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Corporate Unlimited "Limited Liability": Potentially Lethal Liability

Leonard Isenberg: Those who created the corporation were not completely unaware of the potential danger of such a powerful entity, so they established certain limitations on corporations that were designed to assure that they would always be under the control of the sovereign.
sorcerers apprentice

Corporate Unlimited "Limited Liability" Is a Potentially Lethal Liability to Democracy - IT'S ALIVE!

The Sorcerer's Apprentice is the English name of a German poem entitled Der Zauberlerhling by Goethe. It tells the story of a sorcerer's apprentice who sought to get around his work responsibilities by using magic, without realizing the ramifications of this ill-advised action until it was too late.

In the beginning, things were just great, the apprentice was able to play and benefit from the work of the enchanted broom which did all his work. But it was not long before things got completely out of hand and catastrophe was only avoided by the timely return of the sorcerer.

The history of corporations has a very similar storyline to the Sorcerer's Apprentice, but as of this writing no sorcerer has appeared to save us from the dreadful consequences of the uncontrolled growth (cancer?) of corporations that now threaten the very future of the body politic. Initially, the modern corporation, which started in England, after the earlier success of charter companies in Sweden and the Netherlands, was a real boon to commercial growth because of the following characteristics:

  • Limited investor liability made it possible for those interested in investing a part of their money to only be liable for that money and no more.
  • Consequently, huge amounts of money that had never before been amassed could be aggregated in furtherance of projects the scale of which had never been seen - not the least of which was the creation of the British Empire upon which the sun never set nor the exploitation of indigenous peoples never ceased.
  • If a corporation was adequately capitalized and formalities were respected, it would be treated as a separate entity from those who had either started it, ran it, or invested in it.
  • It was also able to attain potential immortality, which had heretofore limited the financial success of any financial endeavor run by a mere mortal.

Those who created the corporation were not completely unaware of the potential danger of such a powerful entity, so they established certain limitations on corporations that were designed to assure that they would always be under the control of the sovereign:

  • Corporations existed at the will of the sovereign, who could cancel its charter at will.
  • They were limited to a specific function and anything else was deemed to be ultra vires or beyond the corporation's power to engage in.
  • While considered an entity under the law, this was clearly recognized as a legal fiction for the purpose of creating limited liability with no intention of treating a corporation as a human entity.

What was not appreciated was that an entity, once given life under law, would not rest until its right were coextensive with those of a human being's and, given a corporations immortality and all the time it needed to expand its power over generations, it would ultimately seek powers greater than that of mere humans that had created it- sounds a bit like HAL in 2001 or an earlier creation of Gothic literature.

As time passed corporate power expanded and with it the ability of mere mortals to control it. While human existence has many other exigencies beside that of acquisition of wealth, corporations have only that one: The making of profit at any cost. If a corporation has a 30% profit one year, that is never good enough, since that mark would only be the starting point for the next fiscal year - its appetite for more money can never be satiated.

In Santa Clara County v. Southern Pacific Railroad Company, 118 U.S.394 (1886). Corporations got protection under the 14th Amendment to the United States Constitution, which was the same amendment that was used in 1868 as part of the process of selectively incorporating rights to make certain the Bill of Rights was applicable to the states as well as the federal government, when it came to protecting individual human beings. Corporations like brooms in the Sorcerer's Apprentice were showing the first signs of real life.

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In the late 1950s, most American corporations decided to go off-shore and pledge allegiance to the country that would give them the best deal. Like Delaware had done in offering domestic corporations the most business friendly environment with minimal regulations and other formalities, places like The Channel Islands, Luxembourg, Switzerland, Guernsey Islands, Lichtenstein, San Marion, Monaco, West Africa, and small countries in the Caribbean stood in line to offer what became multinational corporations shelter from the state and federal regulations that had earlier kept amoral corporations in check.

When a company like Standard Oil or a growing number of others attain the Gross National Production of most countries, they also develop de facto sovereignty, so that if Canada wants to remove the water pollutant MTBE from gasoline, it is forced to compensate the corporation.

When genetically engineered seed stock pollutes the traditional crops of an adjacent farm, the corporation doesn't see its action as a harmful trespass, but rather seeks compensation from the farmer for expropriating their ownership interest in the patented seed stock without paying for it. This is tantamount to Tokyo Electric trying to charge the Japanese for all the free nuclear energy it has released from its Fukushima Daiichi power plants.

Checks on corporate power are now clearly a thing of the past. Film production companies that were forced to divest themselves of theaters in the 1950s to assure true competition are now a part of huge conglomerates that have centralized control of all mainstream media into the hands of six mega-conglomerates.

Media like National Public Radio, which cannot be controlled by these conglomerates directly, are controlled through massive donations from entities like The Gates Foundation or Eli Broad. With those donations come strings that prevent any criticism of corporate party line or corporate interest, thus eliminating all criticism of what corporations are doing in foreign or domestic policy that serves them but not the majority of the citizens of this or any other country.

Senator Max Baucus' taking $3 million in campaign contributions from medical insurance companies to bury the single-payer option is just one especially egregious example of the complete control that corporations now hold over the legislative branch of our government. Then Health and Human Services Secretary, Kathleen Sibelius, had no compunction about saying that the "Single payer option is not on the table," although the vast majority of Americans want it and every other major industrialized country in the world has it at far less cost and with far superior health care.

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Corporate money has been allowed to distort the electoral process for so long that President Obama taking $150 million from Wall Street and banking corporations during the last election was not even seriously questioned. Corporate America still has so much power even after nearly wrecking the world economy. And yet -- they are still deemed too big to fail. And the Rubins and Geitners who engineered this Ponzi scheme were given even more power, instead of being indicted, fined, and sent to prison.

While the corporate power that has systematically been developed over the last 150 years in the United States cannot be dismantled immediately, its momentum and direction can be stopped and changed. If "we the people" organize on a state by state basis to call for a constitutional convention for the limited purpose of overturning the outrageous precedent established by Citizens United, that would be a first step toward limiting corporate power that has now made a mockery of our political system where both Democrats and Republicans quack like a corporate duck.

What makes this all the more difficult is that we no longer have the traditional mainstream media willing to report what most citizens need to know in order to be arbiters of power and part of the dialogue that would result in change that reflects their majoritary beliefs.

If Julian Assange and Wikileaks can develop and succeed at getting out the word, then we should also be able to do so, if we don't allow the premeditated and repetitious negative message of our mainstream media and our schools, which teach us to obey, to stifle the power that our Founding Fathers vested in We the People.

Common Cause is starting a campaign to overturn Citizens United with a constitutional amendment and could use a little help. Why not contact: Anjuli Kronheim, Los Angeles Organizer,

It occurs to me that advocating the violent overthrow of the American government is a crime, but when one thinks about it, the continued practice and logical outcome of multinational corporations continuing to grow their wealth year after year at the expense of We the People of this finite globe, can only lead to a violent confrontation when even apathetic and passive people can no longer survive against The Matrix.

leonard isenberg

A person is an entity but an entity is not always a person.

Leonard Isenberg