The Founding Fathers Did Not Want Large Corporations

[rastaman]

The Founding Fathers Did Not Want Large Corporations

Many proponents of the free market defend our current system of corporate-based capitalism as if it descended directly from heaven into the pen of Adam Smith and then onto the hearts of our all-knowing Founding Fathers. An investigation of the history of the corporation, however, reveals a much different story.

The first corporations appeared in Europe in the 16th and 17th centuries and were chartered by governments for specific public missions. The largest and most powerful of these early corporations was The East India Company, founded by Queen Elizabeth in 1600 to facilitate trade between England and her colonies. At the height of its power, The East India Compnay held economic control over 1/5 of world’s population and maintained a private army of over 250,000 soldiers. Unjust taxation policies favoring this company insured that the crown, and not the colonists themselves, reaped the benefits from the colonies’ natural wealth and industry.

During the 18th century, Enlightenment ideals began to challenge the power of monarchies and corporations, and the power of the queen’s corporation began to fade. The Boston Tea Party of 1773 signaled not only a victory over the economic tyranny of the East India Company, it also helped pave the way for the political uprising known as the American Revolution. Also around this time, Adam Smith published the Wealth of Nations, arguing for free market economics, but against the concept of large corporations, claiming that they limit fair competition among smaller-sized merchants and artisans.

When the United States gained its independence in 1776, there were 336 corporations in the United States, but most had been chartered by state governments for specific public works projects. The Founding Fathers, still mindful of the crushing power once wielded by the East India Company, severly limited the power of corporations and never would have dreamed of nor allowed the trans-national behemoths we see today. In fact, the original limitations seem laughable when we consider our modern corporations:

1) Corporate charters were granted for fixed periods of time, usually between 10 and 40 years.

Today, corporations are assumed to be open-ended in their duration, only ceasing to exist if they can no longer afford to stay in business. (And sometimes being allowed to continue with government funds even when they can’t sustain themselves!)

2) Corporate charters could be promptly revoked for violations of law or for causing public harm.

Back then, there was corporate accountability. Break the law, and you’re out of business. Today, an offending individual or two might (and I say might) see jail time, but the corporate machine just keeps rolling along. And as for causing public harm…

3) Corporations could engage only in activities necessary to fulfill their chartered purpose. Could you imagine a government official walking into a board meeting at Disney and telling them that they the only business they can be conducting in the whole company is producing cartoons?

4) Corporations could not own property that was not essential to the fulfilling of their chartered purpose. Does that include luxury jets? How about condos in the Caribbean?

5) Corporations could not own stock in other corporations. I’m beginning to see a trend here. Corporations were not allowed to do anything or own any assets that were not specifically related to the purpose for which they were founded. Period.

6) The personal assets of corporate shareholders were not protected from the consequences of corpoate behavior. Oh snap! If still upheld today, this rule would have meant that anyone who owned stock in any of the companies that needed a bailout would have had to have paid for those bailouts out of their own pockets. Owning part of a corporation meant truly being responsible for that corporation.

Were they around today, the Founding Fathers would look at our corporate climate and our economic situation, and they would say, “We tried to warn you!” But Amercia has not heeded their wisdom. Almost as soon as the country was born, big business interests began to chip away at these constraints on corporate power.

[Smiling Assassin27]

I find this a bit confusing. First it says that corporations were granted charters by states, not the Federal Government. Then it claims that the 'Founding Fathers'--clearly a Federal government body in this context--instituted all these limitations. If anything, this is an argument for a country in which states decide for themselves what regulations to put on corporations, not an argument for Federal restriction of corporations, IMO. Lo and behold, every state in the union has a governing body for corporations doing business in its borders, and THEY have chosen to redefine the nature of the coproration by letting them grow, own assets, etc. Then, the Federal government, by way of its Supreme Court, started redefining corporations by 1820 or thereabouts.

No, what the FOunding Fathers REALLY didn't want was a Federal body speaking for the entire nation in its regulation of things that states had control over, specifically commerce.

Are there any Federal charters or documents that make these regulations national policy and/or law? Got a link to any of these documents? Constitution? Bill of Rights?

Finally, to say that 'the Founding Fathers' believed this is too vague and imprecise. Each had differing views on corporations, their powers, and their responsibilities. Not to mention that the legal status of corporations was a matter of English Common Law, not so much opinions of Founding Fathers.

[Rohirrim]

I find this a bit confusing. First it says that corporations were granted charters by states, not the Federal Government. Then it claims that the 'Founding Fathers'--clearly a Federal government body in this context--instituted all these limitations. If anything, this is an argument for a country in which states decide for themselves what regulations to put on corporations, not an argument for Federal restriction of corporations, IMO. Lo and behold, every state in the union has a governing body for corporations doing business in its borders, and THEY have chosen to redefine the nature of the coproration by letting them grow, own assets, etc. Then, the Federal government, by way of its Supreme Court, started redefining corporations by 1820 or thereabouts.

No, what the FOunding Fathers REALLY didn't want was a Federal body speaking for the entire nation in its regulation of things that states had control over, specifically commerce.

Are there any Federal charters or documents that make these regulations national policy and/or law? Got a link to any of these documents? Constitution? Bill of Rights?

Finally, to say that 'the Founding Fathers' believed this is too vague and imprecise. Each had differing views on corporations, their powers, and their responsibilities. Not to mention that the legal status of corporations was a matter of English Common Law, not so much opinions of Founding Fathers.

The reason you need federal law controlling corporations is that if was left up to the states, then you can bet your life that one of those states, say Delaware for example, is going to be willing to accept bribes, (cough, I mean fees) to offer a totally unregulated regime for corporations, and you will suddenly find all of your national corporations incorporated in Delaware, under Delaware law (or complete lack of law, as the case may be).

[DenverBrit]

If only the tax system were as simple as the 'Tea Tax.'

Mega Corps are not the only problem.

The tax laws as they exist are absurd and complex beyond reason.

The Corporations and Mega-wealthy are the real beneficiaries.....a simplified tax structure would close loopholes and make the corporations much more transparent.

At least with the Tea Tax, we could stop drinking tea.

[rastaman]

The “Founders” were a group of men who held different opinions and we see the same thing taking place today. Legally corporations during this time period had more to do with British law vs the opinions of the Founders. Keep in mind the Founding Fathers spent endless hours of time thinking and debating about the constitution and the bill of rights and future generations spent their time creating the current legal framework for corporations.

These limitations on corporations came from state governments and were not applied across the entire new nation - I guess on can say that state gov't represented the attitude of the Founders at the time of the American Revolution. What the colonialist were rebelling against was the tyranny of the what was then known as the mega-corpation (The East India Company.)
British law greatly influenced the East India Co. The Colonialist were reacting to the economic plight thet were facing, and as a inspiring budding new nation did not want to be dominated by corporate hands.

Unregulated-unbriddled capitalism is what the Founders did want to see take a foot hold in the United States. This isn't why the Founders and the colonialist revolted from England to just turn around 200 years later to be dominated by a 21st century East India entity known today as Trans-Global Capitalism we see dominating U.S.

[W*GS]

It's always amusing when an article starts off "The Founding Fathers believed ..."

It's never as simple as that.

[Smiling Assassin27]

The “Founders” were a group of men who held different opinions and we see the same thing taking place today. Legally corporations during this time period had more to do with British law vs the opinions of the Founders. Keep in mind the Founding Fathers spent endless hours of time thinking and debating about the constitution and the bill of rights and future generations spent their time creating the current legal framework for corporations.

These limitations on corporations came from state governments and were not applied across the entire new nation - I guess on can say that state gov't represented the attitude of the Founders at the time of the American Revolution. What the colonialist were rebelling against was the tyranny of the what was then known as the mega-corpation (The East India Company.)
British law greatly influenced the East India Co. The Colonialist were reacting to the economic plight thet were facing, and as a inspiring budding new nation did not want to be dominated by corporate hands.

Unregulated-unbriddled capitalism is what the Founders did want to see take a foot hold in the United States. This isn't why the Founders and the colonialist revolted from England to just turn around 200 years later to be dominated by a 21st century East India entity known today as Trans-Global Capitalism we see dominating U.S.

'Unregulated-unbridled' capitalism did not then, nor does it now exist in America or any other nation on Earth, so please don't build conclusions on this false premise.

The reason you need federal law controlling corporations is that if was left up to the states, then you can bet your life that one of those states, say Delaware for example, is going to be willing to accept bribes, (cough, I mean fees) to offer a totally unregulated regime for corporations, and you will suddenly find all of your national corporations incorporated in Delaware, under Delaware law (or complete lack of law, as the case may be).

This is not a sufficient argument for Federal regulation, especially in light of how coroporations were always governed by states with the blessing of the Federal body. The whole idea of the Constitution was to provide a framework but to ultimately allow states to govern themselves. Your suggestion that Delaware would not regulate corporations is merely an assertion, but certainly not backed up by any historical evidence. Besides, states should be free to regulate how they see fit regarding commerce in its borders. If its decisions result in market forces and players raping its people, then the representative government is there to reflect the will of those being raped and rectify it. Nowhere in your diatribe does it ever give an example of, let alone justify, a Federal plan to manipulate and control corporations. This is merely the opinion of a person who feels shortchanged and feels they should have more of the pie than they do. It's emotional with you.

[Rohirrim]

This is not a sufficient argument for Federal regulation, especially in light of how coroporations were always governed by states with the blessing of the Federal body. The whole idea of the Constitution was to provide a framework but to ultimately allow states to govern themselves. Your suggestion that Delaware would not regulate corporations is merely an assertion, but certainly not backed up by any historical evidence. Besides, states should be free to regulate how they see fit regarding commerce in its borders. If its decisions result in market forces and players raping its people, then the representative government is there to reflect the will of those being raped and rectify it. Nowhere in your diatribe does it ever give an example of, let alone justify, a Federal plan to manipulate and control corporations. This is merely the opinion of a person who feels shortchanged and feels they should have more of the pie than they do. It's emotional with you.

Are you familiar with the phrase "full of ****?" You should be, because it certainly applies to you. In the first place, if I launch a diatribe I'll use exclamation points. In the second place, get your head out of your ass:

Delaware began to stand out as a corporate haven when its laws began to give corporate management notable latitude in its powers to operate and control the corporation. This latitude has frequently come at the expense of the shareholders' ability to control the corporation.

------------------------------------

The status of Delaware as a corporate haven is not recent: following the example of New Jersey, which enacted corporate-friendly laws at the end of the 19th century to attract businesses from New York, Delaware played the game of fiscal competition by adopting in 1899 a general incorporation act aimed at attracting more businesses.
http://en.wikipedia.org/wiki/Delaware_corporation

I'm very happy with my piece of the pie, thank you very much. Now, run along little asswipe.

[Spider]

'Unregulated-unbridled' capitalism did not then, nor does it now exist in America or any other nation on Earth, so please don't build conclusions on this false premise.



This is not a sufficient argument for Federal regulation, especially in light of how coroporations were always governed by states with the blessing of the Federal body. The whole idea of the Constitution was to provide a framework but to ultimately allow states to govern themselves. Your suggestion that Delaware would not regulate corporations is merely an assertion, but certainly not backed up by any historical evidence. Besides, states should be free to regulate how they see fit regarding commerce in its borders. If its decisions result in market forces and players raping its people, then the representative government is there to reflect the will of those being raped and rectify it. Nowhere in your diatribe does it ever give an example of, let alone justify, a Federal plan to manipulate and control corporations. This is merely the opinion of a person who feels shortchanged and feels they should have more of the pie than they do. It's emotional with you.
Have you suffered head trauma?

[Spider]

Wyoming would be the first ones to **** you .....I delivered loads after Hurricane Hugo , people were charging up to 50.00 for a bottle of water ....

[Smiling Assassin27]

Have you suffered head trauma?

game, set, and match...well played, spidey. ^5

[Smiling Assassin27]

Wyoming would be the first ones to **** you .....I delivered loads after Hurricane Hugo , people were charging up to 50.00 for a bottle of water ....


I can charge $10,000 for my kid's Huffy. Are you saying that if someone needs that bike and is willing to pay 10K for it that the government ought to stop it? We're talking about corporations, who must abide by articles of incorporation and all business regulation imposed by the state they reside in. If you have anything that's relevant to this, fire away.

[rastaman]

'Unregulated-unbridled' capitalism did not then, nor does it now exist in America or any other nation on Earth, so please don't build conclusions on this false premise.

Capitalism is the economic system of choice for the United States. There is no mention of capitalism in the Constitution. In fact capitalism is abusive and undemocratic if not regulated properly. Government is the force that is able to regulate the abuses of capitalism. Unregulated capitalism is the worst, most abusive economic system the world has ever seen. Since 1980 we have seen capitalism deregulated. Republicans favor unregulated capitalism, which has included huge tax cuts for the wealthiest individuals and corporations.

This is not a sufficient argument for Federal regulation, especially in light of how coroporations were always governed by states with the blessing of the Federal body. The whole idea of the Constitution was to provide a framework but to ultimately allow states to govern themselves. Your suggestion that Delaware would not regulate corporations is merely an assertion, but certainly not backed up by any historical evidence. Besides, states should be free to regulate how they see fit regarding commerce in its borders. If its decisions result in market forces and players raping its people, then the representative government is there to reflect the will of those being raped and rectify it. Nowhere in your diatribe does it ever give an example of, let alone justify, a Federal plan to manipulate and control corporations. This is merely the opinion of a person who feels shortchanged and feels they should have more of the pie than they do. It's emotional with you.

Ummmmmm......you're the behaving like you have emotional issues. Point is unregulated profit-seeking corporations cannot be trusted to protect the Public, because their main objective is to make profits, not to be a do-gooder for the Public. Whenever profit-making conflicts with the Public interest, profit-making wins! Thus they become Predators on the Public, not Protectors of the Public.

This is not a radical idea, but an obvious fact, if you think about it. Profit-seeking corporations exist to make a profit, and the more profit, the better. Anything which increases profits is good for them; and anything which decreases profits is bad. So they try to do whatever is necessary to make profits. This is the essence of Laissez-faire Capitalism: that profit-seeking corporations should be left alone to do whatever they choose to do in order to make profits!

The answer is GOVERNMENT REGULATION! Yes, Government Regulation of profit-seeking corporations. Reasonable regulations, applied fairly, so that all the companies are in the same boat and nobody gets any special advantage. This is not difficult to do, but it does require some effort. And it requires going against the current right-wing Republican policies of Laissez-faire Capitalism: that profit-seeking corporations should be left alone to do whatever they choose to do in order to make profits.

[mhgaffney]

It's always amusing when an article starts off "The Founding Fathers believed ..."

It's never as simple as that.

Oh yes it is.

You have a yellow stripe down your back. Yellow for treason.