07/31/2013 10:46 am ET Updated Sep 30, 2013

Finishing the Second American Revolution

There was a time when corporations were a creature of the state, set up and licensed to aggregate capital to achieve certain public purposes. These roles are now nearly reversed, but certain steps are needed to complete the process.

We are now well on our way to government of the people, by the corporation and for the corporation. Having sold our birthright for a mess of porridge, we may as well eat the porridge.

In the Citizens United case, the Supreme Court, in a 5-4 vote, decided that corporations are persons entitled to free speech under the First Amendment to the Constitution. This allows corporations to donate arbitrarily large amounts of money to political candidates chosen by the management, without the knowledge or permission of the theoretical owners, the stockholders. But the rights of corporations as persons need not be limited to the First Amendment.

1. The Right to Vote
Rather than limit corporation's political rights to the current rather tawdry business of lobbying and secret unlimited donations, why not allow corporations the same political rights as every other person, namely the right to vote? There are problems to be worked out, such as how many votes each corporation should get, and where they should vote. Perhaps corporations should be allowed to vote in every locality in which they do business. I suppose they should be required to be 18 years old, as are other voters. States requiring picture ID for voting would have to make some accommodation, I suppose. But those states are faced with the necessity of accommodating those millions of citizens without picture ID anyway.

2. Freedom from Slavery
Slavery is the ownership of a person by another person or persons. If corporations are persons with constitutionally guaranteed rights, why should it be permitted that corporations are "owned" in some sense by other persons, the shareholders? After all, the sense of ownership by shareholders is quite remote and theoretical as it is. Shareholders vote for directors in a process very similar to elections in the old Soviet Union: the number of candidates equals the number of vacancies, the corporation counts the votes, and typically its hand-picked candidates receive over 90 percent of the votes. Corporate governance is an insider's game, and has little to do with the "owners." The market for corporate control is economic evidence of the divergence of interest between the shareholders and the directors/management. Some corporations pay dividends; it is true, but almost all have plans by which high management and directors are every year given stock which dilutes the ownership of the unorganized owners. Most owners buy stocks hoping they can later sell it for more than they bought it for.

Perhaps a more honest system would be a plan where the directors own the company. Then stock plans would be unnecessary, and the system would be less opaque.

3. The Right to Bear Arms
Many corporations have security forces that amount to policing power, but a few go far beyond this. We have seen in Iraq that companies can field private armies under contract. Many functions formerly provided by the armed forces are now privatized.

While President Eisenhower's warning of an industrial military complex went unheeded, it is now clear that the corporations are the senior partners. The struggles of successive Secretaries of Defense to cancel weapons systems deemed unnecessary and too expensive shows that the corporations who wanted to build the weapons have enough power to overrule the Defense Department.

For the senators and representatives who put up such a fight, the issue is neither national defense nor the public purse; it was "jobs in my district." Indeed, corporations place their factories in locations that are attractive because of the political cover that would be provided, which is another corrupting influence on our politics and economy.

4. Freedom from Regulation
Regulation is the last bastion of the public interest in its struggle with corporations. We have seen how the banking crisis led to the government recapitalizing the banks that were primarily responsible for the mess. The banks that were too big to fail are still too big to fail. Hardly anyone has gone to jail from the whole mortgage debacle. Business as usual goes on.

Most of the deregulation that has taken place is de facto. One method is to cut the funds of the regulators, and to arrange the appointment of incompetent or conflicted regulators. Such are the services rendered by lobbyists and their legislative donees.