by Eugene McCarthy

James Kent, in his Commentaries on American Law, published early in the 19th century, observed that "the number of charters of incorporations" was increasing in the United States with disturbing rapidity. "We are multiplying in this country to an unparalleled extent the institution of corporations," he wrote, "and giving them a flexibility and variety of purpose unknown to the Roman or to the English law."

Kent's warning has gone unheeded and the drive to incorporation runs beyond the point he feared.

The corporation is in America today not only the principal instrument for conducting business and finance, but also is a major instrument for influencing and managing education, religion, communications, sports, and politics.

About 80% of the measurable economic activities of the United States is directed through corporate organizations, operating under state charters.

Corporate power is a growing force in determining United States foreign policy and military policy and strategy. Multi-national and international corporations are intimately involved in foreign policy, both in decisions and in execution. This influence is more subtle and more integrated than that of the early decades of this century. Corporations did exercise influence over foreign policy, but that influence could usually be identified, and usually was in some large degree subject to government direction, or at least coincided with government policy. Corporations were to a degree agents of the government, although in some cases, in a kind of reciprocal arrangement, with the government becoming agent of the corporation.

Thus United Fruit carried on trade and also executed national policy, or sustained that policy, in Central and South America. American sugar companies controlled trade in sugar and strongly influenced national policy toward Central American countries, especially towards Cuba, from the time of the Spanish American War, until the time of Castro. (This relationship was noted by Mr. Dooley, in writing of the Spanish American War, when he observed that he would rather be subject to a Spanish nobleman than to an American vegetable (the sugar beet).

The power of the multinational, or supra-national corporations, goes beyond that exercised by companies like United Fruit in earlier times. Multinationals are not agents, but carry the attributes of sovereign countries. For example, when President Reagan undertook to prevent or discourage Dresser Industries from selling high technology pipeline equipment through its multinational connection to builders of the gas line from Russia to Europe, he found that he was without power to intervene.

The involvement of private industry in providing equipment and material for World War II established a relationship between the military and the private suppliers, which in the Post War period became the military-industrial complex which we were warned of by President Eisenhower in his farewell address.

The complex, which had not quite come together at the end of the War, and was threatened by defense budget cuts in the years between the end of the war and the Korean War, defense budgets being cut back in the Truman years to less than 20 billion dollars, was in place when the Korean War ended. Defense budgets have continued to climb ever since. And the "establishment" was protected by the change of the name of the military department of the U.S. government from "War Department" to "Department of Defense" (wars are limited and historically defense is forever and unlimited) by the establishment of the Air Force, which emerged as the popular, heroic, and romantic service, after World War II and the establishment of the Air Force Academy to sustain its separateness; the substitution of the voluntary (mercenary) army, for a draft army for military service, and a budget providing nearly $300 billion in annual appropriations is firmly in place.

Weapons plans conceived in corporate engineering, research and development departments can become the basis for both military tactics and for strategic changes and weapons systems and strategic projections by the military, dependent on corporate potential to manufacture.

The influence of corporations on culture and education too is growing. Dow Chemical cut off its support of a Michigan university because of student protests against the use of napalm. In Minnesota a number of corporations have organized a special committee that meets with governors, archbishops, heads of universities and colleges, etc. to determine who will receive grants and for what purpose. Corporate heads act much like the nobles of England, sitting down with the king or the archbishop.

The corporation has developed into a separate center of power. It is one which was not anticipated by or provided for in the Constitution. It is one which has not been subject to the general laws dealing with business and financial practices. And it is one which has assumed functions that go far beyond its original economic purposes.

What we have allowed to develop is a kind of corporate feudalism, one that fits the schoolboy definition of feudalism as a system in which everybody belongs to someone and everyone else belongs to the king. In its modern form, nearly every worker belongs to some corporation. Everyone else - in civil service, on welfare, on workmen's compensation or social security - belongs to the government.

A great corporation might be viewed as a self-contained feudal manor or barony. General Motors, for example, has its own financial institutions, its own distribution system, its own labor policy and social welfare program, its own security system and special investigators, even its own foreign policy. And the foreign policy of ITT in the case of Chile included an effort to have the United States government prevent the election of a certain presidential candidate in that country. Other multinational corporations run their own foreign policies.

I hesitate to make a direct comparison between today's corporation employees and the serfs of the Middle Ages, yet there are disturbing similarities. Many people become economic captives of the corporations for which they work. Pension programs, family health plans, seniority rewards, vacation and sick leave all limit the freedom of employees to move to other corporations and other types of work. This is true not only of blue-collar workers but also of executives and people in professional fields. I have talked with newspaper people who say, "I can't quit this newspaper and take another job because I would lose my pension program, or my family medical plan. I'm an indentured servant. I'm caught." An indentured servant may be a few steps above a serf, but that is not much consolation.

The loss of freedom that goes with working for a corporation is not always accompanied by security, something that serfs in the Middle Ages did have. Many corporations, particularly those in the military and aerospace industries, stockpiled engineers and other professionals during the boom period of the 1960s. When the corporations faced financial difficulty, or when they no longer needed the professionals, they simply cut them loose to become displaced persons in our society. In recent years, a relief pitcher in the minor leagues has had more security than a Ph.D. in physics who works for a major corporation.

Feudal lords had certain obligations toward the poor, something that cannot be said of our corporations. America's poor and minorities, its undereducated and underfed, are not even the serfs of corporate feudalism. They are its outcasts.

The feudal analogy also hold when one considers the relations between the federal government and large corporations. In case after case of confrontation between the two in the last fifteen to twenty years, the issues have been settled by negotiation. When the question of sending an ambassador to the Vatican was raised in 1960, I suggested that there were other centers of power at which we were unrepresented and which were far ahead of the Vatican in terms of influence. For example, a President might first send an ambassador to the Pentagon and then to several of the giant corporations: General Motors, du Pont, General Electric, U.S. Steel, some of the oil companies. The relationship was not formalized that way, but negotiation has been the rule.

When du Pont was ordered to divest itself of improperly acquired General Motors stock, existing antitrust laws and penalties were not applied. The Congress passed special legislation to lessen du Pont's economic distress. The company thus avoided the imposition of the law and the attendant corporate stresses, which would have been applied to a smaller corporation under the same circumstances.

Taxation of insurance companies is settled more by negotiation than by public determination. The same was true of the oil-depletion allowance for many years.

Such actions as the award of the TFX-airplane contract to General Dynamics in the Kennedy administration and the loan guarantees for Lockheed and Penn Central in the Nixon administration were special concessions to corporate power, political or economic.

The dealings of the government with the steel industry illustrate the feudal character of the corporation-government relationship even more clearly. During the Korean war, President Truman tried to prevent a steel strike by ordering his Secretary of Commerce to take over and operate the steel mills. The case was taken to the Supreme Court, which held that the order was unconstitutional. Subsequent challenges to the industry were handled differently. The Kennedy administration responded to a major price increase not by law or by appeal to courts but by public denunciation, the threat of shifting military purchases to steel companies that had not raised their prices, and even some use of the FBI.

The Johnson administration called presidents of steel companies to the White House for "jaw-boning sessions." The message was that prices should be kept down. It seemed that if the steel executives fixed prices in the White House, it was quite all right, but if they fixed them in Pittsburgh, they might go to jail. It was as though the king had called in the barons and said to them, "If you agree to these things in my presence, they are sanctioned. But if you do it by yourselves in Wales, you are in trouble."

Corporate influence on sports is clearly manifest in the Olympics, winter and especially those of summer, and evident in the summer Olympics just ended.

It seems that the old saying "Who pays the piper, calls the tune," is again proved true, or as Nelson Rockefeller is reported to have said to Diego Rivera, who objected to making changes in the mural he was painting in the Rockefeller Center, "It's my wall."

It is not that the Olympics have been pure and free of outside influence. The seeds of commercialism and of professionalism were present at the first meeting of the Greek athletes at Olympia in 776 B.C. Winning athletes were given not only wreaths and trophies, but free meals and a lifetime exemption from taxation. This latter reward could be a powerful motivation if given to U.S. athletes today.

Three hundred years after the establishment of the Olympic games, Euripides, poet, playwright and athlete wrote that "out of the tens of thousands of ills in Greece, none is worse than the tribe of professional athletes."

In the modern version of the Olympics, after their revival in 1896, political rather than commercial and economic forces appear to have influenced the games in selection of events, eligibility of participants, choice of referees, equipment, location, etc.

We have come a long way since the 1896 revival which was limited principally to classical contests of speed, endurance, and strength of individual athletes. Since then sailing, kayaking, wind-surfing and judo were included in the competitions. No one of these sports is likely to last long in Olympic meetings unless it provides photo opportunities, and popular support from the television watchers. Otherwise they are likely to go the way of some of the events which have been included in past games, for example, fishing, the firing of large caliber cannon, musical composition, and even poetry. On the other hand contests which have been tried in the past, and dropped, may be brought back because of their commercial viability - Indian club swinging, one-handed weight lifting, tug of war, and holding one's breath under water, an event included only once and won by a Frenchman who stayed submerged in the Seine for 68 seconds.

The latest addition of corporate power came in consequence of the Federal Election legislation of 1975-76. In that Legislation, sponsored by Common Cause and liberals, corporations were given authority to set up corporate political action units. The result has been growing corporate influence over both parties, a homogenizing of the two parties, in the corporate image, and a great increase in campaign spending.

The recently passed amendments to the Federal Communication Act, giving one corporation the right to own up to 35% of television licenses, creates a potential to have practically all such means of communication controlled by three corporations, leaving business, finance, communications, entertainment and sports almost wholly subject to the rule or governance of "the bottom line." Ethics, education and even religion in great measure will be subject to the same dominance.

Eugene J. McCarthy was a Democratic-Farmer-Labor Senator from Minnesota from 1959 through 1970. His campaign for the Presidency in 1968 forced incumbent Lyndon B. Johnson out of the race. He ran again in 1976 and in 1992. He is the author of 17 books.

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