In the early history of America, the corporation played an important but subordinate role. The people � not the corporations � were in control. So what happened? How did corporations gain power and eventually start exercising more control than the individuals who created them?

The shift began in the last third of the nineteenth century � the start of a great period of struggle between corporations and civil society. The turning point was the Civil War. Corporations made huge profits from procurement contracts and took advantage of the disorder and corruption of the times to buy legislatures, judges and even presidents. Corporations became the masters and keepers of business. President Abraham Lincoln foresaw terrible trouble. Shortly before his death, he warned that "corporations have been enthroned . . . . An era of corruption in high places will follow and the money power will endeavor to prolong its reign by working on the prejudices of the people . . . until wealth is aggregated in a few hands . . . and the republic is destroyed."

President Lincoln's warning went unheeded. Corporations continued to gain power and influence. They had the laws governing their creation amended. State charters could no longer be revoked. Corporate profits could no longer be limited. Corporate economic activity could be restrained only by the courts, and in hundreds of cases judges granted corporations minor legal victories, conceding rights and privileges they did not have before.

Then came a legal event that would not be understood for decades (and remains baffling even today), an event that would change the course of American history.

In Santa Clara County vs. Southern Pacific Railroad, a dispute over a rail-bed route, the US Supreme Court deemed that a private corporation was a "natural person" under the US Constitution and therefore entitled to protection under the Bill of Rights. Suddenly, corporations enjoyed all the rights and sovereignty previously enjoyed only by the people, including the right to free speech.

This 1886 decision ostensibly gave corporations the same powers as private citizens. But considering their vast financial resources, corporations thereafter actually had far more power than any private citizen. They could defend and exploit their rights and freedoms more vigorously than any individual and therefore they were more free. In a single legal stroke, the whole intent of the American Constitution � that all citizens have one vote, and exercise an equal voice in public debates � had been undermined. Sixty years after it was inked, Supreme Court Justice William O. Douglas concluded of Santa Clara that it "could not be supported by history, logic or reason." One of the great legal blunders of the nineteenth century changed the whole idea of democratic government.

Post-Santa Clara America became a very different place. By 1919, corporations employed more than 80 percent of the workforce and produced most of America's wealth. Corporate trusts had become too powerful to legally challenge. The courts consistently favored their interests. Employees found themselves without recourse if, for example, they were injured on the job (if you worked for a corporation, you voluntarily assumed the risk, was the courts' position). Railroad and mining companies were enabled to annex vast tracts of land at minimal expense.

Gradually, many of the original ideals of the American Revolution were simply quashed. Both during and after the Civil War, America was increasingly being ruled by a coalition of government and business interests. The shift amounted to a kind of coup d'etat � not a sudden military takeover but a gradual subversion and takeover of the institutions of state power. Except for a temporary setback during Franklin Roosevelt's New Deal (the 1930s), the US has since been governed as a corporate state.

In the post-World War II era, corporations continued to gain power. They merged, consolidated, restructured and metamorphosed into ever larger and more complex units of resource extraction, production, distribution and marketing, to the point where many of them became economically more powerful than many countries. In 1997, fifty-one of the world's hundred largest economies were corporations, not countries. The top five hundred corporations controlled forty-two percent of the world's wealth. Today corporations freely buy each other's stocks and shares. They lobby legislators and bankroll electeions. They manage our broadcast airwaves, set our industrial, economic and cultural agendas, and grow as big and powerful as they damn well please.

Every day, scenes that would have seemed surreal, impossible, undemocratic twenty years ago play out with nary a squeak of dissent from a stunned and inured populace.

At Morain Valley Community College in Palos Hills, Illinois, a student named Jennifer Beatty stages a protest against corporate sponsorship in her school by locking herself to the metal mesh curtains of the multimillion-dollar "McDonald's Student Center" that serves as the physical and nutritional focal point of her college. She is arrested and expelled.

At Greenbrier High School in Evans, Georgia, a student named Mike Cameron wears a Pepsi T-shirt on the day � dubbed "Coke Day" � when corporate flacks from Coca-Cola jet in from Atlanta to visit the school their company has sponsored and subsidized. Mike Cameron is suspended for his insolence.

next

19

back