Corporate power has sidelined Lincoln's vision

Abraham Lincoln’s two-minute speech at Gettysburg, Pennsylvania, delivered 150 years ago today, during the country’s bitter civil war, looks back to the founding principles of the American revolution and forward to a democratic society for all.

How the ideals Lincoln championed in the war against the slave-owning south were soon abandoned by his successors and the new, unified American state, is lost among the events marking his historic address.

Lincoln harked back to 1776, when American colonists threw off the yoke of the British crown, wrote their own constitution and proclaimed themselves independent. The president claimed that it was “dedicated to the proposition that all men are created equal”, although the original constitution did not stretch to Afro-Americans or women. 

Nevertheless, the American Revolution shook the modern world, gave birth to the concept and practice of representative democracy, and was the precursor to the great events in France in the following decade. 

Significantly, as the Reclaim Democracy campaign points out, the colonists also freed themselves from control by English corporations. The country’s founders retained a “healthy fear of corporate power” and barred them from attempting to influence elections or public policy. The campaign explains:

“For 100 years after the American Revolution, legislators maintained tight control of the corporate chartering process…. Citizens governed corporations by detailing operating conditions not just in charters but also in state constitutions and state laws. Incorporated businesses were prohibited from taking any action that legislators did not specifically allow. States also limited corporate charters to a set number of years.”

Attempts to introduce the European model of shareholder ownership and legal independence were thwarted for several decades. But the corporations ignored the restrictions. “They converted the nation’s resources and treasures into private fortunes, creating factory systems and company towns. Political power began flowing to absentee owners, rather than community-rooted enterprises.”

While Lincoln was giving his address in honour of the dead Union soldiers, the world around him was changing in more ways than he perhaps grasped. The Civil War had made many corporations rich and they were openly buying people in Washington and state capitals. “During this time, legislators were persuaded to give corporations limited liability, decreased citizen authority over them, and extended durations of charters,” says Reclaim Democracy.

So Lincoln’s declaration at the end of his oration that the end of the war would bring “government of the people, by the people, for the people” was already being hollowed out by corporate power.

Before long, the courts applied doctrines that placed the protection of corporations and their property at the centre of constitutional law, sidelining the citizen sovereignty that followed 1776.

Ironically, it was the 14^th Amendment to the constitution, adopted in 1868, and which protected the rights of freed slaves, that was used to grant corporations “personhood”, giving them human rights. Since then, the corporations have established unbridled power over the American political process.

Back in 1961, president Dwight Eisenhower, himself a former general, in his farewell address, warned against “the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex”, adding: “The potential for the disastrous rise of misplaced power exists and will persist.”

In the half century since, matters have deteriorated. What the corporations want, they more or less get. Deregulation? No problem. Bail-outs. Just a phone call away. More weapons production? Ring the Department of Defence.

Walmart, the world’s biggest retailer with two million employees, can remain staunchly anti-union, while suggesting its poorly-paid workers donate food to their impoverished colleagues! Monsanto has a free rein when it comes to untested genetically-modified crops while a delayed government report into fracking is over-reliant on data supplied by the industry itself.

Reclaim Democracy wants to end the power of the corporation and restore the charter system that was established after 1776. In all honesty, that will require a new American Revolution to achieve.

Paul Feldman

Communications editor

An inconvenient truth for Al Gore

Promoting his new book, former US vice-president Al Gore says that the country’s democracy has been “hacked” by corporate interests. Well, despite hacking being deemed a criminal offence, no arrests appear imminent when it comes to big business.

Hacktivists, however, are routinely arrested because they are taking action against the system. Nevertheless Gore, who made the successful film on climate change An Inconvenient Truth, has once again indicted the US democratic process in a way few other tackled politicians have dared do..

Gore told the BBC’s Andrew Marr show : "It can be fixed, but we need to recognise that our democracy has been hacked … It has been taken over … and is being operated for purposes other than those for which it was intended."

Previously, he used the term “hollowed out” in pointing out that the democratic process was effectively a shell whose content was dominated by money interests. In his BBC interview Gore said government decision-making was "feeble, dysfunctional and servile" to corporate interests. 

In another media appearances associated with his book The Future, he said: “Congress is incapable of passing any reforms unless they first get permission from the powerful special interests that are most affected by the proposal.” But that’s not new or news.

When he was vice-president to Bill Clinton, the administration had a chance to stand up to money. But it didn’t. Who can forget the way the White House caved in to the big insurance companies and pharmaceutical corporations when it tried to legislate a comprehensive health care plan in 1993?

Or how during the eight years of the Clinton presidency, financial deregulation took off.

As Time magazine noted: "Among his [Clinton’s] biggest strokes of free-wheeling capitalism was the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighbourhoods.”

So when Gore says that the role of money has “greatly increased”, he ought to take some political responsibility for that. But he can’t and he won’t because, in the end, he is unable/unwilling to identify the root cause of this and other issues.

On climate change, for example, Gore will talk about human activity but not about the incessant, profit-driven drive for growth, which is not surprising as he himself is extremely rich. His new book identifies what he considers are the emerging forces that are shaping the world.

While they include “unsustainable” population growth (joining hands here with David Attenborough) you won’t be surprised to find that capitalism as a social system doesn’t get a look in.

He wants the role of money to be “diminished” and a grassroots movement “to demand that politics be opened up”. Gore hopes that individuals empowered by the new communications infrastructure “will be able to reclaim their birthrights as free citizens and redeem the promise of representative democracy."

This is a highly improbable agenda. Firstly, real change doesn’t happen because a load of people get blogging or use Facebook. In the end, they have to be out there in numbers, acting collectively in the material world as shown in the Arab Spring.

Secondly, the American revolution that threw off British colonial rule established the world’s first representative democracy with a purpose. One of the aims of James Madison, the father of the constitution, was to keep power within the hands of the political class and out of the hands of ordinary citizens.

After the Civil War had freed the slaves and created the conditions (and a workforce) fit for the development of a ruthless American capitalism, it wasn’t long before money had subsumed politics. The recent period of corporate-driven globalisation completed the process.

With due respects to Gore, the revolution in communications will have to be accompanied by a new American Revolution that goes beyond representative democracy. It will have to have as its goal the government of the people, by the people, for the people that Lincoln promised at Gettysburg in 1863.

Paul Feldman

Communications editor

Time runs out for Obama and the constitution

The irresistible march of economic and financial events undermines legal and constitutional structures, weakens bureaucratic constraints, exposes weak and divided political leadership and transforms long-established relations between people and states.

Generations have stood before the Stars and Stripes and sworn allegiance to the Constitution of the United States. Adopted in 1787, and subjected to 27 amendments – the latest in 1992 – it is the oldest written constitution still in use by any nation in the world.

This is according to Wikipedia, which was itself set up as part of a global movement to undermine the property rights which are of the essence of the capitalist system. They argue rightly that private property in knowledge and software impedes human progress.

But world-shattering events are now shaking the foundations of the United States. The 14th was particularly important in establishing the legal authority of the Federal government in Washington during the reconstruction in the wake of the civil war and the ending of slavery.

Section 4 of the amendment reads: “The validity of the public debt of the United States, authorised by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

Some have suggested that President Obama could invoke this section to raise the government’s $14.3 trillion debt ceiling which is fast being approached. The Republicans are playing hard-ball and declining to reach an agreement with the White House to raise the ceiling before next Tuesday’s deadline. Raising the ceiling is required so that the United States can go on borrowing on international markets and service its debts.

Such a move by Obama would be a constitutional declaration of war with echoes of Abraham Lincoln’s military campaign to bring the south into line. Whether he’s up for this is debatable. But while Obama ponders his next move, what, according to the constitution, “shall not be questioned” is in reality being challenged by the money markets, as well as the obdurate Republicans.

The credit rating agencies which were effectively given power over companies and states by the Basel 2 international agreement on banking laws and regulation first published only in 2004, are threatening to downgrade US debt. That would force up borrowing costs and add billions to the total debt. The “validity” of the US public debt is definitely being questioned.

In any case, would invoking the constitution to raise the ceiling unilaterally do the trick. Not at all, as US commentator Andrew Leonard points out:

“Would taking action under the 14th Amendment make the debt ceiling crisis go away? Highly dubious. Not only would the House GOP [Republicans] immediately start impeachment proceedings, but, as several commentators have observed, there's a real question as to whether investors would continue to buy US Treasuries while the legalities of the president's action were settled. Pretend you are China – do you think it's a wise move to keep buying US government debt while the US goes through a constitutional crisis? Using the 14th Amendment to protect the ability of the US to pay its debts becomes a lot less attractive if as a consequence, borrowing costs for the U.S. government rise sharply.”

Not least among the many problems facing the multitude of politicians, bankers, and civil servants with the hopeless task of holding back the catastrophe is that downgrading a country’s debt to “default”, whether that country is Greece, the United States, Spain or Britain, has dramatic consequences.

During the madness of the last couple of decades, the entire global economy became irretrievably entangled in a seething interdependent mass of credit and debt held together by those fiendish financial instruments known as credit default swaps. The trouble is that if, or rather when one country is declared to be in default, it will trigger a chain reaction throughout the millions of CDS contracts.

No power exists to stop it. And it doesn’t much matter which country is first up. There are no “fixes”, quick or otherwise, as Obama is about to find out.

Gerry Gold

Economics editor