Tame the Corporation

There is no better illustration of out of control corporate power than the cancer industry.

As Tanya Harter Pierce, author of Outsmart Your Cancer. explained on the March 2, 2011 edition of In Context, numerous promising non-toxic cancer treatments have been developed over the past several decades. Many of them have been shown to be much more effective in treating cancer than chemotherapy and radiation and without the horrible side effects. In addition, most of the treatments are much, much less costly.

So why aren’t these treatments widely available to Americans?

The alternative cancer remedies are generally made from natural substances and cannot be patented. Since the remedies can’t be patented, they can’t become huge profit centers for giant pharmaceutical corporations.  So, Big Pharma will never invest in the trials needed for FDA approval of an alternative remedy because there’s no financial pay-off.

Furthermore, use of alternative cancer treatments threatens the profits of the enormously powerful cancer industry which rakes in total revenues of about $100 billion annually.  That’s why, as Tanya recounts, Big Pharma and rest of the cancer industry have done and continue to do everything in their power to keep these alternative cancer treatments from patients.

Let’s try to understand how we reached this state of affairs where powerful corporations make money by keeping us sick.

How did corporations get to be so powerful?

Corporations are legal entities created by the state so that large groups of people can invest in a business enterprise. In return for stock, investors get part ownership of the corporation and a commensurate share of the enterprise’s profits. Unlike partnerships, shareholders generally take no role in management.  Thus, the corporation is a good way to raise a lot of money from a wide number of people.

While corporations go back to the 1500’s in England, they didn’t become central to our economy until the 19th century. That’s when the big industrial enterprises, like railroads and steel makers, got started. These new enterprises needed huge amounts of capital and the corporate vehicle was the best way to get it.

During the late 19th century, large corporations secured three important changes which led to the concentration of enormous economic and political power in their hands and the hands of their bankers.

First, they got the state corporate chartering laws amended so that corporations were no longer created for a limited purpose and duration. Additionally, corporations were no longer restricted from owning each other. This paved the way for huge corporate conglomerates

Second, new laws limited the liability of a shareholder to his investment. This made stock ownership attractive to a much wider group.

Third, in 1886 the Supreme Court declared that corporations were persons entitled to the constitutional rights protected by the 14th Amendment – a provision intended to benefit freed slaves.  This bizarre ruling is the ancestor of the Citizens United case in which the Supreme Court ruled that the First Amendment gave corporations the right to spend unlimited amounts of money on political activity.

With the help of these new laws and financing from New York bankers like J. P. Morgan and foreign ones like the Rothschild’s, Andrew Carnegie and John D. Rockefeller created monopolies in the two most important industries, steel and oil.  By 1912, three New York banks, the House of Morgan, First National Bank, and Rockefeller controlled National City Bank and their financial associates held 341 directorships in 112 corporations with resources of about $22 billion – a sum greater than the assessed value of all the property west of the Mississippi.

Why is it bad to have so much power concentrated in big corporations?

While the government is formed to promote the general welfare, corporations are formed for one purpose – to make profits.  Anything else is just a public relations expense.

The Supreme Court has made this clear.  When Henry Ford, the progressive industrialist who paid his workers more than the going rate so they could buy cars, decided to use profits to reduce prices to benefit consumers, his shareholders brought suit.  They argued that that Ford must act in “the best interests of the corporation” which meant paying the shareholders dividends instead of lowering prices and the Supreme Court agreed.

The large industrial corporation, whether in energy, drugs, armaments or other areas, uses its enormous political power to fatten its bottom line regardless of the well-being of the average citizen or the long term national interest. That’s why our foreign policy, controlled by Big Oil and arms makers, has us fighting wars all over the world for oil reserves and pipelines instead of pursuing alternative energies. And it’s why, under the sway of Big Pharma, we spend hundreds of billions on ineffective and toxic, but highly profitable, cancer treatments instead of pursuing alternative remedies.

The corporation’s single minded pursuit of profit, also, often undermines the very free enterprise system it espouses. Monopoly and oligopoly are profitable for the corporation – not the customer. Look at the cable industry. Consider that your family now pays about $500 and up per year to watch TV with commercials when it once was free.

What can be done to tame the corporation?

Here are some suggestions:

First, eliminate the Federal Reserve Bank.  Despite its name, the Fed is a private corporation controlled by the big banks.  These banks with their monopoly over the creation of money are the lynchpin of interlocking corporations that control our economy and government.  Get rid of the Fed and replace it with a publicly owned national bank that will create debt free money and not be in the pocket of private interests.

Second, start using the anti-trust laws that have been on the books for over a century. Don’t let a single corporation or a small group of them dominate an industry the way Microsoft dominates the personal computer business. Break up these big boys; level the playing field and let the little guy have a chance.

Third, foster the decentralization of economic power to the lowest practical level to increase the self-sufficiency of our families and neighborhoods. Start with energy.  Let’s encourage home and community generated energy that allows us to be independent of big energy companies.

Over the past century the industrial corporation has steadily robbed from us the power of self-government.  It won’t be easy to take it back, but that’s what we ought to do.

Suggestions for further reading:

Bakan, Joel, The Corporation (2004)

Zinn, Howard, A People’s History of the United States (2003)

 

 

 

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About Ken

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