal constitutional rights--they escaped the control of the states and gained powers that our founders thought had been revoked forever.
If we are to reclaim the democracy we have lost because of these court decisions, this gross error must be corrected. As Justice William O. Douglas stated in a famous 1948 Supreme Court dissent: "If they (the people) want corporations to be treated as humans are treated, if they want to grant corporations this large degree of emancipation from state regulation, they should say so. The Constitution provides a method by which they may do so. We should not do it for them through the guise of interpretation. I can only conclude that the Santa Clara case was wrong, and should be overruled."
As an engineer, I know that to solve any problem the first and most important step is to understand what the problem really is. I have been a successful manufacturer, independent entrepreneur, and inventor for more than half a century. My wife and I actively run a manufacturing company, and from that perspective for more than the past 40 years I have experienced and talked about Corporism, which I believe is society's greatest disease.
It starts in this manner. A business enterprise "goes public," that is, it sells shares through a public offering in the marketplace, and thereby embarks on a sustained program of uncontrollable and potentially unlimited growth. As the corporation grows and grows it becomes more powerful, richer, more important, and more incorrigible. Its growth becomes as incompatible with the needs of society as cancer cells are to the needs of the body. As cancer cells overpower normal cells and the person dies; our civilization is going through this same kind of process. Corporate growth and power have destroyed our body politic and are now proceeding to enslave our citizenry as well as the people of other societies.
A public corporation's fundamental characteristic, its nature, is to expand constantly, to grow ad infinitum. This trait is dominant from the first moment of its public existence, making it an uncontrollable element in society with the capability of destroying its opponents--and ultimately, in the aggregate, our civilization and the ecosystem in which we exist.
Every successful public corporation goes through this same pattern. Throughout its new corporate life it pursues its single, simple goal of maximizing profits with optimum effective disregard for any societal or human consequence; by the rules of their charters and their court-defined obligations, corporations have only one goal, profit maximization. This is why many public corporations are guided eventually by accountants: the bottom line is all that matters. As Milton Friedman so aptly stated, "The corporation cannot be ethical; its only responsibility is to turn a profit." Should a firm fail to excel in that one goal, even briefly, it will be seized and absorbed by another more powerful corporate entity, often with junk-bond financing.
How do these public corporations daily harm society? With public monies, their growth is vastly accelerated, and they can select an area of business, dominate it, and ultimately monopolize it. When independent private enterprises try to compete with public corporations in the same field there's usually no contest. The public corporation's tremendous buying power stemming from its vast financial resources soon dominates the marketplace.
Witness what Home Depots have done to neighborhood hardware stores, or Stapleses and Office Depots to stationery stores, or Borders, Barnes & Noble, and Waldenbooks to neighborhood bookstores. Look at what corporate agribusinesses have done to family farmers, HMOs to the medical profession. By reason of their buying power and global resources, public corporations can import products made in foreign lands, frequently by slave and child labor, without the health or safety regulations that are applicable to domestic manufacturers.
Clearly, public corporations destroying the infrastructure of our legitimate business communities. Far fewer owners of local businesses pay local, state, and federal taxes and serve on local civic committees. Profits are now funneled to distant, out-of-state or out-of-country locations where taxes are limited or sheltered through one ruse or another, piling much heavier burdens on local taxpayers. The Enron Corporation used hundreds of offshore affiliates to pay no taxes at all in four of its last five years, a prime example of corporate misbehavior. And all such ruses and practices have been made completely legal and proper by the pliant Congress that corporate money has bought. Superstores or supermanufacturers, abetted by the "deregulation" approved by an accommodating Congress, destroy competition. Then the prices on commodities they sell either to consumers or to industry rise considerably, for when competition dies out prices go up.
In today's corporate economy the cost of product bears little relationship to the price asked. Look how the price of major-brand gasoline is lowered when there is an independent competitor in the area. That same major brand sells for a lot more a few miles down the road while major companies try to buy or force the independent out. Rockefeller made his fortune with Standard Oil of New Jersey doing just that. Today independent oil companies are virtually nonexistent, and the price of gasoline skyrockets when the international oil cartel decides that it should. So do the prices of natural gas and all sorts of energy. All the producers, having deregulated the marketplace, can charge whatever they wish. Not too long ago telephone directory service was free; now it can cost as much as several dollars a number, depending on which phone company you must use! Tens of thousands of products, costing only pennies to manufacture, sell in stores for many dollars, even if they are made in China or Haiti by workers paid 15 cents an hour. Superstores, supermarkets, and other chains feature and limit the items they sell to highly-advertised brands produced by multinational companies, charging whatever price is obtainable--the operational phrase is "what the market will bear." All told, Americans are undoubtedly paying the multinationals, by reason of their monopolistic practices and power, hundreds of billions of dollars annually in excess charges. Essentially these "profits" are hidden taxes on all of us, though the money doesn't go to our government. As Adam Smith wrote, high profits are "absurd taxes."
Perhaps, however, the greatest threat to our democracy from public corporations is the breakdown of ethical standards that their practices embody and their policies demand. In turn, this breakdown is driving citizens down to similar standards and practices in their pursuit of jobs or business. Just as a boxer obeying the Marquis of Queensbury Rules can't compete in a fight with a person boxing under street rules, a legitimate businessperson can't compete effectively with another one who follows no rules whatsoever--or, in the case of the public corporation, which uses its power to make the rules or bend them in its favor. When the government abandons its role in providing a level playing field, as ours has, and anything goes, as anything does, the most aggressive and heavily financed company wins.
IN CONTRAST to the inhuman public corporation, there are a variety of other forms of endeavor, such as proprietorships, partnerships, co-ops, worker-owned enterprises, and private corporations. The public corporation is as different from these as night from day, and for a basic reason. The public corporation is the only one of such entities that has made a legally binding agreement with its investors to at all times maximize stockholders' profits; no such requirement exists for any of the aforementioned entities. The system that drives public corporations does not apply to private enterprises, which operate purely at their owners' discretion.
Now, due to tax, property, and other laws, most U.S. businesses, no matter how small, as well as numerous professionals, incorporate primarily to obtain liability protection for their owners, stockholders, officers, and directors. They do this since not to do it would be imprudent. Here in the United States, if people invest monies in any business venture that is not incorporated, potentially they expose their entire estates to the uncertainties of the marketplace, aggressive attorneys, powerful predators, or competitors set on destroying or acquiring their businesses. They could become personally indebted for years or be forced into personal bankruptcy. Another reason: tax laws provide solely to corporations the means for sequestering profits to accumulate the capital necessary for growth, so in effect any business planning on growth must of necessity incorporate under present laws and tax rules.
Most businesses or financial endeavors begin small, usually producing services or a product. The complexity of business causes the majority of them fail within the first three or four years. Typically those that survive thereafter will grow healthily, achieve some stability, provide employment, pay taxes, and become integral parts of the communities where they are situated. They fill basic needs of their communities and frequently in areas beyond.
Privately-owned small businesses, professions, and other enterprises, whether incorporated or not, are the true cornerstones of our economy. Privately-owned small businesses differ radically from public corporations in that such small businesses are creative, dynamic, diverse, employ local people, and frequently support community endeavors. Their activities are easily observable and understandable and, subject, of course, to argument, are usually compatible with society's needs. Small independent local businesses have always been the cornerstones of the business community.
Depending on the levels of profitability and reinvestment they can grow to sizable proportions. A business that a partner and I started in 1943 with investments of $400 apiece was valued at around $15 million in 1961. There were no outside investors, all corporate stock was owned equally by the two of us. Our product sales were worldwide and our expansion did not require going public. Many privately-owned companies have grown to immense sizes, although their rate of growth is usually slower than that of public corporations.
Not all private corporations are beneficial to society, nor are all proprietorships, partnerships, co-ops, or any other kind of business entities. Each enterprise reflects the personalities and character of those who create and run it. Private businesses, usually run by well-meaning people, may also be run by people who fall into the anti-social patterns of the public corporation. Frequently companies that grow large and powerful develop leaders who possess more power over others than it is wise to permit. With that power there is always the temptation to go for even more power. Those at the head of private corporations can become creatures of power and greed just as the heads of public corporations do.
But the heads of private companies or corporations are able to make up their minds on the goals and standards of their business--no one can tell them what must be done. On the other hand, to reach a secure level within the public corporation, CEOs and their management people have to submit to the corporate mantra, to maximize profits in every way possible to insure the best short-term bottom-line figures. So when the owner of a private corporation goes public, he contracts with investors to do everything he can to maximize their earnings, and his investors include savvy mutual fund managers. In the context of more than a century of case law, the owner then has a mandatory, legal requirement to follow the corporate credo, the end justifies the means--whatever needs to be done to maximize stockholder profits must be done whether or not that action hurts employees, customers, the environment or the community. If that isn't a Faustian pact with the devil I don't know what is.
And the rewards are big!--compensation packages in the millions of dollars, with all sorts of perks, stock options frequently worth tens to hundreds of millions of dollars, and in some cases billions. Under today's corporate laws in the United States there are absolutely no limits to how big a company can become or how much its executives can be paid. And under the right conditions oodles of publicly accessible funds are available--the more profitable the business, the more money is available. With the payoffs so fabulous, is it any wonder that those persons to whom great wealth is the most important objective in life gravitate toward going public? Why not subordinate your morals for a while to become a millionaire overnight, to be free from want, from work, from all restraints, and to be admired as a success? How many people can resist that?
And then, what are embryonic public corporations but "live bait" for larger public corporations which, using their vast resources, can gobble them up almost at will? In a sense the new public corporations are the growth industry of the multinationals. Many multinationals, lacking creative talent or disvaluing what talent they have, can grow only by assimilating these newer entities, many of which are on the cutting edge of new technologies or creativity. Generally speaking, the size and hidebound nature of major corporations prevent them from creating their own innovations. I truly believe that if public corporations were barred from acquiring smaller corporations or businesses, they could not dominate the economy as they now do. Actually it wasn't too many years ago that the law prevented public corporations from buying others, but, as with virtually all laws restricting the growth of megacorporations, that rule has been repealed, too.
THE DISEASE of Corporism is endemic in America today; there is little if any concern on the part of public corporations for the health and welfare of their customers or the public they sell to. There is no fair trade, no fair play. There is no way for injured customers to obtain redress of their grievances or collect damages against corporations too powerful to sue effectively in court, no way to prevent public corporations from sending the bills to the American taxpayer for the damages they cause in communities or for losses caused by corporate fraud or failures, no sufficiently powerful political party that will represent consumers and citizens and protect them from monopoly-created excessive costs. There are just no remedies at all.
After the 2000 election it became all too clear that the political parties in our two-party system, both of which are totally under the control of corporate finance and capital, have in fact perfected a system that locks out any third party from effective access to the people and deprives the people of knowledge about alternatives that are likely to improve their lot. Lawmakers from either of the two parties cannot obtain or retain their seats in Congress without earning the financial support of their corporate sponsors by doing their bidding. The slogan of America as the country "of the people, by the people, for the people" is thus exposed as a myth.
Can we allow the people who command these vast, inaccessible corporations to run our work, our lives, our political parties? We do now because we haven't found a way to stop them, but we must find a way. People elsewhere in the world believe we have democracy and freedom here, and of course compared to certain societies we do. But more and more of us who live here know that we have democracy in name only, that in reality we have lost it to the robber barons and the corporations they spawned--to an elite oligarchy that rules us with the iron fist of the Supreme Court and the police and military forces at the captive government's disposal.
A world ruled by multinational corporations is the opposite of a world ruled by people. It was a gross mistake to allow these mythical entities, corporations, to be given the rights of citizens, to function as "family" within our communities. Like the blood-sucking Dracula of Bram Stoker, they pretend to be human, but by their nature they prey upon humans at every opportunity.
An ever-increasing tangle of new chemicals and toxins is infesting our air, water and food, which daily become more contaminated, as do our bodies. That is only one of the astounding specters that now actually threaten us--global warming and the rising sea level; the ever-growing hole in the ozone exposing us to cancer-causing ultraviolet rays; the destruction of life in the oceans; the emergence of global water shortages, welcomed as just another opportunity for profit and growth by the late unlamented Enron and the wholly opportunistic multinational corporations that presently rule us.
And threatening us even more than all these tangible things is the capture of the minds of the masses of people by the insidious corporate TV culture--the conversion of billions of us, through TV propaganda and trivial entertainment, into unthinking, dependent consumers, and the amalgamation of the venerable varieties of human life and culture into one world society addicted to and dependent on the types of products, services, values, and culture that the multinationals are best equipped to produce, foster, and deliver.
The terrible truth is, we are fast losing our civilization, which was thousands of years in the making. Just as fish don't know they're in water, collectively we do not realize that we have been plunged into a commercial effluvium that is suffocating us and draining away our independence..
This seizure of our civilization and humanity by giant corporations must be reversed. Corporism, today's government of the corporation, by the corporation, and for the corporation must not be permitted to continue. Unless and until we can make corporations powerless to control either us or our government they will continue to divide us by race, by class, by haves and have-nots, by religion, by any and every means possible. The world's bankers, in concert with the largest corporations in the world (which they enable, since they are cut from the same cloth), will use the justice system against us at every turn, as they have just done in the very selection of a president they preferred, and they will oppose us ferociously with their police systems, armies, and mind-numbing propaganda.
There are a myriad of real problems, human and ecological, that we must get on with. We need a truly democratic government representing only the people, for without that we are truly lost. We Americans invented and refined Corporism, and let it break loose upon the rest of the world. Now we must band together with people all over the world to stop this huge mistake from destroying everything we hold dear and creating a world unworthy of the potential of human beings. It will be a tough struggle, and it will have to be world-wide, for technology has enabled the multinationals to be in power everywhere and their leaders won't just give up the system that gives them money, power, and what they see as the good life at the expense of the have-nots of the world, who have become their (and our) slaves.
Can we actually recover control of our societies from corporations? It's almost too late, and we can fiddle around no longer; freedom, variety, and democracy are slipping out of focus. It will take a superhuman effort to overcome these seemingly insurmountable forces, but it can and it must be done. Many of us are legitimate business people trying to earn a reasonable livelihood while producing products or services for our communities or the nation. We private business owners need to resist the corporate powers just as much as workers or retirees. Fortunately, many in our country have tasted democracy and freedom, and still believe in them, and will not accept the cancerous dismantling of our economic production, our systems of justice, and our freedom in the cause of building a transnational corporate oligarchy.
We all have so much in common. We believe in families, in children growing up healthily. For that a family needs a decent home in a nonviolent neighborhood and enough income from one parent working to at least let the other parent teach and supervise the child or children. Public schools are needed with classes small enough that teachers, supplied with good teaching materials, have a chance to teach. Citizens must not accept the reduced status of being merely consumers; a democratic society cannot survive without reliable knowledge about what is happening inside the country and throughout the world. Therefore, commercial TV must not dominate our national broadcasting, as currently it does, and radio and TV outlets, utilizing the airwaves that we the public own, must be made freely available to all communities throughout the nation for wide-open public discourse.
I urge every legitimate business person to join with every worker, in every industry, and with every union representing workers--I call on every cleric or religious person, every politician genuinely interested in the people, the heads of all non-governmental and non-profit organizations, and every person raising a family, every student of voting age, every mother and father in every village, city, state or country, to join the struggle against corporism. You might start by talking to neighbors, friends, associates about the facts you are aware of, complain as cogently and as clearly as you can, and then find allies and common ground through organizations that are in no way financed by, related to, or supported by corporate interests or the foundations controlled by them. With an advance wave of hundreds of thousands of students in American universities, we are on the move. Many dedicated groups are working together already, and many more are springing up in this hemisphere and on other continents. As we saw in Seattle in 1999 and have seen again and again since then, a powerful movement of popular revolt against corporate domination and for justice and peace is rising in the United States and all over the world. Join this movement here and all over the world, help your fellow citizens save civilization.
Ken Reiner, a founding member of the Alliance For Democracy who attended its initial organizational meetings in Chicago and the founding convention at the Mo Ranch in Texas in 1996, is a successful inventor and businessman. Billions of one of his inventions, a simple self-locking nut, are used in 90% of the airplanes in the world. Another of his devices, a simple two-piece clip for holding women's pincurls (called Klippies), was used by tens of millions of women. In Long Beach, California, he and his wife Dottie currently run a small manufacturing company that makes proprietary projects that he has invented. They support a variety of organizations with their contributions, and Reiner has proposed that those organizations form a coalition to end the domination of society by giant corporations, an idea that has contributed to the development of an Alliance project to form a communications network perhaps to be called Equal Independent Allies.
The author can be contacted at kreiner@earthlink.net
Copyright Ken Reiner 2002