When Corporations Are People: A Grim Fairy Tale by Lew Rosenbaum

When Corporations Are People:  A Grim Constitutional Fairy Tale

Or

How I Learned To Live With an Iron Heel on My Neck

poster by Doug Minkler

By Way of Introduction

This is the second of a two part series on the Constitution in history and how it has evolved.  The first part, by independent scholar Chris Mahin,  reviewed the revolutionary period of American history and its roots in the European enlightenment.  This part will deal with the Constitution itself, the debates leading up to its ratification, and the evolution of the political apparatus in this country.  We will look closely at how slavery impacted the development of the State, and how corporations and the State have been intertwined since the inception of the United States.  In the final analysis we want to look at these three propositions that are fundamental to understanding history and the present.

  • The Constitution is the legal framework upon which the State has been constructed. Within its content one can see the results of the debates that created it and can understand the class struggles that emerged from it. A general dictionary definition of “state” is: ” a nation or territory considered as an organized political community under one government”; a more specific definition, under which I am operating considers: “The State is a particular power of suppression”  (Friederich Engels).
  • The Constitution is an evolving document.  Interpretations of it have changed, depending on the forces in society.  Therefore, to rely on the thinking of the founders both discredits the revolutionary period in which it was written and makes us hidebound to the reactionary conclusions of that same period.
  • To analyze what is happening today requires that we understand history – but not be shackled by it.

Let’s restate some of the background of the years leading up to the revolution.

First, the revolutionary war was one phase of a century long struggle, in which European powers contested for global supremacy.  Viewed from our side of the Atlantic, it is often easy to ignore the monumental battles taking place between France, Spain, England and Portugal for control of the seas and hence the “right” to colonize the world.   Colonies provided the feudal nobility new sources of raw materials and other forms of wealth.  Some of the nobility who obtained the rights to colonize North America attempted to reproduce European feudal relations on the new landscape.  Every such extent failed within a few years of settling.  If nothing else, the opportunity for indentured servants, who formed the bulk of the early settlers, to escape (legally or otherwise) significantly altered their expectations.  The other feature that greatly influenced  development was the cash crop economy of the South, integrated into the emerging world economy by the production of sugar, tobacco and indigo.  What became known as the triangular trade– sugar and tobacco from the South and Caribbean shipped to England, where it would be sold and turned into rum and chewing and smoking products; money obtained from commerce or products thus manufactured then were shipped to West Africa where the profits would be used to purchase slaves; and the cargo of slaves made the return final leg of the triangle back to the South or Caribbean.  This was the beginning of a sophisticated capitalist process,

Triangular Trade

distinct from what was found in Europe, a process which shaped the history of America.

Second, this side of the Atlantic participated grudgingly in the revolutionary struggle, only coming late to the conclusion that this would need to be a war for separation of the colonies from England.  Even the idea of a “United States of America” was foreign to the colonists a short 20 years before the Declaration of Independence.  The revolutionaries themselves debated whether independence was necessary, up to the eve of the war and even after the victory.

Third, the American revolutionaries were by no means united on what kind of nation an independent America should be.  The reaction to the European conflict and the disagreements about how to relate to England can be found in the Constitution; but the main issues that writers of the Constitution fought over concerned what the new nation would look like.  And they made certain fundamental assumptions that were grounded in the theology and ideologies of the period.   The main, fundamental assumptions, codified in the Declaration of Independence, start out with this phrase: “We hold these truths to be self evident . . .

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. –That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

It is fair to say that none of the founders understood the radical implications of the statement that they had written in the Declaration and now were charged with carrying out in writing a Constitution.  We have discussed briefly in the first part of this presentation that  these words and the Constitution struck fear into the hearts of European monarchs in their palaces.  But the founders of the new, independent colonies deeply distrusted the implications.

They had, in the wake of their victory, written Articles of Confederation and effected a union that stumbled as it tried to stand.  The leaders of the new government could not raise taxes; could not pay their war debt; could not maintain an army; could not build the infrastructure to transport goods; could not protect the fledgling manufacturing and merchant interests from competition with the British Empire; and were everywhere confronted by former colonial administrations that resisted a centralized governmental structure.  Now 4 years after the Treaty of Paris certified the victory of the colonists,  many of the leaders saw the structure as a model of centrifugal force without a counterbalance.  The new nation was disintegrating and the cause was too much power dispersed.  Too much democracy.  In some ways, Shays Rebellion was the epitome of what was wrong.

Shays’ Rebellion

Daniel Shays was a Western Massachusetts  farmer who served as a lightning rod among all the other poor farmers threatened with high taxation and then foreclosures when they could not pay.  Leaders everywhere looked on with horror as the former Boston radicals, none more radical than Sam Adams, called out the militia on the rebellion of the poor.  What if this happened elsewhere?  What if this turned into a general insurrection to “alter or to abolish” the new government? What if a general slave insurrection would threaten the Southern planters?

The 55 men who gathered in Philadelphia in May 1787 had Shays and all he represented on their minds.  They were men of wealth and means, and highly educated for the time  —  when 1% of  the Americans had a college education, half of these men had been to college.  George Washington, probably the wealthiest man in America, presided over the convention.  Many of the men were people who had loaned the colonial army money and had much to gain by a central government that could and would repay them. In fact, they suffered under the Articles, because the government could not even pay the interest on the money owed them.

But they had some disagreements as well.

They did not agree on the extent to which democracy should be limited.  Who should be entitled to vote?  What offices should they be entitled to vote for, either directly or indirectly (through electors)? How long should an office holder be entitled to hold office?  What kind of man should be allowed to hold office?

They agreed (mostly) that they did not want to re-institute a monarchy; but how could they institute in the form of the government some way in which one of differing interests could not become dominant?  How could the powers of the government be effectively separated?

They did not agree on the relation between states and the central government.  How could the states maintain their autonomy within a centrally supreme structure?  How can the powers of federal and state and local governments be effectively divided? How can the sectional interests of the states be protected against the controlling tendencies of the federal government?

They did not agree on slavery, which was a sectional and economic interest but more than a sectional interest.  How could the South establish and maintain an electoral parity with the North? How could the property rights of slaveholders be protected from Northerners harboring escaped slaves? How could the rights of the slave traders be protected? How could free labor in the manufacturing centers of the North protect themselves against slave labor?  And what about the moral question of slavery itself?  81 year old Benjamin Franklin, petitioned the Convention for abolition, which in the final analysis the Convention refused to take up.

Alexander Hamilton

Hamilton, Madison and Jay took up the cause of the Constitution in a series of polemics published in the newspapers of the day, ultimately collected as The Federalist Papers.  Their opponents became known as the Anti-Federalists, which of course gave them a disadvantage from the start.  They were the “anti faction.”  Madison, soon to be allied with Jefferson and against Hamilton in the first administration under the new Constitution, wrote in the Federalist Papers that “faction” was the great enemy of democratic government, and that the faction most to be feared was that of the rabble, the majority, the poor.  The poor would always predominate in numbers, and the nation would need to find a way to enforce a government of the “best people.”  Madison and Hamilton meant that in a large nation, such as the new United States, electoral districts could be large enough, encompassing enough people, so that only those who were known to so many could stand a chance of being elected.  Only the best people.  The Anti Federalists disagreed among themselves about the degree of democracy, but leaned more toward a more direct democracy.

Madison and Hamilton also argued vigorously against a Bill of Rights.  This was the major platform of the Anti Federalists. In fact,  Anti Federalists blocked ratification of the Constitution until the Federalist majority agreed to make writing a Bill of Rights the first item on the agenda of the first Congress convened under the new Constitution.  Madison and Hamilton objected because they thought the rights were already guaranteed under the Constitution, hence redundant.  Given all the furor over at least the First, Second and Fifth amendments in our own time, perhaps Madison and Hamilton (and the Federalists in general) may have thought these too much a concession to the rabble as well.

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What The Constitution Says

A line by line careful reading of the Constitution will reward anyone who seeks to, well, read between the lines;  but we are only going to review a few of the most significant points here.

The Preamble of the Constitution starts out with the well known phrase: “We the People.”  It is of course easy to recognize that this group of 55 men were not representative of the breadth of “The People,” even if you consider “The People” white males.

John Adams described the convention as a gathering of men “ability, weight and experience.”  He might have added “and wealth.”    Few men of ordinary means attended. . . nearly all were quite prosperous by the standards of the day.

At a time when fewer than one-tenth of 1 percent of Americans attended college, more than half the delegates had college educations. (Foner, p. 235)

But it is easy to understand why this elite of the elite wanted to cast themselves as representing the interests of all.  Still, this deception is not the most significant meaning of the usage.

For another, “We the People” distinguishes it’s origin from the contemporary divine right of kings, or from god.  Further, “We the People” should be contrasted with “We the several states,” or “We the People of the several states.”  It is an attempt to relegate the states to a secondary position under “the People of the United States of America.”  From the outset of the Constitution, the writers are sending a message that the federal government, which represents the interests of all “the People,” is supreme to the states, which represent the interests of a section of “the People.”  From the outset, they make the “division of powers” clear.

Very quickly the Constitution gets into the meat of what it is about.  The document emphasizes the role of the Congress – the House of Representatives and the Senate. Remembering that one of the chief concerns of the framers of the Constitution was  to limit democracy, they defined the office holders.  Representatives were to be elected directly for a 2 year term and were to be allocated proportionally within the states according to a census to be conducted every 10 years, from districts created within the states.  The South Carolina, however, threatened to block the Constitution unless some accommodation was made for the large number of slaves in the South (who could not vote or hold office, but whom the South wanted enumerated for the purposes of representation).  In other words, the South foresaw the potential of domination by the non-slaveholding North, and wanted to shift the center of gravity. The “compromise” was the “3/5 clause,” which enumerated the slaves at the rate of 3/5 of a person for the purpose of representation.  Let’s avoid any misunderstanding: Southern politicians were not admitting that slaves were even partly human or part of “the people.”  The 3/5 clause was strictly a matter of preventive book-keeping, certifying in fact that slaves were stock.

On the other hand, senators were to be elected only indirectly, through a system of electors, and from each state as a whole, for a period of 6 years. Each state, regardless of size or population, would be entitled to 2 senators.   The Senate was to be a much more stable gentleman’s club, viewed as a counter to what was expected to be a more raucous House with much greater turnover.  The men at the convention from the bigger states resented domination by the smaller ones, but this also foreshadowed the debates of the first half of the nineteenth century to balance slaveholding states in the South with free states in the North, as more states were brought into the Union.

The discussion about how long a President should serve started at the extreme end with a proposal from Hamilton:  the President should be elected for a life term (much as is true of a Supreme Court Justice, who is appointed by the President and must be confirmed by the Senate, for a term of “good behavior”).  This got  little traction among delegates who feared the restoration of the monarchy.  They compromised on a four year term, indirectly elected.  (While both the 3/5 clause for Representatives and indirect election for Senators has been amended, the electoral college still exists for the President and Vice President). The Presidency is the only office which has a limit of two terms (amended after Franklin Roosevelt was elected for four terms).

What each branch is responsible for is the crux of the “separation of powers.”  For example, only the House can initiate a revenue raising bill; but all legislation must be approved by both House and Senate and then must be submitted to the President for approval.  The President can veto legislation (this was originally conceived as an exceptional circumstance;  the first significant use of the veto was Jackson’s refusal to accept the renewal of the national bank charter in 1832), and Congress must obtain a 2/3 majority vote to override the veto.  It was not until the Supreme Court ruled in Marbury vs Madison (1803) that the doctrine of “judicial review” was established: the right of the Supreme Court to rule on the constitutionality of Congressional legislation (extended a few years later to state legislation).

Fearful that the executive might accumulate too much power, the framers gave the Representatives the sole power to “impeach” the President, that is, to draw up articles accusing the President of a serious crime.  Under the Constitution, once the President is thus accused, the Senate has the sole power to try the case, and the Supreme Court Chief Justice presides.

Section 8 of Article 1 (The legislative branch) collects here the “enumerated” powers of Congress – those powers specifically assigned.   Here the legal framework for the State strides to the forefront.  Collecting taxes, coining and regulating the value of money, naturalization laws, bankruptcy law, declaring war, establishing and supporting armies, navies, a militia – all the necessary legislation to maintain the organs of force required by a national government.  While the power to “raise the armies” is given to Congress, the command is specifically given to the President.  Civilian control of the military is the principle here.  However, only rarely has the military been commanded directly by the President (e.g., Washington during the Whiskey Rebellion).   It is a legitimate question as to how much that separation of function really matters in a militarized society such as ours.

Sections 9 and 10 limit the powers of Congress and prohibit powers of the States respectively.  Generally these show the efforts of the Federalists and Anti-Federalists to compromise on the central authority of the federal government.  The power of the Southern representatives at the convention is seen by the first paragraph of Section 9:  the Congress is prohibited from abolishing the slave trade from overseas before 1808.  Even before the invention of the cotton gin made the South the source of the bulk of the world’s cotton, slave production of both sugar and tobacco were the source of great wealth in the South.  Many people including Southerners expected that slavery would ultimately fade away because of the tendency of tobacco production to deplete the soil.

It is worth while questioning, before going on to the amendments, who is entitled to benefit from the Constitution.  Who is entitled to political freedom or citizenship?  Who is entitled to hold office and vote?  Congress is given the power to establish “uniform rules of Naturalization,” but nowhere in the Constitution itself is a definition of citizenship given.  The document refers to “the People,” and “Indians” and “Indians not taxed” and “other persons.”    “Other persons” refers in all cases to slaves, who have no rights.  Even fugitive slaves, run away to free territory, must be returned to their owners just like any other property (Article IV, Section 2). The states can regulate how they want to treat free blacks.  Women are not mentioned in the Constitution and were subject to different regulations depending on the states.  Owning property was considered a measure of responsibility by the framers, and consequently became a measure of whether a person could vote or participate in society.  Limitation on democracy was evident everywhere, in conflict with the revolutionary proclamation “We the People” that starts this document out.

With Washington elected and the first Congress seated, the new government faced some significant questions that it had to resolve before it could find out, as we stated earlier, what kind of nation an independent America should be.

As indicated above, the first question they did address was writing a Bill of Rights.  The new Congress wrote 17 amendments, which were then consolidated to 12 amendments presented to the states for ratification.  Only 10 were ratified at first, and these have come down to us as the Bill of Rights.

The first amendment begins “Congress shall make no law . . .” and then goes on to enumerate what Congress is prohibited from infringing on:  religion, speech, press, public assembly.  For most of the nineteenth century, this was interpreted as a prohibition only against Congress.  States routinely promulgated laws that inhibited free speech.   The twentieth century saw the application of the first amendment to more peripheral cases, so that today it is generally applied to states as well.  But even after the Alien and Sedition Acts of the Adams administration (1796-1800)  were rescinded in the succeeding Jefferson administration, states continued to pass legislation that limited first amendment rights.

Amendments 2, 3 and 4 are closely connected to experience in the immediately concluded revolutionary war.  The presence and behavior of British soldiers on colonial soil gave rise to the right to bear arms (2), the right to refuse to have soldiers stay in your home (3) and the right to refuse officials searching your home.  Of these, the second and fourth amendments continue to be a bone of contention.  Note that the FBI raids on anti war and labor activists over a year ago and the seizure of computers, printed files and art work are seen in violation of the fourth amendment as much as the first (targeting those who exercise rights of free speech and public assembly).

The Fifth Amendment figures prominently in our own day.  The prohibition against being tried twice for the same crime (double jeopardy); the requirement for due process of law; and that one may not be compelled to testify against oneself are all wrapped up in this amendment. “Taking the Fifth” has been the last resort of those politically prosecuted, often to keep from implicating others as in the McCarthy era witch hunts.  The grand jury system, originally conceived of as a protection against unjust indictments, now effectively eliminates protection against self-incrimination when it offers prosecutorial immunity in exchange for testimony.  Under these circumstances, pleading self-incrimination can invoke a contempt charge and jail.

Amendments 6, 7, and 8 all deal with the conduct of the justice system, trials, bail, and cruel and unusual punishment, all intended to ameliorate any excesses caused by a punitive central government.  The extent to which these amendments have been successful can be judged by the length of time people are in jail now before trials take place or before final adjudication of their cases.

Amendments 9 and 10 are the amendments which limit the control of the federal government by reserving rights to the people, so long as they are not enumerated nor prohibited by the Constitution.  This is the last defense of the advocates of states rights vs. national government rights.

In the next section, I want to discuss how these themes — slavery and democracy;  corporations, business and labor — have continued throughout our history, in the context of the Constitution.    Before we get there, I want to point out how some of what we discussed earlier was modified by the amendment process.  We will discuss the Civil War Amendments separately.  Note however that the language in the Constitution prohibiting a direct tax on the people was altered in 1913 by Amendment 16, which established the Constitutionality of the income tax and followed decades of attempts to resolve this question.

Also in 1913 the ratification of the 17th amendment changed made the election of Senators direct.  As a historical curiosity, the 27th amendment, which had been proposed in 1789 as one of the original Bill of Rights, was finally adopted in 1992.  This amendment requires that Congressional raises could not take effect until the session after they were approved by Congress.

Corporations and the Constitution

The period roughly from the first administration under the Constitution until perhaps 1830 is sometimes called the “Market Revolution.”   This term has a number of levels of meaning.  First and foremost, the former colonies that had been dependent on British imports (thus they were thoroughly integrated into the developing manufacturing system of Britain) now established their own manufacturing base.  Second, internally, within the former colonies, a market developed between city and surrounding countryside, between manufacturing areas and farming areas.  Third, the already distinct regional differences between North and South became exaggerated, as the slave economy actually inhibited the development of manufacture, and the bond between shipping, Southern cotton, and Northern manufactured products became strengthened. (The South did build some  textile mills in the large cities and ports.)

Immediately upon the completion of the Bill of Rights and its submission to the states, the Federalists put forward their program for what the new nation should look like.  Spearheaded by now Secretary of the Treasury, Alexander Hamilton, they proposed that the new nation needed to be credit worthy, therefore needed to pay off its debts (primarily to the investors who had bankrolled the revolutionary war) and needed to borrow more money (since it had none) and institute a system of taxation (to be able to pay off new debt and to pay for anticipated projects).  One such project was the establishment of a standing army (fear of invasion; need to put down rebellion).  Another was to subsidize new manufacturing initiatives and to erect protective tariffs against England.

Jefferson and Madison and others coalesced in opposition to this plan.  In their view, everything needed to be centered on developing an agricultural economy of “yeoman farmers,” that is people who owned their small farms and produced grain for export to the world.  Owning land guaranteed independence, in their view.  The factory system and wage labor simply reproduced dependence on the manufacturer. The banking system seemed to the Jeffersonians only an effort to produce a dependent population.

Where they mostly agreed was on the need to repay war debts and to protect both Southerners and Northerners against English tariff walls and other protective legislation.  American ship builders and Southern cotton planters had lost some of their best British customers.  The two sides reached a compromise, when the Republicans (as the Jefferson-Madison faction called themselves) agreed to all of the Federalists’ program except the manufacturing subsidy; and the Federalists agreed to establish the national capital in a Southern location, what became Washington, D.C.  By the mid nineties, what both Madison and Hamilton had argued against in the Federalist Papers and hoped to avoid had become commonplace, Not only had party factions developed within Congress and the states, but Madison and Hamilton had become leaders of the factions.

The invention of the cotton gin in 1793 changed the South and therefore the entire country.  The gin is a relatively simple machine that cleans seeds from the cotton boll.  This was a highly

The cotton gin

labor intensive job and therefore limited the amount of acreage that could be planted.  In 1790, the amount of cotton produced in the South amounted to perhaps 8.5 million tons.  By 1820, the amount had increased 20 times, the American South was the center of the world’s cotton production, and after 1833 when the British abolished slavery, the U.S. became the world center of a slave economy.  This had definite implications in regard to the slave trade, which we will go into later.  For now, however, it is important to emphasize that the concentration of the cotton kingdom further differentiated North from South, and integrated the slave system of cotton production into the world capitalist economy.

The first national bank, chartered in 1791 for 20 years, was an essential part of Hamilton’s plan.  Jefferson opposed the bank, a private institution, as undermining property rights and as a power not enumerated and delegated to Congress in the Constitution.   In contrast, Hamilton asserted that what Congress could do for a person it could do for an artificial person, namely, a business. You can trace the government arguments about banking, corporations and people back to this point.  The plot thickens, however, as the nation begins to develop.

The Jefferson presidency took advantage of a revolution that broke out in Haiti, along with the French engagement in a European war, to purchase the Louisiana territory, a land grab that doubled the size of the United States.  Note that Jefferson, who showed how conflicted he was about slavery in his writings,  took the opportunity to quarantine Haiti. His Federalist foes, whom he had defeated by branding them anti-democratic, welcomed the Haitian revolution. The Federalists were also quick to point out that such a purchase was not consistent with the enumerated powers either – not delegated to the President.  They argued that he spent money that the Federal government did not have to obtain land that it did not need.  But Jefferson foresaw an expanded frontier which would allow the yeoman farmer class, the backbone of the nation, to move West.  The purchase also gave the United States control of the port of New Orleans, which was the gateway from the Ohio and Mississippi river grain producing areas to Europe.    Jefferson was eager to achieve this.

In 1811, half way through Madison’s administration, which succeeded Jefferson’s in 1808, the charter on the first national bank expired and was not renewed.  The Republicans ran into trouble, however, in the War of 1812.  Unable to finance the war or to pay the debt that accrued from the war, Madison moved to re-establish the national bank.  This charter was passed in 1816 for another 20 year period, part of what became known as “The American System,” an economic package sponsored by the Federalists in 1812 to 1816 and then, as the Federalists fell apart, by the new party that emerged out of the wreck of the Federalists, the Whigs.

The “American System” was a continuation of the Federalist plan of Hamilton, focusing on the bank, high tariffs on imports, and federal subsidies for “internal improvements.”  The Whigs now aimed to finance the development of roads and canals to further the westward expansion and the trade that was necessary to support that expansion.  The opposition to this was led by Southern capital, which had no need for  federal subsidies for “internal improvements.” River waterways had always provided its primary internal traffic, and externally the oceans allowed for transport of the cotton crop around the world.  Southern capital did invest in railroads as the century progressed.  The purpose was to tie the cotton plantation areas with the ports and the newly built textile mills, constructed to compete with the more rapidly developing industry of the North.  Again the arguments raised were Constitutional.  Congress had no enumerated right to tax Southerners to pay for Northern improvements.  The arguments in favor went all the way back to the Preamble, to provide for the general welfare.  Monroe, who became president in 1816, relied on John Quincy Adams to prepare the legislative package;  Adams was thoroughly shocked when Republican Monroe had a change of heart and vetoed the internal improvements measure.

Chief Justice John Marshall

The Second National Bank, however, had been approved in 1816 and given a 20 year charter.  Three years later came the Dartmouth and McCulloch decisions of the Supreme Court.

In Dartmouth College vs. Woodward, the court decided that corporate charters are contracts that cannot be rescinded by future lawmakers.  The charter was a contract, and just because the members of the legislature changed did not mean they could unilaterally refuse to honor the previously negotiated contract.  Going even further, in McCulloch vs. Maryland the Supreme Court ruled that state laws could not be made in opposition to federal legislation that carried out Constitutional provisions.  In that particular case, Maryland attempted to tax the Baltimore branch of the National Bank, pursuant to a law that allowed the state to tax banks not chartered by the state.  The Court, in its ruling, indicated that the taxing power was being used not simply to raise funds, but to tax the bank to death.

John Marshall, presiding over the Supreme Court, here ruled first that the federal government has the power to establish corporations (e.g. banks) even though this is nowhere stated directly in the Constitution.  It is implied, he said, in that the creation of the bank was for the general welfare of the population, and it was not prohibited in the Constitution.

Further rulings in 1824 and 1837 clarified also that the states could not limit the right of corporations to compete.  And in 1830 to 1832, under the Andrew Jackson administration, a series of Court decisions relating to “Indian Removal” – expropriation of Indian land – asserted the primacy of contracts with the federal government. In general, the Supreme Court confirmed the “sacred rights” of private property.  The government, the Court repeatedly affirmed, is bound to protect property rights over personal rights.

By the time Jackson took office in 1828, the old Federalist Party had disintegrated.  Jackson’s own party, a reinvented version of the Republicans now called the Democratic-Republican Party or just the Democrats, was a states rights, pro slavery, Southern oriented party, with strength among Western and Northern farmers.  The Whig opposition based itself in the North, among artisans, manufacturers, workers and small farmers.  Jackson was opposed to the “American System” and especially the National Bank, which he saw as fraudulent.  Jackson was a “hard money” man.  He saw the banks as issuing worthless paper that depreciated the value of money and cut into the real income of wage earners and farmers.  In 1832, Nicholas Biddle, head of the National Bank, persuaded Congress to extend the life of the bank (even though it was not due to expire for 4 more years; he feared that after the upcoming elections Jackson would be able to organize to stop the bank renewal).

Jackson responded by vetoing the extension.  He was the first president to go over the heads of the Congress and to appeal to the whole people to “oppose the rich and powerful.” His message  called forth considerable criticism from Whigs, who denounced him for usurping the power of the legislature.  After the veto, and in spite of the Biddle campaign against him, Jackson won re-election by a sweeping margin as the defender of the “humble American.” In his second term of office, Jackson removed deposits from the National Bank and placed them in various state banks, often under the leadership of Jackson’s cronies (“pet banks”), where the unregulated issue of paper money was a factor bringing on the economic crisis of 1837.

It is worthwhile stopping here, for a moment, to see what the country looked like on the eve of the 1836 election.  48 years after the ratification of the Constitution, all but 8 years were under Southern administrations  (32 years were Virginia presidents).  The dominance of the South had played a significant role in limiting the development of what we have called “The American System.”  Still, objective forces pushed that forward.  Despite Southern objections, the National Bank was chartered for 40 of these years.  In part it was chartered because, despite the ideological convictions of the leadership of the Parties, wars had to be financed, the elite had to be repaid for financing the revolution, and taxes had to be raised.  Both sides were fundamentally agreed about this.  And underneath the political machinations, manufacturing advances were fueled by rapid technological discoveries.

We have already talked about the significance of the cotton gin, introduced in 1793.  The development of the steam engine from the early 1700’s to the introduction of the double acting steam engine in the early 1800’s rapidly accelerated the advance of industry.  Mills and factories that had depended on water power could now be located far from water power sources. Steam power was also fundamental to the commercial use of steamboats and railroads.  Steam also powered the printing press and the rapid expansion of newspaper publishing.  The Erie Canal, the Cumberland Road and other  canals, railroads and toll roads opened up the west to transportation of goods, and thus developed the market relationship between East and West.

Nation and commerce changed in this 48 year period.  We started with a loosely associated group of former colonies now called states that had two distinctly different regional economies. Northern farmers produced food crops, while merchant shipping served the triangular slave trade and as fishing vessels. The agrarian South depended on cash crops of  sugar, tobacco, indigo and cotton.  Politically the cash-crop South dominated the small farming and manufacturing North.  The goal of most families was land ownership, which conferred “independence”: that is the owner of land, like the owner of a business, is “his own man.”  This translates into the ideal of the Republicans, later the Democrats, as the “yeoman farmer.”  By the end of this period, the dominance of the South (politically) is on the wane.  The wealth in property is still concentrated in the South, but “internal improvements” have connected the separate states.  New England has become a manufacturing center, and the factory system has made huge inroads in the agrarian base of the North.  “Mill girls” flee the farms to find “independence” in the textile plants that crowd the landscape. The ideal of the yields to the practicality of the worker and the workplace, wages begins to replace land ownership. As the century proceeds, controlling the land becomes, for many, tied to the banks who own the land; while independence becomes identified with the workers’ freedom to move from one job to another. Farmers and industry in the North produce more than can be consumed in the region, and steam boats plying the Ohio and the Mississippi penetrate the heart of the South with food and finished and manufactured goods.

This market revolution of the early 19th century is, in a certain sense, being revisited in our own day.

The market has been redefined globally by a new form of production analogous to the steam engine. The technological revolution we have experienced in the last 40 years has introduced a new mode of production in the microchip and its spinoffs.  What was independence before (the promise of a good job and the freedom to find another better one) has become dependence once more; while electronics has created a class free from employment at all (i.e., no longer connected to the old production process, no longer likely to find work within the old environment).  Between the 1840s and the present lies a world of difference.  Now century old Supreme Court decisions on monopoly no longer seem to hold water, old rules no longer apply.   Corporations do what they want and government steps in to help out when they stumble.

In this context the Citizens United Supreme Court decision is consistent with the position of a large faction of those who wrote the Constitution. The decision is even more consistent with a global economy in which the microchip and robotics has ejected many wage earners into a permanently unemployed class. It is consistent with an era in which everything takes a back seat to privatization.

Slavery and the Constitution

James Madison

Let’s step back again, this time to examine how the Constitution laid the basis for the “irrepressible conflict” about slavery.  Madison, like Washington and many other framers of the Constitution, was a slaveholder. He recorded in his notes about the deliberations that color had become the basis for “the most oppressive dominion ever exercised by man over man.”  (Foner, p. 258).  Later he assured his fellow Virginians, questioning whether they should ratify the Constitution, that the document offered slavery better security that was available under the Articles of Confederation.

Madison had good reason for assuring the Virginia delegation.  One of the most significant pieces of legislation passed by the Congress under the old Articles (in 1787) was the Northwest Ordinance.  The effect that concerns us here is that it prohibited slavery in the first “territory” created by the federal government for the purpose of ultimately admitting new states to the Union.  By this prohibition the Ordinance made the Ohio River the boundary between free and slave states.  The Ordinance also established the precedent that the Federal government had a right to determine whether a territory could engage in slavery. South Carolina, one of the states with the greatest slave population, came to the Convention determined to defend the “peculiar institution,” and by their efforts greatly affected the document.

South Carolina was responsible for the fugitive slave clause and the 3/5 Clause. Their delegates proposed the Electoral College and pressured the Convention to limit Congressional ability to levy taxes for fear of federal taxation on slave property. While New England and slaveholding Virginia wanted the slave trade abolished (Virginia had a large number of native born slaves), South Carolina threatened disunion if the abolition were not delayed (70 years later South Carolina led the secession movement and the military attack on the North that opened the Civil War).

The fugitive slave clause not only attached “extraterritoriality” to slavery – i.e. that slaves were still in bondage no matter where they traveled – but also created a mechanism that required all states to police the institution of slavery.  Further, the 3/5 Clause greatly exaggerated the national power of the Southern states, giving them much more representation in the House than their voting population would have allowed them.  Through that representation, they also influenced the Electoral College.  Jefferson won the presidency from John Adams in large part because of the 3/5 Clause.  Of the first 16 presidential elections, all but four placed a Southern slaveholder in the white house.

Finally, Southern slaveholders were even partly responsible for the opposition to the Bill of Rights among the delegates to the Convention.  Again we call attention to South Carolina, whose delegate Charles Pinckney, argued: “such bills generally begin with declaring that all men are by nature born free,”  while “a large part of our property consists in men who are actually born slaves.”  The words “slave” and “slavery” appear nowhere in the document, and as Maryland delegate Luther Martin wrote, “[his colleagues] anxiously sought to avoid the admission of expression which might be odious to ears of Americans,” but were “willing to admit into their system those things which the expressions signified.” (Foner, 258, 259)

Finally, while the first Congress passed a Bill of Rights, it shrank from hearing petitions and bills to abolish slavery.   Writing for the Pennsylvania Anti-Slavery Society, Benjamin Franklin again sought to bring a petition before Congress.  Again he could not get a hearing.

Our inquiry purposefully focuses on the legal (Constitutional) expression of the “irrepressible conflict.”  But at the same time I want to emphasize that rebellion and abolitionism, both taking place in the “extra-legal” sphere, were extremely important elements leading up to the Civil War.  While large, organized rebellions were few and far between, they did occur and were extremely significant; few because of the close overseer and state suppression that isolated them early, and executed those who threatened the status quo.  But from Gabriel to John Brown, armed insurrection was a threat which the South was bound to fear and the North to take account of.  It is just not the subject of this discussion.

If we fast forward to 1820, we find ourselves in an America caught in the middle of the market revolution.  This is an America where New York surpassed Virginia as most populous. Cotton production had reached 170 million pounds, 20 times what it was when the cotton gin was invented.  Population was rapidly increasing and settlers moved westward.  Land speculators, often families of the elite framers of the Constitution,  bought huge tracts.   From 1791 through 1820 Ohio, Illinois and Indiana were admitted as states from the territory of the Northwest Ordinance, along with Maine and Vermont, as states without slavery.  However the following states were also admitted, all of which allowed slavery: Kentucky, Tennessee, Louisiana, Alabama and Mississippi.  Southern states regarded their Northern neighbors with great fear.

In the 12 years following Congressional abolition of the slave trade, the “Up-South” border states had stepped in to fill the gap by developing a specialty as a breeding reserve of the plantation states.  Of course illegal trading in African slaves continued, but the insatiable demand of the cotton kingdom created the division of labor to fulfill the supply.  The concept of being sold “down the river” was a death sentence from overwork in 7 years. Then Missouri applied for admission as a slave state.

In 1821 Congress reached a “compromise” which pushed the conflict into the background for the time being.  Congress agreed that Missouri could come in as a slave state, but that all other states admitted from the Louisiana Territory north of the southern boundary of Missouri would be free.  With that, the South eyed expansion into Texas and carving five states out of the Texas territory.  This required taking the territory from Mexico, a process which took another 25 years before it was accomplished. Again, the details are beyond the scope of this investigation.  However, in a style which would be repeated many times in our history, the Federal government manufactured a pretext for invasion of Mexico and captured a vast territory including Texas, California and the states in between.

In 1846 Representative Wilmot proposed to Congress that no slave state be admitted from the territory taken from Mexico.  This was unacceptable to Southerners, for whom the expansion of slave territory was now a matter of dominance in the government.  The balance in the House of Representatives was turning against the South;  the Presidency was no longer guaranteed to a Southerner; the Supreme Court was still in the hands of the South.  The battle was now for the Senate, and thus the electoral expansion here was crucial to the slave power.  The conflict was so great that a new political party emerged in 1848 taking elements of the Whigs and the Democrats with them.  These Free Soilers ran Martin Van Buren for President.  That a former President would run on a platform limiting slavery showed that abolition had achieved a popular respectability not seen before.

Still, in 1850 the legislature did what it had done before, covering the conflict over with a “compromise” that allowed the voters of a particular territory to determine if the territory should be admitted free or slave. California applied for admission as a free state. John Calhoun, representing South Carolina, was intransigent representing the slave power, but finally agreed to “popular sovereignty” as long as Congress would pass a strengthened fugitive slave law, and as long as Washington, D.C. would remain a slaveholding area (the slave trade would be abolished in the District).

Once again the conflict arose about the Kansas territory in 1854.  With Calhoun and Clay, the titanic compromisers of an earlier era now dead, Stephen Douglas, hoped to position himself for a run for the Presidency.  He proposed to apply the doctrine of popular sovereignty to the Kansas territory.  But this was part of the territory already decided in 1821, all the territory being north of the Missouri Compromise line.  The firestorm this set off shattered the Democratic Party, from which the Republican Party was born, led directly to bloody Kansas (the struggle between free and slave factions), and the passage of the Kansas-Nebraska Act.

The Supreme Court set in place the legal capstone to the battle around slavery  with its Dred Scott decision of 1857.  Chief Justice Roger Taney ruled that Blacks, not being persons, “had no

Dred Scott

rights which the white man was bound to respect.”  From definite limits to slave states, little by little the South had enforced their dominance while they had it. In Dred Scott the Court established that slave property existed everywhere in the United States. This direct challenge to the North set the stage for the consolidation of the Republican Party and the 1858 election campaign.

1858 was not a year for Presidential elections, but the issue was national:  what to do about the slave power and its threats against the Union.  The Congressional and Court battles against the Market Revolution often took the form of the structure of government and “states rights.”  John Calhoun, who had at one time championed the cause of internal improvements, became the champion of the Southern doctrine called “nullification,” meaning that states had the right to oppose legislation that in their view went against the Constitution.  From South Carolina he had also championed the Southern states’ right to maintain and expand slavery.  In 1858 Calhoun’s legacy was carried on by Stephen A. Douglas, running for Senator against the Republican Abraham Lincoln.  The issue was the slave power and how to contain it. In a hotly contested election, after a series of legendary debates, Lincoln lost, most likely because the shift in population to the northern part of Illinois (Chicago) was not reflected yet in the electors who chose the Senators.

1860 was a Presidential election year, and the Republicans nominated Lincoln.  His Illinois Senate campaign brought him to the notice of the national party, when Republicans could not decide among more prominent figures vying for the candidacy.   The Democratic Party was fractured by the slavery question, and ran two candidates:  Douglas ran as the Northern Democrat candidate, while Breckinridge ran as the Southern Democrat.  A fourth party, the Constitutional Union Party, ran a candidate as well.  With 40% of the vote Lincoln polled more than any other candidate and won the election.  Before Lincoln even took office, South Carolina’s legislature passed articles of secession from the Union, followed first by six other Deep South states. Four more states seceded to comprise the Confederate States of America.

Election of 1860

The political result of the Republican victory, the subsequent secession of Southern states, and the consequent Civil War was a Congress dominated by Republicans, all hailing from the North. Within this group were “radicals” who went further than limiting the expansion of slavery and the slave power.  Sentiment for abolition now resided at the highest levels of government.  While Lincoln maneuvered to get support, civil rights legislation was passed that formed the basis for what became known as the Civil War amendments to the Constitution.

The 13th Amendment, to abolish slavery in all of the U.S., was proposed by Congress January 31, 1865, as the war drew to a close.  (Less than 3 months later, Lincoln had been murdered). It was quickly ratified by the Northern States;  all but Mississippi of the reconstituted Southern states ratified it by the end of the year.  (The North organized the re-establishment of the Southern legislatures).   Lincoln’s vice president, Andrew Johnson, became President after Lincoln was assassinated.  A Southerner, Johnson hoped to re-admit the Southern states to the Union when they passed the 13th Amendment.  The “radical” Republicans thwarted this aim.  They wanted to maintain the power that the North exercised during the War,  not to return to the state of affairs before the War.  Further, when they saw the Southern states passing legislation to control the ex-slaves with violence, called “Black Codes,” they understood further action would be necessary.

Congress then passed the Reconstruction Acts, placing the former CSA states under military rule.  Congress prohibited Southern members of Congress from rejoining the legislature until their state passed the 14th Amendment to the Constitution.  While aimed specifically at ensuring that the former slaves were granted citizenship and enjoyed equal rights, the 14th Amendment has been applied much more broadly.  All persons born or naturalized in the U.S. are citizens (this is the first mention of citizenship in the Constitution), and no state can abridge their rights, privileges, or deny equal protection of the law.  Further, the 14th Amendment struck down the infamous 3/5 Clause, simply stating that Representatives are apportioned according to population.  Proposed in June, 1866, the Amendment was finally ratified 2 years later.

In 1870, under the new presidential administration of Ulysses S Grant, the 15th Amendment was ratified, making it explicit that ex slaves have the right to vote.

Having politically broken the back of the slave power, the Republican “radicalism” receded until, in 1877, the contested election of 1876 was decided by a compromise that withdrew troops from the garrisons that still existed within the former “military districts” that had governed the South under the 14th Amendment.  Peonage, debt slavery and sharecropping became the order of the day in agricultural Southern states, but now under the control of Wall Street.  W.E.B. DuBois, writing in Black Reconstruction, describes the political result thus: “Wall Street Controls the South and the South Controls the Nation.”

Just as the Market Revolution reflected a change in the economic forces in society, so too the political developments leading up to the Civil War and Reconstruction reflected a further development of those economic forces. The various compromises and Congressional battles and the Dred Scott decision of the Supreme Court all reflected attempts to shove under the rug an irrepressible conflict that forced its way out without regard to the wishes to ignore it.  Clausewitz’ famous dictum, “War is politics by other means,” certainly holds true here, as unsatisfying compromise after compromise yielded to armed conflict.  Reconstruction was a political continuation of the War and resulted in the political supremacy of the North along with the economic supremacy of industry and railroad capital.

Prior to the Civil War, the wealthiest individuals in the country were slaveholding Southerners;  the four million slaves, considered as property, were

Note how composition of capital changes over time, from primarily slaves to railroads to industrial capital to financial capital in our own day. Source: Power in America, John Keller, p. 58

collectively the largest percentage of capital.  The passage of the 13th Amendment legislated the largest expropriation of private property until that time – without payment to the owners.  It is not a coincidence that following this two sectors of society were immediately affected.  The elite of society, where the greatest accumulation of capital took place, was first (until the World War I) in the expansion of railroads (throughout the South and out to the West, an internal improvement that had not been possible under Southern domination) and at the same time a rapid expansion of industrial capital, especially with the expansion of the steel industry at the end of the 19th and beginning of the 20th centuries.  Between World War I and World War II, industrial capital became proportionally larger than railroad capital.

The second sector affected by the end of the slavery was the labor movement.  Karl Marx had written about slave and free labor that labor in the white skin cannot emancipate itself as long as labor in the black skin is branded.   He also famously predicted that ending slavery would lead to a rapid expansion of organized labor across the country “in 7 league boots” .  It is again no coincidence that 10 years after the cessation of military action the first national general strike took place – starting among railroad workers; and that the fight for the 8 hour day culminated in massive demonstrations May 1, 1886; and that the troops removed from military garrisons in the South at the end of Reconstruction were redeployed in the North to put down the strike movements of the workers.

The period from the end of the Civil War to the 1940’s in the South appeared to be a return to the pre-war days, without the name of “slavery.”  Perhaps nothing epitomizes this as much as the nefarious Plessy vs Ferguson decision in which the Supreme Court affirmed “separate but equal education. But the Market and Industrial Revolutions had changed the face of the nation forever and created the basis for further changes to take place.  The cotton picking machine finally ended the reliance on sharecropping, creating a vast section of unemployed that migrated into Chicago, Detroit, Cleveland and New York, industrial centers in the North.  Black veterans returning from World War II were unwilling to re-integrate into second class citizenship.  And an American ruling class, poised on expansion supplanting the European colonial masters in Africa and Asia, began to position itself to represent a “democratic” alternative.  These forces, not entirely in agreement, took on the relics of the Democratic Party hanging on in the South.  Brown vs. Board of Education represents the judicial turning point, a reassertion of the 14th Amendment’s equal protection clause.

______________________________________________________________________________________________

So we return to where we started from, to recognize that the Constitution and its creation was and is a tremendously complex process. This has been a cursory overview, so cursory in fact that we have scarcely mentioned the First Amendment and its perils.  The Constitution is first and foremost the legal basis on which our society is constructed. Their time was the destruction of feudal society and the creation of capitalism; the invention of the steam engine and through that the creation of new classes and class relations. The Constitution was written to deal with these revolutionary changes.  But these are not our revolutionary changes.

We live in an age of the dominance of financial capital (since World War II), exacerbated by a microchip revolution that undercuts labor and consequently capital’s ability to profit from the labor of the worker.  Financial speculation is a response to this reality, represented also by new class relations and the growth of a social group that exists outside production, that has been expelled from relations in production.  This high-tech capitalism is perhaps the fundamental characteristic of what is called “neoliberalism.”  Flowing from this fundamental characteristic is the drive to turn everything into a commodity.  All public property becomes fair game, sold to the highest bidder or the inside trader. The watchword is “privatization.”  Corporations merge with the government, assume whatever mantle assures them most power (including but not limited to “personhood,” and all efforts at reform are met with refusal and then violence. Mass incarceration, disinvestment in education, privatization of public health (and other services) follow a familiar pattern, codified in the original Constitution in the 3/5 Clause, that focuses on Blacks and Latinos in order to attack the poor as a whole.  The racism of the 19th century is raised to a higher power to attack the “race” of the poor.

Whether we like it or not, the Constitution is the authority for what is most heinous in our society, including corporate personhood and other features of “neoliberalism.”  It is also the authority for what is most revolutionary in our history, no matter how restricted or how little envisioned by our founders.  Our attitude toward the Constitution requires that we reclaim from it whatever is revolutionary, while recognizing that our time is different.  Still, the demands that echo from that time to ours reflect the striving of centuries of fighters for a new society organized to provide justice, peace and equality.

We are taking up that banner.  The State system erected by the Constitution, and the corporations with which it is merging, can no longer contain or answer the demands of a population excluded from the benefits that the society can produce in abundance.  It is the “Right of the People to Alter or Abolish” a destructive government. That is our birth right.  It is our responsibility.

Suggested Readings:

Beard, Charles An Economic Interpretation of the Constitution (MacMillan)

Foner, Eric  Give Me Liberty  (WW Norton)

Keller, John  Power in America  (Vanguard Books)

Peery, Nelson  The Future is Up To Us  (Speakers For A New America)

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One Response to “When Corporations Are People: A Grim Fairy Tale by Lew Rosenbaum”

  1. danielwalldammit Says:

    Well done piece. Thank you for writing it.


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