Corporate Reform Could Unite Occupy Wall Street and the Tea Party

A Pres­by­ter­ian Hunger Pro­gram Article

Occupy Wall Street & the Tea Party

There is one sig­nif­i­cant area where mem­bers of the Occupy Wall Street (OWS) and Tea Party (TP) move­ments are likely to have much more in com­mon than most would think: The United States would be bet­ter off if we treated cor­po­ra­tions today as we did for the first 100 years of our country—the way our Founders envi­sioned the rela­tion­ship between cor­po­ra­tions and government.

Found­ing of an anti-corporate nation
The U.S. Con­sti­tu­tion does not men­tion the word cor­po­ra­tion, yet as for­mer Supreme Court Jus­tice Felix Frank­furter said, the his­tory of con­sti­tu­tional law is “the his­tory of the impact of the mod­ern cor­po­ra­tion upon the Amer­i­can scene.” Thomas Jef­fer­son warned about the threat of cor­po­ra­tions, say­ing: “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.”

Rarely por­trayed as such, the Amer­i­can Rev­o­lu­tion was as much anti-corporation as it was anti-government. Before the rev­o­lu­tion, most of the enti­ties that we now know as states were run like cor­po­ra­tions char­tered by the British gov­ern­ment. The Vir­ginia Com­pany and other “pre-states” were granted to indi­vid­u­als and run by their will. The Vir­ginia Com­pany was known for being espe­cially ruth­less in its treat­ment of work­ers, includ­ing chil­dren. In an effort to revoke the Company’s char­ter, one stock­holder in 1664 com­plained that of the approx­i­mately 6,000 adult and child work­ers who had been sent to the colony since its foun­da­tion, an esti­mated 4,800 had died from over­work and ter­ri­ble work­ing and liv­ing con­di­tions. In Gangs of Amer­ica: The Rise of Cor­po­rate Power and the Dis­abling of Democ­racy, Ted Nace uses orig­i­nal writ­ings to paint a har­row­ing descrip­tion of life in Vir­ginia at the same time that reports to Vir­ginia Com­pany investors and poten­tial work­ers por­trayed a utopia for workers—not too dis­sim­i­lar from cor­po­rate reports today describ­ing their work­shops overseas.

The Boston Tea Party was as much a protest against the East India Tea Com­pany as it was against the British crown that was help­ing to cre­ate its monop­oly. The Com­pany was deeply in debt due to over­ex­pan­sion and was fac­ing heavy com­pe­ti­tion from small busi­ness­men in the colonies who were buy­ing tea from Dutch traders and smug­gling it in small ships. After pres­sure and lob­by­ing from the Tea Com­pany, the British gov­ern­ment passed the Tea Act of 1773. Some think the Act only increased the taxes on tea paid by colonists, but it went far beyond that: It exempted the Com­pany from taxes on tea exported to the colonies and even gave a tax refund on the mil­lions of pounds of tea they hadn’t been able to sell. Since the Com­pany didn’t have to pay taxes and was given extra money, it was able to lower its prices and under­cut small busi­nesses in the colonies — does this sound at all famil­iar to our recent bank­ing cri­sis? Thom Hartmann’s book, Unequal Pro­tec­tion, quotes orig­i­nal doc­u­ments from peo­ple involved in the Boston Tea Party who sound quite sim­i­lar to peo­ple today strug­gling against trade agree­ments, includ­ing sol­i­dar­ity protests in Eng­land by peo­ple affected by the Tea Act there.

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The Boston Tea Party was as much a protest against the East India Tea Com­pany as it was against the British crown that was help­ing to cre­ate its monop­oly.
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When the mer­chants who fought the Tea Act and expe­ri­enced life under the Vir­ginia Com­pany wrote their new Con­sti­tu­tion, they were very care­ful to place strong con­trols on cor­po­ra­tions, in the same way that they wanted to restrict the power of gov­ern­ment offi­cials. The char­ter­ing of corporations—establishing the exis­tence of cor­po­ra­tions and the rules by which they operate—was placed in the hands of state gov­ern­ments, which at the time were the only directly elected bod­ies. They didn’t want cor­po­ra­tions to be able to become so pow­er­ful again. For the first 100 years of the new nation, cor­po­ra­tions were cre­ated to do pub­lic works projects that the gov­ern­ment did not want to do with gov­ern­ment workers.

The states, almost unan­i­mously, wrote char­ters with the fol­low­ing char­ac­ter­is­tics: 1) char­ters for new cor­po­ra­tions were rarely granted, and only if nec­es­sary to serve the com­mon good, 2) the cor­po­ra­tion was estab­lished for a set period of time rang­ing from three to 50 years, usu­ally 10 to 20 years. Banks were lim­ited to three-year char­ters in many states, 3) the cor­po­ra­tion had a spe­cific pur­pose (for exam­ple, to build two bridges across a river), 4) it was allowed only to own as much land and cap­i­tal as was nec­es­sary to com­plete its social pur­pose, 5) it could not be involved in pol­i­tics, 6) it could not own stock in other cor­po­ra­tions, and 7) it was lim­ited to oper­at­ing only within a state or even a sin­gle county. Some states only char­tered banks through direct ref­er­en­dums. Cor­po­ra­tions’ char­ters were rou­tinely revoked for break­ing any of these and other statutes. After hav­ing its char­ter revoked, the cor­po­ra­tion was divided up among its investors. The idea of the cor­po­ra­tion was to serve a pub­lic pur­pose while mak­ing an ade­quate profit for its investors.

While a fun­da­men­tal divide between the Tea Party and Occupy Wall Street is that the for­mer tends to look back in time while OWS mem­bers tend to look for­ward, in the case of cor­po­rate power, a harken­ing back to the early days of our coun­try really does point the way to a pos­i­tive future. Bring­ing back the men­tal­ity of our Founders toward cor­po­ra­tions would be a sig­nif­i­cant and pos­i­tive step forward.

Check out the six-part series on the his­tory of the cor­po­ra­tion in the United States by the same author.