Posts Tagged ‘corporate welfare’

Corporations should not have the rights of humans

October 10, 2008


Perhaps the most important law that could be passed to ensure justice for Americans would be a law that made it clear that corporations do not have the rights of human beings.

The most widely recognized personality to hold this position is Ralph Nader.  He has written extensively on the subject.  In Mr. Nader’s 2004 book titled The Good Fight, Mr. Nader wrote:

Whether we think in terms of justice under law or equal protection of the laws, it is untenable that artificial entities called corporations are given most of the constitutional rights of real humans while aggregating powers, privileges, and immunities that individuals, no matter how weathy, could never come close to attaining. 

Two thirds of corporations paid no income taxes

Two thirds of corporations paid no federal income taxes between 1998 and 2005, according to a report released this summr by the Government Accountability Office (GAO).  The report said that 1.2 million corporations (66.7 percent) paid no income tax.  The corporations had combined sales of $2.5 trillion, the report said.  The report also noted that about 25 percent of large corporations — those with at least $250 million in assets or $50 million in receipts — paid no corporate income taxes.

In Mr. Nader’s 2000 book titled Cutting Corporate Welfare, Mr. Nader explained the widespread practice of corporate welfare.

Corporate welfare — the enormous and myriad subsidies, bailouts, giveaways, tax loopholes, debt revocations, loan guarantees, discounted insurance and other benefits conferred by government on business — is a function of political corruption.  Corporate welfare programs siphon funds from appropriate public investments, subsidize companies ripping minerals from federal lands, enable pharmaceutical companies to gouge consumers, perpetuate anti-competitive oligopolistic markets, injure our national security, and weaken our democracy.

Political corruption and corporate welfare

Treating corporations as having the rights of living people contributes to political corruption and corporate welfare.  Mr. Nader reasons that the doctrine of corporation as person must be reversed.

“A national debate is needed regarding the necessity to reverse the dicta in the 1886 Supreme Court case of Santa Clara County v. Southern Pacific Railroad that first awarded the corporation constitutional status as a person and in subsequent decisions,” Mr. Nader wrote.  “Corporations are not human beings, they don’t vote; they are artificial entities which should be subordinated to the rights of human beings.”

Mr. Nader argues that “there can be no equal justice under the law if . . . Exxon has all the rights of humans plus all the privileges and immunities to concentrate enormous power and escape responsibility in ways unavailable to the wealthiest real people.”

As an example of the legal fiction of a corporation being a person with substantial rights but without corresponding responsibilities, consider these fact patterns: (1) A human being selling office supplies to the government is caught short changing the government (i.e., delivering 140 legal pads when he was supposed to deliver a full gross of legal pads).  After being caught, the human being is convicted of theft and is banned from doing future business with the government.  (2) Boeing Aircraft Co. is caught conspiring with Pentagon officials to inflate the cost of aircraft being sold to the government.  The Boeing employees implicated in the conspiracy are fired but Boeing is not banned from doing future business with the government.

Looted and drained trillions of dollars

“The U.S. needs to crack down on corporate crime, fraud and abuse that have just in the last four years looted and drained trillions of dollars from workers, investors, pension holders and consumers,” Mr. Nader wrote.  “Among the reforms needed are resources to prosecute and convict the corporate executive crooks and to democratize corporate governance so shareholders have real power; pay back ill-gotten gains; rein in executive pay; and enact corporate sunshine law, among others.” 

Mr. Nader has been warning of Wall Street and other corporate criminals for years.  The current financial crisis should make it apparent that Mr. Nader has been right all along.

“[B]ailouts, of course, are generally doled out to large corporations and industries,” Mr. Nader wrote in Cutting Corporate Welfare.  “When a family-owned restaurant fails, no government intervenes to stop it from going up.  If a small factory can’t pay its bills, it goes out of business.  The bailout, a premier form of corporate welfare, is typically yet another market distortion against the interests of small and medium-sized businesses.”

Corporate corruption will continue so long as corporations are given the rights of people and Americans do not educate themselves about corporate abuse.

“Successfully ending corporate welfare as we know it will turn on a sustained campaign to educate, organize and mobilize citizens,” Mr. Nader wrote.  “Merely documenting abuse is not sufficient to spark the national movement needed to trump corporate power.”