The Divine Right of Capital by Marjorie Kelly

The Divine Right of Capital by Marjorie Kelly

Author:Marjorie Kelly [Kelly, Marjorie]
Language: eng
Format: epub, pdf
Publisher: Berrett-Koehler Publishers, Inc.
Published: 2001-06-15T05:00:00+00:00


AMERICA’S FOUNDING TRADITIONS BETRAYED

While I call this a new principle, it more accurately represents a return to America’s oldest economic traditions. At the time of America’s founding, corporations were created by state charters only to serve the public good. As an 1832 treatise on corporate law put it, “The design of the corporation is to provide for some good that is useful to the public.”3 Or as the Pennsylvania legislature in 1834 declared, “A corporation in law is just what the incorporation act makes it. It is the creature of the law and may be molded to any shape or for any purpose the Legislature may deem most conducive for the common good.”4

By the midnineteenth century, this original and public purpose of corporations began to be eroded in the courts. As activist Richard Grossman has documented, that erosion was at odds with the intent of America’s founders—which we can see in a dissenting opinion in the U.S. Supreme Court’s 1855 Dodge v. Woolsey case. “Combinations of classes in society … united by the bond of a corporate spirit … unquestionably desire limitations upon the sovereignty of the people,” that opinion said. “But the framers of the Constitution were imbued with no desire to call into existence such combinations.”5

Again in the late nineteenth century, the Nebraska Supreme Court in the case of Richardson v. Buhl warned of the danger of allowing private entities to escape control by the public, writing: “Indeed it is doubtful if free government can long exist in a country where such enormous amounts of money are … accumulated in the vaults of corporations, to be used at discretion in controlling the property and business of the country against the interest of the public … for the personal gain and aggrandizement of a few individuals.”6

The phrases here are telling: “the sovereignty of the people,” “the interest of the public,” “the common good.” The corporate form was clearly intended in America’s early years to be subject to the sovereign will of the people and to serve the common good. It could not be otherwise, for serving the public good was, as one general put it, the “polar star” of the American Revolution. Serving private groups at the expense of the public was anathema. In a letter to Thomas Jefferson, Horatio Gates wrote that Americans opposed a system holding “that a Part is greater than its Whole; or, in other Words, that some Individuals ought to be considered, even to the Destruction of the Community.”7



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