IV: The First American Corporations--pre-1776

            Corporations as they exist today did not spring up all at once. It took several centuries for the concept to catch on and be implemented as a way of doing business. Viewing this history will help us to see the strengths and weaknesses of the corporate structure and help us to determine how corporations might be steered to contribute to the welfare of all instead of contributing primarily to the profits of a few.

As this series continues, we will also see more clearly the role governments play in making corporations possible. The goal of this series is to provide a foundation of understanding so that we may intelligently tackle the problem of excessive corporate influence, particularly on the funding of electoral candidates. (1).

            To understand the role corporations play in the nation and the world, it is crucial that we see that some very important corporations include more than profit-making businesses.

            The first currently-existing corporation created on the soil of what is now the United States is Harvard University. (3). It was incorporated in 1650 through the action of the Massachusetts colonial legislature, called The General Court (as it is still called today). Harvard’s existence began in 1636; incorporation came later. (2, p. 84). Yale University received its charter of incorporation in 1701. (4). By the time of the American Revolution, nine colonial colleges had been incorporated. (2, p. 84). (Most private colleges and universities today are corporations.)

            In the colonies, communities also sometimes were incorporated. Apparently the very first corporation in the colonies occurred in 1587 when a grant from Sir Walter Raleigh, acting under authority given to him from England, created the city of Raleigh, Virginia (2, p. 30), on an island (later in North Carolina) that was subsequently abandoned. Although it was not always clear which entities had legal status as corporations and which did not, there were roughly two dozen municipal corporations created in the colonies, beginning in the latter half of the seventeenth century. (2, pp. 50ff). Most of them survived up to and following the Revolution. (2, p. 59). However, most cities and towns in the colonies were not corporations or had a disputed legal status. (2, pp. 60-64). In addition to municipal corporations, a few public corporations were established for the purposes of charity or to administer loans. (2, p. 73).

In the colonies there was no clear line separating public from private corporations, but the latter were more directly financed and controlled by private parties. (2, p. 75). These private corporations included many non-business entities, such as religious institutions, e.g., churches and various religious societies. (2, pp. 75 ff). The establishment of such religious corporations started at the beginning of the eighteenth century. (2, pp. 75 ff). Many such institutions were not corporations but enjoyed legal stability in other forms that varied considerably over time and in different places. (2, pp. 75 ff). Private corporations too included entities that were charitable, educational, or a combination of both. (2, pp. 82 ff).

Business corporations existed prior to the Revolution, but their influence was limited. (2, p. 87). Apparently the first business corporation in America was established in 1589 when Sir Walter Raleigh, under authority granted to him by the Queen, granted a group of men a corporation for business. It did not last long. (2, pp. 31-32).

Subsequently colonial corporations came into existence by receiving a charter from the colonial government with no interference by the British. The governmental sources of these charters varied across the colonies: sometimes it was from the governor acting alone, sometimes from the governor with legislative approval, and sometimes from just the legislative body. Most were set up for charitable, educational or religious purposes; a few were for business purposes. There were also many corporate-like associations and societies that lacked one or more of the formalities required to create a corporation. (2, pp. 104-107).

As we shall see in subsequent postings, it was not until the nineteenth century that the business corporation took hold as an important and significant alternative way of doing business. Even so, the concept of the corporation was controversial. The slowness of the rise of the corporation was most likely because, until the middle of the nineteenth century, corporations were too dependent on the governments that created them. The existence of a corporation depended on a specific charter granted by the appropriate governmental authority. For example, the governing body of Connecticut granted a charter to the New London Society for Trade and Commerce in 1732, and then revoked the charter a year later. (5, p. 43). The existence of any particular corporation, therefore, depended on politics. Since one of the purposes of a corporation is to have an extended life beyond the life of any particular owner, there was little reason to form a corporation that may live for a shorter time at the whim of the legislature. Educational, religious and charitable institutions were on safer, less political ground.

As we shall see in subsequent postings, the business corporation as we know it today requires some assurance that its life would not be threatened by a change in the composition of the legislators or governorship in power at the time of the corporation’s creation.

__________________________

References (numbers correspond to the numbers in the preceding text):

(1)   Links to other posts in this series:

Corporations (Part I of series): Introduction—Why We Need To Know About Them (2/3/12)

            II. Corporations: Their Early Beginnings (2/18/12)

                  III. Corporations--an Example of Extreme but Conditional Power 
                   (7/3/12)

(2)   Essays in the Earlier History of American Corporations, Vol. 1, by Joseph Stancliffe Davis, New York: Russell & Russell, Inc. (1965) (originally copyrighted in 1917).

(3)   Harvard’s website (as of this posting) claimed that Harvard is the oldest corporation in the Western hemisphere (http://www.harvard.edu/harvard-governance). It does appear to be the oldest existing corporation in the United States, but verifying that the original inhabitants and the various European colonists did not establish an earlier still-existing corporation somewhere in the Western Hemisphere would be difficult if not impossible to do.

(4)   http://yale.edu/about/history.html

(5)   John Micklethwait and Adrian Wooldridge, The Company: A Short History of a Revolutionary Idea (New York, 2003; page references are to the paperback edition, 2005).

Another unspeakable massacre, more to come

We typically blame individuals for bad and terrible things. By blaming individuals, we excuse the institutional and cultural frameworks that provide the channels for the individual acts.

We are all responsible for allowing these institutional and cultural channels to continue. By blaming the individuals for their acts, we absolve ourselves and pretend the wrongdoing has nothing to do with us. But these institutional and cultural channels--including the lack of gun regulation and the level of violence we accept as entertainment--made possible the terrible massacre in Newtown, Connecticut.

These channels will not end overnight. Accordingly, there will be more massacres of the innocent. Nonetheless, we must fight for change or it will only get worse.

The rest of what I would have like to have said was said much better by Nicholas Kristof of the New York Times, “Do We Have the Courage to Stop This?” (link).

Fight Against Religion's Continuing Intrusion Into Politics

The following letter was published by the Boston Globe on November 16, 2012, p. A14, and online at BostonGlobe.com:

Faith groups should lose tax break when they enter politics

Step by step, we are allowing religion to intrude further and further into politics. Ballot Question 2 and the laws governing abortions, for example, are political issues. Yet current interpretation of tax law allows churches and religious organization to raise money in support of their views on these political issues with no consequences to their tax-exempt status (“Bishops adopt a mandate,” Metro, Nov. 13 [stating that the Catholic Church helped raise over $4 million to oppose a proposition in support of physician-assisted suicide]).

By allowing religious organizations to raise money for political causes through tax-exempt donations, we are giving them a privileged position. Our tax laws need to change or be interpreted to remove this privilege and put these groups in the same position as similarly situated nonreligious organizations.

The issues of abortion and physician-assisted suicide concern the laws by which the public desires to be governed consistent with our constitutional rights. These laws are political in that they affect everyone without regard to religion. Religious matters, on the other hand, properly pertain only to the members of the religious organizations to which they belong.

When religious organizations raise money to support or oppose laws that affect nonmembers, they overstep their role and become political organizations.

The public should fight back and call for taxing the contributions to these organizations when they engage in fund-raising to support political positions.

John L. Hodge

Jamaica Plain

_____________________________

Links to the author's related posts and writings:

• Get Religion out of Politics: Part I
• Get Religion out of Politics: Part II
• What's God Got To Do With It?
• Towards—Or Away From—American Theocracy?
• Dialogues on God: Three Views
• An explanation of why the values of democracy require separation of religion from government is contained in Chapter 4 of How We Are Our Enemy—And How to Stop.
• A thorough analysis of President George W. Bush’s belligerent views connecting God to the United States is contained in Chapter 3 of How We Are Our Enemy—And How to Stop.

Why the Republican Platform, not Repudiated by Romney, Would Destroy Women’s Rights: Part II

            Alissa Pugh might be in prison now if the Massachusetts highest court, the Supreme Judicial Court, had adopted the Republican party platform’s position on rights of fetuses. Her fetus died during an unattended home delivery. She was prosecuted and charged with manslaughter, convicted of involuntary manslaughter and sentenced to two and a half years in a house of correction. The Supreme Judicial Court (SJC) reversed her conviction. (Commonwealth v. Pugh, decided June 15, 2012.)

            After experiencing pain at work, Ms. Pugh went home to give birth to what would have been her second child. Instead of feeling a baby’s head emerging during the birth as she anticipated, she felt a foot. She somehow managed to give birth on her own, but the baby was blue. She tried to resuscitate it, but failed. This event led to the charge of manslaughter.

            With her attorney, she chose a trial without a jury. The judge determined that she had a legal duty to seek medical assistance. Her failure to do so constituted wanton or reckless acts against her viable fetus. Thus, he convicted her of involuntary manslaughter, a lesser version of manslaughter.

            We must be careful at this point not to blame the judge who convicted her. He was in a difficult spot. The law of Massachusetts at the time was sufficiently unclear that an argument could be made for conviction. The only way to make the law clear was to get the case before the SJC. If he had acquitted her, the case would have ended and not gone to the SJC, so the law would have remained unclear. If he convicted her, he had good reason to believe that the case would be appealed and that the SJC would rule as it did. It is likely that this is what he was thinking. He suspended her sentence pending appeal, so she did not actually serve any time.

            The SJC ruled as anyone familiar with this progressive court would expect. While determining that the facts did not support the conviction, the Supreme Judicial Court, in a unanimous opinion, also determined that Ms. Pugh had no legal duty to seek medical assistance for the birth. “Medical assistance imposed by the judge in this case would amount to a significant incursion on the birthing woman’s liberty interest in freedom from an unwarranted degree of government surveillance and coercion.” In effect, the court acknowledged what I stated in Part I of this series.

            The Republican platform says something quite different.  It states, “We support a human life amendment to the Constitution and endorse legislation to make clear that the Fourteenth Amendment’s protections apply to unborn children.” The Fourteenth Amendment provides that a state may not “deny to any person within its jurisdiction the equal protection of the laws.” The platform also states that “the unborn child has a fundamental individual right to life which cannot be infringed.” (These words have been there and repeated since 2004.)

            Thus, the Republican platform treats the fetus, viable or not, the same as a child or an adult. Whereas the Supreme Judicial Court has said that “there are inherent and important differences between a fetus, in utero, and a child already born,” the platform removes that distinction. By taking a slightly different view of the same facts, a court that followed the Republican platform would have upheld Ms. Pugh’s conviction.

            The Supreme Judicial Court was mindful of the implications of a conviction. “Every decision a woman makes during her pregnancy, medical or otherwise, could have a profound impact on the fetal life inside her.” There are “countless ways in which a woman can be perceived to endanger her fetus during pregnancy or childbirth.”

The Supreme Judicial Court realized that a conviction would mean that these “countless ways” could all be subject to governmental surveillance and intrusion to protect the fetus, just as I explained in Part I. The court’s decision protects pregnant women. The Republican platform does not. In asserting the equal rights of the fetus, the platform would open the door to governmental surveillance and intrusion into the lives of all pregnant women. It is likely that some courts in some states will reject the position of the SJC and make every effort to follow the intent of the Republican platform.

As I stated in Part I, since Mitt Romney has not repudiated this part of the Republican platform, it means that, since he is a Republican, we must assume that he supports it. If this part of the platform were implemented, many women who do not seek an abortion will nonetheless go to jail if their fetus dies.

Thus, much is at stake in this presidential election--the rights of women and the very meaning of democracy. But after the election, even if Obama wins, the Republican platform advocating giving equal rights to fetuses will continue to threaten the rights of women and the values of democracy.

________________________

Links:

• Part I
• Commonwealth v. Pugh
• How We Are Our Enemy and How to Stop, containing in Chapter 5 a section titled “Take Equality Seriously – Give Women Full Rights to Their Bodies,” that explains the anti-democratic ramifications of pro-life extremism and what should be done to strengthen women’s right to choose. 

Why the Republican Platform, not Repudiated by Romney, Would Destroy Women’s Rights: Part I

            The Republican platform contains two sentences that would spell the end of women’s rights. The hidden threatening consequences of these two sentences must be exposed.

            These two sentences advocate equal rights for fetuses. The platform states, “We support a human life amendment to the Constitution and endorse legislation to make clear that the Fourteenth Amendment’s protections apply to unborn children.” The Fourteenth Amendment provides that a state may not “deny to any person within its jurisdiction the equal protection of the laws.” The platform also states that “the unborn child has a fundamental individual right to life which cannot be infringed.” These words have been there and repeated since 2004. They will continue to be repeated if their implications are not fully exposed.

These words have been misinterpreted to merely state an opposition to all abortions. But giving equal rights to fetuses is much more devastating than that. You cannot give equal rights to fetuses without taking away the rights of those who carry fetuses--or who unknowingly might be carrying fetuses--within their own bodies.

Giving equal rights to fetuses support the following shocking consequences:

            Consequence 1: All states have laws that protect the health of children to the extent that state agencies may remove a child from the parents if the appropriate state agency determines that the parents are abusive or the parental home is not in the best interests of the child. But what if that “child” is a fetus? The Republican’s position gives the fetus the same rights and protections as a child. The platform would empower the state agency to do what it can to protect the fetus, just as the agency is already empowered to do what it can to protect a born child. Thus, a state agency could determine that the best interests of a viable fetus require that it be removed from the pregnant woman against her will, and handed over to medical personnel and foster care. This might occur, for example, if the pregnant woman does anything that might increase the probability of harm to the fetus, such as taking illegal drugs, having unprotected sex, drinking heavily or not eating well.

            Consequence 2: If a fetus does not survive, and that failure to survive can be attributed to any behavior of the woman who carried it, the woman could be prosecuted for causing the fetus’ death. This could result in charges ranging from manslaughter to first degree murder. Part II of this two-part series will give a real example of such an occurrence.

            Consequence 3: Since conception cannot be immediately determined, every woman of child-bearing age would have to be treated as a potential carrier of a fetus. To protect the equal rights of this potential fetus, the state not only would have to monitor the sexual activities of every woman of child-bearing age to see if she might be pregnant, it also would have to require her to behave in certain ways so as not to harm the fetus that might be within her--whether or not she is actually pregnant. If a woman failed to behave in those prescribed ways and happened to get pregnant and the fetus did not survive, she would be subject to Consequence 2.

            In short, the consequences of the Republican platform’s position would potentially lead to placing all women of child-bearing age, not just pregnant women, under governmental surveillance and control. Thus, this extreme “pro-life” position would destroy the equal rights of women. This is a threat to women’s rights that must not be glossed over or ignored.

          We must all take notice and do what we can to expose these consequences of the Republican platform. We cannot have democracy without equal rights for women. Giving equal rights to fetuses would destroy women’s rights and thereby destroy a necessary component of democracy.

          Where does the Republican presidential candidate Mitt Romney stand on this issue? Given that he has not repudiated this part of the Republican platform, it must be assumed that he supports it. That would be a significant danger were he to become President.

          Even if President Obama wins the election, we must not forget that the continuing presence of this part of the Republican platform will remain a lurking threat to women’s rights. Imagine what would happen if the Republicans controlled the Presidency and both houses of Congress, and the Supreme Court. Fetuses would have equal rights, and women would suffer the consequences.

Get Religion out of Politics: Part II

            Those who argue that the “Founders” were religious, and that, therefore, religion should be a part of politics today, are wrong on two counts and correct on none. (See for example, Jeff Jacoby’s “Faith enriches politics, on both sides,” The Boston Globe, Page K9, Sept. 9, 2012). First, many of the founders were not particularly religious. Second, and more importantly, the Founders wrote into the U.S. Constitution clear instructions to keep religion out of politics.

As I stated in Part I, beliefs in God should be personal, not political.  Far from enriching politics, appeals to God are barriers to compromise, nationally and internationally. Such appeals are also disrespectful of those who are atheists or agnostics, as well as disrespectful of those whose beliefs in God do not fit traditional views. (Read Dialogues on God: Three Views, for further discussion of this point.)

            In deciding how we should approach this issue today, it does not matter what the individual Founders’ faiths were, any more than it matters today what the Founders thought about slavery. Are we going to say that, since some of the Founders had slaves, that it is OK to have slaves today? Thus, appeals to the Founders’ faiths is not relevant.

But we would also be wrong to accept the commonly stated view that the Founders were strongly religious people. Some of them, at least, kept their religious beliefs to themselves, so we do not know how religious they were, if at all. Historians are still not clear what religious beliefs George Washington and Thomas Jefferson actually held. There seems to be no record of George Washington ever mentioning the name of Jesus, and his references to God were not easy to find or interpret. Thomas Jefferson may have been a deist, one who believes that God set the world in motion and kept out of it thereafter. This is not the kind of God who would bless America. The point is that this uncertainty about their religious beliefs, or lack thereof, means that they did not make it a public matter. (See “The faith (and doubts) of our fathers,” The Economist, Dec. 17, 2011.)

            More important than the different faiths, or lack thereof, of particular Founders are the words in the U.S. Constitution that they agreed upon. The First Amendment states, “Congress shall make no law respecting an establishment of religion.” Article VI states, “no religious test shall ever be required as a qualification to any office or public trust under the United States.” These statements establish the separation of government and religion. They do not support the view that “faith enriches politics.” Instead, they support the view that religion and politics should not mix. “No religious test” means that belief in God, or in any particular view of God, is not a prerequisite for public office.

            In spite of the clear separation of government from religion that is supported by the U.S. Constitution, successful efforts to put religion back into politics have been going on for decades. The words “under God” were put in the Pledge of Allegiance in 1954. The words “In God We Trust” became the national motto and were added to the currency in 1956. Every presidential speech today ends with “God bless America.” President G. W. Bush went further. By frequently adding the words, “and continue to bless America,” he changed the meaning of “God bless America” from a desire that God bless America (which nonetheless assumes the existence of a particular kind of God) into an historical assertion that God in fact does bless America. With those words (along with others), he completed the identification of America with God. For decades, beginning even prior to the 1950’s, we have been increasingly headed in the wrong direction and continue on the same dangerous path.

Bringing faith into politics is contrary to the values underlying democracy. When we identify our political views with God, we are doing nothing more that asserting, “We are right!” This assertion generally implies that those who have other views are wrong. God is with us, not them. There is no need to think about it. Facts are irrelevant. Bringing God into politics is the means by which we disrespect those with differing views. (Read Chapter 4 of How We Are Our Enemy—And How to Stop for further examination of this point, with an historical and ethical perspective.)

            If we get God out of politics and stop identifying God with America, we will become more open-minded, more thoughtful, and give greater consideration to opposing points of view. It will help replace belligerence--the kind that led to the invasion of Iraq--with peaceful negotiation of agreements. Identifying God with America is a rejection of the very values that underlie democracy, the values that assert the equality of all people regardless of their religious beliefs.

__________________________

Notes:

• On the dangers of theocracy, see this commentary.
• A thorough analysis of President George W. Bush’s views connecting God to the United States is contained in Chapter 3 of How We Are Our Enemy—And How to Stop.

Get Religion out of Politics: Part I

Here is my letter that the Boston Globe published today in its "Ideas" section, page K9 (the title is the Globe's):

With 'God' on our side, we've blundered into wars

Beliefs in God should be personal, not political ([responding to Jeff Jacoby's] “Faith enriches politics, on both sides,” Op-ed, Sept. 9 [Boston Globe, Page K9]). When we identify our political views with God, we are doing nothing more that asserting, “We are right.” This assertion generally implies that those who have other views are wrong.

            By believing that we are “under God,” we are more likely to become belligerent and impetuously go to war against “evil.” Appealing to God in the struggle against “evil,” President George W. Bush led the nation into disastrous wars in Iraq and Afghanistan. There was relatively little public protest at the time. How do you protest against God and in support of evil?

            If we get God out of politics and stop identifying God with America, we will become more open-minded, less belligerent, and give greater consideration to opposing points of view. 

            Such political and social open-mindedness is essential in our diverse world.

John L. Hodge
Jamaica Plain

Ms. Romney Captures the Essence of Republicanism

As reported by ABC news and other news organizations, Ann Romney announced,

“I had the most rocking time in Puerto Rico at a political rally than I’ve ever had in my entire life.” “You people really know how to party.”

http://abcnews.go.com/blogs/politics/2012/08/ann-romney-switches-focus-from-wooing-women-to-hispanic-voters/

Perhaps an appropriate response would be, “Right, Ann. We’ve been singing and dancing since the beginning of colonialism and slavery.”

Ms. Romney’s comment reveals the essence of the Republican Party, a Party that does not know how to participate in a diverse society and a diverse world, except to speak down to it.

A little political humor (original)

The reign of Bain was mainly insane.

III. Corporations—An Example of Extreme but Conditional Power

Corporations come in all sizes. Some consist of a handful of people with little or no capital. Others are huge and powerful. Some are non-profits that have socially valuable objectives. Some, such as private educational and health-care institutions, are woven into the fabric of society. But many exist only to provide profits to the shareholders without regard to their broader social impact. It is incorrect to lump them all into one bucket.

This posting, the third in this series, will briefly describe the power and fate of what was perhaps the most powerful corporation of all, the British East India Company (which had various other official titles, and below will just be called “the Company”). It survived for 274 years from 1600 until 1874—though its power was practically all taken away from it in 1858. (Today, another company by the same name, selling food in London, claims some kind of unclear connection to the defunct one.) Subsequent postings in this series will also discuss other kinds of corporations, from the minute to the powerful, from the charitable to the soulless.

“What was so special about this Company? Well, at the end of its powers it was responsible, directly or indirectly, for nearly one-fifth of the world’s population.” (Gardner, p. 11—see references below.)

What started it? The exotic health foods of the day—spices, notably cloves, nutmeg, mace, pepper and cinnamon, and later tea and coffee, combined with the irresistible lure of profits. The attraction of these spices led to the European “discovery” of America, resulting from an attempt to reach these spices by sailing west instead of east. The Europeans who sailed east found many of these spices in an area appropriately called ‘The Spice Islands,” an area mostly of now Indonesian islands between the Philippines to the north and Australia the south. These spices could be obtained at very low cost from their sources and sold at high prices in Europe and England. (For example, in one instance, in 1608, a cargo of cloves that was purchased for the equivalent of £3000 sold in England for £36,000.) The ships of Europe began to replace the slower transport of these spices through Persian and Arab lands. The Portuguese ships got to this area first, followed more successfully by the Dutch and later the Company which engaged in frequent skirmishes with the Dutch. Due to the success of the Dutch, the Company pulled back from the Spice Islands and retreated northwest towards India and for certain periods, Burma and Thailand.

The Company was established as a corporation by Elizabeth I, Queen of England, in 1600, by her signing a “charter” that gave the Company authority to operate as a corporation. The corporate form enabled the Company to collect large investments simply by selling shares, often to others who had no interest in engaging directly in the Company’s business. Years before, British merchants began to set up various endeavors, complete with ships, to engage in trading with Asian areas, just as Portuguese and Dutch merchants did. The Company evolved out of these earlier endeavors, but to become a corporation, an artificial legal entity, a charter from the Queen was necessary. The Company’s charter was initially valid for only fifteen years, but it was continually renewed (with modifications) until the final charter that expired in 1874. The Company’s first ships sailed in 1601, going south and around the African Cape of Good Hope and then northeastward to reach their destinations many months after leaving England.

With the huge profits from the sales in England of these Asian items, the Company not only funded itself and built more ships, but also paid the shareholders who provided the Company’s funding. Much later, beginning in the late eighteenth century, the Company earned further income by engaging in the Asian tea and opium trades that included trade with China.

The Company’s earliest efforts were focused on trade in the East Indies, not conquest of Asian lands. Nonetheless, the Company’s ships were well armed and, when the opportunity presented itself, would often attack and plunder other European ships, take over their outposts on land or seek to divert trade to itself. Other major battles were fought with pirates—and, less successfully, with cholera and other diseases. By the end of the seventeenth century, the Company was well established along various costal areas of what was later known as India. Occasionally there were battles with local Indian authorities, which the local authorities sometimes won, and some ill-advised plundering of Indian vessels that jeopardized the very trade on which the Company depended. Often, but not always, the Company’s presence was accepted by the local authorities through various arrangements, including bribes and intrigue.

Beginning in the early eighteenth century, the Company’s armies grew, consisting of both British and Indian soldiers (“sepoys”). Without the sepoys, the British would have had no hope of success. Beginning in the middle of that century and well into the next, the Company increasingly engaged in military takeovers of Indian lands with the essential assistance of sepoys. These ventures involved fighting other European powers, most notably Portugal and France, as much as Indian powers. Communications and directives from London, including occasional directives to avoid intervention into Indian affairs and to respect native culture, were often ignored or arrived too late to change what had already happened. Desires to westernize and Christianize India increased, both within the Company and in England. Nonetheless, there were some marriages between Company men and Indian women and some notable Anglo-Indian families resulted. In addition to the marriages, from the beginning of the Company’s numerous landings from India to Japan, sex between the Company’s male personnel and the local women were documented and sometimes seemed to play a role in decisions affecting commerce. Thus, the Company’s complex and varied life might be said to have been governed by commerce, carnality, adventure, alcohol, disease, warfare and intrigue.

As these incursions into India increased, by the end of the eighteenth century the Company controlled, directly or indirectly, much of the Indian sub-continent. It expanded further. However, its attempt to take over Afghanistan resulted, in 1842, in the total slaughter of an entire Company camp, more than 16,000 people, with only one known survivor. (A poignant trilogy of novels set in those times was written by Thalassa Ali, noted below.)

While the Company came increasingly under the control of London beginning towards the end of the eighteenth century, the Company’s final demise was brought about in 1857 by a mutiny of sepoys in a large area that included Delhi. The mutiny developed into war. During these battles, both the British and opposing Indian forces engaged as commanded in some of the most depraved and bloody atrocities of which humans are capable. The Company eventually prevailed at great cost to human life—and the loss of any credibility of whatever dubious claim it might have made to be a force of decency.

The war was not well received in London, and it triggered successful efforts in Parliament to transfer the Company’s possessions to the crown. By act of Parliament in 1858, the Company was reduced to a minimal existence that was later completely eliminated by the expiration of its final charter in 1874. Its huge, stately headquarters in London were demolished in 1861. However, the Company set the stage for England to take direct control over the places that the Company had colonized. By then, the age of imperialism was well underway.

While the Company has been called the world’s most powerful corporation, we must not lose sight of the fact that the Company’s existence depended entirely on charters from the government. When the Company’s final charter expired and was not renewed, the Company ceased to exist. This is important, because a corporation today, as has always been the case, exists only to the extent that a government authorizes its existence.

But we must also not lose sight of the fact that the Company often operated on its own, sometimes in direct defiance of directions from London. The Company became a nation of its own, authorized by another nation that could not control it while it existed. Still, the Company’s foundation was nothing more than a series of legal writings approved by the British government. Thus, in spite of its independent stature, the Company was, as a legal matter, an extension of the British government, but an extension that took on a life of its own and that the government could not fully control without entirely removing the Company’s legal foundation.

_____________________________ 

Histories:

Brian Gardner, The East India Company: A History, McCall Publishing Co, New York, 1972.

John Keay, The Honourable Company: A History of the English East India Company, Macmillan Pub. Co., New York, 1991.

A short overview:

John Micklethwait and Adrian Wooldridge, The Company: A Short History of a Revolutionary Idea, Modern Library, New York, 2005, pp. 21-28.

A trilogy of novels in an historical setting in nineteenth century India: 
Thalassa Ali, A Singular Hostage (London, 2002), A Beggar at the Gate (New York, 2004), Companions of Paradise (New York, 2007).

Links to previous postings in this series:

1. Corporations (Part I of series): Introduction—Why We Need To Know About Them (2/3/12)
2. II. Corporations: Their Early Beginnings (2/18/12)

It’s Past Time to Relegate “Race” to History

A conservative columnist for the Boston Globe, Jeff Jacoby, got it right (for a change), when he said, “Perhaps by then [a generation or two down the road] the very idea of race -- white, black or anything else -- will finally have been discarded, and American children will marvel at the idea that color of skin or shape of eye could ever have mattered so much to their forbears.” (“When ‘white’ is a trick of definition,” Boston Globe, K9.)

Only 45 years ago, when I was twenty-seven years old, lawyers defended a Virginia law that banned “interracial marriage” on the grounds that the law prevented pollution of the “white race.” The U.S. Supreme Court, in a landmark decision (Loving v. Virginia, 388 U.S. 1 [1967]) overturned the Virginia law, and since then no laws banning “interracial” marriage could be enforced in the U.S.

Those laws banning “interracial” marriages, which several states still had in 1967, relied on a concept of “race” that has no scientific basis. Ashley Montagu pointed this out in his book, Man’s Most Dangerous Myth: The Fallacy of Race, first published in 1942, 25 years before the decision in Loving v. Virginia. As I pointed out in How We Are Our Enemy -- And How to Stop, “ ‘Race’ is a mythical creation of the human imagination, having no basis in biology. There is no ‘race’ gene. It is long past the time when the concept of ‘race’ should be totally extinguished from our way of thinking” (p.136).

Yet, science is continually ignored when we talk about “mixed race” couples, etc. There is no such thing. If you mix nothing with nothing, you get nothing.

It is still necessary, of course, to recognize racism and the reality of different ethnicities and cultural groupings. These are observable phenomena. “Race” is not observable. It is a concept inferred from observation -- and a concept that observation and genetics do not support now and never did.

In my rare support of Mr. Jacoby, I wrote a letter to the editor, which the Boston Globe published today (6/3/2012), with minor modifications, in its “Opinion” section. Here is the letter as published (the misleading title is the Globe's):

Time at last for us to become post-racial

Jeff Jacoby effectively makes a case for getting rid of the very idea of “race” (“When ‘white’ is a trick of definition,” Op-ed, May 27). I fully agree. Not only is “white” a trick of definition. So are all of the other terms used to designate race. But for these tricks, President Obama, given his biological parents, is as much “white” as he is “black.” Yet we try to fit him and everyone else into so-called racial categories that make no sense.

“Race” exists only as a mythical idea created centuries ago by people who wanted to affirm the superiority of those who looked like them. It is past time to get rid of this false idea.

Whenever we use the term “race,” we should put it in quotation marks as a way of recognizing and affirming that it is primarily an idea that exists to support racism.

John L. Hodge

Jamaica Plain

What's God Got To Do With It?

In February of this year I published a book, Dialogues on God: Three Views. So what has God got to do with a blog on democracy, human rights and ethics? Since I am not prepared either to affirm or deny the existence of God, I cannot say. However, beliefs about God and other religious beliefs have a major impact on what people consider to be right or wrong. That, in turn, affects what people do and their political views. You can see this by observing the frequency of the appeals to religious beliefs by those who oppose gay marriage and women’s right to abortions, and the religious sources of those objecting to funding contraceptives. You also see it whenever the President of the United States concludes his speeches with “God bless America.” These are just a few examples.

These dialogues explore beliefs about God from three perspectives, including that of an atheist. It shows how different beliefs about God are linked to different ways of living and apprehending the universe. The three disagreeing dialoguers eventually agree on something quite relevant to democracy. Read the book to find out what it is, and why.

Another way of approaching this subject is an excellent book by Steven R. Prothero, God is Not One: The Eight Rival Religions That Run the World (2010). His book is fairly long, easy to read and very informative; mine is short and, I hope, thought-provoking. I suggest you read both.
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Read a review (not paid for) of Dialogues on God: Three Views by The Midwest Book Review.

The President’s Authority to Kill

It is a rare occurrence when the New York Times and John E. Sununu agree. (Mr. Sununu is a Republican and former U.S. Senator from New Hampshire.) But they did agree on one thing—the lameness of Attorney General Eric Holder’s untenable defense of exclusive executive authority to determine when American citizens can be targeted for killing. (See NYT Editorial, “The Power to Kill,” Mar. 11th,  http://www.nytimes.com/2012/03/11/opinion/sunday/the-power-to-kill.html?scp=1&sq=the%20power%20to%20kill&st=cse  and Sununu’s column, “Death, by order of your president,” Mar. 19th, http://articles.boston.com/2012-03-19/opinion/31205637_1_habeas-corpus-judicial-review-eric-holder .) As Mr. Sununu correctly points out, “The gist of [Holder’s] message was this: If you are a US citizen, the president of the United States can issue an order to have you killed without review or approval from any other branch of government. No president has ever asserted such authority. This administration has already acted upon it.”

Both articles point out that Mr. Holder’s position places the exclusive authority to determine who should be killed in the hands of the executive branch—headed by the President of the United States. Accordingly, the killing by a drone strike on Sept. 30, 2011, of Anwar al-Awlaki, an American-born member of al Qaeda, and the subsequent and little publicized killing of his 16-year-old son two weeks later, were justifiable, according to Mr. Holder, on the grounds that the President has the authority to decide. The concept of due process, that necessarily would involve some form of judicial proceeding before anyone is executed, has been discarded.

It is one thing to kill on the battlefield, where the conflicting sides are shooting at each other, and no one really knows the personal identities of those shooting from the other side. It is another thing to declare that an organization is the enemy, to identify its members, and to kill them, whether they are armed or not, from a drone flying high in the sky. Ever since the former President, George W. Bush, declared that al Qaeda was the enemy, that they were terrorists, and that we are in a war against terrorism, the distinction between these two scenarios has been blurred. First, President Bush declares that there is such a war on terrorism, and second, both Mr. Bush and President Obama act as though such a war is the same as fighting on the battlefield, so that the President’s authority is the same in both instances. Congress has essentially supported this view. We are now at the point where the President can determine who is a terrorist, whether or not the terrorist should be killed, and order the killing. The only restrictions on this power are restrictions determined by the executive branch—i.e., the President.

The authority that Mr. Holder claims is not in the United States Constitution, and Mr. Holder did not even assert that it is. Article II of the Constitution sets forth the powers of the executive branch, powers that “shall be vested in a President of the United States of America” (Art. II, Section 1, 1). It states, “The President shall be commander in chief of the army and navy of the United States, and of the militia of the several states, when called into the actual service of the United States . . . and he shall have the power to grant reprieves and pardons for offenses against the United States. . . (Art. II, Section 2,1).  The Constitution does not provide for executive authority to execute and assassinate whomever the executive branch determines should be killed. (Also see my previous post, “Why Aren’t Drone Killings Human Rights Violations?”)

There is little to distinguish the authority claimed by Mr. Holder from that exercised by the world’s worst dictators. We may be looking, frankly, at the approaching death of democracy and human rights in the United States.  Human rights provide the legal backbone of democracy. Protection of human rights requires an independent judiciary. Mr. Holder’s position dispenses with the judiciary. That this flaunting of democratic principles is coming from a Democratic administration bodes ill for the nation. A Republican administration would make matters worse. (See my post of Jan. 23, 2012, “What is the Opposite Direction From Republicanism?”)

To discourage such national departures from established principles of human rights, there need to be international protectors of human rights that are strong enough to challenge national prerogatives. (A good source for international documents is the Meiklejohn Civil Liberties Institute, http://www.mcli.org .) In the meantime, only an active and concerned public can change the unfortunate direction this country is taking in the name of defense.

Although the New York Times and Mr. Sununu agree on this issue, both limit their criticism of Mr. Holder’s views to the killing of U.S. citizens. Neither seek to explain why it matters whether the target is a U.S. citizen or not. Can human rights apply only to U.S. citizens and not to others? The distinction makes no sense. Either we, as human beings, have equal rights or we do not. The very distinction between rights belonging to citizens and rights belonging to others undermines the ethical foundation of democracy—the fundamental equality of all people.

Why Aren’t Drone Killings Human Rights Violations?

A widely published Associated Press article by Sebastian Abbot attempts to make the case that few civilians have been killed by U.S. drones (e.g., “Most killed by US drones are militants, study finds,” Boston Globe, Feb. 26, 2012, p. A3). (Click here to see the article printed elsewhere.) The same article establishes that many civilians have been killed by drones in Pakistan. Since about 70% of those killed were “militants,” according to the article, that means about 30% were civilians. According to the article’s numbers, about 56 civilians or other non-militants have been killed by U.S. drones in Pakistan.

Imagine the international outcry if these killings had occurred in England, or Germany, or the U.S. Pakistan is not a war zone. Are Pakistani civilian lives considered to be of less importance that the lives of Europeans or Americans? Why is there no international outcry, or outcry within the U.S., that 56 innocent Pakistanis have been killed by U.S. drones?

The other 138 people killed were “militants.” And who are the “militants”? What is a “militant”? Is a “militant” the same as a “terrorist.” What is the difference between a “militant” and a “terrorist” or a “dissident”? When terms like “militant” and “terrorist” are vaguely defined, if defined at all, they become subject to creeping expansion to include more and more people. When an attack kills many, it is in the interest of the attacker to define “militant” and “terrorist” as broadly as possible to minimize the number of “civilian” deaths. No one has conclusively determined that all of the “militants” who died were proper targets.

These killings reflect complete disregard of the role of the judiciary. The purpose of judicial procedures is to determine guilt or innocence. It is the judiciary that is charged with enforcing the rights of the accused. Without an independent judiciary, human rights is an empty concept that cannot be implemented. When the policing body and the prosecutor can freely kill those suspected of criminal acts, the judiciary becomes irrelevant. These drone killings did not take place in the heat of battle or on a battlefield. They were premeditated. The non-civilian victims may or may not have been armed, but even if armed, they were defenseless against a drone high in the sky. These killings were not shootouts between the police and suspected criminals. No attempt was made to capture the targets alive and bring them to trial.

In these government-sponsored killings, there was no “due process of law” as envisioned by the Fifth Amendment, or a right to trial as a required by the Sixth Amendment. These provisions in the U.S. Constitution—in the Bill of Rights—state very fundamental principles of human rights. As a technical legal matter, they were not applicable. But from an ethical standpoint, these rights apply to all people everywhere in the world. They are recognized internationally as fundamental human rights.

What kind of example is the U.S. providing to the world? Just as nuclear technology spread beyond the U.S. to other nations, so will drone technology spread to other nations, including tyrannical ones. Under the regimes of these tyrannical nations, there is no difference between a terrorist and a militant, between a militant and a dissident, or between a dissident and the opposition. These regimes will use drone technology to kill the opposition. The model for this approach is being provided now by the U.S. It is the wrong model.

Towards—Or Away From—American Theocracy?

Here’s an article I recommend on the dangers of theocracy—not in Iran—IN AMERICA: Timothy Egan’s blog in the New York Times online edition (not the print edition) titled “Theocracy and Its Discontents” (2/23-24/2012). 

The candidacy of Rick Santorum stands for Theocracy in America. Pro-theocracy is perhaps the biggest danger democracy faces today throughout the world. Pro-theocracy is responsible for the “personhood” legislation being considered by some states. Make the fetus a person, and reduce the pregnant woman to servitude. This is not an exaggeration. I explained this in Chapter 5 of my book, How We Are Our Enemy—And How to Stop. Personhood for the fetus is a fundamentalist proposition. The current debate over the funding of contraception is the result of a related fundamentalist intrusion into the political and social realm. These propositions would reduce all women to servitude under fundamentalist ideology.

Put simply: Democracy and theocracy are incompatible.

As for the religion of the Founders, they had their heads on straight. Not only does the U.S. Constitution contain the First Amendment, it also contains Article 6, clause 3, that states, “[N]o religious test shall ever be required as a qualification to any office or public trust under the United States.” 

As I explained in Chapter 4 of How We Are Our Enemy—And How to Stop, separation of religion and government is essential to democracy. The current crew of Republican candidates do not believe in this separation. Accordingly, they are a threat to democracy. A terribly lot is at stake in the coming election.

II. Corporations: Their Early Beginnings

[This is the second of a series. Why this series on corporations?]

Beyond the individual, the family, the church and the state, there have always existed associations of people who act as a group. In early times, such associations may have been hunting parties, harvesting groups, gangs, villages, tribes and the like. Somewhere during the development of civilization, some of these associations evolved into today’s corporations.

When did this evolution begin? (Hint: It was long before the nineteenth century.)

To even attempt to answer that question, we first need to have an idea of what a corporation is so that we know what to look for.

In essence, a corporation is an entity that (1) holds and expends resources of monetary value (capital), (2) has a legal existence independent of any natural person or group of natural people living at any particular time, and (3) has a management that is different from the providers or owners of its capital.

A private business corporation is only one kind of corporation. Corporations may be towns, educational institutions, religious institutions, religious communities, and charitable organizations, as well as profit-making businesses. A key feature of a corporation is its independent existence apart from living people. (One historian traces the origin of the corporation to the family, which has a continued existence beyond the family members living at a particular time—Ancient Law, pp. 178 ff; see “References” below. However, a family is not a corporation; the latter has additional characteristics.)

A consequence of this independence and structure is that people or entities that provide capital to the corporation are protected from any of the corporation’s liabilities that may exceed the capital provided to it. That is, the providers of the capital (investors or owners) have “limited liability.” In practical terms, that means that a corporation may go bankrupt without bankrupting the investors or owners.

Thus, a corporation is not like a family or any ordinary organization of people. If all of the participants of an ordinary organization die, the organization dies. A corporation would continue to have a legal existence (though it may die for other reasons). Historically, before there was a corporate option to form a business, businesses were run by individuals and teams of individuals (partnerships). If all of these individuals died, the business died. In addition, if the business was sued because its products were harmful (assuming such suits were possible in those days), each of these individuals would be liable to pay the damages, even if it took everything these individuals owned. But if these individuals could have instead formed a corporation, the damages owed would not exceed the amount of capital the individuals had contributed to the corporation. The rest of their assets could not be used to pay the damages. (There is an exception if the corporation is too completely tied to one or two people.)

An advantage of the corporate structure, therefore, is that a corporation can obtain and use capital and risk failure without risking the economic survival of those who provided the capital.

When and where in history did such an entity begin to exist?

Unlike specific historical events, it cannot be said that corporations began on a specific date. If there was a “first” corporation, we may never know when it happened or what it was, although there are some informed guesses. Suffice it to say, as two writers noted:

In the early Middle Ages, jurists, elaborating on Roman and canon law, slowly began to recognize the existence of “corporate persons”: loose associations of people who wished to be treated as collective entities. These “corporate persons” included towns, universities, and religious communities, as well as guilds of merchants and tradesman. Such associations honeycombed medieval society. . . .

(Quoted from The Company, p. 12; cited in full in “References” below.)

Prior to the Middle Ages, the concept of corporate entities can be found in Roman law, dating back to the late third century B.C. (The Company, p. 4.)

So the concept of the corporation developed very gradually beginning even prior to the Middle Ages. Corporations set up for private commercial purposes developed later. A commercial corporation, Aberdeen Harbour Board (Scotland), was set up in 1136. (The Company, p. 12.) Some believe the first European private business corporation still in existence was Stora Kopparberg of Sweden, which was issued a royal charter in 1347 and is the predecessor of today’s Finish company, Stora Enso Oyj. (The Company, p. 12; supplemented by information on Wikipedia.) 

The importance of this historical background is to know that corporations and corporate personhood did not just come into existence in modern times. It’s an ancient idea that continued to grow and develop into the modern corporation. The next few posts in this series will briefly outline this development. That will help us understand the corporation today.

And tomorrow? We would be short-sighted to believe that this process of historical change has ended. 

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Go to the first post in this series on corporations.

References:

Joseph Stancliffe Davis, Essays in the Earlier History of American Corporations, Vol. 1, (New York, 1965; originally published 1917)

Melvin A. Eisenberg, The Structure of the Corporation (Boston and Toronto, 1976)

Robert W. Hamilton, The Law of Corporations, 4^th ed. (St. Paul, MN, 1996)

Henry Sumner Maine, Ancient Law, 10^th ed. (Gloucester, MA, 1970; originally published 1861)

John Micklethwait and Adrian Wooldridge, The Company: A Short History of a Revolutionary Idea (New York, 2003)

Wikipedia.org (used with caution; it contains errors)

The Republican Policy “Gerrymandering” of the Right to Vote

Republicans today, as they have historically, are advancing policies to limit the number of people who can vote. Similar to geographical gerrymandering, where electoral district lines are drawn to reduce the ability of minority voters to elect officials whom they favor, voting policy “gerrymandering” is not politically neutral but designed to disproportionately reduce the number of voters who vote for Democrats. It is happening now and may change the outcome of the 2012 national elections, not only for President but also for Congress.

Please read this February 12th New York Times article by Alexander Keyssar, “The Strange Career of Voter Suppression.” His article concludes, “Even a cursory survey of world events over the last 20 — or 100 — years makes plain that democracies are fragile, that democratic institutions can be undermined from within. Ours are no exception.”

 As I pointed out in my book, How We Are Our Enemy—And How to Stop:

 “The failure of the electoral process in Florida in 2000 was not a one-time failure but a portent of the future. The flaws were structural. Our failure to correct the flaws is a continuing national failure. This failure due to our inaction is partly how we are the enemy of the values we profess.”—p18.

Corporations (Part I of series): Introduction—Why We Need to Know About Them

Corporations are an integral part of the fabric of modern society. They affect nearly everything we buy as well as our jobs, entertainment, news sources, and politics. Yet, little is known about them. What is a corporation? Can they distort financing of political campaigns? I am writing this series on corporations so that we may learn about them.

The need for this series is indicated by my previous posting, “The Misguided People’s Rights Amendment.” The promoters of this amendment are seeking to amend the U.S. Constitution to make it inapplicable to corporations. Though these promoters are liberal democrats with good intentions, they are going down the wrong path. They think, incorrectly, that the disproportionate influence of wealth in the financing of political candidates can be corrected by eliminating any legal rights corporations may have under the Constitution. They also think, incorrectly, that the amendment will reverse the U.S. Supreme Court decision in the Citizens United case. (See previous post.) These promoters not only misunderstand what Citizens United actually held (which pertains to much more than corporations), they also misunderstand what corporations are. Their promotion of this amendment, thus, arises from and depends on public ignorance.

But don’t feel bad if you are among the ignorant. Corporations are such varied and complex entities that they are not easy to comprehend. Understanding Citizens United requires very careful reading of a very long legal opinion. You can have a Ph.D. and know nothing about corporations. My first introduction to corporations was in law school, and many lawyers never took a course in the subject. I will be learning too as I continue with this series.

Corporations are entities created by law that exist independently of any person or group of people. Corporations cannot exist without some sort of legal authorization from a governmental body. They have historically been regarded as artificial persons. Unlike real people, they are potentially immortal, though like real people, they can be born, die or be killed. Whether a corporation is created and how long it lives, nonetheless, depends on real natural living people.

Most of us think of corporations as huge businesses, like General Motors or Apple or Bank of America. But there are many different kinds of corporations. They include tiny businesses, educational and religious institutions, and non-profit organizations. For example, Wikipedia is operated by Wikimedia Foundation, Inc., a non-profit charitable corporation. Thus, it is incorrect to equate corporations with large capitalistic profit-making enterprises. Corporations serve many purposes, some good, some not so good, depending on your point of view. If we think of corporations as “bad,” then we do not understand what they are. Nonetheless, there is good reason to be concerned about the influence and power of mammoth multinational corporations. Are they a threat to democracy?

This series of postings on corporations will give us some basic information. The series will span many months. We will use this information later to discuss the role that corporations should have, or not have, in a democratic society. We will learn that corporations, for better or worse, have played a major role in the development of modern civilization. The world economy depends on them. This blog depends on them. So if we determine that there is a problem with them, we need to be careful in addressing the problem.