We’ve Been Here Before

American History Offers a Hopeful Lesson in Checking Corporate Power

Anyone looking for the source of today’s tsunami of corporate money in politics might consider blaming Earth Day 1970.

Earth Day? Kids picking up litter and swatting giant beachballs painted like Planet Earth? That’s certainly part of what happened on the first Earth Day, but it bears reminding that in the early 1970s the environmental movement was on such a roll, and corporate America was doing such a poor job of defending itself, that many corporate executives were concerned about the future of capitalism itself.

Besides producing a great deal of today’s environmental regulatory structure – the National Environmental Policy Act (1969), the Clean Air Act (1970), the Environmental Protection Agency (1970), OSHA (1971), the Coastal Zone Management Act (1972), Endangered Species Act (1973), and the Safe Drinking Water Act (1974) – the victories of the environmental movement had the unintended side effect of provoking an intense spate of soul searching among corporate leaders.

Chris van Es, www.chrisvanes.com

In a confidential memorandum written in 1971, future Supreme Court Justice Lewis Powell (then a corporate attorney at a Virginia law firm) described a “massive assault” on the foundation of business by environmentalists and consumer advocates. Powell urged corporations to mobilize politically by creating an infrastructure of think tanks, trade groups, lobbying bodies, and media outlets that would promote a pro-business ideology in every available arena, from local television news to congressional hearings. The Powell memo laid out the game plan for the corporate counterattack that has reshaped American politics from the 1980 election of Ronald Reagan through the rise of the Tea Party. Perhaps most significantly, the conservative movement has locked in a majority of seats on the Supreme Court, whose members have embedded their pro-corporate views into the structure of the law. Exhibit A: the 2010 Citizens United decision that enshrined corporate political spending as a constitutionally protected form of “free speech.” But the story goes back much farther than the first Earth Day or the machinations of the current Supreme Court. The push and pull between corporations and citizens has formed a backbeat to the rhythm of American politics since the American Revolution itself.

Take the Tea Party, for example. No, not the one whose members show up at community meetings to heckle members of Congress about giving their fellow citizens health coverage. I mean the one that happened in Boston Harbor in 1773. The attack on ships owned by the British East India Company grew out of worries that sales of tea in the colonies would soon be allowed only in outlets controlled by the company, which at the time was the largest corporation in the world. Colonists feared it was only a matter of time before the East India Company took over all other commodities, including cotton, tobacco, and grain. To fight the East India Company, Boston’s merchants made common cause with radicals like Sam Adams and – in what we now call direct action – boarded the company’s ships and destroyed millions of dollars’ worth (in today’s dollars) of tea. An anti-corporate protest was the spark that ignited the American Revolution.

During the republic’s early years, many citizens remained concerned about the scope of corporate power. At the Constitutional Convention, delegates agreed on the importance of preventing corporations like the East India Company, or any homegrown equivalent, from dominating the new nation. Benjamin Franklin proposed giving the power of authorizing and controlling such entities to the federal government. But the convention settled on different answer: Keep corporate chartering close to the citizenry by putting it in the hands of the state legislatures.

For decades the “small is beautiful” formula worked. States wrote numerous restrictions into corporate charters such as forbidding companies to own each other’s stock and requiring companies to guarantee that their actions would benefit society. An 1809 decision by the Virginia Supreme Court stated that a corporation shouldn’t receive a charter if the “object is merely private or selfish; if it is detrimental to, or not promotive of, the public good.”

Ultimately, however, state governments turned out to be too small to stand up to wealthy, and increasingly interstate, corporations. By the 1860s the first billion-dollar company, the Pennsylvania Railroad, had taken virtual control of its home state legislature. As the Pennsylvania Railroad broadened its operations into other states, it applied the same tactics of influence, from buying up newspapers to buying politicians. It was said that of Pennsylvania Railroad executive Tom Scott that when he “trailed his garments across the country, the members of twenty legislatures trembled like dry leaves in a winter’s wind.”

Read more in this special report on the environmental pollutant called money in politics.

For the next half a century, large corporations dominated all branches of government and corruption became endemic throughout the American political system. According to historian John Hope Franklin, corporations “were bribing officials with greater regularity than they paid their own employees.” For a contribution of $150,000, railroader Jay Gould won a promise of veto power over three Supreme Court appointments from presidential candidate James Garfield. It was a sound investment. Supreme Court justices overturned basic worker protections, citing the harsh principles of social Darwinism. Corporate money and corporate values were turning out to be every bit the corrosive force that the framers had feared.

Sound familiar? Of course it does. As in the Gilded Age, today’s era of corporate dominance is marked by massive transfers of public resources into corporate hands. In the post-Civil War era this meant land: 200 million acres of public territory transferred to railroads, millions more to mining companies. Today, the scope of the giveaways remains vast: massive offshore oil leases; billions of tons of coal leased at bargain rates; huge bailouts to banks. And just like a century ago, such policies have widened the gap between the super-rich and the rest of us.

As long as corporate money dominates democratic institutes, no environmental victory can be expected to last for long.

Yet the Gilded Age eventually came to an end, and anyone depressed about today’s corporate ascendancy should take hope from the fact that it was people’s movements that propelled a new era of reform. Grangers, prairie populists, Bonus Army marchers, socialists, communists, union organizers, suffragettes, and civil rights advocates – not to mention the early environmentalists known as conservationists – all played a part. Despite widespread repression, these movements successfully challenged the corporate ethic of social Darwinism with the community ethic of social welfare. They won impressive victories along the way: a ban on corporate political contributions (1907), women’s suffrage (1920), the right to organize and engage in collective bargaining (1935), the 40-hour workweek (1938), and Medicare (1965). Today, environmentalists are often on the defensive, fighting to protect the landmark achievements of the 1970s. As long as corporate money is able to dominate democratic institutions, no environmental victory can be expected to last for long. The same goes for other progressive social movements. The labor movement, the peace movement, the feminist movement – none of them will be able to fulfill their aspirations as long as corporations are able to buy off politicians. Yes, this is discouraging, but it also reveals what could, and should, be the basis for a mass social movement committed to ending corporate dominance over democratic institutions. Progressives have a common enemy. It’s long past time to join in common cause and to remember that old Wobblie slogan: “An injury to one is an injury to all.”