People marched against corporate power during the Democracy Spring. | AP
By Mark Gruenberg / 11.17.2017
WASHINGTON—They may be telling unionists nothing they already don’t know, but four academics who just collaborated on a book detailing the history of the intersection of capitalism and democracy in the U.S. say the way to combat concentrated corporate power is – in so many words – organize, organize, organize.
If that’s in unions, fine, the four said at a session at the Brookings Institution on November 15. If it’s in other organizations outside the union movement, fine, too, they added.
“The question is how to do people coordinate?” said University of Maryland Economics Professor John Wallis, who repeatedly mentioned unions as a road to do so.
“It’s a matter of organizing. Individuals don’t have a lot of power.”
The four discussed the role of corporations in U.S. society at a time when the corporate class is wielding enormous power over the rest of us, thanks to the deregulatory and pro-business policies of the GOP Trump administration, more than 30 years of prior deregulation of airlines, trucking, intercity buses and other industries, and the tsunami of corporate cash unleashed into politics by the U.S. Supreme Court’s 2010 Citizens United decision.
The result has been to leave workers and their allies to pick up the crumbs, or get nothing at all, unions repeatedly point out. Federal data on wage growth for the last 40 years bear that out, showing that for the overwhelming majority of the U.S. – everyone but the 1 percent, which is basically the corporate class – incomes have been flat or declining.
And the 2008 Great Recession, caused by the financiers’ finagling and fraud, left a wealth gap converted into a chasm: A report this week from the Institute for Policy Studies shows the three wealthiest men in the U.S. – Bill Gates, Jeffrey Bezos and Warren Buffett – hold as much wealth as the bottom 50 percent of the nation’s people combined.
The Brookings discussion, however, focused on the love-hate relationship people in the U.S. have with corporations. They’re viewed as both economic engines of prosperity and as forces overwhelm and squelch individuals.
The solution, the panelists said, is “countervailing pressure” from other institutions in society, including unions, the media and regulatory agencies. Legislatures, including Congress, were often co-opted or – in the states – bought, the panelists said.
“The important thing is to form a society that creates such organizations,” Wallis said. “The societies that provide tools to organize are doing way better than those that don’t.”
But those “organizing tools” won’t work unless workers and consumers use them, he warned. And they haven’t been using unions as much as they used to, he said. He didn’t speculate why, but his chapter in the book discusses that.
But even such organizing cannot cope with corporations that organize themselves as holding companies, with interlocking and intermediate parts, making themselves tough targets, Vanderbilt Law Professor Margaret Blair pointed out.
And all the panelists agreed the Citizens United ruling vastly increased corporate power.
Wallis suggested taxes are one way to limit it. The four did not discuss, however, the current GOP-sponsored tax cut bill, which wants to cut the corporate tax rate from 35 percent to 20 percent, keep corporate deductions while killing individual deductions, and raising the lowest tax rate for individuals from 10 percent to 12 percent.
The most drastic tax examples came during the two world wars, when the Wilson and Franklin Roosevelt administrations got lawmakers to impose “war profiteering” taxes on firms, Wallis, the economist, noted.
Another check on corporate power is to start treating corporations like regulated utilities, said Michigan Law Professor William Novak. That’s what FDR’s 1938 Public Utility Holding Company Act, enacted in 1938, did. It passed in response to the excesses of pyramid utility company schemes centered in Chicago. The pyramids crashed when the Depression hit.
“Once something is dubbed a ‘public utility,’ controls on prices, discrimination and other areas can be put in place,” Novak explained.
The panelists said controlling corporations should be a bipartisan effort. It isn’t now. The panel opened the session quoting right wing Supreme Court Justice Antonin Scalia jousting with progressive Justice William Brennan over the corporate role in their Citizens United opinions. But Blair closed with a quote from another justice:
“He said we have to regulate them (corporations) because they are accumulations of financial resources that can influence the political process,” Blair said.
“That was from William Rehnquist,” Blair concluded – a conservative justice named by Richard Nixon.