Challenging Corporate Power
An interview with Richard Grossman
by David Barsamian
Z magazine, January 2000
Richard Grossman is co-director of the Program on Corporations,
Law and Democracy. He is co-author of Taking Care of Business:
Citizenship and the Charter of Incorporation. He lectures widely
on issues of corporate power, law, and democracy.
BARSAMIAN: You write in an essay, "Giant corporations
govern. In the Constitution of the United States they are delegated
no authority to make our laws and define our culture. Corporations
have no constitutions, no bills of rights. So when corporations
govern, democracy flies out the door." What do you mean by
GROSSMAN: On one level, it's that corporations are making
the fundamental decisions that shape our society. They determine
essentially what work we do, which technologies get developed,
which production methods are used. They are constantly pushing
the concept that production has to expand, and from that comes
wealth, liberty, and freedom. Most of the decisions they make
are essentially beyond the public's ability to interfere with.
In terms of having this fundamental authority to shape our society,
to get the law to reflect their position.
The federal courts, and the Supreme Court in particular, have
bestowed the equivalent of human rights on these artificial entities.
They now have the protection of law and the Constitution, which
means the protection of the police and the military, to interfere
in our elections and in our lawmaking. They're able to field 50
to 1,000 lobbyists. They're able to take politicians to dinner,
to buy all kinds of advertising, to shape the culture. Increasingly
over this century even citizen activists and activist organizations,
have not challenged the claimed authority of corporations to make
the fundamental decisions. What's happened is, we've been channeled
into regulatory administrative agencies, like the Federal Communications
Commission, the Environmental Protection Agency, the Securities
Exchange Commission and the National Labor Relations Board, where
we try to make the best of the worst of a bad situation.
We're saying that if we are to be a self-governing people,
which is what the American Revolution is about, then we have to
be in charge of everything. There can be no realm of decision-making
that should be considered private, beyond our authority.
The conventional wisdom would have it that we are governed
by local, state, and federal governments.
Look at the Multilateral Agreement on Investment, the MAI.
It would grant to property, to corporations, to artificial concentrations
of wealth the authority to go into other countries, and exercise
the same kind of so-called private rights of decision-making that
they have exercised in this country.
If you go back and look at populist and other public resistance
to increasing corporate power in the 1880s and 1890s, you find
a vigorous societal debate, about what the role of the state is
in creating corporations. It's our states that charter corporations
and are supposed to define them and keep them subordinate. What
happened was, towards the end of the l9th century corporate leaders
realized that they needed to get away from the authority of the
states to define them. They ran to the federal government and
said, This is unconstitutional. This interferes with the interstate
commerce clause, our property rights, and our freedom of contract.
And the federal courts helped them. They stripped the states of
their ability to define the corporation.
Here's something that comes out of the whole mythology, that
jobs, progress and the good life come from giving these corporation
a free hand and saying, Do whatever you want because we're incapable
as people of creating jobs, of figuring out how to grow our food,
of arranging our affairs. We need you. The politicians say, We
have to create a good business climate. We have to give the corporations
whatever they want, including all kinds of subsidies and special
privileges. All the money goes to them. They have the law on their
side. We as the people are left with, well, if anything bad happens
to this corporation, what will happen to jobs, to taxes? How can
we possibly compete with the rest of the world? The whole gamut
of mythologies that the corporations have created in our culture
means that at the local level we have very little control.
You emphasize redefining democracy and law.
And in the process redefining us. What's happened is that
corporations have defined human beings as consumers. We're told
we can vote with our dollars and with our feet and not buy. That's
crap. If we're a self-governing people, then our main job is to
nurture the democratic process. That's a job that has been entrusted
to us by previous generations and that we want to help empower
future generations to do.
One of the things to stress is that corporations don't have
rights. Rights are for people. Corporations only have privileges,
and only those that the people bestow on them.
A New York Times editorial recently applauded a court decision
granting to people due process rights dealing with HMO corporations
on medical care issues. Think about that. The corporation already
has due process rights because the courts have made clear that
they think the corporation is a legal person. But on company property
workers don't have First Amendment rights. They don't have due
process rights. On issues that are concerned with these insurance
companies, these medical companies, it's not just generally assumed
that all human beings have due process rights. It's nuts.
Over the last 15 years. There have been a number of cases
where the Supreme Court has expanded the privileges of free speech
to corporations. One of them came out of a case in Massachusetts.
The Commonwealth of Massachusetts passed a law saying that in
referendum elections corporations don't have the right to spend
money to sway the vote one way or the other. Corporations took
that all the way to the Massachusetts Supreme Judicial Court,
the highest court in the Commonwealth. It approved the law. The
corporations then took it to the U.S. Supreme Court. The Supreme
Court sort of changed the question and said, When is democracy
the most helped? When all voices are heard. These corporate voices
need to be heard. Therefore this law is unconstitutional. They
refused to acknowledge the finding of the Massachusetts legislature
and courts that great concentrations of wealth and power that
are considered private in our society are a menace to the functioning
of democracy and that the state has the total right to say, For
corporations to use shareholder money to sway votes without having
even polled the shareholders is inappropriate. What the Supreme
Court did was totally throw out the logic and say, Democracy means
all voices, and since corporations are persons, they have voices.
Let them be heard, even if they're going to outspend humans a
billion to one.
Critics sympathetic to your argument might say that state
and federal legislatures are largely dominated and controlled
by corporate money and interests and to go that route for some
kind of change is totally futile. You're asking the fox to police
the hen house.
I don't know what other mechanisms to seek. We're not naive.
Our near-term approach over the next few years is to provoke a
different debate and discussion about this. These issues have
been off the agenda for a century. We're taught in a knee-jerk
way if we have a problem to look for justice, for resolution,
to go into the EPA or the NLRB or the FCC. They don't have the
authority to deal with what we're talking about, which is the
constitutional question of who's in charge. Maybe after ten years
a community group knows how to shut a toxic dump or make it a
little more safe or a little less harmful or get rid of a particular
toxic chemical. But we don't have time to be going one chemical
at a time, one forest at a time, one assault on liberty at a time.
If we don't have a revolution in consciousness , <` among
enough people, then there's no way we're going to ever end up
going to our legislators and our courts and where we're supposed
to go, the mechanisms of self-governance, in order to get redress.
People are starting to address this issue and understanding
that we have to move into different areas as organizers, as educators,
as activists. It would ,,- ~ be a very different organizing task
and a very different struggle if groups that have been dealing
with, say, trying to stop toxic chemicals in food, instead of
trying to get one more regulatory law passed giving the EPA ten
years to write a code of regulations to limit how many chemicals
can be used and set up a system of fining corporations if they
use a little too much of X or Y, to go into the state, amend the
state corporate law to say, a corporation will not be allowed
to do business in this state if it emits any poisons into the
air or the water. A corporation will not be allowed to operate
in this state if it claims the rights of persons. A corporation
operating in the state does not have free speech. Workers on corporate
property in this state will have free speech and free assembly.
Every privilege that a corporation has means a right denied
to human beings. The courts in particular have had a special responsibility
to undo this because they caused a lot of this. If you compare
in the 19th century, for example, the extent to which the federal
courts and some state courts kept granting more privileges to
capital to organize and denying the privilege of workers to organize,
you can make a chart. Every time they gave capital another privilege,
they took something away from workers.) So you have an incredibly
How can some of the issues and concerns that you're raising
be injected into the mainstream discourse if that discourse is
largely driven, shaped, and formed by corporate-controlled media?
We have to understand that from an organizing educational
strategy the media corporations are the adversary, more than the
adversary, they're part of the whole structure of corporate dominance
and governance. However, there's an enormous, incredible alternative,
grassroots media. When we first came out with our early publications,
like the pamphlet Taking Care of Business in 1993, none of the
mainstream corporate media would touch it. We were forced to go
to the grassroots. We got hundreds of reviews and excerpts in
print, newsletters, magazines, radio, some videos. The word spread
in a very effective way. The base we've been building is much
stronger because people have had to grapple with this stuff. I
think that the opportunities are there. In a couple of years,
when there are challenges to corporate privilege even the corporate
press is going to be forced to grapple with this.
What are your views on the notion of socially responsible
I think it's a terrible and dangerous diversion. If all we're
going to do is create organizations and develop materials and
educate people to come-together in order to say to corporations,
Please, you have a responsibility not to be so destructive. Please
be a little less harmful. Please be nicer. What you're doing is
reinforcing the corporate worldview that they have ultimate authority,
like petitioning a king to be a little nicer or a little less
bad. Some of the groups have invested ten years into these voluntary
codes, an incredible amount of time and energy getting their members
involved, and when they win, what do they get? Pretty much codes
without teeth and no law backing them up.
A principal purpose of a business corporation is to ~) shield
decision-makers from responsibility. That's why there are limited-liability
corporations. The corporation can be doing all sorts of horrible
things, assaulting democracy, destroying property, taking people's
future income, and nobody's responsible. What happens when a corporation
is brought before a regulatory body or even into court on a criminal
case? The worst thing is it's fined. Maybe it's declared a felon
and the corporation is fined. But that's not going to have a deterrent
effect. A corporation doesn't think. It doesn't have feelings,
a soul. It doesn't have a conscience. It's playing games to think
that these minor fines, which by the way are usually tax deductible,
have any real impact on the corporation.
What is your response to the corporate chieftains who argue
that they are creating jobs, creating wealth, this is a capitalist
There's nothing in the Constitution that mentions corporations
or capitalism. There's nothing in the Constitution, other than
protecting contracts, that sets up a system that is so overly
competitive and not cooperative. There are a lot of people throughout
our history who believed that everything doesn't have to be cutthroat,
that people can cooperate. I would say that the smartest corporate
leaders from the 1870s on have always understood that what they
wanted was the ability to cooperate among the top corporations
and make everybody else compete.
There was a piece in the New York Times by Walter Goodman
that quoted James Randall, the president of Archer Daniels Midland
Corporation. ADM was caught in some scam in which they were fined
$100 million, peanuts. Randall was secretly taped saying to some
of his associates, "Our competitors are our friends and our
customers are our enemies." I think that's how big corporations
have felt for 100 years. They created the regulatory system and
laws to minimize competition among themselves but maximize competition
among workers and the community so they could play one community
off against another and one country off against another. Of course
corporations bring some jobs. That's where all our money goes,
our subsidies, our wealth. With all these privileges they have,
they damn well should be creating some jobs. But the question
is, Is that the only source and the appropriate source of getting
things done? Are we so helpless that if we didn't have these giant
corporations we wouldn't have wholesome food, we couldn't build
our own houses, we couldn't have newspapers and radio and television
and magazines, we couldn't heat our homes and create electricity?
If people and communities had any fraction of the vast authority
and the public wealth that has been channeled into these corporations,
we would be able to do what's needed to be done.
I was involved in a major anti-nuclear effort in California
in the early 1970s that led to a statewide initiative on nuclear
power. In 1975 the utility corporations were saying they were
planning to build 50 nuclear plants in California. The government
was planning to build 1,000 nuclear plants around the whole U.S.
We came up with another scenario for California showing that for
the next 30 years you wouldn't have to build a single central
station power plant, nuclear, coal, oil, whatever, in order to
meet energy needs. You could do it with energy efficiency, solar,
wind, conservation. They called us crazy, Communists, nuts, Luddites,
whatever. By the early l990s, the Pacific Gas and Electric Company,
the dominant utility in California, essentially adopted our position.
They were saying, We don't have to build any central station power
plants over the next generation because we're using efficiency
and solar and wind. They've since backed off on that. But if we
had had access to the money that they had in 1975, which after
all was rate-payer money, we could have made the decisions to
start installing solar and conservation and doing that. They chose
to squander billions of dollars of rate-payer money into building
nuclear and coal plants and investing in other countries. So of
course they're creating jobs. They've also destroyed ten million
jobs over the last 15 years, taking production overseas. It's
totally based on their whim.
CEOs would argue that their obligation is to their shareholders,
not to the larger society. They need to generate profits in order
to give shareholders dividends. If they don't they're out.
I noted at a recent GE shareholder meeting that the CEO, Jack
Welch, kept saying to the shareholders, This is your corporation.
Well, I'd like to see some shareholders go onto company property
and say, I want to see the books. I'd like to see some shareholders
start exercising some of their authority. The fact is that over
the last 25 years, through courts and legislation, the rights
of shareholders have been decreased enormously. They have very
little authority any more in the running of these corporations.
It's the self-perpetuating boards, the people like Jack Welch
of GE, who are running them as dictators. This line that the obligation
of the corporation is to maximize profits for the shareholders
came out of another federal court decision dealing with the Dodge
Motor Company in the early part of this century. It's not written
in federal law. It was a court decision saying it was the obligation
of the corporation to maximize profits for the shareholders. However,
many states have put into their state corporation codes that the
directors can take into account the impact of the corporation
on the environment, on workers, on future generations. So in 15
or 20 states the law is clear that there are much broader criteria.
The most important value in this country that drives everything
is, The economy must expand. We must increase production. Efficiency
is defined as production per person. That's productivity. In order
to have high productivity to please Wall Street you have to have
people working in China or India or Malaysia making Nike sneakers
and being paid nothing. Where did those values come from? Can
we say we can have a society where production doesn't always have
Could you elaborate a little more on the environmental consequences
of the current path that we're on?
We have a number of environmental laws, toxic chemical laws,
clean air and water laws, that have been passed since the 1970s.
These are laws regulating what the corporations can put out. Despite
these laws, the amount of toxic chemicals produced every day by
corporations is increasing. The amount of harm that people and
other species are suffering is increasing. If you go back and
look at these regulatory laws, what they do is legalize the corporations'
ability to put out poisons. They channel us, as activists and
environmentalists, into trying to deal with one poison at a time
rather than saying to the corporations, It's illegal for you to
be poisoning in the first place. So we have poisons in the air
and the water, in the food.
From an ecological standpoint, from an equal distribution
of wealth standpoint, from a justice standpoint the rule by giant
corporations has brought us problems. It's certainly brought us
a lot of raw wealth. There's a lot of production. We are the masters
at producing things in this country. We produce more than anybody
else in the world, more poisons and more garbage and more crap
than anybody else in the world.
We and other organizations have been producing materials over
the last six years or so. Those can be very helpful to people,
to read the history that they didn't know, and see how other folks
in other generations have been addressing this.
Talk about practical things that people can do in to reframe
We and other organizations have been producing materials over
the last six years or so. Those can be very helpful to people,
to read the history that they didn't know, and see how other folks
in other generations have been addressing this. We're suggesting
that folks who are interested form some kind of study group, read
and start thinking and talking about this. We have to start using
a different language, thinking about ourselves in a different
way. People who belong to activist civic organizations need to
bring these debates into churches, academic institutions, professional
societies, or in places like town meetings. We need to start bringing
these discussions into the body politic.
For example, in the little town of Arcata in northern California,
a group of people formed Democracy Unlimited. They qualified a
petition, an initiative for the ballot which called on the city
hearings to commission a report on the ways that the city could
begin to take back its authority from the giant timber corporations
that dominate northern California. They're creating a public debate
and using some of the resources of their own government.
In 1994 you helped establish the Program On Corporations,
Law And Democracy. Its mission statement is "instigating
democratic conversations and actions that contest the authority
of corporations to govern. "
I think that says it in a nutshell. We're saying that the
norm of giant corporations is to usurp the governing authority
of the people. With that authority, given their values and their
own internal needs, they're going to make the wrong decisions.
Most people don't recognize that corporations are governing illegitimately,
we're trying to help create that debate. Out of that debate will
come, we hope, a different kind of citizen organizing in the 21st
century, which is about taking these powers and privileges away
from corporations and saying: We are the sovereign people, we
come together to form this government, to protect the general
welfare, to preserve our posterity. We create these corporations.
We define them. When they have exceeded their authority, we must
say, We're in charge. Here's how we want things to be run.