Origins of the Corporate State
Posted on February 24th, 2010 by Daniel McCarthy
As I mention below, Ralph Nader is not altogether wrong about what the doctrine of corporate personhood has led to. As Felix Morley explains, abuse of the Fourteenth Amendment to nationalize rights, for corporations as well as individuals, enabled the federal government to extend its powers tremendously, first in the name of laissez faire and later in the name of labor. But regardless of which ideology or which interests tried to use centralized power for their own benefit, it was power itself that benefited most — which would ultimately give us big business and (for a time) big labor prospering in collusion with and subordination to big government. The loser in all of this was the idea of a cons utional federation:
The Fifth Amendment had stipulated that “no person” shall be deprived of property “without due process of law.” The Fourteenth Amendment repeated this, but with the provision directed specifically against “any State.” Now the ingeniously simple formula was to define a corporation as a “person,” whose property under the Fourteenth Amendment was then not subject to deprivation by any State without due process of law. In practice this meant that any regulatory action by the states could be appealed to the Supreme Court, which thus gradually replaced them as guarantors of property rights. As described by Charles A.Beard: “before the end of the nineteenth century the once almost sovereign powers of the States over property and business within their borders were reduced to mere shadows of their former greatness.”
By a logical extension of the corporate person argument the railroads, again for instance, soon found it expedient to apply to national instead of State courts, under the interstate commerce clause. That procedure brought the granting of injunctions against strike action, the violation of which in turn resulted in summary imprisonment of labor leaders, without jury trial, for contempt of court. Thus the national development of industry on the one hand, and of trade unionism on the other, led through the channel of the Fourteenth Amendment to the nationalization of governmental power and the resumed weakening of federal structure. Business leadership, too “practical” to theorize on politics, welcomed this centralization of power as long as it seemed to favor laissez-faire at the expense of labor organization. There was all too little anticipation that, in the name of democracy, this favoritism would eventually be reversed.”
That’s taken from Morley’s Freedom and Federalism. His chapter “The Fourteenth Amendment” elaborates the story. Morley is not, of course, arguing that he’d like to see businesses or individuals deprived of their property or rights in a lawless fashion at any level. But the structure of government matters as well as its content, and the combination of a liberal reading of the Fourteenth Amendment with the concept of corporate personhood wrought tremendous changes in the way governments works, in its scope and machinery. Power fled the people in the states and was absorbed and amplified by the ins utions of the federal government — first by the Supreme Court, to a lesser extent by Congress, but ultimately and to the greatest extent by the executive branch, whose agencies, in the name of rights, can now seize property (the DEA), kill (the CIA), interfere in business (the FTC), censor communications (the FCC), and manipulate elections (the FEC) with nary a thought to “representation” or the legislative process. The corporate state turns out to be the executive state — which probably in the end becomes the military-security state. We’re not there yet, but we’re well on our way.
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