UFPPC (www.ufppc.org) Digging Deeper: May 30, 2005, 7:00 p.m.

Ted Nace, Gangs of America: The Rise of Corporate Power and the Disabling of Democracy (San Francisco: Berrett-Koehler, 2003).
Acknowledgments. 2 pp. Introduction. “What is the nature of [corporate] power?” (12). Author’s early experience of corporations in SW North Dakota (2-5) and as founder of Peachpit Press (5-9). Americans seem to feel “that inquiring into the substantive aspects of corporate capitalism is vaguely unpatriotic” (9). “The story of how the central institution of our economic system ― the corporation ― developed is not part of our culture” (9). This book an effort to tell that story (9-10). Ch. 1: How Did Corporations Get So Much Power? Harris polls show Americans think corporations have too much power (11-12). The confusing case of Santa Clara County v. Southern Pacific RR (1886), holding that “corporations are persons” (12-14). But the story is more complicated, with “three overlapping phases”: (1) Legislative creation of corporate quasi-rights (1820-1900); (2) Judicial creation of corporate constitutional rights (1886-1986); (3) Trade agreement creation of corporate global rights (1987-present) (15-18). Ch. 2: From Street Fights to Empire: The British Roots of the American Corporation (1267-1773). British guilds (1922). Trading companies, with pooling of capital (22-23). Exclusivity added: “the gene of violent organization grafted onto the chromosome of peaceful trade” (23). Joint-stock company, 16th c. (24). “Essentially, a corporation is a deal between the state and a group of people to which the state says: ‘You can create a separate entity and do business under that name, and the law will deal with the entity rather than with you as individuals’” (24). The East India Company, “the most powerful corporation that has ever existed” (24-28). Ch. 3: The Ultimate Reality Show: . . . the Virginia Company (1607-1624). Jamestown Colony the only business venture of the Virginia Company (30). James Fort, first settlement, starved while promoters advertised “abundance” (30-31). Investors hoped for rich profits (31-32). Labor supply from peasants driven off lands by enclosures (32-33). “Regimentation & institutionalized cruelty” (33-34). Aggressive business plan gave rise to Virginia General Assembly elected by landowning settlers (35). Demands for investigation led to revocation of charter (36). Legacy of resistance in American Revolution (37). Ch. 4: Why the Colonists Feared Corporations . . . (17701773). Despite corporate propaganda, “To a surprising degree, the American Revolution was directly and explicitly an anticorporate revolt” (38-41). Boston Tea Party was “a highly pragmatic economic rebellion against an overbearing corporation . . . or more accurately . . . a rebellion against a corporation and a government that were thoroughly intertwined” (42). East India Company’s dumping and vertical integration plan (42-44). Establishment embrace of “rebellious subculture” (44-45). Ch. 5: And What They Did about It (1787-1850). Only 6 non-banking business corporations in U.S. in 1787 (46). Debate over charters in Constitutional Convention (47-48). Anti-corporate (but not anti-business) sentiment supported restrictions on corporate charters, notably on lifespan, liability shields, corporate expansion; and charters could be revoked (48-54). This did not inhibit economic growth (54-55). Ch. 6: The Genius: The Man Who Reinvented the Corporation (1850-1880). State legislatures’ concessions to RR corporations enabled Pennsylvania’s Tom Scott to use the Penna. RR as a means of forging a nationwide RR system (5665). Scott’s invention of the holding company was key because it allowed them to escape the control of state legislatures (65-66). Later William Nelson Cromwell succeeded in 1889 in getting New Jersey to allow any N.J. corporation to hold stock in any other corporation, a capitalistic mechanism superior to the trust used by Rockefeller (66-67). “By 1901, 71% of all U.S. corporations with assets of $25 million or greater were using New Jersey as their home base” (68). Delaware followed New Jersey in 1899 and “pulled ahead” in 1913 when Woodrow Wilson tightened New Jersey statutes (68). Corporate revolution (6869). Ch. 7: Superpowers (1860-1900). Modern corporation distinguished from “classic corporation” by greater powers (70-72). General incorporation (72-73). Perpetual life (7375). Ability to morph (75-76). Mobility (76). Free to change purpose (77). As the means of controlling corporate activities or revoking charter, corporations find themselves beyond the reach of “conscience” (77-79). Management takes over (8083). Awarded constitutional rights (83-86). Ch. 8: The Judge: Stephen Field and the Politics of Personhood (1868-1885). Dred Scott case (87-88). Fourteenth Amendment (88). Stephen Field’s early career (89). Railroads and the Supreme Court (90-93). Populist opposition (93-95). Field’s use of 14th Amendment on behalf of corporations (95-96). State tax cases (96-97). Field’s argument simple and logical, but ignored social realities (98101). Ch. 9: The Court Reporter (1886). Santa Clara case (1886) (102-03). Discovery in 1960 of exchange of notes between Chief Justice Morrison Waite and court reporter J.C. Bancroft Davis, showing Waite thought “he avoided meeting the constitutional question in the decision” (103-05). Reason for Waite’s pre-argument remark (105-06). Other justices did not believe a constitutional matter had been decided (106). Davis’s motives uncertain (107). Within a year, Santa Clara was being cited as precedent (107-08). Legal status of decision (108-09). Muddled circumstances served corporate interests (109). Ch. 10: The Lavender-Vested Turkey Gobbler (1883). Roscoe Conkling cited secret journal on the drafting of the Fourteenth Amendment in arguing the San Mateo case for 14th-Amendment corporate personhood (110-12). Beards’ The Rise of American Civilization (1927) seized on this “proof” of

capitalist plotting (112-13). But Howard Graham, studying the journal, shows Conkling made it up (114-16). Historical reflections (116-17). Ch. 11: Survival of the Fittest (1886-1937). Spencerian Social Darwinism (118-19). Lack of freedom for laborers (119-20). Pattern of “labor upsurge followed by repression and union collapse” (122-25). Lochner v. N.Y. (1905), struck down legislation limiting bakers’ hours (125-27). Substantive due process doctrine, developed by Thomas McIntyre Cooley (127-29). Oliver Wendell Holmes Jr. (129-30). Anti-labor decisions (130-31). Political pressure led Supreme Court to abandon substantive due process and uphold social legislation (West Coast Hotel Co. v. Parrish, 1937); from 1922 to 1970 expansion of corporate rights stopped (except for Fong Foo (1962), granting 5th-Amendment double jeopardy protection) (131-33). Movement for individual rights (133-34). Roosevelt as engineer of balanced “win-win solution” (13435). Galbraith’s optimism that the New Deal had “permanently exorcised the Progressive-Era fears of looming corporate domination” (135-36). Ch. 12: The Revolt of the Bosses (1971-2002). Lewis J. Powell Jr., [Aug. 23,] 1971 memo, “Attack on American Free Enterprise” inspired by 1960s regulatory legislation, identifies college campuses as the “single most dynamic source” of corporate America’s problems and advocates “careful longrange planning and implementation . . . through united action and national organizations” (137-42). Business Roundtable, conservative think tanks, Paul Weyrich’s American Legislative Exchange Council, corporate lobbying groups, aggressive attacks on critics, “judicial education” (142-47). After 1975, corporate PACs grow (147-49). Soft money (149-51). Ch. 13: Speech=Money. Anti-Prop. 134 (drink tax in CA) as example of corporate speech (152-53). First-Amendment protection of Montana corporation used to strike down Initiative 125 (banning cyanide in cold mining) in 1999 (15456). With Powell on Supreme Court, Buckley and Belotti [5-4] decisions block campaign finance reform (156-59). Can be seen as wrenching the tension between freedom and wealth in the Bill of Rights toward wealth (159-60). Ch. 14: Judicial Yoga. [Chapter follows Carl J. Mayer, “Personalizing the Impersonal: Corporations and the Bill of Rights,” Hastings Law Journal (1990).] “What is a corporation?” (161). Artificial entity theory (161-62). Field’s shareholder-oriented theory (163). Natural entity theory, a presumption that “seeped into the Court’s decisions,” derives from Otto Gierke’s (1841-1921) organicism and advocacy of intermediate institutions, but was doused by John Dewey in 1926 (163-66). Hiatus, 1922-1962, but Hugo Black’s and William O. Douglas’s advocacy for reversing Santa Clara goes nowhere (166-67). 1962-1986 cases expanding corporate rights rely on history and the intended purpose of a particular constitutional right (167-70). Court’s acceptance of corporations’ “privileged status,” but with no “overarching theory” (170). ACLU’s defense of corporations’ FirstAmendment rights ignores Berle & Means’ analysis of the nature of the modern corporation and the structure of American media (171-73). But to consider the corporation a “speaker” is a “fallacy,” as the Nike case shows (174-77).

Ch. 15: Crime Wave. 2001-2002 corporate scandals (17879). Linked to introduction of stock options as management compensation (180-81). Perverse unintended consequences (181-82). Failure of oversight (182). Business Roundtable recommendations and the Sarbanes-Oxley Act (183-84). Democrats on corporate dole, reforms stymied (184-85). Deeper problem: “overwhelming corporate influence in democratic government,” e.g. PNAC (185-86). Ch. 16: Global Rules. In Hong Kong in 1997 corporations got the right to vote in the legislature (187). Antecedents of globalization (188-89). Bretton Woods institutions ― World Bank, IMF, WTO ― use “structural adjustment” requirements to facilitate corporate moves into Third World (189-90). Special industrial zones (190-91). Free trade agreements introduce “national treatment,” “minimum standard of treatment,” and “compensation for regulatory takings” as new international corporate rights (191-95). Multilateral Agreement on Investments turned back in 1997-1998 (19596). Ch. 17: Fighting Back. Rev. Billy Talen’s haranguing of businesses (197-98). Groundswell of anti-corporatism in mid1990s (198-200). Seattle, Nov. 1999 (200). Anti-sweatshop movement (200-02). Failure of “codes of conduct” approach (202-03). Richard Grossman, Frank T. Adams, et al. form POCLAD (Program on Corporations, Law & Democracy), try to revive state charter revocation (203-06). Alien Torts Claim Act revived (206-07). Deadria Farmer-Paellmann’s classaction slavery lawsuit, 2002 (207-08). Carl J. Mayer’s proposed constitutional amendment (208-09). Prospects for Supreme Court reversal (209). Local governments (e.g. Porter Township, PA) (210). New populists despair of regulation, seek new approaches (211-12). International Right to Know standards (212-13). Causes of the collapse of earlier movements (213-16). History of media shows corporate power (216-19). Eisenhower’s Farewell Address as exception proving the rule (217-18). Despite its disparateness, “the movement should not be underestimated” (218). Ch. 18: Intelligent, Amoral, Evolving. ExxonMobil annual meeting (219-22). Corporation managers required to maximize shareholder returns (222-23). Institutions can be reengineered (223-24). Seven-point program to constrain corporate power (224). The corporation as a new life form (225-27). Benefits of this perspective (227-28). Appendix A: Supreme Court Decisions. 37 cases, arranged chronologically (230-37). Appendix B: The Bill of Rights and the Fourteenth Amendment. (238-39). Notes. 22 pp. References. 98 books; 6 scholarly papers; 2 conference papers; 1 Ph.D. thesis; 1 unpublished thesis. Index. 15 pp. About the Author. Born in North Dakota. Youthful environmentalism. Founded Peachpit Press, computer book publisher, then returned to free-lance writing. .

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