FacebookTwitterGoogle+RedditEmail

We Must Begin to Curb the Power of Corporations

The revelations of the Paradise papers, the earlier Panama Papers and numerous articles in the western mainstream and alternative media demonstrate just one dimension, tax evasion, of an increasingly obvious truth: global corporations have become the greatest threat to the planet. The deliberate starvation of government, climate change, grotesque inequality, Dickensian working conditions, environmental degradation, dwindling bio-diversity, the slow (or not so slow) death of the oceans and the creation of the security state on their behalf threaten not only the natural world but the our capacity to democratically govern ourselves while maintaining some semblance of civilization.

The advent of the corporate state was truly unleashed when Canada and the US signed the first ‘free trade’ agreement in 1989. In the twenty-eight years since hundreds of such agreements have been signed, all of them designed to erase borders for corporations and radically reduce the operational space for democratic governance.

Governments are the only institutions that can seriously challenge the power and reach of transnational corporations: they made them and they could unmake them. Only governments can curb their predatory nature, constrain their contempt for their workers, communities and the environment, and genuinely punish them when they openly break the law as part of their fiduciary ‘duty’ to their shareholders.

Of course it’s difficult to imagine current governments in any role other than the unindicted co-conspirator which have played for decades. The implementation over thirty years of neo-liberal policies by governments of virtually every stripe has liberated corporations, increasingly removing constraints designed to make them accountable to the broader society.

The tax avoidance/evasion tidal wave is just one example. This obscene anti-social conspiracy has not just been allowed by governments it has been facilitated by them. Much of it is actually legal, in other words sanctioned by governments we elect. Yet that does not absolve corporations from their responsibility. A recent study by Canadians for Tax Fairness (disclosure: I am on their board) revealed that the sixty largest public companies in Canada have 1,021 subsidiaries in a string of tax havens. Four had none; Valeant Pharmaceuticals and Sun Life Financial have over fifty each. According to the study,  “Canadian foreign direct investment (FDI) in tax havens grew from $2.1 billion in 1994 to $284 billion in 2016.”

By now most people know how these ‘profit shifting’ schemes work. Companies assign profits made elsewhere to tax haven subsidiaries in countries with low or no income taxes. They half-heartedly claim they actually do business in these countries but the numbers say otherwise. The study shows subsidiaries in non-tax haven countries employ between 1,244 to 2,760 employees per billion in assets; for tax-haven users the ratio is one to 250. In 2014, Canadian corporations held almost $31 billion in assets in Bermuda; their subsidiaries employed a total of 35 employees.

While the Trudeau government has made some moves in the right direction to track flesh-and-blood tax cheaters, it has does done virtually nothing to curb the immoral behaviour of so-called corporate citizens. This should hardly surprise us. Over the decades we have watched these ersatz ‘citizens’ develop into the institutional equivalent of psychopaths. This is not a subjective assessment; it is written into their legal DNA by our laws governing corporations. They don’t have social responsibility like ordinary citizens – only the fiduciary duty to their shareholders. They are citizens who live forever; once a corporation has a charter it can’t be revoked.

Twenty years ago of the 100 largest ‘economies’ in the world, 51 were corporations. I am sure that number is higher now. It was recently revealed that the Royal Bank is now, officially, ‘too big to fail’ – or more to the point free to be reckless knowing the taxpayer will bail it out.

In attempting to imagine how we can save our civilizations and ecosystems from corporate predation it may be helpful to know that  corporations haven’t always had such free reign. In 1809, the Supreme Court of Virginia ruled that if an applicant’s purpose in seeking a corporate charter “…is merely private or selfish; if it is detrimental to, or not promotive, of the public good, they have no adequate claim upon the legislature for the privileges.” Charters were routinely denied and in 1832, Pennsylvania revoked the charters of 10 banks for not serving the public good.

These strict limits on corporations — they could only engage in the single activity described in their charter — began to disappear in the late 1800s. The civil war resulted in corporations becoming much more powerful. States competed with each other for corporate investment and their judges systematically eliminated restrictions on corporate charters. They gradually re-interpreted the U.S. constitution and changed the common law to make corporations citizens.

Canada of course, actually started off as a corporate state – the Hudson’s Bay Company –  and they corporations have always had a cozy relationship with governments here. But it wasn’t until the Charter of Rights and Freedoms that they were considered ‘natural persons’ with the same human rights as you and I. The fight to get corporations to pay their fair share of taxes must continue. But we should set our sights a lot higher. A good start would be to find a compelling case to take to the Supreme Court and have corporations’ ‘natural persons’ status removed. And then put back into corporate law the power to revoke the charters of corporations which violate the public good.

More articles by:

MURRAY DOBBIN, now living in Powell River, BC has been a journalist, broadcaster, author and social activist for over forty years.  He can be reached at murraydobbin@shaw.ca

November 13, 2018
Patrick Cockburn
The Midterm Results are Challenging Racism in America in Unexpected Ways
Victor Grossman
Germany on a Political Seesaw
Cillian Doyle
Fictitious Assets, Hidden Losses and the Collapse of MDM Bank
Lauren Smith
Amnesia and Impunity Reign: Wall Street Celebrates Halliburton’s 100th Anniversary
Joe Emersberger
Moreno’s Neoliberal Restoration Proceeds in Ecuador
Carol Dansereau
Climate and the Infernal Blue Wave: Straight Talk About Saving Humanity
Dave Lindorff
Hey Right Wingers! Signatures Change over Time
Dan Corjescu
Poetry and Barbarism: Adorno’s Challenge
Patrick Bond
Mining Conflicts Multiply, as Critics of ‘Extractivism’ Gather in Johannesburg
Ed Meek
The Kavanaugh Hearings: Text and Subtext
Binoy Kampmark
Concepts of Nonsense: Australian Soft Power
November 12, 2018
Kerron Ó Luain
Poppy Fascism and the English Education System
Conn Hallinan
Nuclear Treaties: Unwrapping Armageddon
Robert Hunziker
Tropical Trump Declares War on Amazonia
John W. Whitehead
Badge of Shame: the Government’s War on Military Veterans
Will Griffin
Military “Service” Serves the Ruling Class
John Eskow
Harold Pinter’s America: Hard Truths and Easy Targets
Rob Okun
Activists Looking Beyond Midterm Elections
Binoy Kampmark
Mid-Term Divisions: The Trump Take
Dean Baker
Short-Term Health Insurance Plans Destroy Insurance Pools
George Wuerthner
Saving the Buffalohorn/Porcupine: the Lamar Valley of the Gallatin Range
Patrick Howlett-Martin
A Note on the Paris Peace Forum
Joseph G. Ramsey
Does America Have a “Gun Problem”…Or a White Supremacy Capitalist Empire Problem?
Weekend Edition
November 09, 2018
Friday - Sunday
Louis Proyect
Why Democrats Are So Okay With Losing
Andrew Levine
What Now?
Jeffrey St. Clair
Roaming Charges: Chuck and Nancy’s House of Cards
Brian Cloughley
The Malevolent Hypocrisy of Selective Sanctions
Marc Levy
Welcome, Class of ‘70
David Archuleta Jr.
Facebook Allows Governments to Decide What to Censor
Evaggelos Vallianatos
The Zika Scare: a Political and Commercial Maneuver of the Chemical Poisons Industry
Nick Pemberton
When It Comes To Stone Throwing, Democrats Live In A Glass House
Ron Jacobs
Impeach!
Lawrence Davidson
A Tale of Two Massacres
José Tirado
A World Off Balance
Jonah Raskin
Something Has Gone Very Wrong: An Interview With Ecuadoran Author Gabriela Alemán
J.P. Linstroth
Myths on Race and Invasion of the ‘Caravan Horde’
Dean Baker
Good News, the Stock Market is Plunging: Thoughts on Wealth
David Rosen
It’s Time to Decriminalize Sex Work
Dan Glazebrook
US Calls for a Yemen Ceasefire is a Cynical Piece of Political Theatre
Jérôme Duval
Forced Marriage Between Argentina and the IMF Turns into a Fiasco
Jill Richardson
Getting Past Gingrich
Dave Lindorff
Not a Blue Wave, But Perhaps a Foreshock
Martha Rosenberg
Dangerous, Expensive Drugs Aggressively Pushed? You Have These Medical Conflicts of Interest to Thank
Will Solomon
Not Much of a Wave
Nicolas J S Davies
Why Yemeni War Deaths are Five Times Higher Than You’ve Been Led to Believe
FacebookTwitterGoogle+RedditEmail