Corporations are not capitalism

One of the most widely believed myths in America today is the belief that corporations are an inherent part of capitalism. Concomitant with this is the idea that big corporations and big government have an intrinsically hostile relationship and that the stock market is a free market.

Nothing could be further from the truth.

Capitalism was already well entrenched and the Industrial Revolution was complete when the U.S. Supreme Court radically altered the concept of the corporate charter in 1886 by ruling that the Southern Pacific Railroad was a “natural person” under the U.S. Constitution. Prior to this time, corporations were strictly controlled by state law, which is why the word “limited” still occurs in corporate language.

The Supreme Court had tried once before to expand corporate power by stripping sovereignty from the state of New Hampshire in 1819. In response, many states wrote laws to ensure that they would retain their sovereignty – 19 “even amended their constitutions to make corporate charters subject to alteration or revocation by their legislatures”.

The 1886 ruling trumped these efforts, fulfilling Thomas Jefferson’s prescient fears. In a letter to George Logan written on Nov. 12, 1816, he wrote:

I hope we shall take warning from the example and crush in it’s birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength and bid defiance to the laws our country.

But these monied corporations did more than challenge our government, they corrupted it entirely and established a symbiotic relationship with it. This symbiotic relationship is openly anti-capitalistic, as undying corporations take advantage of laws originally written to protect the entrepeneurs who are the genuine engine of technological progress and economic growth, and use them to sustain their unnatural, parasitic life.

For example, Disney successfully lobbied Congress in 1998 to extend the period of copyright law for 20 years, increasing it to the life of the author plus 70 years. This is obviously of no benefit to a deceased author or his children, but it does prevent Mickey Mouse from entering the public domain while remaining technically within the constitutional dictates that copyrights be granted for a “limited time.”

Corporations also use the government to protect their pool of investment money in the stock market. Due to the massive regulation of this anti-capitalist and unfree market, entrepreneurs needing to raise large sums of capital to challenge established corporate competitors are forced to submit to the predatory regime of the investment banks. In a genuinely free market, the owners of small, but growing businesses could simply sell their public shares over the Internet to anyone who wished to invest.

Indeed, with today’s high-speed communications technology and digital money, there is no more need for Wall Street than there is for Congress. Eliminating both and replacing them with electronic systems – Free and Open Source, of course – would result in the realization of significantly more pure and efficient strains of capitalism and democracy alike.

One need only look at the various socialist and communist states around the world and the friendly relations that giant Western multinationals have with them to realize there is no fundamental link between capitalism and corporations. Gozprom, LUKoil and 400 other Soviet corporations were operating inside and outside the USSR prior to 1989, while Communist China not only permits corporations, but owns several that are listed on the Global Fortune 500. Some of them, such as PetroChina and Sinopec, are even traded on the Hong Kong and New York stock markets.

In fact, it is not the Chinese government, but the People’s Liberation Army that owns the International Trust and Investment Corporation, which among other things has more than 200 Canadian corporations and is the largest “private” operator of shipping container terminals.

Not everything to which the idiot Left is hostile is necessarily good. It is impossible to assert that the age of untrammeled corporatism has been friendly to individual liberty or prosperity, especially when real wages have been falling for three decades – they are 14 percent lower than they were in 1972.

The genius of human invention and the undeniable blessings of capitalism do not stem from artificial structures at law, they come only from the mind of the individual. Conservatives would do well to remember that the next time that the corporations go to their comrades in Congress, demanding more violations of human freedom and more restrictions on individual liberty in order to sustain their vampirish unlives.