Editor's Note: This is the first in a three-part series on corporate welfare and citizen representation by Jack W. Dean of Mattapoisett.
A national movement to amend the U.S. Constitution called “Move To Amend” came together in 2010 to stem what was seen as a growing issue of income inequality in the United States. Since the beginning of 2010, decisions by the Supreme Court (Citizens United v. FEC and McCutcheon v. FEC) in support of the concept of “corporate personhood” and largely unrestricted freedom to spend money on elections by corporations and individuals has led to what is described by some as a system of corporate welfare. This has led to a growing popular desire to rein in money spent on elections and to abolish the concept that artificial entities such as corporations have the same rights as real people. It is widely believed that the only viable way to achieve these ends is to amend the Constitution.
What started out as a democracy in which the people rule is becoming an oligarchy, in which all power is in the hands of a few. This apology for supporting democracy leads us to the necessity that we amend both the state and U.S. Constitutions.
Typically, when the term “welfare“ is used, someone is referring to “social welfare” for the poor or needy among us who are unable to meet their basic human needs of food, shelter and/or health care for a variety of reasons. To meet these real needs, local, state and national governments, along with religious and other volunteer organizations, have developed programs over the years to help these people survive. There are a few who “scam” the programs, but they are indeed just a few. The vast majority of people receiving these benefits and services are indeed needy, and deserving.
“Corporate welfare,” on the other hand, is neither widely recognized nor understood. Corporate welfare is a term used to describe largess toward another constituency that is neither needy nor deserving. Corporate welfare describes those great privileges and advantages that accrue to large corporations, banks, financial institutions and other moneyed interests via the strength of their financial power in the marketplace. Financial power leads inevitably to political power and the ability to influence laws, regulations and built-in loopholes designed to give those who have this ill-gotten power undeserved advantages.
Our Founding Fathers used the prevailing economic ideas of their time in setting up the rules of commerce in the new United States of America. Adam Smith’s highly acclaimed work, "An Inquiry into the Nature and Causes of The Wealth of Nations," (1776), was a seminal source used as a rationale for the development of modern capitalism. While this work is often referenced, it is in his other major work, "The Theory of Moral Sentiments," (1759), that we see most clearly the moral basis for his economic system. While this economic component of his 1776 work is often mistakenly portrayed as a simple, conservative policy of laissez faire attitudes toward the private sector, he in fact advocated “a limited but positive role for government in the economy," or more precisely, an optimum division of labor between the market system and government policy. Smith saw the necessity for regulation in his system. Limitations in a theory of unlimited appropriation is recognized when he states in "Wealth of Nations" that “civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor.”
The Boston Tea Party in 1773 was not a demonstration against unfair taxation by Great Britain, but against the unfair competition set up by a series of laws passed by the British government to favor the trade activities of the East India Co. By the 1770s, the colonies had become a huge market for tea, which was being largely supplied by Dutch Trading companies and American “smugglers” who operated privately without going through the East India Co. The Company set a precedent that multinational corporations follow to this day: They lobbied for laws that would make it easy for them to put their small business competitors out of business.
Since most of the members of the British government and royalty were stockholders in the East India Co. by 1681, it was easy that year to pass “An Act For Restraining and Punishing Privateers and Pirates.” This law required a license to import anything into the Americas and licenses were only rarely granted to anyone other than the East India Co. and other large British corporations. Since the competition for the tea trade had become quite significant by the 1760s, pressure from the East India Co. on the British government resulted in a series of laws being passed that increased the Company’s power and influence and reduced its competition and barriers to international trade. These laws included the Townshend Acts of 1767 and the Tea Act of 1773.
The Tea Act was not simply an increase in taxes on tea paid by American colonists. The actual purpose was to give the East India Co. full and unlimited access to the American tea trade and exempt the company from having to pay taxes to Britain on tea exported to the American colonies. It even gave the company a tax refund on millions of pounds of tea they were unable to sell and holding in inventory.
This abbreviated account of the earliest events leading to the Revolutionary War of 1776 from Thom Hartmann’s book "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights" (2002) illustrates that one direct cause of the American Revolution was the revolt by the colonists against unrestrained corporate power. It should be no surprise, then, that protecting against such unbridled corporate power in the new United States government would be in the forefront of thinking by our Founding Fathers.
Jack W. Dean lives in Mattapoisett. He is a member of the public interest group Citizens for Economic Justice.