The Future (22 page)

Roosevelt made a fateful decision at the beginning of his presidency not to run for a second full term in 1908, noting that he had served almost the full eight years that George Washington had established as the “
wise custom” by serving only two terms. When Roosevelt’s handpicked successor,
William Howard Taft, abandoned many of TR’s reforms, the march of corporate power resumed. In response, Roosevelt began to organize his Bull Moose Party campaign to replace Taft as president in the election of 1912.

In October of 1910, Roosevelt said, “Exactly as the special interests of cotton and slavery threatened our political integrity before the Civil War, so now the great special business interests too often control and
corrupt the men and methods of government for their own profit.” Eighteen months later, in the midst of the campaign, he said that his party was engaged in a struggle for its soul:

After Roosevelt lost that campaign to Woodrow Wilson (Taft came in third), he continued to speak out forcefully in favor of Progressive reforms and a rollback of corporate power. He said that the most important test of the country remained “the struggle of free men to gain and hold the right of self-government as against the special interests, who
twist the methods of free government into machinery for defeating the popular will.” He proposed that the U.S. “
prohibit the use of corporate funds directly or indirectly for political purposes,” and in speech after speech, argued that the Constitution “
does not give the right of suffrage to any corporation.” Thanks in part to his vigorous advocacy, the Progressive movement gained strength, passing a constitutional amendment to reverse the Supreme Court’s prohibition against an income tax, enacting an inheritance tax, and enacting numerous regulations to rein in corporate abuses.

The many Progressive reforms continued during Woodrow Wilson’s presidency, but the pendulum shifted back toward corporate dominance of democracy during the Warren Harding administration—remembered for its corruption, including the Teapot Dome scandal in which oil company executives
secretly bribed Harding administration officials for access to oil on public lands.

Following three pro-corporate Republican presidents, President Franklin Roosevelt launched the second wave of reform when he took office in 1933 in the midst of the suffering caused by the Great Depression that was triggered by the stock market crash of 1929. The New Deal expanded federal power in the marketplace to a formidable scale and scope. But once again the conservative Supreme Court stopped many of the Progressive initiatives, declaring them unconstitutional. Theodore Roosevelt had declared the justices “a
menace to the welfare of the nation” and FDR essentially did the same. But he went further, proposing a court-packing plan to add to the number of justices on the court in an effort to dilute the power of the pro-business majority.

Historians differ on whether Roosevelt’s threat was the cause or not, but a few months later the Supreme Court reversed course and
began approving the constitutionality of most New Deal proposals. To this
day, some right-wing legal advocates refer to the court’s switch as a “betrayal.” In the twenty-first century, right-wing judicial activists are trying to
return court rulings to the philosophy that existed prior to the New Deal.

In spite of FDR’s initiatives, the U.S. found it difficult to escape hard times, and slipped back into depression in 1938. Then, when America mobilized to respond to the totalitarian threat from Nazi Germany and Imperial Japan, the Depression finally ended. After the U.S. emerged victorious, its remarkable economic expansion continued for more than three decades. By then, the consensus in favor of an expanded role for the federal government in addressing national problems was supported by a majority of voters across the political spectrum.

In the turbulent decade of the 1960s, however, the seeds of a corporate-led counterreform movement were planted. After the assassination of President John F. Kennedy in the fall of 1963, a variety of social reform movements swept the nation—driven in part by the restless energy and idealism of the huge postwar baby boom generation just entering young adulthood. The civil rights movement, the women’s movement, the first gay rights demonstrations, the consumer rights movement, Lyndon Johnson’s War on Poverty, and the escalating protests against the continuation of the ill-considered proxy war against communism in Southeast Asia all combined to produce a fearful reaction by corporate interests and conservative ideologues.

Just as the Paris Commune had radicalized Justice Stephen Field 100 years earlier, the social movements in the U.S. during the 1960s also awakened a fear of disorder, radicalized a generation of right-wing market fundamentalists, and instilled a sense of mission in soon-to-be Supreme Court Justice Lewis Powell.
Powell, a Richmond lawyer then best known for representing the tobacco industry after the surgeon general’s 1964 linkage of cigarettes to lung cancer, wrote a lengthy and historic 1971 memorandum for the U.S. Chamber of Commerce in which he presented a comprehensive plan for a sustained and massively funded long-term effort to change the nature of the U.S. Congress,
state legislatures, and the judiciary in order to tilt the balance in favor of corporate interests. Powell was appointed to the Supreme Court by President Nixon two months later—though his plan for the Chamber of Commerce was not disclosed publicly until long after his confirmation hearings. A former president of the American College of Trial Lawyers, Powell was widely respected, even by his ideological opponents. But his aggressive
expansion of corporate rights was the most consequential development during his tenure on the court.

Justice Powell wrote decisions creating the novel concept of “
corporate speech,” which he found to be protected by the First Amendment. This doctrine was then used by the court to invalidate numerous laws that were intended to restrain corporate power when it interfered with the public interest. In 1978, for example, Powell wrote the opinion in a 5–4 decision that for the first time struck down state laws prohibiting corporate money in an election (a citizens referendum in Massachusetts) on the grounds
that the law violated the free speech of “corporate persons.” Thirty-two years later, the U.S. Supreme Court relied on Powell’s opinion to allow wealthy individual donors to contribute unlimited amounts to campaigns secretly, and further expanded the 1886
Southern Pacific
precedent declaring corporations to be persons.

While it is true that corporations are made up of individuals, the absurdity of the legal theory that corporations are “persons”—as defined in the Constitution—is evident from a comparison between the essential nature and motives of corporations compared to those of flesh-and-blood human beings. Most corporations are legally chartered by the state with an ironclad mandate to focus narrowly on the financial interests of their shareholders. They are theoretically immortal and often have access to vast wealth. Twenty-five U.S.-based multinational corporations
have revenues larger than many of the world’s nation-states. More than half (53) of the 100 largest economies on Earth are now corporations. ExxonMobil, one of the largest corporations in the world, measured by revenue and profits, has a larger economic impact than the nation of Norway.

Individuals are capable of decisions that reflect factors other than their narrow financial self-interest; they are capable of feeling concern about the future their children and grandchildren will inherit—not just the money they will leave them in their wills; America’s founders decided as individuals, for example, to pledge “our Lives, our Fortunes, and our Sacred Honor” to a cause deemed far greater than money. Corporate “persons,” on the other hand, now often seem to have little regard for how they can help the country in which they are based; they are only concerned about how that country can help them make more money.

At an oil industry gathering in Washington, D.C., an executive from another company asked the then CEO of Exxon, Lee Raymond, to consider building additional refinery capacity inside the United States “for
security” against possible shortages of gasoline. According to those present, Raymond replied, “
I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.” Raymond’s statement recalls the warning by Thomas Jefferson in 1809, barely a month after leaving the White House, when he wrote to John Jay about “the selfish spirit of commerce, which knows no country, and feels no passion or principle but that of gain.”

With the emergence of Earth Inc., multinational corporations have also acquired the ability to play nation-states off against one another, locating facilities in jurisdictions with lower wages and less onerous restrictions on their freedom to operate as they wish. The late chairman of the libertarian Cato Institute, William Niskanen, said, “corporations have become sufficiently powerful to pose a threat to governments,” adding that this is “particularly the case with respect to multinational corporations, who will have much less
dependence upon the positions of particular governments, much less loyalty in that sense.” In 2001, President George W. Bush was asked by the prime minister of India, Manmohan Singh, to influence ExxonMobil’s pending decision on allowing India’s state-owned oil company to participate in a joint venture including the oil company and the government of Russia. Bush replied, “
Nobody tells those guys what to do.”

Those who advocate expanding the market sector at the expense of democratic authority believe that governments should rarely have the power to tell corporations “what to do.” For the last forty years, pursuant to the Powell Plan, corporations and conservative ideologues have not only focused on the selection of Supreme Court justices favorable to their cause and sought to influence Court opinions, they have also pursued a determined effort to influence the writing of laws and the formation of policies to expand corporate power. They dramatically increased corporate advertising aimed at conditioning public opinion. They significantly expanded the number of lobbyists hired to pursue their interests in Washington, D.C., and state capitals. And they significantly increased their campaign contributions to candidates who pledged to support their agenda.

In only a decade, the number of corporate
political action committees exploded from less than 90 to 1,500. The number of
corporations with registered corporate lobbyists increased from 175 to 2,500. Since then, the number has continued to increase dramatically; recorded expenditures
by lobbyists increased
from $100 million in 1975 to $3.5 billion per year in 2010. (The U.S. Chamber of Commerce continues to
top the list of lobbying expenditures, with more than $100 million per year—
more than all lobbyist expenditures combined when the Powell Plan was first conceived.) One measure of how quickly attitudes toward lobbying have changed in the political culture of Washington was that in the 1970s,
only 3 percent of retiring members of Congress gained employment as lobbyists; now,
more than 50 percent of retiring senators and more than 40 percent of retiring House members become lobbyists.

Corporate coffers were far from the only source of funding for efforts consistent with the Powell Plan. Several wealthy conservative individuals and foundations were also radicalized by the 1960s, which Powell had described as “
ideological warfare against the enterprise system and the values of Western society.” When he called for an organized, well-funded response by “business to this massive assault upon its fundamental economics, upon its philosophy, upon its right to manage its own affairs, and indeed upon its integrity,” many conservative business leaders rose to answer Powell’s charge.

John M. Olin, for example, reacted to the armed takeover by militant black students of a campus building at Cornell University, his alma mater, by refocusing his wealthy foundation to support right-wing think tanks and a variety of right-wing efforts to
change the character of American government. He embarked on a plan to not only spend the annual income from his foundation’s endowment but to spend down the entire
principal as quickly as possible in order to have maximum impact. Numerous other right-wing foundations also financed efforts consistent with the Powell Plan, including the
Lynde and Harry Bradley Foundation and the
Adolph Coors Foundation.

Perhaps the most effective part of the heavily funded conservative strategy has been their focus on populating the federal courts—particularly the U.S. Supreme Court—with ideological allies. The Powell Plan had noted specifically, “Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change.… This is a vast area of opportunity for the Chamber … 
if, in turn, business is willing to provide the funds.”

Subsequently, corporate interests became particularly active and persistent in lobbying to place judges on the bench who would be responsive
to conservative legal theories that diminish individual rights, constrict the sphere of democracy, and elevate the rights and freedom of action for corporations. They have also established conservative law schools to train an entire generation of counterreformist advocates, and a network of legal foundations to influence the course of American jurisprudence. Two U.S. Supreme Court justices have even taken corporate-funded vacations at resorts where they were treated to legal instruction in
seminars organized by wealthy corporate interests.