From the Birth of American Democracy
Through the Birth of Corporate Personhood

excerpted from the book

Unequal Protection

The Rise of Corporate Dominance and the Theft of Human Rights

by Thom Hartmann

Rodale Press, 2002, paper

A business can operate at a profit, a break-even, or a loss. If the business is a sole proprietorship or partnership (owned by one or a few people), and it loses more money than its assets are worth, the owners and investors are personally responsible for the debts, which may exceed the amount they originally invested. A small business owner could put up $10,000 of her own money to start a company, have it fail with $50,000 in debts, and be personally responsible for paying off that debt out of her own pocket.

But let's say you invest $10,000 in a limited liability corporation, and the corporation runs up $50,000 in debts, and defaults on those debts. You would lose only your initial $10,000 investment. The remaining $40,000 wouldn't be your concern because the amount of your investment is the "limit of your liability" even if the corporation goes bankrupt or defaults in any other way.

Who foots the bill? The creditors-the people to whom the corporation owes money. The company took the goods or services from them, didn't pay, and leaves them with the bill, exactly as if you had put in a week's work and not gotten paid for it.

And if the corporation declares bankruptcy and dissolves itself, there is nobody the creditors can go after. That's the main thing that makes a corporation a corporation, and it's why in England the abbreviation for a corporation isn't "Inc." as in the United States. It's "Ltd.," which stands for limited liability corporation. (also used in the United States and other nations.)

If you were a stockholder in a corporation that went under, it wouldn't even be reflected on your personal credit rating (unless you had volunteered to personally guarantee the corporation's debt). Your liability is limited to however much you invested.

Moreover, a corporation can outlast its founders. If you started a one-man glassblowing business, for example, when you die or can't work any more, the income stops. But a glassblowing corporation is an entity unto itself, and can continue on with new glassblowers and managers after the founders move on. The implication, of course, is that a corporation can pay L-profits as a dividend to its shareholders for centuries, theoretically forever.

... on October 28, 1813, Jefferson would write to John Adams about their earlier disagreements over whether a government should be run by the wealthy and powerful few (the pseudo-aristoi), or a group of the most wise and capable people (the "natural aristocracy"), elected from the larger class of all Americans, including working people.

... Adams and the Federalists were wary of the common person (who Adams referred to as "the rabble"), and many subscribed to the Calvinist notion that wealth was a sign of certification or blessing from above and a certain minimum level of morality. Since the Senate of the United States was elected by the state legislatures (not by the voters themselves, until 1913) and entirely made up of wealthy men, it was mostly on the Federalist side. Jefferson and the Democratic Republicans disagreed strongly with the notion of a Senate made up of the wealthy and powerful.

... Jefferson's vision of a more egalitarian Senate-directly elected by the people instead of by state legislators-finally became law in 1913 with the passage of the Seventeenth Amendment, promoted by the Populist Movement and passed on a wave of public disgust with the corruption of the political process by giant corporations.

Almost all of his visions for a Bill of Rights-all except "freedom from monopolies in commerce" and his concern about a permanent army-were incorporated into the actual Bill of Rights, which James Madison shepherded through Congress and was ratified December 15, 1791.

But the Federalists fought hard to keep "freedom from monopolies" out of the Constitution. And they won. The result was a boom for very large businesses in America in the 19th and 20th centuries ...

... on the eve of his becoming Chief Justice of Wisconsin's Supreme Court, Edward G. Ryan said ominously in his 1873 address to the graduating class of the University of Wisconsin Law School, "[There] is looming up a new and dark power... the enterprises of the country are aggregating vast corporate combinations of unexampled capital, boldly marching, not for economical conquests only, but for political power . . . . The question will arise and arise in your day, though perhaps not fully in mine, which shall rule-wealth or man [sic]; which shall lead-money or intellect; who shall fill public stations-educated and patriotic freemen, or the feudal serfs of corporate capital ...

It's only when a group of people get together and put capital (cash) at risk and want to seek from the government legal limits on their liability and to legally limit their possible losses, that a corporate form becomes necessary In exchange for these limitations on liability, governments demand certain responsibilities from corporations. The oldest historic one was that corporations "operate in the public interest" or "to the public benefit." After all, if the people, through their elected representatives, are going to authorize a legal limitation of liability for a group of people engaged in the game of business, it's quite reasonable to ask that the game be played in a way that throws off some benefit to the government's citizens, or at least doesn't operate counter to the public welfare.

But the bigger they got, the less America's corporations (or their investors) seemed to like regulation, and the more they started to seek more flexibility. Railroads, in particular, were finding themselves increasingly subject to local and state taxes, regulations, and tariff and passenger fare limits, which were specifically designed to keep prices affordable for the people and to limit the profits of the railroads to what the people's governments considered fair for state-authorized monopolies.

So, starting in the 1870s, the railroads and their owners began directing massive legal attacks against the power of governments to regulate them.

... Madison knew exactly where he stood. In 1817, he wrote, "There is an evil which ought to be guarded against in the indefinite accumulation of property from the capacity of holding it in perpetuity by... corporations. The power of all corporations ought to be limited in this respect. The L growing wealth acquired by them never fails to be a source of abuses."

And in a letter to James K. Paulding on March 10, 1817, Madison made absolutely explicit a lifetime of thought on the matter. "Incorporated Companies," he wrote, "with proper limitations and guards, may in particular cases, be useful, but they are at best a necessary evil only. Monopolies and perpetuities are objects of just abhorrence. The former are unjust to the existing, the latter usurpations on the rights of future generations. Is it not strange that the Law which will not permit an individual to bequeath his property to the descendants of his own loins for more than a short and strictly defined term, should authorize an associated few, to entail perpetual and indefeasible appropriations. .

" Because the Founders of America tended to agree with Thomas Hobbes that corporations had the potential to be "worms in the body politic," governments at all levels-municipal, county, state, and federal-had laws carefully circumscribing the behaviors of corporations.

After the American Revolution, it was a basic principle of democratic government to protect the people it represented from unrestrained corporate power. Thus, during the first few decades of the existence of the new United States of America, there were only a handful of corporations, most formed for international trade or banking.

Seeing in even these few corporations the possible reincarnation of an East India Company type of corporate plutocracy, in 1816 Thomas Jefferson wrote, "I hope we shall crush in its birth the aristocracy-of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country."

Those "moneyed corporations" grew in power and influence through Jefferson's lifetime and after his death in 1826.

The Civil War was a huge boom for the largest corporations in America because government spending exploded for just about every conceivable commodity that was needed by the troops. By the time the war was over, several corporations that supplied war materials and transportation, particularly the railroads, were operating in multi-state and monopolistic ways that were raising alarm bells among citizens and in legislatures across the nation.

On July 1, 1862, President Lincoln signed into law under "military necessity" the Pacific Railway Bill, which granted to the Union Pacific and the Central Pacific Railroads ten sections of land along a right-of-way from Iowa to San Francisco. The bill also included government loans for building rail lines of $16,000 per mile for level ground, $32,000 per mile for railways crossing deserts, and $48,000 per mile for rails crossing mountains. The national railroad-building campaign became a frenzied activity; sloshing with money and manpower.

But the money was everywhere, and it spawned rampant corruption. As Attorney General Edward Bates wrote in his diary on March 9, 1863, "The demoralizing effect of this civil war is plainly visible in every department of life. The abuse of official powers and the thirst for dishonest gain are now so common that they cease to shock."

In his classic biography of Lincoln, Carl Sandburg wrote, "A procession of mouthpieces and fixers twined in and out of Lincoln's office from week to week. .

Sandburg notes that General James Grant Wilson wrote to Lincoln, "every contractor has to be watched" because "some of the most competent and most energetic contractors were the most dishonest, [and] could not be content with a fair profit." He quotes Blackwood Magazine of England as noting, "A great war always creates more scoundrels than it kills."

Between just June 1863 and June 1864, the War Department paid out more than $250,000,000. In the last year of the war, on November 21, 1864, Lincoln looked back on his actions and the growing power of the now-unleashed and enriched corporations, and wrote the following thoughtful letter to his friend Colonel William F Elkins.

"We may congratulate ourselves that this cruel war is nearing its end. It has cost a vast amount of treasure and blood. The best blood of the flower of American youth has been freely offered upon our country's altar that the nation might live. It has indeed been a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country.

"As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the

people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety than ever before, even in the midst of war. God grant that my suspicions may prove groundless."

Acting on behalf of the railroad barons, attorneys for the railroads repeatedly filed suits against local and state governments that had passed laws regulating railroad corporations. The main tool the railroad's lawyers tried to use was the fact that corporations had-historically been referred to under law not as corporations but as artificial persons. Based on this, they argued, corporations should be considered persons under the free-the-slaves Fourteenth Amendment and enjoy the protections of the Constitution just like living, breathing, human persons.

Using this argument for their base, the railroads repeatedly sued various states, counties, and towns claiming that they shouldn't have to pay local taxes because different railroad properties were taxed in different ways in different places and this constituted the creation of different "classes of persons" and was thus illegal discrimination. For almost 20 years, these arguments did not succeed.


The first thing to understand is the difference between the natural person and the fictitious person called a corporation. They differ in the purpose for which they are created, in the strength which they possess, and in the restraints under which they act.

Man is the handiwork of God and was placed upon earth to carry out a Divine purpose; the corporation is the handiwork of man and created to carry out a money-making policy.

There is comparatively little difference in the strength of men; a corporation may be one hundred, one thousand, or even one million times stronger than the average man. Man acts under the restraints of conscience, and is influenced also by a belief in a future life. A corporation has no soul and cares nothing about the hereafter.

In the decade leading up to this May day in 1886, the railroads had lost every Supreme Court case that they had brought seeking Fourteenth Amendment rights. I've searched dozens of histories of the time, representing a wide variety of viewpoints and opinions, but only two have made a serious attempt to answer the question of what happened that fateful day-and their theories clash.

No laws were passed by Congress granting that corporations should be treated the same under the Constitution as living, breathing human beings, and none have been passed since then. It was not a concept drawn from older English law. No court decisions, state or federal, held that corporations were persons instead of artificial persons. The Supreme Court did not rule, in this case or any case, on the issue of corporate personhood.

In fact, to this day there has been no Supreme Court ruling that could explain why a corporation-with its ability to continue operating forever legal agreement that can't be put in jail and doesn't need fresh water to drink or clean air to breathe-should be granted the same constitutional rights our Founders explicitly fought for, died for, and granted to the very mortal human beings who are citizens of the United States to protect them against the perils of imprisonment and suppression they had experienced under a despot king.

But something happened in 1886, even though nobody to this day knows exactly what or why.

In the decade leading up to this May day in 1886, the railroads had lost every Supreme Court case that they had brought seeking Fourteenth Amendment rights. I've searched dozens of histories of the time, representing a wide variety of viewpoints and opinions, but only two have made a serious attempt to answer the question of what happened that fateful day-and their theories clash.

No laws were passed by Congress granting that corporations should be treated the same under the Constitution as living, breathing human beings, and none have been passed since then. It was not a concept drawn from older English law. No court decisions, state or federal, held that corporations were persons instead of artificial persons. The Supreme Court did not rule, in this case or any case, on the issue of corporate personhood.

In fact, to this day there has been no Supreme Court ruling that could explain why a corporation-with its ability to continue operating forever legal agreement that can't be put in jail and doesn't need fresh water to drink or clean air to breathe-should be granted the same constitutional rights_ Our Founders explicitly fought for, died for, and granted to the very mortal human beings who are citizens of the United States to protect them against the perils of imprisonment and suppression they had experienced under a despot king.

But something happened in 1886, even though nobody to this day knows exactly what or why...

According to the record left to us, here's what seems to have happened. For reasons that were never recorded, moments before the Supreme Court was to render its decision in the now-infamous Santa Clara County v. Southern Pacific Railroad Company case, Chief Justice Waite turned his attention to Delmas and the other attorneys present.

As railroad attorney Sanderson and his two colleagues watched, Waite told Delmas and his two colleagues, "The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a state to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are of the opinion that it does." He then turned to Justice Harlan, who delivered the Court's opinion in the case.

In the written record of the case, the court recorder noted, "The defendant corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws."

This written statement, that corporations were persons rather than artificial persons, with an equal footing under the Bill of Rights as humans, was not a formal ruling of the court, but was reportedly a simple statement by its Chief Justice, recorded by the court recorder.


* There was no Supreme Court decision to the effect that corporations are equal to natural persons and not artificial persons.

* There were no opinions issued to that effect, and therefore no dissenting opinions on this immensely important constitutional issue.

The written record, as excerpted above, simply assumed corporate personhood without any explanation why. The only explanation provided was the court recorders reference to something he says Waite said, which essentially says, "that's just our opinion" without providing legal argument.

In these two sentences (according to the conventional wisdom), Waite weakened the kind of democratic republic the original authors of the Constitution had envisioned, and set the stage for the future worldwide damage of our environmental, governmental, and cultural commons. The plutocracy that had arisen with the East India Company in 1600 and been fought back by America's Founders, had gained a tool that was to allow them, in the coming decades, to once again gain control of most of North America and then the world.

Ironically, of the 307 Fourteenth Amendment cases brought before the Supreme Court in the years between Waite's proclamation and 1910, only 19 dealt with African Americans: 288 were suits brought by corporations seeking the rights of natural persons.

Supreme Court Justice Hugo Black pointed out 50 years later, "I do not believe the word 'person' in the Fourteenth Amendment includes corporations .... Neither the history nor the language of the Fourteenth Amendment justifies the belief that corporations are included within its protection.

Sixty years later, Supreme Court Justice William 0. Douglas made the same point, writing that, "There was no history, logic or reason given to support that view [that corporations are legally 'persons']."

There was no change in legislation, and President Grover Cleveland had not issued a proclamation that corporations should be considered the same as natural persons. The U. S. Constitution does not even contain the word "corporation," and has never been amended to contain it because the Founders wanted corporations to be regulated as close to home as possible, by the states, so they could be kept on a short leash-presumably so nothing like the East India Company would ever again arise to threaten the entrepreneurs of America.

But as a result of this case, for the past 1 00-plus years corporate lawyers and politicians have claimed that Chief Justice Waite turned the law on its de and reinvented America's social hierarchy.

While corporations can live forever, exist in several different places at the same time, change their identities at will, and even chop off parts of themselves or sprout new parts, the Chief Justice of the U. S. Supreme Court, according to its reporter, had said that they are "persons" under the Constitution, with constitutional rights and protections as accorded to humans. Once given this key, corporations began to assert the powers that came from their newfound rights.

* Claiming the First Amendment right of all "persons" to free speech, corporate lawsuits against the government successfully struck down laws that prevented them from lobbying or giving money to politicians and political candidates.

* Earlier laws (such as the Wisconsin laws noted in chapter 5) had said that a corporation had to open all its records and facilities to our governments as a condition of being chartered. But now, claiming the

Fourth Amendment right of privacy, corporate lawsuits successfully struck down such laws. In later years, they also sued to block OSHA laws allowing for surprise safety inspections of the workplace and stopped EPA inspections of chemical factories.

* Claiming the Fourteenth Amendment protection against discrimination (granting persons equal protection), the J. C. Penney chain store successfully sued the state of Florida, ending a law designed to help small, local business by charging chain stores a higher business license fee than locally owned stores.

On December 3, 1888, President Grover Cleveland and delivered his annual address to Congress. Apparently, the President had taken notice of the Santa Clara County decision, its politics, and its consequences, for he said in his speech to the nation, delivered before a joint session of Congress, "As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people's masters."

In 1906, President Theodore Roosevelt proposed campaign finance reform legislation in his annual address to Congress on December 3, saying, "I again recommend a law prohibiting all corporations from contributing to the campaign expenses of any party ... .Let individuals contribute as they desire; but let us prohibit in effective fashion all corporations from making contributions for any political purpose, directly or indirectly."

Teddy Roosevelt made another run at trying to rein in the new corporate "persons" a year later, when in December 1907 he addressed Congress and said, "The fortunes amassed through corporate organization are now so large, and vest such power in those that wield them, as to make it a matter of necessity to give to the sovereign-that is, to the Government, which represents the people as a whole-some effective power of supervision over their corporate use. In order to ensure a healthy social and industrial life, every big corporation should be held responsible by, and be accountable to, some sovereign strong enough to control its conduct."

The result was the Tillman Act of 1907, the first law to bar (in a very limited fashion) corporate money from political campaigns. The Republican Roosevelt followed this by building a popular reputation as "the trustbuster" through his aggressive enforcement of the Sherman Anti-Trust act, using it to break up more than 40 large corporations during his presidency.

From 1909 to 1913, President Taft continued Teddy Roosevelt's tradition by further breaking up John D. Rockefeller's Standard Oil Trust into 33 separate companies, and breaking up American Tobacco. Working people loved him for it, as did entrepreneurs who again had opportunities in the newly freed marketplace.

But in the first year of the Wilson administration, the corporations reacted by trying to use the same law-the Sherman Anti-Trust Act-to get unions outlawed. They essentially argued that if it was illegal for corporate persons to conspire or form monopolies for their own benefit, then it should be equally illegal for human persons to do the same in the form of unions.

When corporations started using the Sherman Act against unions, going against the spirit of an act that was passed to protect the average person from excessive corporate power, the U. S. Congress passed the Clayton Anti-Trust Act of 1914 at the urging of President Woodrow Wilson. It specifically outlawed tying together multiple products, price discrimination, corporate mergers, and interlocking boards of directors. The Clayton Act also mandated the creation of the Federal Trade Commission (FTC). The FTC's original job was to control corporate wrongdoing, and it still carries that mission.

Through the Roaring Twenties, little was done to enforce these various acts by the corporate-friendly administrations of Calvin Coolidge ("the business of America is business") and Herbert Hoover. Seven years after the onset of the Great Depression, however Franklin D. Roosevelt again began to enforce the Sherman Act, and it was pretty much the law of the land from that time until Ronald Reagan was elected President.

As we've seen, throughout most of the 18th and 19th centuries, states were moving to restrict corporate activities by placing limits on the term, activities, and powers a corporation could take in their charter of incorporation. When Ohio broke up the Standard Oil Trust in 1892, Rockefeller and other corporate giants with similar problems began looking for states where they could recharter their corporations without all of the restrictions that Ohio and most other states had placed on them.

New Jersey was the first state to engage in what was then called chartermongering-changing its corporate charter rules to satisfy the desires of the nation's largest businesses. In 1875, its legislature abolished maximum capitalization limits, and in 1888, the New Jersey legislature took a huge and dramatic step by authorizing-for the first time in the history of the United States-companies to hold stock in other companies.

In 1912, New Jersey Governor Woodrow Wilson was alarmed by the behavior of corporations in his state, and "pressed through changes [that took effect in 1913] intended to make New Jersey's corporations less favorable to concentrated financial power."

As New Jersey began to pull back from chartermongering, Delaware stepped into the fray, by passing in 1915 laws similar to but even more liberal for corporations than New Jersey's. Delaware continued that liberal stance to corporations, and thus, as the state of Delaware says today, "More than 308,000 companies are incorporated in Delaware including 60 percent of the Fortune 500 and 50 percent of the companies listed on the New York Stock Exchange. The Delaware Corporation Law, the Court of Chancery, and the customer service-oriented staff at the Division of Corporations are all sound reasons why Delaware leads the nation as a major corporate domicile."

As New Jersey and then Delaware threw out old restrictions on corporate behavior, allowing corporations to have interlocking boards, to live forever, to define themselves for "any legal purpose," to own stock in other corporations, and so on, corporations began to move both their corporate charters and, in some cases, their headquarters to the chartermongering states. By 1900, trusts for everything from ribbons to bread to cement to alcohol had moved to Delaware or New Jersey, leaving 26 corporate trusts controlling, from those states, more than 80 percent of production in their markets.

Between 1900 and 1970, in order to remain competitive, nearly all U. states rolled back their state constitutions or laws to make it easier for large corporations to do business in their states without having to answer to the citizens of the state for what they do or how they do it. At the same time, America's largest corporations-including the burgeoning defense industry began to look overseas and see a whole new frontier of minerals and wood and raw materials owned by poor or powerless people, and great new places to build factories because the people would work for extremely low wages compared to workers in the United States who were trying to maintain a middle-class lifestyle. Not to mention all those potential customers for their products.

The race to the bottom of costs, regulation, taxes, and prices was underway, and would bring with it a race to the top in wealth for a few hundred multinational corporations and the politicians and media commentators they supported.

And soon that race would turn worldwide.

Congress was reluctant to accept all the provisions of the Bretton Woods Agreement for an important reason international treaties almost always supersede national laws. If the United States signed a treaty with, for example, Saudi Arabia that said, "In exchange for a cheap oil deal, all American gas stations must display a picture of the King of Saudi Arabia out front," then that would become the binding law of the United States from coast to coast, even though neither Congress nor the American citizens had ever voted on it. If you didn't put a picture of the king on your gas station, you could be subject to fines or imprisonment.

As former Secretary of State John Foster Dulles said on April 11, 1952, before a Louisville, Kentucky, American Bar Association meeting, "Treaties make international law and also they make domestic law. Under our Constitution, treaties become the supreme law of the land. . .

The language that provides for this is in the Constitution. Clause 2 of Article VI of the U S Constitution says, "This Constitution and the laws of the United States which shall be made in pursuance thereof, and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding." In other words, treaties and some agreements can supersede federal, state, or local law, or court decisions, with the single possible exception of constitutionally defined rights.

That's why the Founders were so wary of treaties. Knowing how draconian this treaty power was, the framers of the Constitution made it difficult for treaties to be ratified, by requiring a full two-thirds vote of the Senate instead of just a simple majority as with normal legislation ...

The Reagan administration ushered in an era of mergers and acquisitions that in many ways resembled the trusts of the late 1800s and the 192 Os. Corporations were well-represented in the corridors of power, and their power to combine into market behemoths was again blessed by an American president.

... In addition to merging into giants that could keep out small competitors and largely control entire marketplaces, multinational corporations wanted the government to ease up on restrictions on their activities overseas. The U. S. Constitution specifically states that the president "shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur."

That two-thirds-of-the-Senators requirement, however, made for a slow and contentious process, particularly when it came to issues that could affect American jobs. During the Ford era, the administration proposed that the Senate go around the Constitution and turn their power to negotiate and define the details of treaties over to the sole person of the president. They did this by using an obscure provision of the 1974 Trade Act that gave the president the right to negotiate trade treaties and then let him submit them to Congress for a straight up-or-down vote with no amendments allowed. Under these rules, debate is limited to 45 days in committee and 15 days on the floor of the House or Senate.

Called fast-track authority, each president from Richard Nixon to the first George Bush pushed to get this authority for himself. Bush pushed for ratification of the GAIT agreement, but was unsuccessful.

But Bill Clinton, in the final days of his first 4-year term, joined with Senate leader Bob Dole to use political pressure, fast-track procedures, and careful timing (just before the Christmas recess) to bring the GATT agreement to pass.

Thus, after much lobbying and giving out of substantial campaign contributions by multinational business interests and a Senate vote to invoke cloture-a procedure that allowed only 30 hours of Congressional debate and forbade amendments-the final parts of the Bretton Woods Agreement and its offspring were ratified in November 1994, just as Congress was in a hurry to head home for the holidays. Most of the members of Congress didn't read the document they voted on, but it became the law of the land in any case. One month later, GAIT gave birth to the U. N. World Trade Organization.

Of course, the legislation had been around for a long time, but the record at the time, based on statements by at least one member of Congress, is that only one senator, Hank Brown of Colorado, actually read the agreement. He was a supporter of the trade agreements when he first decided to read their nearly 30,000 pages. By the time Brown finished reading it, however, he had changed his mind. On December 9, 1994, he wrote, "The GAIT, which cleared Congress December 1, creates a form of world government limited to trade matters without fair representation for the U. S., and an international court system without due process. The details of this new government called the World Trade Organization (WTO) are buried in the thousands of pages of the Agreement.

"Fifty new committees, boards, panels and organizations will be created by the WTO making it an international bureaucracy of unprecedented size. The United States could be responsible for up to 23 percent of the cost of running the WTO, yet will have less than 1 percent of the control of how the money is spent. The WTO courts' (Dispute Settlement Body Panels) proceedings will be secret and decisions will be rendered anonymously by unaccountable bureaucrats. No conflict of interest rules exist to ensure impartial panelists .... Unfortunately, efforts which I supported to block the passage of the GATT implementing legislation (H. R. 5110/S. 2467) failed. The final measure, which I voted against, passed the Senate by a margin vote of 76-24." Senator Brown resigned after his one term and became a director of a multibillion-dollar corporation. Both the World Bank and the WTO were now reality.

Since 1995, virtually every area of consumer and industrial product has been affected by the new WTO or NAFTA regulations, which have the force of law in those countries where they're ratified. Thousands of U. S., Canadian, European, and other safety and consumer protection laws and regulations have been overturned or, through a process called harmonization, weakened to the point of irrelevance.

Harmonizing is a term that refers to bringing the laws of different nations into alignment. The effect is usually to force all nations to accept the most corporate-friendly and least restrictive laws of any of the member nations. Anti-globalization folks have referred to the process as leveling all nations to the standards of the lowest common denominator. Supporters point out that harmonization increases profits for corporations who participate, and assert that has a positive social benefit.

These trade agreements use tribunals and Dispute Resolution Panels (DRPs) to review complaints. Their largest effect has been to put corporations on a level ground with national governments. Corporations can sue countries under NAFTA, and many have successfully won tens of millions of dollars for "unfair restraint of trade" because of laws designed to protect the environments or workers. So far, no countries have sued a corporation.

If a DRP decides a law is obstructing corporations from their right to engage in free trade across national borders, then fines are assessed unless all of the WTO members vote within 60 days to dispute the DRP's decision. As of this writing, this has rarely happened. If a nation continues to try to enforce laws ruled antitrade by a DRP, it suffers huge ongoing fines, must pay reparations, and can be branded a renegade nation and suffer massive trade penalties.

Thus, the DRPs are among the most powerful groups in the world they can pressure governments to repeal or change laws that were legally passed by the people of those nations, and enforce their judgments with penalties, sanctions, and fines. Even with all this worldwide power, the DRPs are not democratic, not elected by the people, not controllable by the voters of any nation, and they don't meet in public.

The Dispute Resolution Panels meet in private in Geneva, Switzerland. Their panels constitute three to five members in total. The public is forbidden from watching, listening, or participating in the meetings, the experts on whom the panels rely for testimony are never publicly named or identified, and the documents resulting from the meetings are forever sealed from the public.

Under NAFTA, a corporation can sue a foreign government and can also force the taxpayers of the defendant nation to pay the corporation for any profits it might have earned if the nation had not passed laws that re-

The United Nations Millennium (2000) Report submitted to member nations and the world by Secretary-General Kofi Annan pointed out that:

* More than 2.8 billion people, close to half the world's population, live on less than the equivalent of $2 per day. More than 1.2 billion people, or about 20 percent of the world population, live on less than the equivalent of $1 per day.

* More than 1 billion people do not have access to safe water; some 840 million people go hungry or face food insecurity.

* About one-third of all children under the age of 5 suffer from malnutrition.

* The top fifth (20 percent) of the world's people who live in the highest income countries have access to 86 percent of world gross domestic product (GDP). The bottom fifth, in the poorest countries, has about one percent.

* The assets of the world's three richest men exceed the combined gross domestic products of the world's 48 poorest countries.


* In 1998, for every $1 that the developing world received in grants, it spent $13 on debt repayment.


In the novel 1984 by George Orwell, the way a seemingly democratic president kept his nation in a continual state of repression was by having a continuous war. The lesson wasn't lost on Richard Nixon, who, some suggest, extended the Vietnam war specifically so it would run over an election cycle, knowing that a wartime president's party is more likely to be reelected and has more power than a president in peacetime.

As he was leaving office, the old warrior president Dwight D. Eisenhower, had looked back over his years as President and as a General and Supreme Commander of the Allied Forces in France during World War II, and noted that the Cold War had brought a new, Orwellian type of war to the American landscape-a perpetual war supported by a perpetual war industry.

"Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea," Eisenhower said. "Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations."

Nonetheless, Eisenhower added, "This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence-economic, political, even spiritual-is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources, and livelihood are all involved; so is the very structure of our society.

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

"We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the . / huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together."


War has become big business in America, and we're now not only a big user of military equipment, we sell it to the world: We're the world's largest exporter of weapons of virtually all sizes and types. While some consider the U. S. defense budget excessive, others argue that we live in a dangerous world and a strong military is necessary. After all, there are sociopaths and psychopaths out there, and sometimes they rise to the highest levels of power with nations and threaten life and liberty around the world.

But in a nation where the political process is more strongly influenced by the profit value than by human and life-based values-where corporations have human rights but not human vulnerabilities-Eisenhower's warning becomes more of a concern.

Military spending is the least effective way to help, stimulate, or sustain an economy for a very simple reason: Military products are used once and destroyed.

When a government uses taxpayer money to build a bridge or highway or hospital, that investment will be used for decades, perhaps centuries, and will continue to fuel economic activity throughout its lifetime. But when taxpayer dollars are used to build a bomb or a bullet, that military hardware will be used once and then vanish. As it vanishes, so does the wealth it represented, never to be recovered.

As Eisenhower said in an April 1953 speech, "Every gun that is made, every warship inched, every rocket fired, signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. The world in arms is not spending money alone. It is spending the wealth of its laborers, the genius of its scientists, the hopes of its children."

It was a brilliant articulation of human needs in a world increasingly dominated by nonbreathing entities whose values were not human values. But it was a call unheeded and today, it is nearly totally forgotten.

Meanwhile, the ruling elites of the Third World, aligned with transnational corporations, generally become richer and more well-armed as their people become poorer. The world, in part as a result of the notion contained in the Santa Clara ruling-that corporations have the rights of persons-is becoming more unequal day by day.

Unequal Protection

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