Volatility

March 20, 2011

Spring

Filed under: American Revolution, Freedom, Nietzsche, Tower of Babel — Russ @ 3:22 am

 

Today’s this blog’s second birthday, and I’m feeling good about the new Spring. I think I’ve largely completed my work in laying out the basic ideas, as I see them, regarding where we are, how we got here, and what we’re up against. While there’s still some arranging and polishing to be done there, from here on most of what I write’s going to be about where we need to go and how to get there. I’ve laid out my basic ideas there as well. Now it’s time to organize it all and flesh it out in detail.
 
The road to our transformation will likely be long and hard. But we can have confidence in humanity’s eventual triumph, because:
 
1. This system is physically and fiscally untenable, a Tower of Babel, which is caving in upon itself and must soon topple once and for all.
 
2. Every tyranny, the more intense it becomes, generates an ever more intense resistance against itself. This gathering resistance, which may for a long time remain clamped under the lid of a bulging pressure cooker, or may exhibit itself in what seem as first like disconnected outbursts, accelerates the process of the tyranny’s self-destruction.
 
This dialectic of revolution also evinces in the growing pains of the democratic movement, as it finds its historical way. It reminds me of what Nietzsche wrote about self-overcoming.
 
In Thus Spoke Zarathustra, “On Self-Overcoming”, Nietzsche wrote of the inner conflicts as an individual or movement evolves from one wellspring of action to a higher one.
 

But that you may understand my word of good and evil, for that
purpose will I tell you my word of life, and of the nature of all
living things.
The living thing did I follow; I walked in the broadest and
narrowest paths to learn its nature.
With a hundred-faced mirror did I catch its glance when its mouth
was shut, so that its eye might speak unto me. And its eye spoke
unto me.
But wherever I found living things, there heard I also the
language of obedience. Whatever lives, obeys.
And this heard I secondly: Whatever cannot obey itself, is
commanded. Such is the nature of living things.

 
This transcendence often involves a rising but still subconscious force having to enlist the conscious ego as a taskmaster against the inertia of the superannuated habits and thoughts of the old force. In this case, in N’s description (“On War and Warriors”), through the device of the ego one is commanding oneself in a consciously top-down sense, rather than obeying oneself from the soil of one’s being.
 

Recalcitrance – that is the distinction of the slave. Let your
distinction be obedience. Let your commanding itself be obeying!
To the good warrior “thou shalt” sounds more pleasant than “I
will.” And all that is dear unto you, you shall have it commanded
unto you.

 
But as the new wellspring surges and the old one runs dry, the organism completes its psychic movement, and the new stage of the movement becomes the bottom-up imperative, upon which ego only floats as a passenger.
 
To make it more clear what he meant, I’ll give two examples from my personal life. Years ago, after years of failing to exercise, I started running again. At first it was a chore to nag myself into going out each day, especially if the weather sucked. But as I got used to it and felt stronger, and as I realized that running wasn’t a necessary chore I was doing for the sake of getting back in physical shape, but a symptom of an evolutionary spiritual change, it felt more and more natural and effortless. By now I’ve long been at the point where not only is it not a psychological chore to persuade myself to get going, but if for whatever reason I miss a run that’s what causes me to feel weird. The chore is failing to act.
 
To put it in Nietzschean terms, at first my ego commanded my body, now my body commands. It’s the same with writing this blog. When I finally broke my years of silence/lethargy, it was often a chore to write or even to figure out what to write. At first the ego was commanding me to write, commanding me to feel my way toward what I was really going to try to say. Now my body commands.
 
This is the key to everything. Keep struggling, however much psychological drag you feel, until you feel yourself driven by necessity. This is when we attain the fullest positive freedom.
 
It’s not just a subjective concern. Everywhere we see uncertainty and hesitation in the face of fear. But this mass feeling can be overcome only by each of us forcing ourselves to assert ourselves democratically and fight for our freedom until it becomes our massing, coursing life blood. 
 
Nietzsche wrote primarily about the evolution of the individual. But the description is just as true of the movements of history. The democratic movement must now overcome itself, outgrow what is superannuated. Specifically, democracy must forever renounce all compromises with elitism – political, economic, spiritual. We know now that elitism is inherently totalitarian and can never be compromised with, never appeased. This is true of centralized government power, and it’s true of corporatism. It’s the final conflict between these and democracy. One force, the human or the criminal, must win absolutely. This will decide the fate of humanity, to triumph or perish.
 
This means the democratic movement, still cluttered with every kind of halfway measure and regression, must achieve self-discipline. In Beyond Good and Evil (section 188) Nietzsche described how artists and thinkers face the same need to discover necessity in freedom.
 

In every people how much trouble poets and orators have made for themselves!—not excepting some contemporary prose writers in whose ears a relentless conscience dwells—“for the sake of some foolishness,” as utilitarian fools say, who think that makes them clever, —“out of obsequiousness to arbitrary laws,” as the anarchists say, who think that makes them “free,” even free spirited. The strange fact, however, is that everything there is or has been on earth to do with freedom, refinement, boldness, dance, and masterly certainty, whether it is in thinking itself, or in governing, or in speaking and persuading, in arts just as much as in morals, developed only thanks to the “tyranny of such arbitrary laws,” and in all seriousness, the probability is not insignificant that this is “nature” and “natural”—and not that laisser aller! Every artist knows how far from the feeling of letting himself go his “most natural” condition is, the free ordering, setting, disposing, shaping in moments of “inspiration”—and how strictly and subtly he obeys at that very moment the thousand-fold laws which make fun of all conceptual formulations precisely because of their hardness and decisiveness (even the firmest idea, by comparison, contains something fluctuating, multiple, ambiguous—).

 
It’s ironic that he chose that passage for one of his ignorant jabs at anarchism (a term he understood only in the dumbest MSM sense), since on the contrary this description of the body’s command of itself has always been the ideal toward which anarchism strives through all forms of direct action. We seek freedom in necessity. This is the dialectic of democratic self-organization and self-discipline.
 
I’ll close with one more quote (section 213) describing this freedom/necessity dialectic:
 

And so, for example, that genuine philosophical association of a bold, exuberant spirituality, which speeds along presto, with a dialectical strictness and necessity which takes no false steps, is unknown to most thinkers and scholars from their own experience, and hence, if someone wishes to talk about it in front of them, they find it implausible. They take the view that every necessity is a need, an awkward requirement to follow and to be compelled, and for them thinking itself is considered something slow, hesitant, almost labourious, and often enough “worth the sweat of the noble”—but under no circumstances something light, divine, closely related to dancing and high spirits! “Thinking” and “taking an issue seriously,” “considering it gravely”—among them these belong together: that’s the only way they have “experienced” thinking.—In such matters artists may have a more subtle sense of smell. They know only too well that at the very moment when they no longer create “arbitrarily” and make everything by necessity, their sense of freedom, refinement, authority, of creative setting up, disposing, and shaping is at its height—in short, that necessity and the “freedom of the will” are then one thing for them.

 
This is synonymous with the dialectic of direct democracy and self-discipline. Elitists have always been wrong in thinking that only superior (generally meaning, financially rich) individuals and organizations could allegedly discipline themselves this way. Soon humanity in the mass shall prove its own self-organizational skills and spirit, far beyond the dreams of any technocrat. This shall be the self-overcoming of democracy, and the redemption of humanity.
 
I’m going to be taking a partial Internet break for a week or so, but I’ll be around to respond to comments.
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March 18, 2011

Corporations Are Extensions of Government

 

The nuclear disaster in Japan has once again highlighted the basic insanity of this technology. Allegedly failsafe systems readily failed, and aggravating the catastrophe has been the failure of spent rod storage, which again reminds us that no one has come up with a solution for what to do with nuclear waste because there is no solution.
 
We all know what the solution will be. It will be directly dumped in the ghettos of the poor, overseas and probably domestically as well. Any nuke supporters out there – you know it. That’s what’s going to be done.
 
I’m not going to rehash the whole argument here. Instead, I’ll just mention how nuclear energy is one of the most egregious examples of corporate welfare. The entire structure from uranium extraction to electricity delivery is a massive, bloated corporate/government nexus. Nukes = Big Government, Big Corporatism. In fact, as many objections as I have to nuclear energy, my main objection is that it represents the further centralization of political and economic power, the further concentration and intensification of corporate and government power. It’s a further step in the opposite direction from where we need to be heading.
 
As for the idea that nukes are somehow a substitute for fossil fuel extraction and burning, and that when we choose nukes we’re choosing not to blow up mountains for coal or drill offshore, that was never anything but a fantasy. The US has deployed nuclear reactors for forty years now, and there’s been no slackening in the pace of fossil fuel extraction or imports. It’s clear that the corporatist nuke complex is built only in addition to the exploitation of fossil fuels, not in place of it.
 
Indeed, the fact of the corporate/government nexus means that the economy couldn’t work that way anyway. There are no substitutes for existing rackets, only new members of the gang. There’s no established sector where supply has anything to do with what would be demanded in a truly free market. On the contrary, the goal in every sector is simply to produce, with the government guaranteeing the rent extractions wherever there’s insufficient demand.
 
The oil and coal companies have no purpose or responsibility but to produce and sell oil and coal. They bear no market risks or responsibilities, for example to “compete” with nuclear energy, because the government guarantees their rents with however many subsidies are necessary. There’s indirect subsidies like policy which favors increased energy consumption, military spending, and allowing externalizations of costs and risks on society and the environment. But there’s also things like alienation of public property through absurdly lenient royalty and mining laws. This is simple embezzlement, like all other privatization. Then there’s examples the way the government simply refuses to enforce the Clean Water Act where it comes to mountaintop removal mining. This is another example of how corporatism is legalized organized crime. There are also direct subsidies, tax breaks, and so on ad nauseum. The government will extend this hospitality however far is necessary to guarantee the sector’s accustomed level of rents.
 
So nukes do nothing to mitigate this corporate welfare sector. They merely become another, gratuitous one. Big Government doesn’t get more intrusive on the “free market” than this. The health racket bailout is merely an extreme example of the way the government creates forced markets for corporate rackets. This is the nature of the command economy.
 
Add the government’s imperial, police state, contract enforcement, and imprisonment functions, all on behalf of its corporate owners, and we have the bagman/goon theory of government. There are several different versions of the Big Lie to pretend that the government is not simply an extension of corporations, and vice versa. Conservative lie about being against Big Government when they really just want all government resources to go to the bagman/goon functions. But they don’t want it to get smaller, only bigger. Similarly, liberals lie about the government being a counterweight to the corporations. But they also want the corporations themselves to exist. In the end, liberals also want the government to keep getting bigger, but only as bagman and goon. By now they’re indistinguishable from conservatives on policy. Then there’s the more honest and childish “libertarians” who admit the existence of the command economy and claim to want to get rid of the bagman/goon completely, in favor of a direct corporate dictatorship. The corporations themselves are more intelligent than this and want to try to maintain the facade of government. Libertarians as well usually end up supporting the Big Government bagman/goon functions.
 
What is a corporation, really? It’s clearly nothing but an artificial extension of government. Even in Dartmouth vs. Woodward, the original SCOTUS case which first invented the concept of a corporate “right” under the Constitution, John Marshall called the corporation “an artificial entity…existing only in contemplation of law.” This, what Ted Nace still calls the artificial entity theory, is actually the definition of a corporation. Subsequent “theories”: the transparent veil, the organic/natural entity, the “corporate personality”, were simply exercises in absurdity intended to Constitutionally justify jurisprudence and legislation which empowered this particular government branch over other branches of government and over the people themselves. In chapter 14 of his Gangs of America, Nace describes how even corporatist jurisprudence found these theories ultimately unusable (as explicit doctrine, though not as implicit guiding ideology) and discarded them in favor of ad hoc rationales.
 
Nace writes, “A business can exist without the blessing of government. A corporation, by definition, cannot.” As he says, this isn’t a theory, but a definition. From there it’s axiomatic that it cannot have Constitutional rights, any more than any other government body.  Here’s the extent of the rights of a corporation according to the artificial entity theory:
 

The artificial entity theory does not deny that corporations can
have some rights, but it limits those rights to the functional ones necessary
for the corporate entity to participate in the legal arena: the right to
own property, the right to enter into contracts, and the right to defend its
property and enforce its contracts in court.

Implicit in the artificial entity theory is the philosophy that legitimate
power can only emanate from democratic institutions. The theory
reflects the wariness toward corporations inherited from the colonial
period, a belief that corporations will inevitably seek power over their
legislative masters. Such fears have even older roots in traditional English
law. For example, mortmain (“dead hand”) clauses in church charters
limited the amount of land that the congregation could own, in
order to prevent the accumulation of real property in immobile corporate
hands. (p. 192-3)

 
Anything beyond this, for example the notion of a corporation having Constitutional rights, is an example of the solecism of sovereignty, a sovereign over sovereigns, a self-contradiction of the concept of sovereignty itself. We see how the exile of corporations from the text of the Constitution was indicative of how the framers recognized the corporation as too dangerous a concentration of anti-democratic power. They would not have been surprised to see the evolution of organicism, originally a liberal theory intended to create counterweights to the state, to the natural entity theory of the corporation, i.e. an extension of state power through the profit-seeking corporation, to its ultimate manifestation in fascist theories of the “corporate state”. The line of descent here is logical and, given the inherent fact of power’s encroachments on liberty wherever it possibly can so encroach, inevitable. Once again we see the inner affinity of liberalism and all other authoritarian corporatism.
 
The correct view of sovereignty is as follows:
 
1. The people and only the people are sovereign.
 
2. The people can constitute a body to incarnate this sovereignty, whatever they choose to call this body. Government is the most common term, but it can also be called other things.
 
3. Whatever its form and name, this sovereign entity cannot then create a new sovereign form which it then places prior to itself. This is a conceptual absurdity, a constitutional abdication, and a political usurpation. Yet that’s precisely what the “natural entity” theory of corporations claims: That even though a corporation is an artificial creation of government, it is also prior to the government in its rights and prerogatives.
 
We see how it’s impossible for the government to charter a corporation, thereby creating an extension of itself, and then declare this extension not only outside itself but prior to itself. Yet that’s exactly what government claims when it confers Constitutional rights on corporations.
 
We can analyze this absurdity another way if we look at the Bill of Rights, most of which have been hijacked for this fraudulent corporatist purpose. The purpose of the Bill of Rights was to restrain the tyrannical actions of government against the people. So by definition these rights are the rights of the people vs. the government. How can they also be the rights of government vs. government, which is the way we have to view such notions as “corporate free speech”?
 
In practice, such “rights” are in fact still meant to be the same government vs. the people, but with the tables turned. In its corporate form, the government is now represented as the victim of the people, which needs to have its rights protected against the people. It’s actually the criminal minority which needs protection of its “rights” against the democratic majority. Once again we see the fundamental malevolence of the ideas contained in Madison’s Federalist 10 and 51. That’s what’s really going on with the campaign to invent corporate rights under the Constitution.
 
What’s the real relationship of rights and corporations? What’s the answer when a corporatist demands to know, “Can the police search corporate premises without a warrant?”, as Greenwald and others did in defending Citizens United and the concept of corporate speech? The answer is that a corporation is in the same position as any other government entity. Does the IRS or the FDA have “rights”? What happens if the FBI wants to conduct a search of another government premises? Whatever the procedure, no one claims it must recognize a Constitutional “right” of that government agency. The procedure with the corporate/government agency must be the same.
 
I’ll conclude with a reprise of the conclusions of two earlier posts, the first on the identity of corporations and government, the other on how to limit government and corporate assaults by limiting the government’s pro-corporate power:
 

Let’s get rid of ALL government regulation. That means all government assaults on our rights as citizens and human beings. And it means eradicating big corporations and all the regulations and taxes those corporations impose upon us.

1. Corporations are artificial creatures of the government. So by definition they are extensions of the government, and all corporate power is laundered government power. Every regulation and tax a big corporation inflicts upon us is really a government regulation and tax.

2. Corporations directly write or implicitly dictate all government laws, regulations, and taxes anyway. So any direct government regulation or tax is being imposed upon us by the big corporations.

So however you look at it, whether you approach it from the “left” or the “right”, whether one’s preferred mode of thought and expression is anti-corporate or anti-government, either way it comes down to the same thing.

This is one tyrannical nexus of regulation and taxation, corporate and government, all of it purely predatory and parasitic. The only answer, the only way forward, is to rid ourselves of this evil nexus in all its manifestations…..

The radical extension of government’s contract power as well as the radical extension of its initial arrogation in empowering corporations in the first place are expressions of Big Government at its most aggressive. How ironic that it’s the self-named “libertarians” who have been the most fervent ideologues of this radical, aggressive Big Government, and all these aggressive interferences in the market. (There’s no such thing as a “free” market, but there are certainly more or less free markets. A market where government interferes to create corporations is a market greatly distorted by Big Government action.)

So there’s a basic principle and practical outline for policy advocacy.

1. Limit corporations by limiting government, and limit government by limiting corporations.

2. The most simple and far-reaching solution: Abolish the government power to create corporations in the first place.

3. Short of that, the basic concept is to limit the contract recognition and enforcement power to the kinds and magnitudes of contracts which are in the public interest.

March 15, 2011

Arcs of Revolution and Reaction (Bahrain, Libya, Tunisia)

 

At the moment it’s looking bad in Bahrain and Libya. Although the force of freedom is undeniably on the rise, as demonstrated by this great wave of rebellions, this may be a long, ponderous curve. In the meantime, the forces of reaction are retrenching.
 
In Libya, Gaddafi’s counteroffensive is gradually engulfing the country, crawling eastward toward the rebel stronghold at Benghazi. Yesterday loyalist jets bombed the transportation hub at Ajdabiya, which the rebels call the last line of defense. From there the roads to Benghazi and Tobruk are wide open. “We will defend it”, vowed a rebel commander.
 
Meanwhile there are dueling reports over the disposition of the oil town of Brega. The rebels had held it, regimists retook it, then the rebels claimed they captured it back. As of now (Tuesday morning EST) both sides are claiming to hold it.
 
It seems like in the initial confusion and exhilaration of the uprising, it was difficult for Gaddafi to know which forces were reliable, and it simply took time for generals loyal to him to muster the forces they could vouch for and then launch a coordinated counteroffensive. Unfortunately, it now looks like the initial rebel surge was illusory. It didn’t reflect the balance of real forces. Right now the best we might be able to hope for is if the rebels can hold in the East, providing the basis for a future resumption of the drive to overthrow the regime. If they’re driven out of Benghazi, a bloodbath is likely to follow, and it’s hard to see where the fugitives can go from there.
 
(The notion of a no-fly zone seems pointless by now. Gaddafi will win or lose on the ground. It’s long been clear that his use of aircraft is more for harassment and terror value than any real military effect it may have. He doesn’t seem to have enough jets to use them for more than this. Although I suppose it’s also possible that he’s been restrained by the threat of a no-fly.
 
So the whole debate over whether or not getting help from the neoliberal system was worth the risk to the political integrity of a successful rebellion looks moot in this case. A no fly zone by itself couldn’t make the difference in whether the rebellion succeeds or fails, and I think we all agree that ground troops would merely replicate the tyrannical experience of Afghanistan and Iraq.
 
But through all this I’ve basically held the same position, that if a rebellion:
 
1. Can possibly get limited help from the West, and
 
2. Such help looks like it would be necessary make the difference between success or failure,
 
then it may be worth the risk of asking for such limited assistance as a no fly zone.
 
As I said, it looks like in this case a no fly zone would fail to meet at least the second condition, so it’s not worth risking.)
 
Libya is the relatively less important front. The revolt in Bahrain (and signs of it in Saudi Arabia itself) hits closer to the heart of the world’s power structure. Bahrain, like the UAE and Kuwait, is a post-modern City of the Plain. It’s a Persian Gulf banking center, a hedonist paradise for the corporate jet set, and home to the US Fifth Fleet, front line enforcers of the Carter Doctine, linchpin of neocon strategy. It’s a primary Saudi proxy.
 
The unrest in Bahrain and Saudi Arabia is largely along sectarian lines, with the economically and politically disadvantaged Shiites (large majority in Bahrain, significant minority in Arabia, concentrated in the oil-important eastern provinces) opposing Sunni-dominated regimes. Counter to this US –> Saudi –> Sodom-Bahrain hierarchy, Iran seeks regional hegemony and sees all restive Shiites as clients. They in turn must thread the same needle of using Iranian help without coming under its thumb.
 
I’m not sure to what extent these protestors are dedicated to economic and political demands independent of their sectarian interest. There’s been some labor unrest in Saudi Arabia where the workers made purely economic demands. But such demonstrations have been sporadic and minor. Meanwhile last Friday’s intended Day of Rage fizzled out on account of a proactive Saudi security deployment.
 
But the Bahrain uprising flared up to new heights on Sunday, as protestors defied riot police and Sunni mobs to lay siege to the capital’s financial center. This is a direct assault on at least a symbol of the neoliberal order in the Gulf. The Saudi regime again took action. At the “request” of Bahrain, redolent of Cold War Soviet invasions of Hungary in 1956 and Czechoslovakia in 1968, Saudi forces crossed the causeway to deploy across the country. UAE troops were also said to be on the way. Regime hardliners are calling for martial law under this “foreign” force.
 
This stick has been raised even as the regime is pretending to negotiate with some of the protestors. There seems to be some division among the Shiites, between a democratic group which wants to overthrow the regime and a conciliationist group willing to “negotiate”, that is beg for some crumbs (and cushy positions for its own leadership, no doubt).
 
If the GCC is determined to impose martial law (de jure or just de facto) in Bahrain and anywhere else among the Gulf Gomorrahs where protest flares up, it’s hard to see what immediate response the people can have which could counteract it. I think the best thing to do would be to directly challenge the foreign thugs just as the Egyptians challenged the riot police. It’s one thing for Gaddafi to open fire in Libya. It’ll be harder for the direct proxies of the US to invade and open fire in the West’s own pleasure cities. Not that I think it’s unlikely they’ll try to do it. But we already saw Bahrain’s own police back down after their initial recourse to savagery was met with defiance. The consistent lesson everywhere seems to be: Stand up and keep fighting back, even in the face of open state violence.
 
I’ll close today where this all began a few months ago. The Tunisian Revolution continues to develop, continues to make gains. The people’s continued bottom up pressure and continual resort to street demonstrations has forced out several generations of would-be Ben Ali successors. In the latest turnover, the provisional government has been forced to move up the timeline and enhance the scope of promised elections. The government had planned to hold only a presidential election in July. It now promises to hold an election on July 24 to elect a constituent assembly which will write a new constitution. Interim president Fouad Mebazza says a “special electoral system” will run the election. Existing dissident or pseudo-dissident parties expect to do well in this new election. There’s no word on the status of the existing parliament, where Ben Ali’s cadres still numerically dominate. It sounds like that body is superannuated and should be bypassed completely. (Much like my view of how a new constitutional convention here in the US should try to bypass the articles of the main body of the document.)
 
So there’s the state of things around the revolutionary rim, as I see them. It’s a perilous moment, and there’s an excellent chance we’ll be seeing temporary, perhaps ugly setbacks. But these setbacks are ephemeral in the great movement of history. There’s no doubt that the rising, vibrant force is one which liberates. This is the force of democracy, rising from the heart of the people. No matter what temporary forms it takes, and whatever temporary detours it may have to make, there’s no doubt about the reality of the people’s sovereignty. The modern revolution in all its economic and political aspects finally awoke this human latency and nurtured it to maturity. All of history was an evolution toward this awakening.
 
Many mistook the economic forces and forms as the real genius of the age, and in my lowest moods I too still lapse into such fears. But in fact these forms were just epiphenomenal. The true genius of the age is democracy. I often mention how all of today’s trend lines point toward feudalism. But these are only the shortest, most proximate lines, a mere fleck of turbulence amid the far vaster current. The real arc of history leans toward democracy, as all the long-term historical evidence demonstrates. That means it also leans toward justice, as MLK said, quoting abolitionist Theodore Parker.
 
It’s one of history’s great ironies that this newest green shoot of the democratic imperative is sprouting in the heart of the great classical source of oil. Oil has been the driver of all the modern economic forms, the forms so hyped or feared as having been the End of History. From that point of view, Peak Oil has also often been depicted as the end of history.
 
But Peak Oil is really just the logical exhaustion of what was always a temporary, epiphenomenal form. It isn’t the end of anything affirmative, but the clearing away of an obstacle to democracy’s further development. Democracy shall now reach maturity, and we the people shall take adult responsibility for ourselves. It’s time to remove the training wheels, which are completely rusted anyway.

March 14, 2011

Corporatism is Legalized Crime

 

As Ted Nace points out early in his survey of corporatism, Gangs of America, the worst crimes of corporations seldom involve technical breaking of the law or the personal evil of corporate executives, but the pattern of destructive anti-social activity which corporatism (and its corrupted system of “law”) enshrines in principle as normal and normative. Corporatism is in fact the ideology and practice of formally enshrined organized crime.
 
The banks recently crashed the real economy, and permanent joblessness (including the waste of life termed “underemployment”) creeps toward and over 20% according to the measure. This destruction of the basis of our lives is a calculated, intentional corporate-dictated policy. Today we see quarter after quarter of corporations reporting record levels of “profit”, building up record cash hoards, and their executives personally looting these corporate hoards in the form of “bonuses”. All this even though the original stated purpose of the Bailout was to get liquidity circulating again. Today, not only does the government tolerate what’s obviously fraudulent accounting, disaster profiteering, and the obstinate refusal of corporate elites to live up to the terms of the Bailout. (I include all corporate sectors among the bailed out, since the bankster and government allegation was that all sectors would perish unless the TBTF banks were bailed out, and no other sector dissented from this, because they all expected the Bailout to trickle down to at least their own stock prices and exec comp.)
 
Not only does it do this, but it proclaims that this “jobless recovery” is in fact the real recovery they intended all along. Thus we have the same history as in Iraq: The initial rationale is proven to have been a Big Lie. The government then starts inventing new rationales ad hoc, temporarily proclaiming victory according to each, until forced by reality to move on to the next, further attenuated rationale and metric.
 
So we have Sodom-like corporate profiteering as the real economy continues to deteriorate, indeed in inverse proportion to the rising calls for “austerity”, that public amenities and civil society need to be gutted because there’s not enough existing wealth to support them.
 
Corporate profiteering and personal looting by executives, vs. austerity. This ratio is a direct metric of organized crime. It’s nothing but monumental, capital crime. Corporatism is the system of command economy, and trickle-down is ideology meant to justify it. But corporatism is nothing but robbery, and trickle-down nothing but the verbal part of fraud. Advocacy of it abets capital robbery. This incriminates both Washington gangs, the entire MSM, most of academia, and conservatism and liberalism as a whole.
 
In a formula:
 
Capitalism = corporatism and trickle-down = organized crime.
 
This is not a new kind of corporate behavior. Privateering, the formal charter to commit crimes, goes back to the 16th century, the dawn of the corporate form. Corporations were envisioned in the first place to help enable “violent crime grafted onto trade”, as Nace put it. The very term “free trade” originally referred directly to freedom from the law. Or as Hannah Arendt wrote in Origins of Totalitarianism, legalized gangsters sought to use politics to regulate their bloodshed. The British East India Company’s violent lawlessness is exactly mirrored today in the form every sort of corporate thuggery and the way corporate crimes are generally considered above and outside the law. Blackwater, explicitly declared above the law and granted a charter to literally perpetrate massacres, is merely the distillation of the way every large corporation is empowered to act, and the way they usually do act. Indeed, in principle this is the way they are required to act according to the core principle that profit-seeking is the only acceptable value. (The question of what kind of sick society would ever have enshrined such a sociopathic form in the first place I’ll leave for another time. But I’ll say here that the very existence of profit-seeking corporations reflects a self-loathing and self-destructiveness on the part of civilization itself.)
 
Today’s “free trade” has exactly the same criminal nature, but the term has been sanitized to refer to an economic theory rather than a legal concept of chartered outlawry.
 
Today it’s true in a precise sense that corporations are formally legalized criminal organizations. Take for example the repeal of the bucket laws, which used to recognize gambling as gambling whether done over dice in a back alley or stocks on an exchange. A bank couldn’t ask the state to enforce a wager any more than a two-bit hood. But these sane laws started being repealed in the 1980s. The process culminated in the CFMA in 2000. Now what was naturally unproductive antisocial gambling was legalized as a “contract”. The result was massively bloated bank profits and hideous distortions of the economy, climaxing in the crash of the real economy. (This is the intended culmination of financialization itself.) The crash was then used as the pretext for the Bailout and austerity. This entire process was premeditated and had its origin in the legalization of what are naturally outlawed acts. The massive conspiracy, dating back to the 90s, to fraudulently induce mortgages was enabled by this original legalization. And the rest of the crimes were piggybacked on these.
 
This is both the most extremely destructive and the most typical of the formal legalizations of organized crime which are bound up in the corporate form. While many of the subsequent crimes may still technically be illegal, they were enabled by the underlying legalization of gambling. (And once the government has been corrupted enough, even existing laws are no longer enforced, as we see every day. This is simply the de facto legalization of corporate crime.)
 
Yet today most people fail to see this. The magnitude of the crime, and the government imprimatur accorded it, is such that it becomes hard to register. Pro-corporate propaganda and indoctrination reinforce this self-obfuscation. This is what Hitler intended with his doctrine of the Big Lie. (This same magnitude of crime enabled by the hijacked law and corrupted polity also renders it impossible for the existing system of law to rein such crimes back in and impose any deserved justice. When the day comes that the people finally take back their country from such criminals, nothing short of a Nuremburg-level proceeding is sufficient to the task of justice.)
 
So we have a regime where responsibility for every crime, the robbery of trillions, international murder, slavery, the ravaging of the environment, conspiracies against plant genomes, and anything else profitable, are either directly legalized at the corporate behest or else laundered through the corporate form and dissolved.
 
All this is within the prescribed use of corporations. These are not “abuses”.
 
Here’s another example. Corporations serve as the underlying for the stock market. The stock market has a fraudulent basis in the first place, since only the first offering actually raises capital. The rest is just the same legalized gambling. It has never been anything but socially and economically destructive. And by what reality-based measure does stock price reflect value at all? Yet once you enshrine it as the most important measure of value, control fraud becomes ideologically justified. From there the next step is to change the law and/or regulation itself. Again, organized crime becomes legalized.
 
One of the ways the law gets changed is through pro-corporate SCOTUS decisions, like the recent one striking down most of the enforcement potential* of the “honest services” law, which was a modest attempt to retain some criminal liability for the most egregious executive fraud. This is just one example of how corporate power has corrupted our institutions, that even in the rare cases where the legislative branch tries to do part of its job, the judiciary blocks it.
 
[*In my previous corporatism post I referred to the double standard of law and jurisprudence enshrined by the SCOTUS where it comes to corporate speech. Corporate speech “rights” are interpreted extremely loosely, while at the same moment, in the same cases, corruption is interpreted with extreme pedantry. If there’s not a physical sack with a dollar sign drawn on it, it’s not corruption.
 
The SCOTUS just applied this same strict standard of “corruption” in the honest services case, declaring that the law is constitutional only where applied to explicit kickbacks and such. Obviously, this is meant to gut the law in practice, since today’s corruption is generally more sophisticated than that. But SCOTUS jurisprudence is designed to let all implicit corruption elude accountability.]
 
We’ll soon find out what’s the latest from the SCOTUS on unconscionable contracts of adhesion, extortionate “contracts” forced upon us through the coercion of monopoly and artificially created economic hardship. These strong-arm contracts are increasingly popular, and are imposed anywhere the corporations attain the position of dominance which enables them. In theory such contracts, just like gambling, are supposed to be unenforceable, uncontracts. But here too the SCOTUS has usually served as the corporate goon. The Lochner era was based upon the legalization of “contract” extortion, and although the court nominally abandoned this doctrine in 1937, in practice courts almost always still find such contracts valid. In the case of AT&T vs. Concepcion, AT&T’s thefts were so outrageous that the lower courts found the contracts it imposed, forestalling its victims to combine to sue as a class, to be unconscionable. But this will be the SCOTUS’ big chance to restore Lochner as official court doctrine. 
 
Meanwhile government contractors, starting with the weapons rackets, are implicitly encouraged to bilk the taxpayer out of billions. By now it’s not conventional corruption but systematic corporatist robbery, with the DoD and other agencies as bagmen. Robert Gates once explicitly told an audience of weapons racketeers that where it comes to the military Obama’s top priority is an ever-escalating Pentagon budget as such, as a value in its own right.
 
Those are just a few examples of systematic corruption, i.e. organized crime. The term kleptocracy should be understood in a profound way. Corporatism comprises a new paradigm of criminal practices, and the pro-corporate mindset is a characteristic, immutable criminal mindset. It’s not just a set of criminal actions, but an indelible criminal essence. It’s the mindset that we can no longer exist at all without being totally controlled by corporations, having all we produce monopolized and stolen by corporations, and submitting at every moment to corporate imperatives even in our very thoughts. The elites, for obvious reasons, believe this themselves. The system they’ve set up is dedicated to enforcing this corporate totalitarianism from the top down. The corporations themselves have no purpose at all except to preserve and intensify this kleptocracy, and to keep stealing.
 
But we know that we don’t need corporations to have a vibrant, productive economy. We know we’d be far more productive without them. Without them we would restore our prosperity, our communities, our social morality, and our democracy. The only thing in the way of our redeeming our humanity and saving our lives and freedom are a few gangsters, organized as big corporations. The corporate form is what enables this in the first place. Let’s abolish it. 

March 12, 2011

Chernobyl in Japan?

Filed under: Dance of Death, Scientism/Technocracy — Tags: — Russ @ 5:24 am

 

I can’t tell how bad it is yet, but after dire news of how officials at the Fukushima Daiichi plant in Okuma were trying to stave off a meltdown, we’re getting reports of an explosion inside the plant.
 
Here’s the text of two e-mail alerts from Stratfor:
 

Red Alert: Japan Warns of Possible Nuclear Meltdown
March 12, 2011

Japanese officials are cautioning that a nuclear meltdown may occur at the Fukushima Daiichi nuclear power plant near the town of Okuma. According to Japan’s Jiji Press, some of the reactor’s nuclear fuel rods were briefly exposed to the air after the reactor’s water levels dropped through evaporation. A fire engine is currently pumping water into the reactor and the water levels are recovering, according to an operator of the Tokyo Electric Power Co. (TEPCO), which operates the plant. A TEPCO spokesman said the company believes the reactor is not melting down or cracking and that workers are currently attempting to raise the water level.

If a meltdown takes place — essentially the core of the reactor overheating and damaging the fuel rods themselves — it would be the first since the Chernobyl disaster in 1986 and the Three Mile Island incident in 1979.

Red Alert: Explosion Reported at Japanese Nuclear Plant
March 12, 2011

An explosion occurred March 12 at the Tokyo Electric Power Co.’s (TEPCO) Fukushima Daiichi nuclear power plant in Okuma, Japan, Japanese news agency Jiji reported, citing local police. Reports of an explosion and smoke come after Japanese officials cautioned that a nuclear meltdown was possible. Officials at the plant had reported that part of the reactor core was exposed to air for a brief moment and that they were attempting to raise the water level to continue cooling the reactor. Officials later stated that steam was vented from the power plant to release the pressure built up by evaporating water. If an explosion occurred, it would indicate that the additional water pumped into the reactor has been unable to stave off the meltdown reaction inside the reactor core and that the plant is experiencing a far more serious crisis than initially reported by the Japanese authorities.

 
Here’s the latest from Al Jazeera.

March 11, 2011

Corporations Are Anti-Democratic

 

Lewis Powell’s 1971 strategy memo for a renewed corporate assault on democracy included the call for corporations to subvert the polity by using their wealth to become the dominant political speakers themselves. The plan was to directly buy the government, which would then destroy democracy and politics from above.
 

But one should not postpone more direct political action, while awaiting the gradual change in public opinion to be effected through education and information. Business must learn the lesson, long ago learned by labor and other self-interest groups. This is the lesson that political power is necessary; that such power must be assidously (sic) cultivated; and that when necessary, it must be used aggressively and with determination — without embarrassment and without the reluctance which has been so characteristic of American business.

As unwelcome as it may be to the Chamber, it should consider assuming a broader and more vigorous role in the political arena.

 
The tried and true weapon of corporate constitutional “rights” would be helpful here.
 

Neglected Opportunity in the Courts
American business and the enterprise system have been affected as much by the courts as by the executive and legislative branches of government. Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change…….

This is a vast area of opportunity for the Chamber, if it is willing to undertake the role of spokesman for American business and if, in turn, business is willing to provide the funds.

As with respect to scholars and speakers, the Chamber would need a highly competent staff of lawyers. In special situations it should be authorized to engage, to appear as counsel amicus in the Supreme Court, lawyers of national standing and reputation. The greatest care should be exercised in selecting the cases in which to participate, or the suits to institute. But the opportunity merits the necessary effort.

 
Powell himself was soon on the SCOTUS, leading an ecumenical (conservative and liberal) charge to empower corporate rule. The big modern breakthrough was Buckley v. Valeo (1976), which said, in a nutshell, money = speech, for constitutional purposes. There we’re already at the end of any democratic or political principle. It’s on the same ideological wavelength as Lochner (by definition a contract is 100% voluntary, and there’s no such thing as economic coercion) and Law and Economics (law should directly calculate what would be in the interest of the biggest property-holder and support him). There can be no debate with a proposition like “money = speech”; it’s the direct enshrinement of corruption, bribery, extortion. The ideology I sketched in this paragraph is nothing but the ideology of kleptocracy in the most literal sense. (I discussed in an earlier post how by definition corporate speech has to seek political corruption. If it didn’t, it would be a dereliction of the duty of corporate management to shareholders.)
 
(If one wanted to say that as long as concentrated wealth exists it would be somehow “unfair” or at any rate unworkable to not give it special rights, then the answer must be to dissolve the wealth concentrations. But it’s absurd and malign to say that because Might exists, it has to be declared Right in principle. So long as Might has the prerogative of its strength, it will do what it wants. But that’s no reason for human beings to submit in their souls and collaborate to the extent of calling it anything but criminality. If the system was too corrupt and cowardly to condemn corporate power and the power of concentrated wealth as crime, then that means we must include the system in the condemnation. The anti-democratic work of the SCOTUS simply proves the SCOTUS has no legitimacy.)
 
As usual the SCOTUS moved incrementally. Buckley applied to human candidates buying elections for themselves. Two years later in First National Bank of Boston v. Bellotti the court extended political speech rights to corporations. Soon there would be a menagerie of cases refining this fraudulent corporate speech right, always in the corporation’s favor.
 
How did the SCOTUS justify legalizing corruption? Is this strict or loose jurisprudence? Activist or passive? The answer is that it’s all of these at the same time, by design. The SCOTUS set up a heads-I-win-tails-you-lose double standard for its interpretations. As Ted Nace describes (chapter 13, p. 185):
 

These decisions placed two serious obstacles in the path of campaign
finance reform. First, the Court interpreted very broadly the connection
between corporate political spending and free speech, thus
setting a high constitutional bar in front of any efforts to restrict political
spending. Second, the Court interpreted very narrowly the issue of
corruption, making it difficult for reformers to use systemic corruption
(as opposed to direct favor trading or quid pro quo corruption). Together,
these two obstacles have drastically narrowed the ability of state
and federal legislatures to deal with the overwhelming influence of
corporate money in the political process.

 
Just as with the original whack-a-mole of justifications for corporate rights in themselves, so with the newly invented corporate speech right, and “speech = money” in general, the corrupt courts had to keep dodging and weaving and spinning and distorting in order to prop up a jurisprudential rationale at all, while they had to keep issuing often mutually contradictory decisions. Thus the proclaimed First Amendment rationale in Bellotti was to maximize the amount of speech available to the public. (I’ll leave aside for now how empowering money directly contradicts this rationale, but I discussed it further in my post on constitution and process liberalism.)
 
But it wasn’t long before the predictable result was in: Corporate money was drowning out non-corporate speech. Now some locales enacted regulations intended to maximize speech (the court’s own rationale) by piggybacking it on corporate speech. For example, the California Public Utilities Commission required the monopoly utility to include conservation materials with its bills. A clear cut case of leveling the speech playing field and increasing the amount of information available to the public, right?
 
But now it was the corporation who balked at speech. Suddenly maximizing speech was bad. The SCOTUS was eager to please. In Pacific Gas and Electric v. Public Utilities Commission (1986) it invented a brand new corporate right, “negative free speech”. The corporation cannot be “forced” to associate with speech of which it disapproves, even where it exercises a monopoly, even where that monopoly has been explicitly enshrined by government. The court found that a corporation, alleged bearer of First Amendment rights insofar as those rights serve to maximize speech, can deploy the same right to stifle speech wherever it chooses. Suddenly, without warning, maximizing speech was no longer the court’s rationale.
 
If there’s to be negative free speech, isn’t the prior speech right that of democracy itself? The formula should run: A law or rule restricting corporate speech = democracy not wishing to be associated with predatory corporate speech.
 
So what was the new SCOTUS rationale? Although not formally elucidated, it boils down to: Corporate management decides (Nace 200) what level and kind of speech the public should receive. The courts should validate these decisions, and state legislatures must not interfere with them. (Citizens United extended this to the federal government.) We see again the Law and Economics style of calculus, the refined neo-Lochnerism.
 
With this radical anti-democratic, anti-political result, we see the culmination of two major threads of the corporate coup going back to the postbellum 19th century: The extension of corporate rights (redistributing power from democracy to corporations) and the shift of power from shareholders to management within the corporation.
 
As Nace put it (p. 202)
 

Like a myopic Dr. Frankenstein, the Court had worked piecemeal
and haphazardly, grafting a finger here, an eyebrow there, until the result
was a full-fledged legal super-person. Yet only sporadically, in dissents
interspersed across the decades, was there an explicit recognition
that the cumulative impact of its decisions was to tie the hands of legislative
bodies seeking to control corporate power. In general, the Justices
displayed no awareness that the Supreme Court’s creation of a corporate
bill of rights amounted to an immense transfer of power from democratic
institutions to private ones. The process was not driven by any
overarching theoryto this day, the Court has yet to lay out any consistent
rationale to support its creation of the corporate bill of rights. On
the contrary, the process has been muddled and blurry, a perfect illustration
of the Orwellian ability of large, unaccountable institutions to bend
even ordinary language into a tool to serve their own needsthe gravitational
force exerted by power. Far from laying orderly tracks, that
force of power seemed to operate between the cracks of reason, leaving
in its wake only muddled, blurry traces.

 
And as we saw in discussing the reality of the “transparent veil” concept, this “corporation” is nothing but a gang of regular people, convened to commit crimes, and receiving a special charter to do so with impunity.
 
Clearly, for Powell and the SCOTUS, and for all corporatists, the right decision and result is by definition the pro-corporate one, and then they invent an ad hoc rationale for it.
 
We anti-corporatists, on the other hand, are always consistent in our correct appeal to the authority of:
 
1. Common sense and the simple morality of democratic principles.
 
2. The actual history of the American Revolution.
 
3. The text of the Constitution.
 
4. The empirical evidence of all subsequent history.
 
The enemy has nothing to back them up but their criminal greed. 
 
This combination of the monstrous concentration of sociopathic corporate power in itself, with a government which has worked assiduously to abdicate its own claim to embody sovereignty in favor of becoming corporate bagman and hired goon, has brought our politics to endangerment of becoming extinguished forever. It will be the death of democracy unless we fight back with a new vision for a redeemed and expanded democracy. This is the affirmative need.
 
On the negative side, we must abolish corporations, which are inherently anti-democratic and anti-political, and a clear and present danger to democratic institutions in practice and in principle.

March 10, 2011

Corporations Are Anti-Sovereign

 

The real civil war began during what we call the Civil War, which was only a part of the vastly bigger whole. The real winners of the Civil War were those who used it to win their first big victories in the more ponderous civil war which is only today reaching its climax. These winners were the corporations, and their victories included the mutually reinforcing and procyclical arrogation of pseudo-constitutional “rights” (through rogue courts), unlimited powers, and absolution from practically all responsibility (through courts and state legislatures).
 
This corporatist onslaught has been, since its beginning, anti-sovereign. What is sovereignty? It is the inherent right and prerogative of a civilized people to rule itself, and dictate all the forms and conditions of the institutions it sets up to carry out this rule. This right is postulated, since we know all other derivations of right are fraudulent. One must, in principle, either accept democratic sovereignty or oppose civilization itself. It follows that legitimate power can exist only insofar as it’s deployed through a sovereign form. Any power exercised by any other entity is simply brute state-of-nature force. Such an entity is nothing but a bandit gang operating out of a cave in a swamp, no matter how much it embellishes itself with fraudulent ideology and the trappings of pseudo-authority.
 
In principle, a profit-seeking corporation – sociopathic and anti-democratic by definition and in practice – is an affront to sovereignty. A government which fails to restrain such corporations, which on the contrary sees its role as to empower and aggrandize them, is not bestowing sovereign legitimacy upon them. On the contrary, it’s abdicating any sovereign legitimacy it may have had itself. So the crisis of corporate legitimacy always forces a crisis of government legitimacy as well. (This is in addition to all the other reasons we have to reject this kleptocracy’s legitimacy.)
 
Corporate ideologues have tried to turn this order upside down. They used 19th century theories of organicism and the Natural Entity, along with intentionally sowed confusion between corporate personhood (a technical legal/constitutional status) and corporate personality, the broader ideology regarding who or what juridically exists in the first place. Using these they tried to assert that corporate sovereignty was actually prior to government sovereignty, which would not only forestall government’s right to limit the essence and actions of corporations, but would justify the corporatist bagman-and-goon theory of government.
 
This is absurd on its face and really just calls into question the legitimacy of the state as well, rather than conjuring legitimacy for the corporation. Since sovereignty reposes in the people, only the state could possibly be the legitimate form of this sovereignty. (I’m not saying it ever is legitimate in practice; I’m saying only it could ever be legitimate in principle.) By definition an institution which embodies sovereignty must encompass all the people within the sovereign body (which we can take to mean, a logical area defined by geography, nationality, or some such elemental measure; for now it often also means the existing technical boundaries of countries, however arbitrary these usually are) as citizens, and it must do so toward the goal of their human well-being.
 
A profit-seeking corporation, on the contrary, is dedicated only to profit and property, and recognizes as its equivalent of “citizen” only those who own property and/or are engaged in profit-seeking behavior. Therefore, by definition it cannot be sovereign, only anti-sovereign.
 
The corporation also runs afoul of what was classically called the solecism of sovereignty. This was also called the fallacy of imperium in imperio, “sovereignty over sovereigns”. What it means is that sovereignty can never be divided against itself; this is a conceptual absurdity and can only bring chaos in practice. During the American Revolution the British and their loyalists accused the colonists of this fallacy, when the colonists tried to claim that the King but not Parliament was sovereign over them. (That was prior to declaring complete independence.)
 
It’s easy to see that the British were wrong, since there was no logical reason King or Parliament could be sovereign or should exercise any power at all over people on the other side of the world who were economically self-sufficient. (The colonists were therefore wrong as well so long as they tried to figure out concepts which could justify flouting Parliamentary authority but still recognize British sovereignty at all. Finally they accepted the absurdity of this and declared independence.)
 
But it certainly is true that a corporation asserting rights against its creator (the government, and indeed the people themselves) is a logical impossibility. (It’s the same if government claims “rights” against the people. We can see how backwards most of the language and concept of the Constitution are.) In the original SCOTUS case which first claimed to discover corporate Constitutional rights, Dartmouth vs. Woodward, John Marshall still admitted that a corporation was “an artificial being…existing only in contemplation of law”, but he proceeded to find that a 1769 dictate from King George himself had sovereign authority, and that a corporation could now argue this sovereign right against the government. This is a clear example of the solecism. But thanks to that case the corporation could now claim incorporation itself as a “property right”. (Too bad nobody had ever put through a revolution to purge the notion that George had sovereignty to dictate to us. Oh, wait….)
 
(Before proceeding, I’ll mention that in Federalist 20, in the course of arguing for a strong federal government which would act directly upon individuals without any mediation of the states (this was argued by the “anti-federalists” to be a usurpation of state authority), Madison declared that the real violation of state sovereignty would be if the federal government were to undertake “a legislation for communities as contradistinguished from individuals”, that is if it held states collectively responsible for individual violations of federal law. He said this would constitute the real solecism, the real “sovereignty over sovereigns”.
 
But transposing this to corporate charters, since the state government generates this alien corporation and this corporate form of “sovereignty”, formally enshrines it as a collective sociopath, isn’t this “legislation for communities”? Technically the government places the corporation outside of sovereignty and then invites it to treat the sovereign people as a prey.)
 
The inadequacy of recognizing corporations as being artificial, created by government and dependent upon it, while still trying to argue their “right” was obvious, and ideologues were soon looking for new rationales. The theory of a corporation as a transparent veil between the government and society on one hand, and management and shareholders on the other, held that the corporation is really nothing more than these persons themselves, with a mere veil subtly obscuring their countenance. This had practical use for trying to justify the doubling of rights and shedding of responsibilities for corporate cadres, since the corporation was then held to be indistinguishable from the actual persons making it up. Yet because they were corporatists they were also supposed to get double the rights and license to run risks and commit crimes with personal impunity.
 
But this theory as well could give no reason why these groups of people, transparently veiled or not, should be able to claim special rights and privileges at the expense of government and society. Indeed, by highlighting how a corporation is nothing but a gang of flesh-and-blood criminals who have unaccountably received a special charter to assault the society and the body politic, the theory called attention to questions like: Why should we allow corporations to exist at all? And it underlined the fact of their anti-sovereign nature.
 
How can anything other than the people themselves and any government they constitute be considered to have an unlimited lifespan? And how can any individual be officially placed above/outside the law by being granted the special license of limited liability? (This is most characteristic of corporations, but it’s spread to government officials as well, who are now granted all sorts of immunities beyond the most basic ones listed in the Constitution. I think it’s obvious that any immunity not strictly written into the Constitution is invalid.) The very concept of corporate chartering is a basic democratic government function, so any government relinquishment of this power by granting general incorporation, “for any purpose” incorporation, infinite lifespan, removing restrictions on activities, ownership, mobility, size, etc., are abdications of sovereignty.
 
Given the conceptual problems with this “transparent veil”, how it cannot justify anything but only tendentiously describe it, ideology moved on to the Natural Entity theory, derived from the “organicism” of German liberal* theory, which I mentioned above. This upside down mirror image of the real nature of corporations could be convincing to those who wanted to be convinced. In practice, it was grafted to Social Darwinism and used to justify the most barbarous notions of Might Makes Right. As enshrined in the Lochner case, the theory simply asserted that corporations had a prior sovereignty claim vs. government in principle, so that government action to restrict corporate contracts was by definition invalid. With its interfusion of Social Darwinism it asserted that profiteering was by definition the highest human activity. Putting them together, ideologues and supportive judges found that government, and by extension democratic society, had no authority to restrict profit-seeking activity, however destructive of society or democracy.
 
[* How cute that the same conservatives who are so quick to pounce on any suggestion that American constitutional law should ever pay attention to the laws and theories of “foreigners” derived one of their most cherished ideological tropes from 19th century European liberals, of all things.]
 
The main problem with this as a theory of Constitutional jurisprudence is that it was obviously unconstitutional. If the Constitution had intended any of these radical propositions, it would have said so. But on the contrary, it implicitly denigrates corporations as such and rejects organicism by recognizing only the federal government, states, and the people. (If we really wanted to enshrine corporatism we’d have to rewrite the Constitution including a new Bill of Rights defining the rights of corporations and the rights of people vis corporations. The fact that no corporatist wants to do this proves their bad faith and tyrannical intent. They know democracy would never embrace such a plan, so they stick with their anti-constitutional coup. But the facts remain facts: Under this Constitution, corporatism is illegitimate. If democracy really wanted to constitutionally meld government and corporations into this quasi-command economy, that economy would have to be Constitutionalized.)
 
(Again, where’s our stalwart Constitutional “originalists” on this one? Out to lunch with their corporate pals, where else?)
 
Eventually jurisprudence would reject proclamations of any particular theory of corporate sovereignty or rights, and simply proceed in an ad hoc manner, justifying pro-corporate findings in any convenient way. But the underlying anti-sovereign ideology remained. The main trend of 20th century legal personhood theory continued to define a legal person as anything which seeks profit and owns property. (A more recent manifestation is law and economics, which without any further fuss would simply perform an economic cost-benefit analysis and then apply the law based upon how it maximizes the benefit for the propertarian. This is also the basis of the “reasonable person” standard which denies the existence of coercive capitalism and from there finds any victim of it to have been “unreasonable” and therefore actually his own victim, from the law’s point of view. A typical example is if your boss orders you to do something unsafe, and you’ll be fired if you refuse. If under that duress you comply and are injured and file suit, a Law and Economics judge would deny the existence of the economic coercion, decree that a “reasonable person” would have refused the order, and find you the victim of your own reckless unreasonability. This is nothing but a resurrection of Lochner but with a new spin.) 
 
Today we confront the ultimate totalitarian manifestation of this ideology and the institutions based upon it, globalization. The “free trade” treaties like NAFTA, “the law of the land” according to the Constitution, comprise a global anti-constitution. Their only content enshrines corporate license and prerogative at a level far above national governments and laws. Democracy and civil society have no place at all in this system. The “treaties”, written by multinational corporations, peddled by corrupted bagman/goon governments, and forced upon all other countries, are nothing but laundry lists of anti-sovereign usurpation and incitements to governments to set up administrative “free trade zones”, designed after the Nazi General Government of Poland, whose secession from law and civil society are then to be extended to encompass the entire “country”. At that point sovereignty would be completely obliterated and replaced by direct corporate rule.
 
The provisions are set up to encourage corporations or their goon government proxies to file lawsuits against any manifestation of sovereignty or democracy anywhere which could hinder the profit-seeking imperative, which is the only one recognized by the globalization structure. (The same imperative which is the only one recognized by the “legal personality” regime.) The suits are heard by unelected, unaccountable secret tribunals staffed, as are the globalization cadres themselves, by corporatists who come in through the revolving door. Suits have been filed against the US, Canada, Mexico, and many other governments. The very threat of such suits has a stifling effect on democracy.
 
While the WTO is relatively backward in having governments sue other governments on behalf of corporations, lateral agreements like NAFTA are more advanced in having the corporation directly sue the offending democracy. If it was deranged to allow domestic corporations to sue for rights against the government that created them, how anti-sovereign is it to allow alien corporations to sue a government? Perhaps the most telling fact is that under NAFTA and similar “treaties”, an alien corporation actually has more rights against a sovereign people than a purely domestic one not involved in global commerce and therefore not eligible for the powers of the Treaty.
 
This perversion of sovereignty is the terminal manifestation of how so-called foreign policy has always been the mechanism by which anti-democratic and anti-federalist subversion has been innovated “elsewhere” and then brought home to subvert domestic democracy. In the next post I’ll discuss the corporate assault on democracy and politics itself more thoroughly.

March 9, 2011

Corporations Are Sociopaths

Filed under: Corporatism, Law, Reformism Can't Work — Russ @ 9:11 am

 

Sociopaths are people who are completely devoid of any sense of empathy or caring. Other people simply don’t exist other than as things to be manipulated and consumed, with no more emotional consideration than when you unwrap a candy bar, throw out the wrapper, and devour the calories. Everyone regards such individuals with horror, except where it comes to business and politics, where suddenly the existence and tolerability, even desirability, of sociopathy becomes controversial.
 
I’m not writing about this sociopathy of the elites themselves today, or about the bizarre collective sociopathy of masses which often exempts, accepts, and celebrates it. Such issues, however, do go toward the general critique of representative government in itself, and from there to elitism in itself. (I define the term elitism as the tolerance of or desire for the existence of hierarchical elites, especially in politics and the economy.)
 
What I want to briefly lay out here is the fact that corporations are inherently sociopathic. By their intrinsic design and imperative they must aggressively and relentlessly seek to sociopathically manipulate and consume. We’re all familiar with the corporation’s legal duty to maximize profit at the expense of all other values. Henry Ford was successfully sued by his shareholders for trying to overcome the inherent contradiction of capitalism by paying his workers a wage sufficient to sustain themselves as consumers. While there’s some question of how far this duty extends in principle, in practice it’s always interpreted to mean that corporate management, no matter what its subjective view of things, should always be doing every legal thing it can, no matter how morally evil it may be. Where an evil would be illegal, the corporation’s duty is to get the law changed. In practice the corporation should always be pushing the envelope where it comes to bribery and extortion. And even every other law is supposed to be broken if management thinks they can get away with it or make some patsy take the fall. So in the end the barrier of legality isn’t supposed to exist either.
 
For the persons involved, where they aren’t actively evil themselves, we have what Arendt called the banality of evil. She was talking about how “normal” people easily slid into the Nazi routine as officials, bureaucrats, functionaries, or just people doing normal jobs. Today, as corporations consistently commit all the same crimes of territorial aggression, robbery and mass murder (so far the murders are mostly in poor countries like Nigeria and Nicaragua), it’s even easier for the individual to be banally evil in his actions, since here it’s not an overtly hateful, belligerent political organization and regime, but merely a profit-seeking business, and we’re all acculturated to assume such activity as the social norm. Those who “work for the corporation” are further indoctrinated and acculturated to accept this as normal, even if a particular corporate culture doesn’t go out of its way to do this. The corporation eventually comes to select for those who are naturally sociopathic. It also must subvert the educational system itself, hijacking it toward the corporatist agenda. This helps maximize both the prosperity of natural sociopaths in their student careers, as well as the indoctrination of the rest. As sociopathy in the schooling, in the media, in the imagery and discourse of society at large, and in the corporation itself becomes ever more refined, it is eventually distilled to actual psychopathy.
 
No one has responsibility, as Ted Nace describes (chapter 14, p.203):
 

A corporation is a complex entity, not a unified mind. As Adolph
Berle and Gardiner Means pointed out in The Corporation and Private
Property, the essence of a corporation is the fragmentation of accountability
among various internal groups. Those who occupy the key leadership
position (the professional managers) aren’t necessary its owners;
those who are owners (the stockholders) are generally neither in charge
nor legally liable; and those who are supposed to be exercising strategic
direction on behalf of the owners (the board of directors) are rarely sufficiently
informed nor sufficiently empowered to actually fulfill their
theoretical function.

 
So we have this machine which not only doesn’t care what it does, but is programmed to systematically destroy society. It has a legal mandate and in internal cultural imperative to do this.
 
The other broad aspect of corporate sociopathy is the way the corporate concept is designed to separate rights and responsibilities. The policy of limited liability, civil and criminal, overtly and in principle seeks a sociopathic imbalance of rights vs. responsibilities. Where the corporation itself gains fraudulent rights, this is procyclical with the way legislatures and courts add to its powers and shed its responsibilities. A goal of corporatism is to legalize crimes where committed by individuals acting in the capacity of corporate cadres.
 
Nace quotes political commenter Arthur Miller (p. 96):
 

As with constitutional law, so with the private law of contracts, of property, and of torts. Judge-made rules in those fundamental categories had the result of transferring the social costs of private enterprise from the enterprise itself to the workingman or to society at large. Tort law provides apt illustration. Under its doctrines, a person who willfully or negligently harms another’s person or property must answer by paying money damages. The analogue of contract, which is a consensual obligation, a tort is a nonconsensual legal obligation. Who, then, bore the costs, in accidents and in deaths, of the new industrialism? Not the businessman. Not the corporation. The worker himself. (Often those workers were children.) And who bore the costs of pollution and other social costs? Society at large. How did this come about? In tort law judges created doctrines of “contributory negligence,” “assumption of risk,” and the “fellow servant rule,” all of which served to insulate the enterprise from liability. By “freely” taking a job, said the judges, the workers “assumed the risk” of any accident that might occur.

 
Where the crimes can’t be literally legalized, the license to commit them and the legal responsibility for them are separated. The latter is the more common example. We have Wall Street’s intentional destruction of the economy as the result of its monumental con jobs (in particular fraudulent inducement of mortgage borrowing), the pollution crimes of BP and many others, Monsanto’s torts wherever pollen from its GMO Frankenplants contaminates natural crops, just to name a few major examples off the top of my head. These are all legal crimes for which no individual is ever held accountable, and usually the corporation itself is also let off free as a bird. One example of where the crimes are actually legalized is the CFMA, which declares simple gambling by the banks, indistinguishable from a bunch of drunks at a bar betting on a football game, to comprise legal contracts. Of course, when a solitary bum bets his children’s lunch money at the track and loses, it’s terrible for that family. When the government lets the banksters do the same thing with trillions and then pays off these bets with taxpayer money, millions of children must go hungry.
 
The wealth corporations amass through such banal evil is then used to subvert the rule of law, from the legislative process to the courtroom. Again, both by its structural mandate and its internal culture the corporation is driven to try to get antisocial laws passed, socially beneficial laws and rules overturned or abolished, and to render any worthwhile laws which do exist neglected, disregarded, or twisted.
 
Greed fundamentalists among the elites first developed the systematic plan to use corporations as a vehicle of maximal rent-seeking in the mid-19th century, and worked assiduously through the state legislatures and federal courts to accomplish what was in sum a crypto-feudal coup against democracy and theoretical capitalism. They received ideological assistance from the rise of Social Darwinism, which provided both a propaganda basis for their greed and, in the form of substantive due process, a legal doctrine the SCOTUS could use to justify its corporatist activism. Together Social Darwinism and substantive due process, in the form of the Lochner doctrine, enshrined corporate sociopathy as literally “the law of the land”. We see again the same pattern: The inherent sociopathic process selects for itself, distills itself, becomes conscious of itself. Inertia becomes will; sociopathy becomes psychopathic evil.
 
Today we’ve reached the terminal stage of this devolution. The neofeudal “elites” wish to undertake the final enclosure of all real assets – land, natural resources, physical space itself, buildings, infrastructure, and all the products of the mind. At the same time they want to cut all ties with human beings other than the ties of exploitation. They want to eradicate all semblance of government, law, and civil society, except insofar as they are either weapons of domination or of pacification. They want to take totalitarian control of the Earth itself, enjoy a total licentious prerogative to do anything they wish (and have this license enshrined as their “rights”), while being absolved of literally ALL social or legal responsibility. These sociopaths, these willful outlaws, want to actually secede from civilization. They want to steal all the benefit of human interaction but incur zero reciprocal responsibility or obligation. They want to burn off all relationships between human and human, distilling them to the primal confrontation of master and slave in the middle of a wasteland. Since neither slaver nor slave can be human, these fundamentalists wish to completely eradicate civilization and humanity itself. They are in fact post-civilizational barbarians. As David Korten put it (quoted in Nace):
 

As corporations gain in autonomous institutional power and become more detached from people and place, the human interest and the corporate interest increasingly diverge. It is almost as though we were being invaded by alien beings intent on colonizing our planet, reducing us to serfs, and then excluding as many of us as possible.

 
The corporation wants to systematically define human beings out of juridical existence, except insofar as they’re defined as debtors or criminals.
 
The corporation has been the primary mode of organization for this anti-civilizational devolution to the terminal post-civilization barbarism. It has concentrated and distilled all the worst sociopathic and anti-social aspects of the hominid experience. It has distilled them, systematized them, rendered them conscious, formulated them into an ideology and strategy. It is now the main practical vehicle of this plan for the final destruction of civilization. Through the doctrines, administrative structures, and ruling techniques of globalization, the corporation intends to completely dissolve the nation-state except for the rump functions I mentioned above. In the next post I’ll describe more fully this program, and how the corporation is inherently anti-sovereign.
 
For now I’ll conclude with the warning that the only way we can avert this hideous outcome planned for us is to smash the corporate power.

March 8, 2011

Capitalism = Corporatism = Oligopoly = Rentier Stagnation

 

In theory capitalism was supposed to unleash such innovation and efficiency that in every sector the optimal combination of quality and quantity would soon be achieved. Capitalism was also supposed to tear down all barriers to marketplace entry, and all these innovations and efficiencies would eventually become standard practice (IP was never meant to do anything but give a particular innovator a temporary advantage, as a finite reward for his innovation).
 
What was the result of this supposed to be? If all went according to theory (if everyone really acted as a good capitalist, a fair competitor), each sector would eventuate in the sale of undifferentiated commodities. Since no one would be able to charge more for his product than his competitor did for the identical product, the price of everything would fall to cost. This is capitalism’s inherently declining rate of profit. Profit is in fact supposed to wither to the bare minimum necessary to keep business functional at all. That’s what would have happened by the 1970s in most sectors, and by today in all of them, if capitalism functioned in reality the way it does in theory.
 
But as we know it never functioned this way in reality. In practice, there’s no such thing as a “capitalist”, if the definition of that is one who competes and wants to compete according to the textbook rules. In practice, no competitor ever competes for a single day longer than he has to. The moment he achieves sufficient leverage to use his market muscle to engage in every kind of anti-competitive behavior and in particular to get support from the government goon, he does so. This is what I call the Rule of Rackets. In practice all capitalists are actually aspiring racketeers.
 
So in capitalist reality the tendency has always been toward oligopoly and monopoly. This was always desirable for profitability reasons. And since modern capitalism’s profit rate reached its dead end, oligopoly has become a necessity if firms are to remain profitable at all. By now capitalism is not just in a struggle for power, but a struggle to survive. This is related to the fact that it’s also no longer possible for capitalism to rob one population and/or resource base, achieving a capital accumulation, in order to market to another consumer base. All consumer bases are now exhausted, and there are no new resource bases. The only enclosure left is the terminal one, restoring feudal calcification. So this too dictates stagnant oligopoly as the only order which can still extract profit.
 
I contend that corporations have always been the main instrument of this drive toward oligopoly, and they have been the only significant modern form of it. It would have been difficult if not impossible for Oil Age economic actors to achieve oligopoly if not for the way the corporate form tilted the playing field and rigged the markets. Cheap, plentiful oil in itself would have been a radically democratizing force. (Who knows? Perhaps textbook “free markets” could even have thrived.) Only a severe artificial restriction on economic freedom could ever have enabled oligopolies to cohere. This artifice was the corporation.
 
Similarly, modern technology, whatever its other issues, would have been a tremendously liberating egalitarian force if not artificially enclosed and controlled. The corporate form was the main mode of this enclosure.
 
In all ways legally and politically possible, corporations have monopolized the vast bounty and freedom which fossil fuels and the modern human mind held in potential. Privatization of public commons like the resources of the earth, including fossil fuels, is at one, physical extreme. The radical extension of the IP regime to the point that it constitutes a new enclosure of a potentially infinite public commons is at the other extreme of intellect and spirit. In both cases, and all in between, there’s been little of private individual involvement. In every case I can think of, the corporate form is preferred. Certainly if the genius of capitalism could conceive of a non-corporatized way to compete, someone would be doing it.
 
Not only is the corporation the most efficient wealth-extracting machine. By design it’s forbidden to do anything but all it can to maximize its extractions. According to the responsibility of management to shareholders, a corporation is required to subvert the rules of capitalist competition. If the more effective expenditure for short-term gain in lobbying for anti-competitive legislation or regulatory treatment, that must be chosen over longer-term research investment. Same for the mergers and acquisitions and offshoring which we know are so destructive and serve no purpose even from the “capitalist” point of view, but which can accomplish a short-term goosing of the stock price.
 
It’s clear that in reality capitalism always seeks oligopoly; that corporatism is the only viable form of oligopoly under the conditions of the Oil Age and now energy descent; and therefore that capitalism is synonymous with corporatism. And as corporations become dominant, and as they’re purely artificial, the sum result is that corporatism is a command economy, every bit as much as that of the Soviet Union.
 
And what’s the result of this command economy devoted to unproductive extraction? Even as permanent mass unemployment becomes politically normalized, and we’re bombarded by vicious “austerity” assaults and their accompanying deficit terror propaganda, corporations continue to report record “profits”. These profits are all fraudulent. They’re the result of straight accounting fraud (all bank “profits”, for example), the fraudulent return on looting the taxpayer (the Bailout, Pentagon budgets, and all other corporate welfare), and cannibalization – cutting jobs, “consolidation”, spin-offs or M&A money shuffles, tax scams, etc. I don’t know how many years it’s been since I saw a corporation of any significant size report an actual profit, and the looting regime has only become more brazen since the intentionally triggered crash. What we’ve seen since 2008 has been nothing but disaster capitalism, disaster profiteering, disaster looting, disaster rioting. That the banks, or any corporation, are paying dividends at all under depression circumstances is proof that they serve no constructive social or economic purpose and therefore shouldn’t be allowed to exist at all. Who can possibly argue a rationale for corporate profit-taking, dividend-paying, and cash-hoarding even as they cut jobs and government slash spending? On its face, if nothing else this proves the corporate worthlessness. It proves they existentially comprise a bottleneck preventing the solution of any of civilization’s problems. They comprise a roadblock against the further evolution of civilization. 
 
Corporations are responsible for all of this, and all of this is their characteristic activity. They are oligopolist and rent-seeking by design.
 
So it follows that if we wish to economically liberate ourselves, whether we dream of economic cooperation or of true markets (I don’t claim the two are necessarily incompatible), either way we face the same enemy and the same imperative. We must break corporate power. At the very least we must radically restrict corporate prerogatives and abolish all corporate constitutional “rights”. Better, we should abolish corporations completely. We no longer need even original-style corporations. We can maintain whatever infrastructure we still need democratically. Things like railroads and canals were always built as joint public-private enterprises anyway, with the corporation’s main role being to parasitically extract the profit after the public pays for everything and does all the work. Most R&D today is in the same category. Democracy doesn’t need corporations, and cannot coexist with them.
 
The American revolutionaries sensed all of this. They were leery of federalized corporate chartering power, and of corporations in general. They experienced at first hand the aggressive monopoly of the British East India Company. They saw Thomas Hutchinson try to make his sons and cronies the monopoly distributors of price-dumped tea.
 
So they physically dumped it instead, and then kept corporations out of the Constitution.
 
Today we know how right they were, and how pathetically our own vigilance has flagged. If we’re to take back our country, we’ll have to reinvigorate the original spirit of the constitution and the revolution. Among other things, that means smashing the corporations. Shattering that blockage may in itself be sufficient to liberate our polities and economies, letting us resume our freedom and prosperity. It is certainly necessary.

March 4, 2011

Corporatism Has Been A Neofeudal Coup (2 of 2)

 

One of the features of the Land Scandal has been the gutter sleaziness of the many of the bottom-feeder participants. According to Naked Capitalism, a lawsuit seeking class action status alleges that two leading mortgage service providers, Lending Processing Services and Prommis, in addition to all the usual crimes, also engaged in systematic fraudulent and illegal extraction of legal fees. The allegation is that when a mortgage mill retained by one of these service providers to do the legal work filed its fee request with the court, it would inflate the request and then kick back over two thirds to the service company. This is illegal fee-sharing and practicing law without a license.
 
Prommis has tried to pull the typical trick of claiming it’s just a holding company with no responsibility for its subsidiaries or contractors.
 
In another post Yves ponders how robo-signing, another typical piece of sleaze, became such a universal practice. After discussing how rampant it was at the Stern mill in Florida, she discusses the example of Fairbanks, a servicer who got very big very fast by buying a laundry list of other servicers along with their mortgage lists.
 

Tom Adams, a mortgage securitization expert, has suggested that the significance of miscreant servicer Fairbanks has not been recognized. Law professor Kurt Eggert provides a good overview in his 2007 article, “Limiting Abuse and Opportunism by Mortgage Servicers.” In 2003, Fairbanks had become the biggest subprime servicer in the US by acquiring other subprime servicers. Some of the servicers it had bought were affiliated with originators that had overstated property values and engaged in lax underwriting. That meant a lot of the loans were due to go bad. Fairbanks came under pressure, via litigation, downgrades in servicer ratings, FTC and HUD investigations, due to widespread evidence of serious servicing abuses.

 
So according to this interpretation Fairbanks undertook a rampage of M&As which no one could conceivably argue served any constructive purpose, solely in order to get big fast. Then when it inevitably found itself having bought all these junk loans perilously high, it was driven by the logic of its own criminality to undertake massive robo-signing binges. This, along with the same practice at dark slimy mills like Stern, contributed to the practice achieving critical mass and becoming the industry standard.
 
These are just two normal, everyday crimes in the MBS biz. Relatively minor details, really, of the overarching kleptocratic mortgage system. Here we see a similar mode of organization at a larger scale: The way (in theory, certainly seldom in practice) each loan had to go through the steeplechase of originator -> sponsor -> depositor -> trust. This was in order to ensure bankruptcy remoteness. In other words, participants were intending to go bankrupt and leave plenty of debt and liability on the table, while the assets would be long gone. IBGYBG. I’ll Be Gone, You’ll Be Gone. That’s how it’s meant to be. The banks were simply engaging in a shell game.
 
What’s the common organizational feature here? The corporate form enables a criminal to launder a criminal act or debt exposure through a series of corporate entities to push it as far away from his person as possible. He is personally the criminal, he is personally the debtor. But the corporation was formed to immunize him from these responsibilities, even as it multiplies his individual rights.
 
In particular, here we see examples of how the holding company, and the general policy of allowing one corporation to own stock in another, are meant to function. Probably most people think this practice is normal and natural. But it’s actually a radical innovation which was intended to revitalize the corporate form as a weapon of feudal privilege. Starting in the 1860s, this and several other key measures which empowered the hitherto weak and constrained corporation turned this musty antique vestige into a crypto-feudal dynamo. The comprehensive result of these radical policy changes over several decades can be summed up as a neofeudal coup against democracy as well as against capitalism according to classical economic theory. The result was to empower the corporate form as the vessel of rentier privilege and prerogative during the age of cheap, plentiful fossil energy and industrial abundance, forces which should have been aggressively egalitarian.
 
Before describing how this coup happened, let’s do a quick comparison of, in Ted Nace’s terms, the classic corporation (pre-1860) vs. the modern corporation (by 1900).
 

 

TABLE 7.1
Differences between the Classic Corporation (before 1860)
and the Modern Corporation (after 1900)
Attribute Classic Corporation Modern Corporation
Birth Difficult: requires a custom charter issued by a state legislature Easy: general incorporation allows automatic chartering
Lifespan Limited terms, usually 20-30 years No limits
“Shape
Shifting”
Corporations not allowed to own stock in other companies; restricted to activities specified in charter Corporations free to pursue acquisitions and spin-offs
Mobility Usually restricted to home state No restrictions
Adaptability Restricted to activities specified in charter Allowed to pursue multiple lines of business and initiate or acquire new ones at company’s discretion
“Conscience” Actions constrained by shareholder liability and by threat of charter revocation Fewer constraints due to limited liability, disuse of charter revocation, and tort reforms
“Will” Managerial action hampered by legal status of minority shareholders and of corporate agents Legal revisions enable consolidation of management’s power            
Size Limited by charter restrictions Asset limits removed; anti-trust laws generally not effective
Constitutional Rights Functional only Steady acquisition of constitutional rights from 18861986

 

 
In each of these cases, corporations used the clout and wealth they gained through Civil War profiteering and control of war infrastructure to launch a campaign for legalized corporate power aggrandizement at the expense of democracy and the people. As Nace says, each step is a redistribution of power and rights from citizens to the corporation.
 
The most important elements of this coup were (1) changes in state chartering legislation which triggered a race to the bottom, (2) as I mentioned above, allowing corporations to own stock in other corporations, (3) the rise of management power at the expense of the shareholders, (4) the invention of fraudulent corporate “rights” by rogue courts.
 
1. The most important conceptual changes were automatic general incorporation in place of the individualized state charter which once had to be issued, and incorporation for any purpose in place of the restrictions* on corporate activity which were originally the norm. Corporations were only supposed to be chartered in sectors like capital infrastructure, for projects like canals and railroads which allegedly were too big for families and partnerships to tackle. Often the very existence of non-corporate going concerns in a sector was sufficient proof that incorporation was unnecessary and therefore disallowed*.
 
New York was the first to allow general incorporation in 1846, and was also the first to allow incorporation “for any purpose” in 1866. But NY still imposed other restrictions. It was New Jersey in 1889 who was first to combine general incorporation, all-purpose incorporation, and the lack of all other restrictions. From there the race to the bottom commenced in earnest.
 
[*When we use terms like “disallowed” in this context, we should always keep in mind that this never refers to state-imposed restrictions on economic activity. Anyone was always free to go into any business as a sole proprietor or partner. It only refers to the limits on the special privilege that the would-be incorporator is demanding from the state at the expense of the non-incorporated and the citizen. It’s the corporate practitioner who wants big, aggressive government. He wants it in order to hold a neofeudal privilege. Only we who oppose corporations and want to limit or abolish them are true advocates of shrinking government.]
 
2. It was Pennsylvania in 1871, at the behest of Tom Scott of the Pennsylvania Railroad, which first legalized the holding company.
 

The fissures that ultimately cracked the containment vessel originated without notice in the back rooms and committee chambers of state capitols during the early 1850s, as lobbyists for the newly emerging railroad corporations began exacting concessions from state legislatures. Scott, a legislative manipulator without peer, was responsible for one such concession, which at the time seemed hardly earth-shattering. It was quite simple: convincing the Pennsylvania legislature to relax the long-standing prohibition against one corporation owning stock in another corporation. Perhaps it is fitting that Scott was a math prodigy in his youth. This inconspicuous change – one corporation owning stock in another – is something like the introduction of the zero by unknown Arab mathematicians: a minimalist placeholder, but nevertheless a monumental invention.

 
This simple expedient of the corporation being allowed to own shares in another corporation made possible all the subsequent machinations and criminal laundering and legalized abdication of responsibility which became the everyday practice of corporations in the 20th century. It also went a long way toward the monumental growth in corporate size and power, as one invested corporate dollar could amass far more shareholder power than that of a single individual.
 
This difference between individual shareholders and corporate shareholders was at least a momentous as the more recent “innovation” of corporate political speech and the corporation’s “right” to give money to political candidates.
 
Here too, this holding company power was first combined with complete license and lack of any other restriction in NJ in 1889 and 1890.
 
3. New York in 1890 was the first to absolve corporate management of the common law “right of unanimous consent”, by which significant changes in a corporation, especially sale of assets, had to be approved by the unanimous consent of the shareholders. Federal court decisions had been heading in this direction since 1884.
 
This represented a huge transfer of power from shareholders to management. Here too a race to the bottom ensued among the states. This played a big role in corporate concentration.
 
4. The door to corporate Constitutional rights was first opened with 1819’s Dartmouth vs. Woodward. Some further “rights” gradually accrued until the 1886 watershed Santa Clara vs. Southern Pacific Railroad, which snuck “corporate personhood” into constitutional jurisprudence through a shadowy back door.
 
Within months the SCOTUS was openly citing this fraudulent “personhood” precedent, and for the next fifty years the phony rights piled up. Case after case expanded corporate rights and restricted citizen and human rights where those conflicted with corporate arrogations.
 
From 1937 through the early 60s was a hiatus, and then the process crept forward again, debouching with the 1970s’ “speech is money” and “corporate speech” decisions. (The ACLU’s aggressive anti-democratic role in this has been despicable from the start. That’s more evidence for how existing groups, even the best of them, are fundamentally against the people.) From then to this day the anti-democratic, anti-constitutional onslaught has advanced tempestuously. Citizens United was just the latest atrocity.
 
Putting all this together, we see how the postbellum era was the time of corporate consolidation. Rentier neofeudalism wanted to preserve itself throughout the life cycle of capitalism. It would do so primarily through the instrument of the corporation as empowered and unleashed in those decades following the Civil War, which in retrospect we can see as having been fought to clear the way for them. The increasingly corporatized industrial power of the US put through a coup in the state legislatures and federal courts to protect monopoly rentierism against the creative destruction fossil fuels, industrialism, and capitalist theory could unleash upon it. This is the true core of the term and concept, conservative. At the deepest level, it meant conserving as much of feudalism as possible through the storm decades of capitalism; the disruptive forces of bountiful energy, cheap technology, and easy innovation; the cohering political consciousness of the proletariat and its subsequent labor activism, as foreseen by Karl Marx; the political and organizational need, in cheap oil’s heyday in the mid-20th century, to allow a mass middle class to arise in the West; the inevitable death of capitalism at the hands of Peak Oil and the maturity of all economic sectors. Any and all of these were mortal threats to the feudal prerogative.
 
Today we see the results. Wealth inequality and concentration of real assets have reached disastrous levels, and continue to get worse. Social mobility continues to deteriorate. The position of all workers has eroded in recent decades, while the mobility of unskilled labor has been rendered extremely flexible at the command of the top. (Mobility of labor is a capitalist rather than feudal phenomenon. But the system carefully controls this mobility through debt policy and immigration policy. It stands poised to restore feudal restrictions on mobility at any time.) Privatization has largely restored much of the phenomena of feudal fiefdoms, from private police forces to HOA constraints on behavior. I would not be surprised to hear of an HOA which requires church attendance. We have the classic feudal two-track legal system, one for the rich and one for the poor. The kleptocracy no longer even bothers to conceal this anymore. We have onerous taxes on labor with little or none on capital, land, inheritance, and other parasitism. This last, a licentious parasite-heir policy including an absurdly low parasite tax, has played a major role in the de facto restoration of hereditary aristocracy. The political system is also meant to entrench this, as both corporate-owned political parties serve as nepotistic conveyor belts.
 
Feudal recrudescence is most stark where it comes to the terminal enclosure process the globe is now undergoing. The IP regime is just the space age version of the age-old enclosure of land, resources, and all real assets which is now recurring. The only difference is that whereas the original European enclosure was meant to provide the original accumulation for the rise of capitalism, this final enclosure is intended to be the permanent restoration of a calcified landed nobility, but in the form of corporate CEOs and large shareholders. Finally, we’re seeing the restoration of a regime based on debt slavery.
 
Corporate form and corporate power played a major role in making all this possible, and they must play the pivotal role in completing the final refeudalization process.
 
The rise of corporatism was, therefore, a neofeudal counterrevolution within the revolutionary age of fossil fuels, industrialism, capitalism, and democracy. Just as those, including the birth of the democratic consciousness, were features of the Oil Age, so was corporatism a necessary countermeasure if the feudal parasites were to carry their poisoned chalice through the dangerous age.
 
Now all of those except one must decline and perish. In prospect we perceive the feudal core now rising again in the form of post-capitalist corporatism, and we experience whatever’s left of the democratic consciousness which is the one shining legacy of the fossil fuel age, the greatest lesson humanity has ever learned, the most marvelous gift we bestowed upon ourselves out of the seemingly endless and pointless travails of history. It’s now up to us to either embrace this democratic heritage and go forward boldly living it, or reject it and adhere to the noxious residue as eternal slaves in the darkness.
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