Customer Reviews

The People's Business: Controlling Corporations and Restoring Democracy

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Two Biggest Problems Facing America: Out-of-Control Corporatism & Blind Militarism

This book performs the crucial service of organizing and structuring our thoughts about the seemingly remote possibility of popular containment of the pervasive and widespread corporate abuse, which has devastated our lives and now poses a very real threat to the continuation of human life as a whole. How do we pressure Congress (predominantly bought and signed for by the corps) to even begin to introduce the topic of corporate reform in legislative discussion? This challenge, the argument here, well grounded in fact, takes up.
The authors list seven basic strategies:
1. Crack Down on Corporate Crime
A permanent, well-funded and staffed corporate crime division should be established within the Justice Department. Budgets for Justice Dept agencies responsible for pursuing corporate criminals such as the SEC should be beefed up. An annual corporate crime report equivalent to the one the FBI produces on street crime should be generated. Federal acquisition regulations should be tightened so lawbreaking corporations do not receive any fraction of the $265 billion worth of government contracts given out each year.
2. Rein in the Imperial CEO's
Warren Buffett once suggested that willingness to curb excessive CEO pay is "the acid test of corporate reform." Yet the ratio of average large company CEO pay ($11.8 million) to average worker pay ($27,460) spiked from 301 to 1 in 2003 to 403 to 1 in 2004. While Wal-Mart paid CEO Lee Scott 871 times what it paid the average "associate," the ratio between executive and worker pay in Europe hovers closer to 25 to 1. In 1982 the ratio at US corporations was about 42 to1; by 2000 it had spiraled to about 525 to 1.
The SEC should give shareholders - the true owners of the corporations - the right to curb out-of-control executive pay packages, which often expand while the companies' earnings and performance decline. Representative Martin Sabo in July 2005 introduced the Income Equity Act, which would eliminate tax deductions for executive compensation exceeding twenty-five times that of the company's lowest-paid full-time employee.
3. Shore Up the Civil Justice System
This strategy stands in direct opposition to the current trend of "tort reform" legislation now pouring through Congress. One of the lost lessons of Enron and other corporate crime scandals is how Washington's deregulation created an incentive for the market system's professional "gatekeepers" - the accountants, bankers, and attorneys - to avoid their responsibilities and, in some cases, even aid and abet the fraud. "Tort-reform" type legislation, such as the Private Securities Litigation Reform Act (PSLRA) of 1995, weakening the ability of shareholder victims of corporate fraud to sue, embolden the corporate perpetrators of such frauds to cook the books. So-called "tort-reform" provides incentive for even further corporate abuse - and although the facts are in (see www.citizen.org, www.centerjd.org), civic and political organization to safeguard the public's right to protect itself against such abuse must be enhanced. The process of establishing such safeguards as legal institutions begins with education. Most Americans have no understanding as to the degree to which the twisted "tort-reform" argument threatens not only their interests, but their personal safety.
4. Regulate in the Public Interest
The ferocious corporate assault over the past quarter century (since the advent of the Reagan Administration) on regulations that worked has cost lives, health, and trillions of dollars. Most of the companies involved in recent giant accounting
scams fall within the industrial sectors that were radically deregulated just years before - energy, banking, brokerage, and telecommunications. In these industries, deregulation, or taking the government cop off the corporate beat, created a kind of gold rush mentality. The authors claim that much of the investment craze of the past two decades has been in part fueled by deceptive scenarios emanating from this situation: a false sense of prosperity bolstered by phony accounting practices.
Corporate lobbies have blocked much needed reforms and resources for corporate law enforcement, which almost passed during the 1970's. The widening schism between `have' and `have not' and wholesale destruction of our environment are
thus the direct legacy of `Reaganomics'. The successful effort to reverse all of the directives and directions of the New Deal - the defamation of indisputably the greatest and most benevolent American president of the last century, FDR - in deference to the sleezy, big money favoritism of the corporate spokesperson, Reagan - is a remarkable chronicle of how easily a significant percentage of Americans, through stubborn adherence to cultivated ignorance, can be hyped and manipulated into voting against their own best interests.
5. Trust-Busting in the New Century: Start With the Media
The so-called `free' market is not free for all, but for the very few - the playing field is hardly level, and conditions are worsening. How are the corporations in evident domestic and international collusion able to avoid regulation, fix prices, and `brand the world'? We need new and powerful legal instruments to assert and enforce popular control over the corporations, effective anti-trust legislation.
The primary means of corporate control over the American public has been through a corporate-owned media. `De-regulation' and regular practices of wild corporate abuse have been sold, through an orchestrated media campaign, by a press which, without a hint of dissent, uniformly obeys the whims of a powerful few. As Louis Brandeis famously put it: "We can have democracy in this country, or we can have wealth concentrated in the hands of a few, but we can't have both."
The key to corporate reform is a vibrant press. When the media fail to provide coverage of civic engagement, change is difficult. Because today's media are essentially dominated by six multinational conglomerates, much of the news sounds and looks the same, regardless of what channel we may be watching or what newspaper we may be reading and regardless of our own political views. One way to insure the broader spectrum of opinion necessary for a healthy democracy is to enact competition rules - limits on cross-media ownership, especially in localities, and on vertical integration, for example - that essentially mandate diversities by prohibiting media conglomerates and restoring the fairness doctrine on the public airwaves.
In addition to advancing the nonprofit, noncommercial media outlets, including low-power radio, today's media activists are battling the corporate takeover of new media technologies like community wireless networks, key community assets that deserve to be protected from predatory corporations. Meanwhile, legislation, which would reduce media concentration and restore fairness to broadcasting, such as Representative Hinchley's Media Ownership Reform Act, remains stalled by powerful interests with an opposed agenda.
6. Get Corporations Out of Our Elections
The cost of running for a seat in the House Of Representatives is more than $1 million. The cost of winning a seat in the Senate is well over $5 million - run ning nearly as high as $40 million in the largest states. The Bush/Cheney 2004 re-election campaign spent $367 million. As a result, those who run for office package their candidacies in a manner attractive to those with money. Roughly 75 percent of the money raised in campaigns comes from business or business related interests. Corporations are legal entities, not human beings: as such, they should be prohibited from contributing to campaigns, sponsoring PACs or lobbying.
7. Reclaim the Constitution
The court-made doctrine of "corporate personhood," created by pro-corporate judicial activists in the late nineteenth century, continues to expand as the result of a well-orchestrated "business civil liberties" movement led by dozens of corporate-front legal groups and right-wing think tanks. The consequences are far-reaching and often insidious. Corporations' growing use of referendums to advance their economic interests and the intrusion of commercial advertising into the public sphere are often legitimized by questionable claims to First Amendment speech rights. Corporations also increasingly use constitutional challenges to undermine local decision-making authority and federal regulations and to impede the right of association by workers, consumers, and small investors.
The relentless colonization of the Constitution by corporations and their proxies has overwhelmed citizens' ability to express their collective interest and exercise their sovereign authority over big business. Comprehensive corporate reform should be a central concern of progressive legislators. But they must drop the bills in the hopper to get the discussion under way. Avoidance of corporate power issues reaches deeply into both parties. This problem was reflected in the non-questioning of former corporate attorney John Roberts during his Senate confirmation hearings for the post of Justice of the Supreme Court - not an insignificant portent for our future.
We must reclaim the lost understanding that corporations are creations of the state - chartered under the premise that they will serve the public good - as our servants, not our masters. By restoring the sovereignty of citizen democracy, we will be able to create a more just and sustainable economy, driven by values of humanity and community, rather than relentless pursuit of short-term financial profit at any cost - market and military - to the innocent peoples of the world.

(...)

To one extent or another, regardless of your politics, everyone shares the dread sense that too many large corporations are out of control these days - stifling competition, buying up our politicians, and driving down the quality of life for their employees, consumers and the communities in which they are based. In this book Drutman and Cray do a fine job of exploring contemporary indicators of corporate excess. Then they go an extra lap and explain how the history of the corporation in America holds the key to understanding what can be done now. The book reminds me of some of William Greider's work, such as Who Will Tell The People. More than the usual polemic against big business, The People's Business makes clear that with the tools available to us in this democracy, we can restore the corporation to its proper place in service to our society. This idea is as old as the founding fathers, and as fresh as pages of this great new book.

This book tells the truth about the unseemly influence corporations have over our everyday lives. But it also provides a road map to reclaim that power. It reminds us that there is such a thing as a social contract and corporations are grossly out of compliance with that contract.

It's empowering to read an analysis that provides a well documented critique but also offers vision and hope. Whether you're just buying a car or paying your utility bills you need to read this book. It suggests hope for democracy and not the hypocritical George Bush brand but an economic democracy where people can regain control over the largest part of their lives, their economic lives.

This is a shorter version of my review published in the journal, Personnel Psychology.

I have read a number of recent, very good books about the corporate threat to our democracy. Their common theme, like that of the book by Drutman and Cray, is that large, publicly traded corporations, the "corpocracy," have preempted our sovereignty and control and exploit for selfish interests and often very detrimentally so every aspect of our lives. What more then, you might ask, could be learned from the present book? What sets it apart from the rest I think is first the broader array of reforms it proposes and second that it draws upon the collective wisdom of over 40 scholars and prominent activists commissioned by Citizen Works. It is the non-profit, non-partisan organization founded by Ralph Nader to develop and promote corporate reform proposals. Mr. Nader himself served on the commission.

The two authors also served on the commission. While they state that its other members bear no responsibility for the book's specific conclusions, all members endorsed the book, and it is referred to by Mr. Nader and the authors as the commission's report. I think it was a wise decision not to issue a report per se but instead to have a more readable, more comprehensive, and possibly a more influential book written.

The intent of the book is to provide an understanding of corporate power and a guide for activists to follow in pursuing the reforms proposed in the book. It is full of so many proposals that it would have been helpful if they had been listed in a table preferably at the book's beginning and in a descending order of priority or feasibility. The titles of the six chapters nevertheless do serve somewhat as a list of specific targets of reform and for the most part adequately convey each chapter's topic such as "cracking down on corporate crime."

That only this chapter discusses corporate crime underscores the fact that citizen sovereignty was not turned over to the corpocracy at gunpoint and that most corporate wrongdoing is legal wrongdoing. One or the other branch or level of government has shamefully patronized big business and acquiesced to it in one way or another over the years. This is precisely what the framers of our constitution did not want to happen. But instead of requiring federal chartering of corporations to ensure they meet some bona fide public purpose and operate under public oversight, the framers decided the states should carry out the function as they saw fit.

Although charters were initially issued with stringent controls, the states soon began, as the authors graphically put it, "a race to the bottom" to attract new business. As a consequence, state charters are a sham. The authors tell how anti-tobacco activists a few years ago, to dramatize their point, easily got a charter for a new tobacco ompany, "Licensed to Kill, Inc.," even though it was clearly stated in the articles of incorporation that the company's purpose would be to make and sell products that annually kill 4.5 million people worldwide. Attempts to establish federal chartering have failed numerous times before, but "ultimately would make sense," the authors believe, once the federal government gets a backbone. I certainly agree. Federal charters would be feckless until then.

Both state and federal legislators have always been, it seems to me, the branch of government most vulnerable to corporate influence. Campaign finance laws will never be able to stem completely the flood of corporate money, and once elected it must be the rare politician who dares risk reelection by defying the flood of lobbying and other pressures from corporations. A number of proposals are offered for shielding legislators from these pressures, but I am amazed to find no mention of a possible solution that I have advocated for decades. If term limits were imposed on all politicians they would concentrate more on attending to the needs of the citizenry and less to the excessive demands of the corpocracy. The solution is not as unrealistic as it may seem, and certainly is no more so than one of the proposals in the book to "ban corporations from politics." As a matter of fact, nearly 20 states already have laws allowing automatic removal of longtime legislators, even ones who would be assured of reelection, and not too many years ago Congress attempted to limit the tenure of its own members (Heavey, 1999). Citizen Works and other activist groups should concentrate some of their resources on reviving efforts to promote Congressional term limits.

The executive branch is probably not far behind in catering to corporate interests at the expense of the broader interests and concerns of the citizenry. The predominant means of corporate influence is through the regulatory process. It has essentially been taken over by the corpocracy and has resulted in the deregulation of such essential public services as energy, telecommunications, and banking, which in turn as the authors amply document, has led to higher prices and poorer service, not to mention the widespread harm caused by just one energy company, the notorious Enron (its scandal along with others at the time helped prompt creation of the commission). Deregulation and weak antitrust enforcement have also led to the growth of monopolies as in the case of the media conglomerates. One of the remedies proposed is to amend an existing law so that it would disallow large mergers.

One might expect the third and final branch of government, the judiciary, to be relatively immune to the corpocracy's power seeking, but that is not the case at all. For example, the corporation is not even mentioned in the constitution, but that has not stopped the US Supreme Court from extending several constitutional rights intended only for the citizenry to corporations, such as the right of free speech, even though no corporation has a mind or a tongue. This give-away, which would surely have shocked the constitution's framers, helps corporations, the authors validly argue "to undermine regulations and other laws" intended to protect the citizenry. Numerous court cases are presented to prove their point, such as those where judicial rulings, invoking the right of corporations to be protected from unreasonable searches and seizures hamstring federal inspections for unhealthy and unsafe working conditions. Acknowledging that a constitutional amendment is not too feasible, the authors propose instead using specific court cases that would allow plaintiffs to "advance legal strategies that challenge the corporate claim to constitutional rights."

The corpocracy is thus relatively unrestrained by the three branches of government, leaving the question of whether there is any countervailing forces available in the market place and investment community. The authors address this question and are not too optimistic about meaningful reforms coming from those quarters. The corpocracy is so big and powerful it mostly controls the marketplace, and shareholders, the authors point out, basically have little or no control either. The corpocracy has thus become accountable only to itself, which is why the book's focus is on political and legal measures to force reform and a retreat by the corpocracy.

In concluding the book, the authors argue that the "first steps" should be campaign finance reform and media reform because they are considered crucial for providing a "compelling foundation for a mass movement that challenges corporate power more broadly."

This short review can't possibly do justice to a comprehensive and, in my opinion, a very important book. I recommend you read it for yourself. The corpocracy, in my opinion, betrays the very principles underlying our nation's foundation, and if allowed to continue its present course may eventually tear apart our society.

Heavey, S. (March 5, 1999). Term limits take effect. (http://www.washingtonpost.com/wp-srv/politics/special/termlimits/termlimits.htm).

In THE PEOPLE'S BUSINESS the authors view history and corporations, their political influence, and advice from such notable figures as Thomas Jefferson.
Jefferson counseled in 1816 that " I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength and did defiance to the laws of our country."
As usual, Thomas Jefferson was correct.

A fundamental topic was the history of charters and the impact of state laws, most notably those of New Jersey and Delaware.
The authors quote Daniel J.H. Greenwood who wrote that " Large corporations and Delaware determine the nation's corporate law, and the rest of us are not even 'virtually represented'".

Where this book touches on a current issue-the recent Supreme Court decision regarding campaign contributions from corporations.
The history of Supreme Court decisions like First National Bank of Boston v. Bellotti demonstrates that corporations have enjoyed some puzzling rulings and twisted judicial logic.

Another interesting topic is the differing theories of "artificial entity" and "natural entity".
On page 54 the authors write "Corporations should not enjoy First Amendment rights that were intended to protect people, since corporations are not people and do not vote in elections."

They quote from Thom Hartmann's UNEQUAL PROTECTION on the mystery of Santa Clara v. Southern Pacific Railroad. That the ruling is cited as the origin of "corporate personhood" is mysterious in that the decision did not say that. The actual source is the commentary or head notes provided by J.C. Bancroft Davis, a court reporter who was also a railroad board member.

The authors also point out some interesting connections between Enron and the Gramms. This book names some of the players in actions that arguably fueled the current crisis.

While I found some text that could have been edited better, overall this book is a superbly researched study of corporate political power and corporate crime. Most importantly, this book suggests a wide array of solutions that can be implemented on many levels of citizen involvement.
From the local level to the global level, there are solutions for gradually decreasing corporatocracy.

This is a charming righteous book, there is not a single thing lacking from my point of view, and as I made my way through the book my admiration for the authors and the work they put into this grew without reservation.

This is a superb orientation for any adult; a superb assigned reading for any level from undergraduate to graduate; and a truly stellar example of what informed advocacy and public purpose scholarship would be...

As with any book I immediately recognize as being best in class, I started with the index, the bibliography (many book titles I did NOT know), and the six pages of centers and web pages as resources.

I am late to finding this 2004 book, but would suggest that it is the perfect partner for Grand Illusion: The Myth of Voter Choice in a Two-Party Tyranny.

The authors set out to address the corporation within the framework of domestic politics, and they conclude that the corporate charter is a grant of, by, and for We the People, and therefore corporations must be subordinate to the sovereign people, and must not be allowed to harm the public interest.

The first three chapters define the corporate "threat" and attributes; the next two discuss the use of existing tools, the sixth addresses obstacles, and then the conclusion. Although a very broad mature reader could fly through a great deal of this, I was struck by the even pace, the concise sensible organization, and it occurred to me that there was not a word wasted. In my world, it takes a LOT of work to get a book to read this well. The authors strike me as exceptional.

The core concern with the corporation is combination of their being virtually no limits on corporate (mis)behavior, and virtually no liability for investors, owners, and managers.

I like the manner in which the authors review the history, both of the corporation as it systematically disembowels federal and state regulation (with lots of help as the states "race to the bottom"), and of the attempts by Ralph Nader, a Nobel Prize level reformer if ever there was one, who has often been misunderstood as being about safety rather than corporate responsibility, and as a spoiler of elections rather than a champion of honest democracy. The authors meet my high standards for crediting others, doing their homework, and tying it all together.

Page 44 gives us a list of corporate rights claimed, citing Carl Mayer:
+ First amendment guarantees of political speech, commercial speech, and negative free speech rights
+ Fourth amendments safeguards against unreasonable regulatory searchers
+ Fifth amendment double jeopardy and liberty rights
+ sixth and seventh amendment entitlements to trial by jury

Page 76 gives us the list of psychopathic attributes of the corporation, for those that have not seen this often quoted section before, Dr. Robert Hare as explained by lawyer Joel Bakan:
- irresponsible
- manipulative
- grandiose
- lack of empathy
- asocial tendencies
- refuse to accept responsibility for their own actions
- unable to feel remorse
- relate to others superficially

The authors review the disconnects between corporate ownership and management, discuss all the standard aspects of corporate escape from accountability including impotent boards of directors.

I myself learn for the first time about 78 corporate governance reforms itemized by Richard C. Brendon, "Restoring the Trust," in August 2003. Note 38 on page 290 provides a web URL that I am placing in the comment below.

I learn on page 119 of Robert Hinkley (author of the Cord for Corporate Responsibility) and his view that adoption of the following would be helpful in refining the role of directors and officers, now focused on maximizing shareholder profit: "but not at the expense of the environment, human rights, the public health or safety, the communities in which the corporation operates, or the dignity of its employees."

Wow. Wal-Mart is toast if that ever comes to pass--along with most corporations.

The authors discuss the consequences of deregulation; the need for anti-trust, and the need to protect inherently governmental functions from being privatized.

I really appreciate the concise detailed overview of what Enron gave to George Bush, and what it got in return, including $7 billion in subsidies, over 50 key positions in the US government, and so on.

As the authors wind toward a conclusion, having discussed funded lobbyists, funded think tanks, legal attacks on regulations, and the 527s that are also a target in Grand Illusion (linked above), the authors made some critical final points:

1. They are at pains to distinguish between corporate crime by the corporation in all its forms; and white collar crime by individuals, noting that difference natures require different responses.

2. They are at pains to point out that financial crime is not the only crime, and cite a litany of others including crimes against humanity.

3. I am fascinated by the estimate of the cost to the public of corporate irresponsibility. The authors cite 1994 estimate by Ralph Estes of 2.6 TRILLION; others add up to at least 1 trillion; and the corporation kills 50,000 to 60,000 people in the USA alone (violent crime kills roughly 16,000). I compare this to the $2 trillion a year that organized crime pulls down within a global economy estimated at 7-9 trillion, and see clearly that corporate crime is every bit as toxic as organized crime. See Illicit: How Smugglers, Traffickers, and Copycats are Hijacking the Global Economy for the other half of global crime.

The book closes with a heartening list of initiatives local communities are taking (page 256), and a call for the labor, environmental, and consumer movements to coalesce around one shared common goal, "a just and sustainable economy [within] a functioning democracy."

They challenge us all to be citizens rather than consumers, to demand media reform as a means of being empowered with knowledge, and conclude that in a democracy, the rights of citizens to govern themselves must trump the rights of corporations to make money at the expense of the public.

See also:
The Corporation: The Pathological Pursuit of Profit and Power
Wal-Mart: The High Cost of Low Price
The Shock Doctrine: The Rise of Disaster Capitalism
Confessions of an Economic Hit Man
The Global Class War: How America's Bipartisan Elite Lost Our Future - and What It Will Take to Win It Back
Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil
Rule by Secrecy: The Hidden History That Connects the Trilateral Commission, the Freemasons, and the Great Pyramids
Election 2008: Lipstick on the Pig (Substance of Governance; Legitimate Grievances; Candidates on the Issues; Balanced Budget 101; Call to Arms: Fund We Not Them; Annotated Bibliography)

As a survivor of hidden government experiments and an investigator of what is hidden behind the scenes, I have to recommend this book to everyone serious about discovering and acknowledging truth. Kudos to the authors for a brave stand. When the populace is willing to see whether or not the emperor has clothes, books like this will be a formidable tool in rebuilding a truly free democracy.

Dixie Waldrip, author, Hide and Go Seek; Searching for Me