Now he’s out with a new book, Citizens Dis-United: Passive Investors, Drone CEOs, and the Corporate Capture of the American Dream. It is a clear, reasoned, and passionate call to see the danger, and to act before it’s too late.

This book is compelling and urgent. It reflects a great decency, patriotism, and honesty. Bob Monks tells the truth, even about where he thinks he has been wrong.

Monks has done more, and knows more, about shareholder democracy and corporate governance than just about anyone. Yet the crisis of our democratic capitalism has reached the point where Monks says that corporate governance is a “myth,” a “chimera at best” and “a fraud at worst.” And what about “shareholder democracy” as a solution to the problem of Citizens United and the corporate capture of our government, elections and culture?

I still believe that in an ideal world, or even a rational one, an empowered and unencumbered electorate is the best remedy to tyranny of any kind, but current circumstances give me no choice but to abandon a position on which I have staked a good portion of my professional life. The atom of ownership is too smashed, and the proxy system through which corporate voting is carried out has been too corrupted to give any hope of a democratic resolution to the multiple ills of corporate governance.

Citizens Dis-United smashes some myths: The myth that the growth of corporate profits can be assumed to be always of worth to America or Americans; the myth that corporate spending is “speech” or that republican government can survive Citizens United and the corporate capture of the government’s branches; the myth that anyone or anything is now in place to ensure that corporations function as intended, to serve a public purpose or even to serve the interest of the purported owners, the shareholders.

Monks shows how “America’s CEO’s have staged a corporate coup d’etat.” The CEOs, “not the titular owners of the businesses, decide where and how company resources will be deployed, what laws will be evaded in the pursuit of short-term gain, what offshore havens profits will be stashed in to avoid taxation, and critically, how lavishly the CEOs themselves will be compensated.”

It should go without saying but it needs to be said again, as Monks does, that this is not about “destroying the corporation but taming it and harmonizing its vast power with human values.”

So what to do?

If you’ve read Corporations Are Not People, you know what I think: (1) A national movement for a Constitutional amendment to reverse the power dynamic of Citizens United and Buckley v. Valeo that accelerates the crisis of democratic capitalism and blocks any chance at real reform; (2) campaign finance reform; (3) legal advocacy in the courts to challenge the corporate capture of our judiciary and Constitutional jurisprudence; and (4) a reform of state and federal corporate laws to better ensure accountability and social benefit.

In Citizens Dis-United, Monks does call for overturning Supreme Court decisions such as Citizens United but his primary and admirable focus is his passionate plea to those who own massive amounts of public company shares to step up to their responsibilities. He calls for decisive and prompt action from those who, like himself, have been blessed by the previous success of American democratic capitalism, who know the truth about corporations and who have access to the few remnant levers left that might yet function.

He identifies the foundations, the pension funds, and the great universities that own hundreds of billions of dollars in shares in corporations that are now run amok. He urges “those fortunate and able enough to prosper in our society [to] stop taking the ‘commons’ for granted, and [to] begin committing their time, values, and integrity to the functioning of companies of which they are the owners.”

Finally, Monks writes of shame. That shame, that “great and public transgression . . . to have known vast harm was being done and to have the power, standing, and resources to intervene, and yet to have failed to act. That is a shame not easily overcome, for the individual or for the society that allowed it to happen.”

In one sense, Monks is shaming those with power and standing (the “great and the good,” as Monks calls them, perhaps with tongue in cheek), and he is trying to move them to action. Yet, this should not be misunderstood as mere finger-pointing at others. Indeed, Monks describes this book as an “atonement for my own shame.”

And he should not feel alone there. One challenge of citizenship in a nation dedicated to a government of the people is that our pointing of fingers or blaming of others only goes so far. In the end, every one of us, including those of us who are not among the leaders of foundations, pensions, and universities, are in the same position of knowing that ‘vast harm was being done’, and having something, big or small, to offer to help. Will we?

I do have a couple of notes of reservation about Citizens Dis-United. First, the emphasis on calling for rescue from the Gates Foundation, Warren Buffet, Harvard University and the like is a little reminiscent of Ralph Nader’s brilliant semi-satire “Only the Super-Rich Can Save Us!” We do need an enhancement of responsibility and virtue from those who have riches and power. But we need that from all quarters, and, in my view, any lasting success for the American experiment and human freedom requires engagement of the problem of corporate power at all levels of American society.

My second reservation is not about anything Monks says but about the unfortunate cover. A leader of the conservative Constitution Party once said that Americans “have more to fear from the U.S. Chamber of Commerce than from al qaeda.” Nevertheless, a cover with smoke and fire rising from the Capitol with a wing-tip clad CEO hitting the trigger is a little much. Don’t let the cover dissuade you from turning to the wisdom within.

Monks has accomplished a great deal in this relatively short book. I can’t help thinking that not the least of Monk’s accomplishments in Citizens Dis-United might be a personal reconciliation with his roots. Monks sometimes describes himself as a “traitor to his class,” one who exiled himself in Maine from the Boston Brahmin world in which he was raised. With Citizens Dis-United, though, Monks reminds us of the best traits of that lost world: duty, trusteeship, responsibility; a resistance to placing the acquisition of wealth above virtue and other human aspirations, and a distaste for extravagance; an undying dedication to the commons, and to the commonwealth and republican government; and yes, a sense of shame.

Citizens Dis-United is not perfect. Bob Monks is not perfect. None of us is perfect. But we are human, we are Americans, and we all can do something beyond ourselves to tackle the very real and present danger that Monks describes so well. If you think the times don’t merit dramatic calls for selfless action, read Monks’ book as soon as possible. It’s available here: http://www.amazon.com/dp/1939282101.

You can find out more about Monks and his work here: http://www.ragm.com/

The Act (1 U.S.C. Sec. 1) provides helpful guidance that“unless the context indicates otherwise,” words that are plural include the singular, a reference to the masculine gender includes the feminine, and “the words ‘insane’ and ‘insane person’ shall include every idiot, insane person and person non compos mantis,” among other examples.

I think that the person who sent the Dictionary Act to me was trying to make a point in defense of Citizens United and to suggest that my book title (“Corporations Are Not People”) may be off-base. As my correspondent pointed out, Congress itself has defined “person” to include corporations. Here’s the Dictionary Act again:

The words ‘person’ and ‘whoever’ include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.

The implication sought to be drawn, I think, is that if Congress has defined the word “person” to include corporations for most of our history, the Supreme Court is correct to extend the metaphor into interpretation of the word “person” in the Constitution, and thus to equate corporations with human beings for purposes of protecting Constitutional rights.  Such an analysis would be a mistake.

The key point is the difference between (1) our Constitution, and its proper interpretation, and (2) our laws enacted by legislators, whether in Congress or in the States. State or federal law cannot change the meaning of words in the Constitution. (This point is discussed at more length in Chapter 3 of my book).

The Dictionary Act and many other statutes include corporations within the defined meaning of the word “person.” The Constitution, however, is different. When the Constitution uses the word “person”, “people” or “citizen,” the words refer to human beings not corporations. More on that point in here, especially at p. 10-15, and in Justice Hugo Black’s 1938 dissent in Connecticut Life v. Johnson ["I do not believe the word 'person' in the Fourteenth Amendment includes corporations."].

This seemingly contradictory approach to interpreting the same word (“person”) to have different meanings in different places (i.e. the Constitution versus enacted laws or regulations) makes perfect sense.

First, we should recall that a corporation is a legal structure for doing business, created and defined by state legislatures (and occasionally, Congress) in order to advance what the state deems to be in the public interest. Corporations do not exist without government action; government (laws enacted by legislatures) make incorporation possible, and define what a corporation is and what it can and cannot do.  Unlike other associations or other ways of doing business, a corporation cannot exist by private arrangement.

While it is necessary for government to enact an incorporation law to permit corporations to exist, many good reasons support our modern practice of permitting ready incorporation for business or other activity. The corporate legal entity is supremely effective at bringing together and channeling ideas, capital, and labor to make a productive, growing enterprise. The corporate form streamlines contract making and enforcement; encourages, secures and rewards investment; enables risk-taking as well as sustained operations, expansion and innovation over long periods of time; and can efficiently spread risk (and reward) over many diverse shareholders. All this and more makes incorporation a very useful economic policy tool to encourage and reward investment, innovation, job creation and economic growth.

None of that, however, can turn a corporation into a Constitutional person (as opposed to a “person” as defined by state or federal statutes).

There are lots of good reasons why states and the federal government enact laws that say, in some instances, that the word “person” includes corporations. For example, the Clean Water Act prohibits unpermitted discharge of toxics and pollutants into the waters of the United States by any person. Congress wrote the Clean Water Act to create civil and criminal penalties for “any person” who violated the law, and intended to include corporations.

Similarly, it makes sense as a matter of policy to treat a corporation like a “person” when a corporation makes a contract, or is sued or brings a lawsuit, or engages in any one of many activities that state law may authorize a corporation to do. We do this because we have decided as a matter of state law that the “person” metaphor can help make the corporation better serve as a tool of public policy and economic activity.

The Constitution is different. Our Bill of Rights is not a “policy choice” that government, or even a temporary majority of people or our elected representatives, can decide upon. Rather, the Bill of Rights is the very definition of the relationship between we human beings and our government. The First Amendment and our other rights in the Constitution are the “carve-outs” for the natural human rights that we insist on withholding to ourselves when we consent to the Constitution’s plan of government in America.

When we decide that under our state or federal laws, corporations are “persons” that can be prosecuted (or that can contract, or be sued, and so on), that decision cannot transform corporations into “persons” under the Constitution’s protections of rights, whether rights of “life,” “liberty,” “property” and “equal protection” for all “persons,” or any others. (See, e.g., the Fourteenth Amendment). We can change state laws of incorporation anytime we can muster a majority in the legislature for any particular change.  We do not change the Constitution anytime a legislature, let alone the legislature of Delaware or any other state alone, decides it might be efficient to do so.

The Constitution cannot be changed by state or federal laws or majority vote but only by the process of Constitutional amendment under Article V of the Constitution. The people have never added corporations to the definition of “persons” in the Constitution by using that amendment process (a vote of two-thirds of Congress, ratified by three-quarters of the States, or a Constitutional convention). As the Supreme Court declared in the 1850s when rebuffing early corporate efforts to create corporate rights, “State laws, by combining large masses of men under a corporate name, cannot repeal the Constitution.”

To appreciate the distinction between “person” under state or federal law, and “person” under the Constitution, consider Delaware’s incorporation law. Delaware law, as in other states, declares that corporations can exist for a defined period of years or may have “perpetual existence.” If a majority of the Delaware legislature wanted to delete that last part of the law, and simply declare that corporations may exist for a period of twenty years, they could do so. In contrast, neither Delaware, nor any other state or federal legislature in America can decide that people shall have a limited period of existence. No matter how good the policy justification for such a law, that law obviously would violate the Constitution’s due process clause protecting the life of all persons.

Corporations, then, are policy tools, not people or holders of Constitutional rights. As economic tools, corporations are highly effective. Yet the same traits that make corporations such useful economic policy tools can also make them dangerous to republican government and democracy if people and lawmakers do not watch and restrain abuses. Corporations can aggregate immense power, corrupt government, drive down wages, trash public resources, concentrate markets to squeeze out competitors and more.

The need to maintain this balance, and to maintain the necessary distinction between Constititutional “persons” and legislative “persons”, is captured by one of the Founders of the nation. James Wilson, a Pennsylvanian, had signed the Declaration of Independence, served in the Continental Congress, helped draft the Constitution, and was nominated by George Washington to be one of the first six Justices on the Supreme Court. (That’s him at the top of this post). He well expressed the prevailing view that corporations can be useful tools but must always be carefully controlled by the people:

A corporation is described to be a person in a political capacity created by the law, to endure in perpetual succession…. It must be admitted, however, that, in too many instances, those bodies politick have, in their progress, counteracted the design of their original formation…. This is not mentioned with a view to insinuate, that such establishments ought to be prevented or destroyed: I mean only to intimate, that they should be erected with caution, and inspected with care.

See James Wilson, Collected Works of James Wilson, Vol. 2. Ch. X, Of Corporations, (ed. Kermit L. Hall and Mark David Hall) (http://oll.libertyfund.org/title/2074/166648/2957866, accessed 2009-07-22)

MEDIA ADVISORY for Monday, February 11 at 10AM at National Press Club, Washington DC

CONTACT:

• Glenn Turner, 917-817-3396, glenn@ripplestrategies.com,
• Shayna Samuels, 718-541-4785, shayna@ripplestrategies.com
• On the ground in DC: Ben Manski, 707-269-0984

First Constitutional Amendment to be Introduced in Congress Stating Corporations Are Not People & Money Is Not Speech

Reps. Nolan & Pocan Respond to Over 500 Municipal Resolutions Calling for “We the People” Amendment

On Monday, February 11, Move to Amend will join members of Congress as they introduce Move to Amend’s “We the People Amendment” an amendment that clearly and unequivocally states that: 1) Rights recognized under the Constitution belong to human beings only, and not to government-created artificial legal entities such as corporations and limited liability companies; and 2) Political campaign spending is not a form of speech protected under the First Amendment.

The Move to Amend coalition was formed in 2009 in preparation for the Supreme Court’s 2010 Citizens United v. Federal Election Commission decision. Today, the coalition of nearly 260,000 people and hundreds of organizations has helped to pass nearly 500 resolutions in municipalities and local governments across the country calling on the state and federal governments to adopt this amendment.

The “We the People Amendment” is being introduced by Representative Rick Nolan (DFL-Minnesota) and Representative Mark Pocan (D-Wisconsin).

WHAT:     Press Conference Announcement of We the People Amendment Introduction in Congress. Amendment language to be unveiled.

WHEN/WHERE:     Monday, February 11, 2013. 10:00 am, National Press Club (PHOTO OP)

WHO:     Move to Amend Spokespeople Ben Manski (Wisconsin) and Leesa “George” Friday (North Carolina) together with lead sponsor United States Representative Rick Nolan (DFL-Minnesota).

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Leaked Investment Texts Reveal Special Rights for Corporations

The document revealed that the United States and all but one other TPP country (Australia) have agreed to a so-called “investor-state” dispute resolution process that would grant transnational corporations special authority to challenge countries’ laws, regulations and court decisions in private tribunals that circumvent domestic judicial systems.

The memo adds that the World Trade Organization (the “WTO”) has already been very active in invalidating application of American laws:

Under the auspices of the World Trade Organization (WTO), the United States has lost more than 90% of the more than 65 cases brought against it by other countries. The United States has lost cases involving the Clean Air Act, Endangered Species Act, Marine Mammal Protection Act, Country-of-Origin Labeling, Internet gambling restrictions and more.

The next step appears to be a move to allow a bypass of the government-to-government dispute process, and create a new “corporate right of action” to allow corporations to move directly against national laws that a corporation may claim violate trade rules:

The leaked texts show the TPP going beyond this “state-to-state” dispute resolution, by inviting individual corporations to initiate “regulatory takings” cases heard by private panels of attorneys specializing in international trade.

Again, here’s the full memo. The Citizens Trade Campaign has a lot of additional information on its website.

Here’s a perspective from the United Steelworkers and from the AFL-CIO labor unions.

Finally, here’s a link to a 2011 Council on Foreign Relations report, U.S. Trade and Investment Policy. The report concludes:  ”Unless the United States develops and sustains a trade policy that yields greater benefits for Americans in job and wage growth, it will be difficult to build the political consensus needed to move forward.”

If you’re looking for transparency and reports from the Office of the United States Trade Representative (part of the Executive Office of the President) about the negotiations, you can try the agency’s website. Unfortunately, the USTO blog that purports to provide updates about the negotiations reads almost as parody: lots of “steps forward” and “progress” but alarmingly little information about what those steps are or where they are taking us.

This is an issue that bears a lot more scrutiny and debate.