Supreme Court Justice Louis D. Brandeis
The Bill of Rights
The Bill of Rights is the collective name for the first ten amendments to the United States Constitution, which limit the power of the U.S. federal government. These limitations serve to protect the natural rights of liberty and property including freedoms of religion, speech, a free press, free assembly, and free association, as well as the right to keep and bear arms.
They were introduced by James Madison to the 1st United States Congress as a series of legislative articles, were adopted by the House of Representatives on August 21, 1789,[1][2] formally proposed by joint resolution of Congress on September 25, 1789, and came into effect as Constitutional Amendments on December 15, 1791, through the process of ratification by three-fourths of the States.
Originally, the Bill of Rights included legal protection for land-owning white men only, [3] excluding African Americans [4] and women.[5] [6] It took additional Constitutional Amendments and numerous Supreme Court cases to extend the same rights to all U.S. citizens.
The Bill of Rights plays a key role in American law and government, and remains a vital symbol of the freedoms and culture of the nation. One of the first fourteen copies of the Bill of Rights is on public display at the National Archives in Washington, D.C..
AMERICAN JUSTICE AND THE CORPORATIONS
Charles A. Reich
Charles A. Reich in Opposing the System (1995) writes that the rise and transformation of the corporation parallels the public history of America since the Constitution was adopted. The earliest corporate forms appeared to pose no challenge to the newly established republic. The corporate form was narrowly restricted. But it was not long before the expansive drive of the corporation began to overcome first one limitation and then others.
Americans have become so inured to the corporation’s major role in our economic life that we must struggle to remember that this was not always so. The history of how the economy became so highly organized is a narrative both forgotten and repressed, largely omitted from our textbooks and history courses. One place where that history can be found is in classic opinion by Supreme Court Justice Louis D. Brandeis, written in 1933.
What evolved, according to Brandeis, was a corporate system comparable to the feudal system, committing American society “to the rule of a plutocracy.” As the greater part of the nation’s industrial wealth passed from individual possession into the hands of corporations controlled by a few hundred persons, there was a “negation of industrial democracy,” a “marked concentration and greater disparity of incomes.” “Such,” said Justice Brandeis “Is the Frankenstein monster which states have created by their corporation laws.”
Justice Brandeis concluded his history by accusing the giant corporation of having played a key role in bringing on the Great Depression and impoverishing the nation.
Brandeis wrote that there is a widespread belief that the existing unemployment is the result, in large part, of the gross inequality in the distribution of wealth and income which giant corporations have fostered; that by the control which the few have exerted through giant corporations, individual initiative and effort are being paralyzed, creative power impaired, and human happiness lessened; that the true prosperity of our pass came not from big business, but through the courage, the energy, and the resourcefulness of small men; that only by releasing from corporate control the faculties of the unknown many, only by reopening to them the opportunities for leadership, can confidence in our future be restored and the existing misery be overcome; and that only through participation by the many in the responsibilities and determinations of business, can Americans secure the moral and intellectual development which is essential to the maintenance of liberty. (33-4)
Reich believes that in the years since Justice Brandeis wrote, the trends he described have continued. Every form of legal control over the corporation has failed. Control by the stockholders—the supposed owners of corporations—was lost to management. Ownership was thus separated from control, with management free to pursue its own course without genuine supervision by the “owners.” The device of nonvoting stock was utilized to keep most stockholders powerless while a small inside group—or sometimes just a single individual—reserved voting rights for themselves.
A second kind of legal control—the antitrust laws—also failed. Passed by Congress at the end of the nineteenth century to prevent monopolies, anticompetitive mergers and other restraints of trade, the antitrust laws have remained on the books but have simply not been enforced. The Department of Justice under both Republican and Democratic administrations has look the other way while ever more gigantic mergers have taken place, and the courts have “interpreted’ the antitrust laws to permit many of the practices which the authors of the laws sought to prevent.
Stephanomics
Episode 2
Media : Listen now (25 minutes)
Availability: Available to listen.
Last broadcast last Saturday, 02:05 on BBC World Service (see all broadcasts).
Synopsis
In the second of three programmes, Stephanie Flanders discusses the global financial crisis with a panel of top economic thinkers including George Soros.
She'll be asking just who is to blame for the current economic mess we're in.
Was it the fault of the bankers - who plenty of people want to blame - or was it the economists?
And what can we learn from this, or is the problem that we simply don't learn lessons from past crises?
Stephanie Flanders will be joined in the studio to debate these questions by the billionaire investor, George Soros, Sir Howard Davies, who is the former director of the LSE, former chairman of the FSA and former deputy governor of the Bank of England, and also Dr DeAnne Julius, chairman of Chatham House and a former member of the Bank of England's monetary policy committee.
UNLIMITED CORPORATIONS
Reich posits that a third attempted legal limit on corporate power was regulatory legislation, some dating back to the Progressive Era, some a product of the New Deal. Today, much of this regulation has been repealed or rejected, [including Glass-Steagall].
Another restraint on corporate power, the labor union, has been so weakened that it no longer serves as the counterforce it was expected to be during the New Deal. As corporate operations have been international in scope, even sovereign states have been unable to exert effective control over multinationals, which in some cases are virtually sovereign states themselves. Today, [as in 1995], the Fortune 500 dominate American life. By the year 2010, will it be the Fortune 50 or Fortune 5? (34-35)
Reich believes that so long as corporations, no matter what their size are seen as remaining in the area of business, it is possible to imagine that the other areas of society continue to function as before. But if corporations begin to exercise functions that are governmental, then a structural change takes place that alters the premise of constitutional government.
Stephanomics
http://www.bbc.co.uk/programmes/p00lh2dq
Episode 3
Media :
Availability: Available to listen.
Last broadcast today, 02:05 on BBC World Service (see all broadcasts).
Synopsis
Every week sees another "make or break" summit to save the euro. This week it is the G20 in Cannes. But somehow the global markets always seem to be a step ahead.
In the third programme in her series of debates about the financial crisis, Stephanie Flanders asks a panel of top economic thinkers whether the world has the institutions it needs to confront today's problems.
Stephanie is joined in the studio by Willem Buiter chief economist at Citigroup, Jim O'Neill chairman of the asset management division of Goldman Sachs, and Katinka Barysch deputy director of the Centre for European Reform in London.
They also discuss whether the lesson of the last few years - especially in the eurozone - is that national democracies and global markets simply do not mix.
CORPORATE RULEThe rules that corporations make and enforce are not adopted democratically, nor are they enforced with the fairness required by due process of law. The workplace is authoritarian and hierarchical. It is ruled from the top down. Because the workplace is an economic necessity for most Americans, they have little choice but to submit to its discipline. But this creates a major conflict with democracy. When corporations make and enforce their own laws, they supersede the democratic process and threaten the core values of representative government.
GLOBAL DEMOCRACY UNDER ATTACK
We are told that democracy is the best form of government, and we have fought wars and spent trillions of dollars in a seemingly successful effort to preserve democracy here and abroad. Following the corporate lead, virtually all of our institutions, from schools and colleges to Little League, are based on the top-down model. If we spend most of our time working under authority, how can we say we are a democratic society? When and where do we practice democracy?
Reich writes that no matter how much governmental power corporations exercise over their employees, corporations are exempt from the Bill of Rights. They do not have to allow their employees freedom of speech, or due process of law, except where statutes explicitly so require.
The reason for this exemption is that the Bill of Rights applies only to actions by the government and its agencies, and no matter how “”governmental” the actions of corporations may in fact be, the courts continue to treat corporations as if they were truly private when it comes to the Bill of Rights. Corporations are glad to accept their exempt status, since rights are obstacles to economic efficiency, and corporations do not welcome legislation that requires them to observe employees’ rights.
The result of this corporate exemption from the Bill of Rights is that employees lose many of their rights as citizens when inside the workplace. An employee who exercises his or her free speech rights outside the workplace is not protected against adverse employer reaction, even though this speech is protected by the Bill of Rights against governmental retaliation. This makes the Bill of Rights a hollow guarantee for many employees, since they may risk jobs or promotions by exercising their full rights as citizens.
And the real impact of this diminution of citizenship is felt not only by the comparatively few employees who get fired for exercising their rights but by the great mass of employees who are afraid to risk their employers’ disapproval. These employees allow their economic dependency to become docility; they are afraid to be free. The corporations which dominate these employees have successfully leveraged economic power into political power that undercuts the Constitution.
http://www.bbc.co.uk/programmes/p00h7mp2
The Trouble with Capitalism
Media : Listen now (28 minutes)
Availability: Available to listen.
Last broadcast on Sun, 19 Jun 2011, 22:32 on BBC World Service (see all broadcasts).
Synopsis
In the aftermath of the credit crunch people are thinking about the way banks work, the way financial markets operate, and the values and purposes of the companies that use those markets.
And some of the big management thinkers are beginning to put forward ideas that challenge many of the assumptions that have dominated the way business has worked for the past several decades.
In this progamme Peter Day hears from management guru Gary Hamel and gets his thoughts on the future of capitalism.
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WHERE WE STAND
Peter Day's Webcomment
About this programme by Peter Day
A lot of the corporate assumptions that business people took for granted in the 20th century are looking pretty threadbare in the 21st.
I keep running into internationally known management experts who are now voicing strong doubts about the way businesses have been run recently.
Now he is one of the people leading the push to get corporations to think outside their own confines about their wider responsibilities to business and society. “The legitimacy of business has fallen to levels not seen in recent history”, he said in a Harvard Business review article.
Michael Porter is arguing that companies need to create what he calls “shared value” … by addressing society’s needs in a far more comprehensive way than they have dreamed of doing up to now.
Game
The Dean of the Rotman School of Management in Toronto, Roger Martin, also voiced his criticisms in Global Business of the way financial constraints and measurements have distorted corporate ambitions in the past 30 years, tracing it back to the widespread move in the 1980s to cut company executives in on the fortunes of the business by awarding them shares and share options in the companies they were running.
He calls the practice “Fixing the Game” ... as though professional football players were permitted to bet on the games they are playing in … a dangerous distortion of Capitalism.
I’ve been dropping in on him from time to time for 20 years now, once at his comfortable home on a twisty road high up above Silicon Valley, California where (at the time) just across the road the founder of Oracle Corporation, the flamboyant Larry Ellison, was building a remarkable spread that took years and eventually cost, it is said, more than one hundred millions of dollars.
That’s a lot of bothersome construction trucks in a rural neighbourhood.
Freedoms
He quotes surveys that show that public trust in companies is at low ebb. If individuals have lost faith in business, he says, then it is possibly because business has abused that faith.
Corporate executives have been unwilling to confront the changing expectations of their stakeholders. And if business loses trust with the people who work for it and by the goods and services it produces, then the way will be opened for the regulators to step in … a prospect which Professor Hamel does not welcome at all.
And that is what we talked about the other day, a conversation (or rather tutorial) which we broadcast in this week’s Global Business.
It is interesting that some of the leading management thinkers agree that it is time for a change. We’ll track down more of them in future editions of Global Business. http://www.bbc.co.uk/programmes/p00h7mp2
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