Jeremy Cloward, Ph.D.
Diablo Valley College
“To understand what goes on in the world today, it is necessary to understand
the economic [forces] that stand behind the political events.”
[1]
-Kwame Nkrumah, Leader of the Gold Coast & Ghana (1951-1966)
1 INTRODUCTION
Dr. Haing Ngor, survivor of the Khmer Rouge “killings fields,”
concluded that the Cambodian government lost its civil war (1967-1975)
with the Khmer Rouge because the nation had lost its “moral direction.”
[2]
As one example, he explained how some Cambodian generals sold
US-supplied weapons to the Khmer Rouge for their own personal benefit.
As a consequence of the individual greed by some of the country’s top
military men the Khmer Rouge became stronger, the civil war continued
and when the US withdrew from Southeast Asia for good in April of 1975,
the Lon Nol government collapsed in less than a week.
Cambodia then entered into one of the darkest periods in human
history. In addition to emptying the cities, wrecking the economy and
making torture a part of daily life, Angka (the ruling body of the Khmer
Rouge) brought about the deaths of between one and two million
Cambodians from starvation, overwork, disease and execution. In fact,
the Khmer Rouge, with their hands on the “wheel of history,” inflicted
so much misery and destruction from 1975-1979 that the country has still
not recovered.
Today, it seems that the United States government has lost its “moral
direction.” Indeed, as a single but deadly example, in the last ten
years US policy-makers have been responsible for the deaths of at least
one million people during the course of the US war on Iraq.
[3]
In a country of just 32 million people this would be equivalent to the
United States suffering the deaths of some 30 million men and women
(instead of 5,000) during the same war. In addition to Iraq, our
political leaders have been responsible for the deaths of many more
people across the globe as a result of non-stop war on an ever-growing
list of nations over the last decade. Sometimes referred to as a state
of “permanent war,” since 2000 the US government has waged war upon or
began “military operations” within the nations of: Sierra Leone (2000);
Nigeria (2000); Yemen (2000; 2001; 2004-present); East Timor (2001);
China – the Hainan Incident (2001); Afghanistan (2001-present); Somalia
(2001-present); the Philippines (2002); Cote d’Lvoire (2002); Sahara
(2001-present); Iraq (2003-present); Liberia (2003); Georgia (2003;
2008); Haiti (2004); Pakistan (2004-present); Kenya (2004); Ethiopia
(2004); Eritrea (2004); Lebanon (2006); Uganda (2011); Libya (2011);
Sudan (2011-present); Jordan (2012); Turkey (2012); Chad (2012); Mali
(2013); and South Sudan (2013). Recognizing that some of these
“interventions” were to “protect US citizens” from social unrest within a
given country, the great majority of them were not. Notably, not one
of these “wars” (limited or otherwise), has been formally
declared by the United States Congress as required by the Constitution.
[4]
Today with US military personnel deployed to more than 150 countries
(out of a possible 195), before its global war is over the deaths in
Cambodia caused by the Khmer Rouge may pale in comparison with what the
United States government is prepared to inflict on the rest of the
world.
Throughout this time-period, government decision-making by each
branch of government has shown a disregard (or lack of understanding)
for the Constitution. With out a doubt, we now have a sitting president
that has recently made news for choosing to “consult” Congress before
deploying the United States military to the sovereign nation of Syria as
part of a “humanitarian invasion.” The president has maintained that
even if Congress does not grant him some kind of formal approval that he
has the “authority” to send troops to the Middle East nation anyway.
Throughout the government-media discussion of the possible invasion of
Syria there has been barely more than a whisper, that by Constitutional
design, Congress is the
only branch of government that has the
power to move the nation from a state of peace to a state of war. To be
certain, the rather conservative (but non-slaveholding) Alexander
Hamilton who is probably the most talented political figure in the
history of the United States wrote in Federalist #69:
“The president is to be commander in chief of the army and navy of
the United States. In this respect his authority would be nominally the
same with that of the king of Great Britain,
but in substance much inferior to it
[italics added]. It would amount to nothing more than the supreme
command and direction of the military and naval forces, as first general
and admiral of the confederacy: while that of the British king extends
to the
declaring of war, and to the
raising and
regulating of fleets and armies; all which, by the constitution under consideration [which was adopted], would appertain to the
legislature [italics added to legislature only].”
[5]
In other words, congress was given the power to raise, fund and
regulate the military while the president of the United States, by
Constitutional configuration (Article II, Section II, Clause I), is only
to be the “commander-in-chief” of the military “when called into the
actual service” of the country. The political body which “calls” the
president into the “actual service” of the nation is the United States
Congress through a declaration of war. Thus, the president’s war powers
(including President Obama’s) are latent and not active until Congress –
the most democratic political entity of our three branches of
government – makes them so.
Some say that we live in the “Age of Irony” where the actual or
manifest meaning of something is the exact opposite of the intended
meaning of that thing. How ironic is it then that the United States has
elected a president who is supposedly a Constitutional scholar yet
believes that whether Congress gives him the “authority” to wage war or
not (note:
not “declare”) that he still has the power to do so on his own accord?
2 LOSING OUR “MORAL DIRECTION”
Whatever President Obama believes his war powers to be, what do we
mean by “losing our moral direction?” We don’t mean the same thing as
what the Westboro Baptist Church means when they say the country has
lost its “moral direction” through the legalization of gay marriage,
abortion and other such things. Instead, what is meant by saying that
government leaders have lost their “moral direction” is that government
decision-making, and particularly recent government decision-making, has
rarely considered the impact of those decisions on the overwhelming
majority of the American people, and at times, people throughout the
world. Too often, when we examine recent government policy we find that
consideration is only given to how decisions made by the state will
serve a narrow group of economic interests, i.e., the rich. Who are
“the rich?” They are, according to Nobel Prize winning economist Paul
Krugman, the richest ¼ of 1% of the US population that has more wealth
than the other 99% combined. These incredibly wealthy individuals
control the commanding heights (or means of production) of the US
economy. Wealth provided to them from their control over some of the
most powerful corporations in the world translates into near uncontested
control over national policy through their allocation of massive
campaign contributions and extensive lobbying dollars to congress and
the president.
This is not to say that past political leaders have regularly behaved
with the utmost legality and the strongest of ethics in mind. The fact
of the matter is that they have not. Even a brief review of American
political-history demonstrates that the United States government has
made decisions that might be considered morally questionable. Whether
it was the perpetuation of slavery, the overthrowing of foreign
governments or the denial of voting rights at home, the federal
government has on more than one occasion been out of step with justice
and equality. Yet, in recent years, our political leaders’
transgressions seem to be so outrageous that we would not be wrong to
add their recent misconduct to this list of shocking historical examples
of government illegality and a failure of ethics. St. Augustine once
said, “An unjust law is no law at all.” However, as we shall see below,
in the United States today, law and justice have less and less to do
with each other on issues of national importance and more and more to do
with protecting private wealth at the expense of the people. The
result of this corrupting of the American political system has made the
strengthening of the American empire not only possible but the downfall
(or at least the downward descent) of the American republic inevitable.
3 IRAQ: A PLACE FOR CAPITAL INVESTMENT
More than ten years after Congress “authorized” President George W.
Bush to invade Iraq and almost two years since President Obama declared
the war to be over, neither the American people nor the Iraqi people
have gained anything from the war. In fact, even though President Obama
declared the war over in December of 2011, at the beginning of 2014
there are still some 2,000-5,000 US military troops, 4,000-5,000 State
Department employees and 16,000 private military contractors stationed
in Iraq. In addition, an estimated 15,000 US soldiers are posted on the
Iraqi border in neighboring Kuwait. These numbers and the US’s
establishment of the largest embassy in the world in Iraq indicate that
minimally the occupation of Iraq continues.
In spite of the Bush administration’s claims that the United States’
primary goal in Iraq was to “spread democracy” (after the weapons of
mass destruction rationale proved false), former chairman of the Federal
Reserve and loyal Republican Party member Alan Greenspan has since
noted that the war was actually “largely about oil.”
[6]
Echoing Greenspan, then Senator and current Obama-Secretary of Defense
Chuck Hagel agreed, stating that “people say we are not fighting for
oil. Of course we are. They talk about America’s national interest.
What…do you think they’re talking about?”
[7]
In an attempt to make the United States’ national interest clear, long
time advisor to Western nations regarding Middle Eastern oil, Dr.
Abdulhay Yahya Zalloum, says that the US interest in the Middle East
(including Iraq) “is not about democracy – it is about oil.”
[8]
Even if the United States was interested in democracy, out of 176
countries that were evaluated in 2012 by Transparency International,
Iraq was ranked as the 169
th most corrupt country in the world – certainly not a primary feature of any understanding of democratic government.
[9]
Some think that the argument that the United States invaded Iraq
because it has the second largest known oil-reserves in the world is
“conspiracy.” We should not think of one country trying to get at the
resources (natural or otherwise) of another country as conspiracy. It
only becomes so when the political and military leaders of a nation
lie
about the real reasons why they want to do so. Thus, the political and
military leaders of the country create the conspiracy, namely, the
conspiracy to hide the truth from the people so some unseemly political,
economic, or military end can be met. Nonetheless, on the whole, these
types of government practices, such as the US war on Iraq, primarily
serve an economic end. Perhaps Jules Ferry, the Premier of the Chamber
of Deputies of France, said it best in 1885 when explaining the purpose
behind the “Scramble for Africa” which had begun four years earlier in
1881. Paying no mind to the “White Man’s Burden” (see: “spreading
democracy,” circa 2003), Ferry argued that two of the main reasons why
European powers “desire[d] colonies” is so that “they may have access to
the raw materials of the colonies” and “as a field for the investment
of surplus capital.”
[10] In other words, colonies were created as a source for
capital extraction and accumulation.
In examining Iraq, we see Ferry’s words to be no less true today than
when they were first spoken during the last part of the 19
th century.
Indeed, after invading the country, setting up hundreds of military bases, securing Iraqi oil fields,
[11]
arresting the president and overseeing his execution it was time for US
political leaders and American scholars to set in place the instruments
needed to begin the process of capital extraction and accumulation.
How did they do this? – By spreading a little democracy. To be certain,
immediately after the invasion of Iraq, the so-called Coalition
Provision Authority (CPA) was set up by the US government as a type of
colonial government to oversee the country during the first year of the
war. L. Paul Bremer was put in-charge and given absolute authority to
make executive, legislative and judicial decisions for the whole of Iraq
on behalf of the United States government. Early on and making clear
what would be the new (or should we say, neoliberal) design of the Iraqi
economy, Bremer signed CPA Order 39 which stated that all economic
sectors within Iraq, including water, electricity and sewage would be
made open, without delay, to privatization by foreign investors.
[12]
In short order, a number of US firms were awarded contracts to
“rebuild” or manage many of these publicly controlled industries for the
Iraqi people. The only industries that foreign investors were excluded
from by the CPA were oil and gas. However, the writing of the Iraqi
Constitution would resolve that.
Without a doubt, once the CPA had set down roots the United States
oversaw the drafting of the Iraqi constitution. Setting aside the fact
that a sovereign nation cannot have another nation “oversee” the writing
of its new constitution (imagine if the British government did this
after the American Revolutionary War) US political leaders and American
academics, nevertheless, put together a new constitution for Iraq.
Whatever virtues it might have had politically (it looks a lot like the
United States Constitution), as an economic document it cleared the way
for global capital to “invest” in Iraq’s most important source of
national wealth. Indeed, Article 25, 26 and the second part of Article
109 of the Iraqi Constitution removed any doubt about the role of
foreign capital and privatization in the reconfiguring of the Iraqi
economy. The Articles stated that while oil and gas were to be
developed “in a way that achieves the highest benefit to the Iraqi
people,” it was somehow suppose to be done so by “using the most
advanced techniques of the market… and [through the] encourage [ment of]
investment.” The average Iraqi citizen is poor, with the median Iraqi
income not exceeding $6000 per year.
[13]
So, how can the overwhelming majority of citizens of Iraq invest in
their nation’s most important source of wealth? The fact of the matter
is they cannot. Who then, can “invest” in the oil wealth of the country
that was already nationalized for the benefit of the people, at least
to some degree, under Saddam Hussein? The answer is clear, those who
own the commanding heights of the US and global economy.
3.1 WHO OWNS IRAQ’S WEALTH?
Much has been made in the mainstream press that only two American oil
companies, Exxon Mobil and Occidental Petroleum, have been awarded
contracts by Iraq’s Oil Ministry to “develop” just parts of two of
Iraq’s 15 “super-giant” oil fields. This is given as proof that the US
war on Iraq was not about oil. The rest of the oil contacts have gone
to corporations from Russia (Lukoil), China (Bohai and the China
National Petroleum Corporation), the UK (British Petroleum), France
(Total), the Netherlands (Royal Dutch Shell), Italy (ENI) Switzerland
(Sataream and Weatherford, which was founded in and operates out of
Houston, Texas), Norway (Statoil), Malaysia (Petronas), South Korea
(KOGAS) and Turkey (TPAO). While only two oil contracts have been
awarded to American oil companies and the state still technically
remains in control of Iraq’s oil (at least for the purpose of issuing
Iraqi oil contracts), the fine point of it is this: the war on Iraq made
it possible for global capital to gain control over Iraq’s chief raw
material for
their benefit and not the benefit of the Iraqi people.
Even if we accept the argument that the war was not about oil, today
most of the revenue being generated in Iraq is not as a result of
producing or selling oil anyway. Instead, the lion’s share of the
wealth being expropriated from Iraq (billions annually) is being done so
by US-based oil corporations who are in the business of
servicing
Iraq’s oil fields. To be certain, the majority of the oil companies
who have been gained contracts to develop Iraq’s oil fields have
enlisted the services of the Texas-based “oil services companies…
Halliburton,
Baker Hughes, Weatherford International and
Schlumberger to drill for oil, build wells and refurbish old equipment.”
[14]
Indeed, before any oil can be pumped and sold from the 15 Super Giant
oil fields on the world market, Iraq’s wells must first be overhauled
and stabilized which is being done so by American companies for billions
of dollars annually.
It is worth noting here that while not discounting the fact that
Saddam Hussein was a brutal dictator who was responsible for a number of
atrocities, Iraqi citizens had the highest standard of living in the
Middle East during his time in power. Some of the benefits enjoyed
under the Hussein government for men and
women were free
education kindergarten through graduate school and the provision of free
health care services for every Iraqi citizen. Each is an impressive
social benefit that not even the government of the richest nation on the
planet – the United States – can lay claim to providing for its
citizens. Was Iraq’s oil wealth used to fight wars, buy arms on the
international market (including from the US) and allow Hussein and
high-ranking Ba’ath Party officials to live lives of luxury? Yes.
However, since the Hussein government has been removed, quality
universal health care has declined to such an extent that at times it
has become almost nonexistent. At the same time, the educational system
in Iraq has suffered horrors that are frightening to consider. To be
sure, more than 2700 public and private schools, kindergarten through
graduate school, have been “damaged” (including, 84% of colleges and
universities), destroyed, looted, have become too dangerous to attend
(e.g., more than 500 professors have been assassinated) or simply
closed.
[15]
Creating the conditions that allow for the destruction of education
within a society is the surest sign of moral decay. Yet, the above
realities are regularly ignored by our political leaders (
and the corporate press) who have created this war.
In addition to the severe strain placed on public health care and the
outright violence committed against education, the average Iraqi
citizen has to do without basic utilities for long periods of time. For
instance, electrical power in Iraq has been reduced to such an extent
that many Iraqi citizens are without electricity “from 15 to 20 hours
per day throughout the year.”
[16]
What’s more, “most of the country lacks effective sanitation” with
“only 32% of the population” having “access to clean drinking water and
only 19%” having “access to a good sewage system.”
[17]
After more than ten years of privatization, what is becoming clear is
that the selling of Iraq’s oil wealth to global capital and the
transferring of public utilities to the private sphere has not resulted
in providing the “highest benefit to the Iraqi people.” Instead, the
reorganization of the Iraqi economy in accordance with neoliberal
principles has created more suffering for the Iraqi people.
3.2 THE WRONGDOINGS OF PUBLIC OFFICIALS
The invasion of Iraq in March of 2003 involved some 200,000 troops
from the “Coalition of the Willing.” Sounding hardly like a coalition,
the invading force included 150,000 troops from the US, 46,000 from the
UK and 4,000 from 38 other countries. Nevertheless, in a unique example
in modern history of capital assisting in opening up a market for
capital investment (instead of the state being solely responsible for
opening up a market for capital) the US war on Iraq included somewhere
between 120,000 and 180,000 private military contractors. The reason
why it is said “somewhere between 120,000-180,000” is because the United
States government has never able to identify exactly how many private
military contractors were actually operating in Iraq. Nonetheless, the
war itself has been a financial windfall for these private military
corporations. To be sure, in an example of an all too close
relationship between the state and private wealth we have a number of
instances where the very people making decisions about waging the war on
Iraq were also financially benefiting from the initiation and
continuation of the war. For instance, the largest contracts awarded
for work in Iraq were to the private military corporation known as
Halliburton (and more specifically, its subsidiary KBR). The
former-CEO of Halliburton was none other than George W. Bush’s
vice-president, Dick Cheney. KBR was awarded contracts for work in Iraq
in excess of $40 billion dollars. Contracts which were often “no-bid”
(or formally, sole-source) contracts, meaning that there was only one
individual or company bidding on a given project. Though illegal and
unethical, then Vice-President Dick Cheney continued to hold more than
400,000 shares of stock in Halliburton during the course of the war
worth millions of dollars which he eventually sold for his own personal
profit.
In an example of our political leaders not only financially
benefiting from the US war in Iraq but also losing their “moral
direction” in the initiation and waging of the war, Dick Cheney, in
addition to Bush cabinet members: President Bush, National Security
Advisor Condoleezza Rice, Secretary of Defense Donald Rumsfeld,
Deputy-Secretary of Defense Paul Wolfowitz and Secretary of State Colin
Powell, are each solid candidates to be indicted for war crimes as
spelled out in the Nuremburg Principles. The Nuremburg Principles were
established in 1950 by the United Nations after the Nuremburg Trials of
the Nazi-Germany politico-military high command in 1945. The Principles
were developed in an attempt to segregate between what is
internationally permissible in war and what is, in fact, not. They are
considered to be “customary international law” which “civilized nations”
agree to refrain from violating. Specifically, Dick Cheney and each
Bush cabinet member have violated Principle VI of the Nuremburg
Principles (there are a total of seven principles) by committing the
indictable offenses of:
“(A)
CRIMES AGAINST PEACE: Planning, preparation, initiation or waging of a
war of aggression or a war in violation of international treaties, agreements or assurances;
(B)
WAR CRIMES: Violations of the
laws or customs of war which include, but are not limited to murder…of civilian population…murder or ill-treatment of
prisoners of war…
plunder of public or private property…
(C) CRIMES AGAINST HUMANITY: namely, murder…and other inhumane acts
committed against any civilian population, before or during the war.”
[18]
With out doubt, in making a prima facie case against top Bush cabinet
members, the facts which are not in dispute is that each individual:
(1) Violated Principle VI, Section (A), by “planning, preparing for and
waging a war of aggression.” They called it “pre-emptive war” or the
“Bush Doctrine.” Yet, the fact of the matter is that before March 20,
2003 the sovereign nation-state of Iraq was not responsible for the
death of one US citizen. Nor was the government of Iraq planning or
preparing in any way for an attack against the United States; (2)
Violated Principle VI, Section (B), which deals with among other issues,
the war crime of “murder.” As previously noted, ranking political (and
military) officials of the Bush Administration waged a war that
resulted in the deaths of one million Iraqi citizens. Some of these
casualties might be dismissed as “collateral damage” and thus do not fit
the legal definition of murder. However, as “major combat operations”
were declared over by George Bush a mere
six weeks after the war began,
the great majority of these deaths cannot be considered to be
unintentional deaths as a consequence of normal military operations
during wartime. No, we must call them what they are. In the United
States, when one person is killed by another person and it is not
justified, we call it murder. So too, then, must we define it the same
way for the people of Iraq. Principle VI, Section (B) also makes the
“plunder of public or private property” a war crime. The plundering of
“public property,” i.e., oil, as noted by Alan Greenspan and Chuck
Hagel, was the central purpose of the war and is therefore a
prosecutable war crime. In addition, Principle VI, Section (B)
identifies the “ill-treatment of prisoners of war” as a war crime. The
torture of Iraqi civilians has been well-documented, with George Bush
even unbelievably making the rounds of the TV political-news discussion
circuit and stating that he, in fact, ordered the use of waterboarding
[19]
on “suspected terrorists” and needs no further comment here, and
finally; (3) Violated Principle VI, Section (C), through the “murder…and
other inhumane acts committed against [a] civilian population” which in
this case would be the people of Iraq. The death or bodily
disfigurement of even one individual because of a lie by a government
official is
inhumane and should be prosecuted as such.
Dick Cheney and the Bush administration were not the only individuals
who had forgot their ethics when it came to the war in Iraq.
Demonstrating that virtue can be corrupted no matter which major party
one belongs to, the supposed liberal Democrat Diane Feinstein from
California made more than one decision about the US war in Iraq that
might be viewed as being less than virtuous. Besides voting to give
President Bush the “authority” to invade Iraq she also voted in favor of
awarding her husband massive contracts for work in Iraq. Feinstein’s
husband is Richard Blum the major share-holder of the construction
company Perini. His corporation received contracts for work in Iraq
that totaled more than $3 billion dollars. Some wonder how Diane
Feinstein could have remained objective when she voted as a member of
the powerful Senate Military Construction Appropriations subcommittee
whether or not to fund her husband’s contracts,’ (or, for that matter,
the continuation of the war as a member of the Senate) when her family
was to be rewarded so extensively by the continuation of the war and the
contracts that followed. The fact of the matter is she could not and
did not remain objective. On this point, how different is Feinstein
from the Cambodian generals who continued their nation’s civil war for
their own financial benefit?
Equally as troubling is that the Senate’s Ethics Committee did not
investigate Feinstein after she stepped down from the Military
Construction Appropriations committee because of her “appearance” of a
conflict of interest. The conflict of interest, of course, was that she
was signing off on contacts that were providing her husband’s firm with
hundreds of millions of dollars which were being financed with American
tax-payers dollars.
[20]
(This is not the only time Feinstein has filled her family’s bank
account with public funds. In 2009, in the wake of the “Great
Recession” and apparently with not a hint of shame, she “introduced
legislation to route $25 billion in taxpayer money to a government
agency that had just awarded her husband’s real estate firm a lucrative
contract to sell foreclosed properties at compensation rates higher than
the industry norms.”
[21] Once again, no investigation was conducted by her fellow Senators).
Here we see at least
a part of the problem. While we have
only looked so far at the case of Iraq, often what is found when
examining the United States government is that it is not only literally
serving the interests of the rich but is, in fact, made-up of
individuals who are themselves wealthy. These powerful decision-makers
are in a position to make themselves, those closest to them, and those
who are willing to generously fund their reelection campaigns richer
still at the expense of the American people. At the same time, these
directors of national policy remain politically situated to prevent any
type of meaningful oversight into their wrongdoing by the very positions
that they hold and likely believe in the virtue of their own actions
and decisions.
4. DOLLARS & THE REPUBLIC
The war in Iraq, like the selling of arms to the Khmer Rouge by the
Cambodian generals, was driven by money. As witnessed in each case, an
insatiable desire for wealth will inevitably lead to unethical
decisions. With out a doubt, politically, there is probably no more
corrupting influence on the republican form of government than money.
But how did it get this way? How have the rich come to dominate the
state and then in turn be in a political position to make decisions
about the most meaningful issues of the day, such as the war in Iraq,
which impact not only the United States but people all across the
planet?
The fact of the matter is that the United States was founded by
wealthy men. Indeed, our most celebrated founder, George Washington, is
not only the richest president in the history of the United States but
is one of the 100 hundred wealthiest Americans of all time.
[22]
The framers of the Constitution (Washington “presided” over the
Constitutional Convention but played no active role in the drafting of
the Constitution) were the political and economic elites of their day.
Not discounting the fact that the Constitution was and is a political
document, it is also an economic document that was constructed, at least
in part, to service the interests of those who wrote it. Indeed, from
surveying the personal-economic and political histories of the framers,
the noted American historian Charles Beard concluded that “the
overwhelming majority of members, at least five-sixths, were…to a
greater or less[er] extent economic beneficiaries from the adoption of
the Constitution.”
[23]
Without a doubt, 40 of the 55 framers of the Constitution “appear on
the Records of the Treasury Department” for having money owed to them by
the federal government.
[24]
Even if one disagrees with Beard’s conclusion that the framers were
somehow financially “interested in the outcome” of the Convention, it
cannot be denied that there was not one person in attendance in
Philadelphia from May 1787 – September 1787 that was or represented the
interests of women, small farmers, working people, slaves or Native
Americans. Thus, by definition and from an economic class perspective,
the only individuals who remained and did in fact lay out the political
and economic foundation of the new nation were those who dominated the
commanding heights of the US economy in the late 1700’s. To think that
these individuals had no personal interests at stake when drafting the
Constitution is contradicted by the fact by whom they excluded from
participating in the writing of that document.
4.1 A BRIEF HISTORY OF CORPORATE PERSONHOOD
From 1787 until today, economic-elites have only gained more power
over the state, and probably most troubling of all, through the very
decisions of the state. This should probably not surprise us as it is
their
state. Through the years, elite power has come from control over
powerful economic forces and institutions or in today’s dominant
economic entity – multinational corporations. If we look at the legal
history of the relatively new phenomena of “corporate personhood” (i.e.,
the corporation having the same standing as a person in the eyes of the
law), we will see not only how we got to this place in time but also
possibly make some predictions about the future relationship between the
United States government and the American people. Among other economic
concerns and with respect to other economic clauses in the United
States Constitution, the framers included in the language of Article I,
Section 10, a clause known as the “Contract Clause.” It ensured that no
state shall interfere with the “obligation of contracts.” Throughout
the next 200-plus years, the Supreme Court would make clear just what
was meant by that seemingly harmless clause.
The first case decided by the Supreme Court which would shed light on
how it understood the Contract Clause, and in so doing, help establish
the framework for viewing corporations as “people” is a case known as
Dartmouth College v. Woodward (1819). In
Dartmouth College,
for the first time, the Supreme Court recognized a corporation’s right
to have its’ charter honored as a contract. The contract was viewed as
existing between “private parties” with “the term ‘contract’ refer[ing]
to transactions involving individual property rights.”
[25] Now, nowhere in
Dartmouth College
does the Court say “corporations are people.” However, the Court does
argue that contracts are between two parties with individual property
rights. If corporations have the right to have contracts honored and
contracts are between two parties with individual property rights then
corporations must have
individual property rights. However, the
reality is that individual property rights are for individuals, not
corporations.
Nevertheless, with their decision in
Dartmouth College
the Supreme Court (even if done so unintentionally) provided a
foundational logic for eventually viewing the corporation as a person
with basic civic rights that are constitutionally protected. Yet, the
real question after
Dartmouth College was just how far would the Supreme Court go in its understanding of the corporation as a person?
An initial answer to that question was given in a second case, known as
Santa Clara County v. Southern Pacific Railroad (1886), in which the Court “implied” that the 14
th
Amendment (which was written in 1868 with the stated purpose of
granting citizenship rights to newly freed slaves) “applied” to
corporations as well as people.
[26]
How this was the case was not made clear. Nevertheless, a Court
reporter noted that the Chief Justice stated at the beginning of the
hearing that the Court was of the “opinion” that the 14
th Amendment does in fact apply to each corporation that was party to the case.
[27] While not formally establishing a legal precedent in
Santa Clara County v. Southern Pacific Railroad, the Supreme Court left no question as to their thinking in their next decision about corporations and the law.
Indeed, in
Pembina Consolidated Silver Mining Co. v. Pennsylvania (1888),
the Supreme Court ruled that “under the designation of ‘person’ there
is no doubt that a private corporation is included in the [Fourteenth
Amendment.]”
[28] Again, forgetting for a moment that the 14
th
Amendment was passed specifically to provide citizenship rights for
African-Americans, nowhere in the language of the Amendment does it say
anything about a corporation being included in the definition of a
“person.” Nevertheless, from here on out we see the notion of
“corporate personhood” grow ever stronger from the vantage-point of the
law and, at last, come to one of the painful truths about law and
justice in the United States – the Constitution does not actually mean
what it says but instead, only means what the
Supreme Court says it means – even when it defies common sense.
With corporations on the rise, fear about increasing amounts of money
in the political system was addressed in the immediate aftermath of the
Watergate Affair by the Court in
Buckley v. Valeo (1976). Money had always been in politics but with
Buckley,
the Supreme Court opened the door for the funding of candidates to be
made a constitutionally protected right. While upholding a federal law
which limited private dollars being given to public officials, the
Court also held (and thereby established) that spending money on
political campaigns is a form of “free expression” protected by the 1
st
Amendment’s Free Speech Clause. The concern that this would lead to
even more money flowing into the political system was realized in the
ironically entitled
Citizens United v. FEC (2010), which in reality was a blow to the people of the United States and a boost to corporate-America.
In
Citizens United, the Supreme Court ruled that any spending
limitation imposed on corporations (and unions) for the purpose of
political advertising is the same as placing a limitation on one’s right
to speak freely. Therefore, one cannot limit a corporation’s right to
spend an
unlimited amount of money on the political candidate or issue of its choosing without violating that corporation’s 1
st Amendment free speech rights. With
Citizens United,
the Court made way for the advent of the Super PAC. Unlike donations
to a PAC (which cannot receive more than $2600 from any one person
during an election cycle) there is no cap on donations that an
individual or a corporation can make to a Super PAC. The only
restriction is that the money may not be given
directly to the candidate but instead only spent on his or her
behalf.
So, let’s say, the CEO of Exxon Mobil or JP Morgan Chase wants to spend
$50 million dollars on behalf of a candidate, then because of the
Court’s decision in
Citizens United, there is no law whatsoever that prevents him from doing so. Presumably, by not allowing corporations to give money
directly to candidates the Supreme Court has somehow helped to protect the integrity of the republic.
Indeed, either not understanding or not caring about the degree of popular rule being undermined by its decision in
Citizens United (or
possibly just trying to hold its place as one of the creators of the
“Age of Irony”) the Supreme Court concluded that “political speech [in
the form of political advertising] is indispensable in a democracy and
this is no less true because the speech comes from a corporation.”
[29] First, corporations cannot speak – not even a little bit. Second, in
this democracy, one of the most important things needed to win an election
is political
advertising. Political advertising costs money – a lot of money. Who
has it – the great majority of the American people or the select few who
steer and profit from the most powerful corporations in the world? The
answer is obvious.
As the American political system already allows for private citizens
(be it the clothes-tailor or the Wall Street trader) to give money to a
political office-seeker, the US political system is, by definition,
corrupt. What others call “bribery,” we call “campaign contributions” or
“lobbying” or the ever-vague but still clear to the informed citizen,
“influence.” You can give it a different name but the function is still
the same. Nevertheless, as the years have gone by, the corporation has
grown and has found more and more ways to get billions of dollars into
the hands of national candidates (billions more are spent each year
lobbying congress and the president). As detrimental to our already
money-flooded republic as
Citizens United has been, a final case,
McCutcheon v. FEC (2013), may prove to be even more destructive to the American people.
McCutcheon is a fairly simple case which involves an Alabama
businessman who wants to give more money to individual Republican Party
members than the campaign limit of $2600. The argument being that the
campaign contribution limit is a limitation on his right to free
speech. The Supreme Court has not yet made its ruling, but any
increase, in fact anything short of overturning every decision that the
Supreme Court has ever made in support of private dollars financing
public-campaigns will be a loss to the American people. To be sure, if
Citizens United is the beast that broke down the gates to the republic, then
McCutcheon
is the thief inside the gates getting readying to steal the last
remnants of public elections, and therefore national policy, completely
away from the American people.
4.2 CONSEQUENCES OF RULE BY THE RICH
What are the consequences of our republic being in
the grasp of economically powerful forces? Whether it is global
warming, income inequality, privatized healthcare, financial bailouts, a
military budget that is second to none or an ever-growing national
debt, rule by the rich has almost always increased hardships for the
American people and often people around world. While seeming to be
separate problems, the above list of concerns are all the result of an
economic system which has one single-minded ambition. To be sure, the
capitalist economic system (and today its more extreme manifestation,
Neoliberalism) has only one drive, one impulse, one pursuit – the
accumulation of capital. Without doubt, the economic system is
structured toward the gathering of more and more wealth for those who
own the commanding heights of the economy. This quest for evermore
riches, to accumulate more and more capital is the only virtue (or vice)
of the system. In fact, that
is the problem with capitalism, it has no other ethic.
Nonetheless, whoever owns the means of production (be it farms,
weapons factories, oil conglomerates, pharmaceutical laboratories or
whatever other industry we might name) is provided with three
significant things: (1) an immense personal fortune that can be used for
a life of luxury; (2) extensive excess wealth to “influence” the state
to provide a market for their commodities and services; and (3) enormous
surplus capital which can be invested at home or abroad to generate
more capital, still. In so doing, the owners of the means of production
gather more wealth, which in turn generates more political power which
in turn creates more wealth in an ever upward cycle of more wealth and
more political power. The result is that the United States government,
the economic system and the direction of the whole of US society (and
often times the whole of the planet) is steered in one direction – the
direction which benefits those who own the productive forces of our
society. As we are beginning to see today, these political and economic
decisions are being made with very little consideration for the future
of the nation or the world in mind. With just a brief review of each of
the above concerns below we shall see that each problem is impossible
to justify, has a relatively simple solution, and yet continues to
exist. Taking one at a time, we know the following to be true:
Global Warming: The scientific community is 95% certain that global warming is not only real but is man-made.
[30]
In fact, scientists are so sure that global warming is being caused by
the burning of fossil fuels that they are now as sure of it as the fact
that cigarettes cause cancer.
[31]
Yet, what is the state doing about it? President Obama and congress
continue to wage wars for oil, support and allow for the development of
environmentally and ecologically destructive methods of oil extraction
such as hydraulic-fracking and offshore oil drilling, continue to
support oil exploration in general and continue to support the
collection and transportation of oil through projects such as the
Keystone Pipeline.
Income Inequality: The US has the worst CEO-to-average
worker pay ratio in the entire world. Depending on whose numbers are
correct, CEO-to-average worker pay stands somewhere between 200:1 and
400:1. One of the most outrageous examples of CEO-to-average worker pay
is that of former JC Penney’s CEO, Ron Johnson, who’s income was almost
1800 times greater than the average employee at JC Penny’s.
[32]
Johnson is hardly alone, as extreme income inequality is quite common
across the United States with the most severe example being that of
Larry Ellison of Oracle who “earns” 2700 times more than Oracle’s
average employee.
[33] (Both CEO’s “compensation” would be much greater if it was measured not by CEO-to-average worker but by CEO-to-
lowest paid worker).
Possibly equally as troubling, CEO-to-average worker pay in the United States has increased 1000% since 1950.
[34]
Indeed, the disparity between those who earn the most and the average
company employee has increased from 20:1 in 1950 to 42:1 in 1980 to
120-to-1 in 2000 to where its stands today.
[35]
Any of this could have been prevented with the passage of one simple
law that makes this type of income exploitation illegal. Yet, no law
has been passed and no law is likely to be passed as the neoliberal grip
and the proponents of its advantages grab more firmly onto the state,
economic system and our society in general.
Privatized Healthcare: At least since 2000, according
to the conservative polling organization Gallup, the majority of people
in the United States prefer free universal healthcare. However, to say
that the state has been unwilling to fund it would be an
understatement. Why? The answer is because no industry in the last ten
years has spent more money “influencing” the federal government than
the health care industry. To be certain, in the election year of 2008,
the health care industry contributed nearly $50 million dollars to the
campaigns of Democratic
and Republican congressional office-seekers to make sure that privatized health care
remained private.
[36]
In 2009, during that critical year of national debate to determine what
our national health care system would look like, the health care
industry spent some $550 million dollars to make sure that health care
in the US was not turned into a public service.
[37]
In fact, no one spent more money lobbying the government in 2009 – not
even the oil or armaments industry, which ranked second and third – to
make sure that government policy continued to work in their favor.
Financial Bailouts: At the turn of the 21
st
Century, with the Ayn-Rand “disciple” Alan Greenspan fully entrenched as
Chairman of the Federal Reserve and the last safeguards of the
Glass-Steagall Act repealed by congress, it was probably only a matter
of time before we would witness just how reckless the wealthy could be
in their pursuit of profits. With nothing preventing them from doing
so, leaders of the most powerful banks in the world gave their
loan-officers the “green-light” to lend out money to what seemed like
anyone who walked through the door (in some instances, this was
literally the case with the advent of the NINJA loan, i.e., providing
loans to borrowers with no income, no job and no assets). The loans
were not given out by commercial banks with the hope of being paid back
by new home-owners but instead the loans were made so they could be sold
to investment banks for a short term profit who then turned around and
set up so-called “special purpose entity” corporations (SPEs). The SPEs
divided up the home loan (or often, thousands of home loans) and
created a security, known as a mortgage-backed security, which investors
were then allowed to purchase.
The banks then “bet” (they call it “investing in a derivative”)
whether or not a person who took a home loan would default on his or her
loan. At least some of the money that was used to make these bets (as
was the financing of some of the home-loans) was made with the banks
deposits, i.e., our money deposited in their banks. If this was not
enough, insurance companies like AIG got into the game by “insuring” the
financial bets. The problem was AIG insured $400 billion worth of
derivates yet was only valued at $200 billion. Eventually, the banks
had lent out too much money and bet too much on people defaulting on
their loans which resulted in a “credit crunch” where the banks did not
have enough money to refinance borrower’s sub-prime mortgages which
resulted in millions of people losing their homes.
What was the fate of the banks? Toward the end of 2008 and during
the course of 2009, first President Bush and then President Obama
approved a federal “bail out” of the banks, the insurers and the auto
industry to the tune of some $2.5 trillion dollars – more than our total
federal tax revenues for FY 2012. Not one nickel was given to a single
home-owner. Why? Because the banks were almost as “generous” with
their campaign contributions and lobbying dollars as was the health care
industry. (It probably didn’t hurt that the Secretary of the Treasury
at the time was Henry Paulson who was a former corporate officer and
large-stock holder of Goldman Sachs, which incidentally, also received a
massive multi-billion dollar tax-payer provided bailout).
The US Military Budget: Today, the actual US military
budget stands at $1.2 trillion dollars. This is a full one-half of our
total federal tax dollars and is
likely more than all other
countries combined. China is second in defense spending with a reported
military budget of $100 billion. In other words, the United States
could reduce its military spending by 9/10ths and still outspend second
place China by $20 billion dollars.
Multiple programs and national concerns draw their money from the
military budget. For instance: War: the US war in Iraq alone is
projected to cost some $3 trillion dollars.
[38]
Care for our veterans: A few hundred billion dollars are spent each
year to take care of our wounded soldiers from past wars; Nuclear
weapons: Accounting for $50 billion dollars annually and threatening the
whole of the human species, President Obama has actually increased the
budget allocation for nuclear weapons during his time in office;
Military bases: While difficult to know for sure, it is estimated that
the United States maintains some 750 military bases in over 130
countries around the world. (The US maintains upwards of 5000 bases
within the United States and its territories). In fact, the Department
of Defense claims that it “manages a global real property portfolio that
consists of more than 555,000 facilities [buildings and structures]
located on over 5,000 sites worldwide and covering over 28 million
acres” making it the largest real estate holder in the entire world.
[39]
Military Aid: The US provides military aid to more than 150 separate
nations each year; Finally, while not a part of the military budget it
is worth noting here that the US government and its corporate suppliers
sell more weapons to the rest of the world than any other country. Why
is
any of this the case? At least one reason is because a
massive military “is needed to keep the world safe for capital”
extraction and a “massive military itself is a direct source of immense
capital accumulation.”
[40]
National Debt: As of January 1, 2014, the national
debt has climbed to more than $17.3 trillion dollars or $54,500 for
every person living in the United States. How did it get this way?
When George W. Bush came to office, the national debt was just under $5
trillion dollars – still within reason. By the time he left office it
stood at almost $10 trillion dollars. Within just five years of being
in office President Obama (with the help of the United States congress)
has increased the national debt another $7 trillion dollars. Without
doubt, these two presidencies and the congresses which have accompanied
them have driven the country into debt through their policy choices.
In recent years, the US government has passed budgets that are so out
of whack with tax revenues that by FY 2013 our federal expenditures
were more than $3.4 trillion while our tax revenues were just $2.7
trillion – for a budget deficit of almost $700 billion dollars. This is
a trend that has been on the rise since the beginning of George W.
Bush’s first term. So, who have these budgets favored and what policies
are we referring to? Budgets and policies that have favored the rich –
the wars in Iraq and Afghanistan, the Bush-era tax cuts for the “top
income earners” that were continued by President Obama during his first
term, the rising costs of health care paid by the federal government
through programs such as Medicaid and Medicare and, of course, the
bailouts of 2008-2009.
5 CONCLUSION
The result of all of this is that the United States has become what Plato originally spelled out in
The Republic
and Michael Parenti made famous today – a plutocracy. That is, a
nation which is ruled by the rich, where money is valued over
“goodness.” Like the Cambodian generals who sold arms to their enemies
our political system has been corrupted by those who steer some of the
most powerful companies on the planet. Indeed, with their massive
funding of political office-holders the rich have made it impossible for
the United States government to have a “moral compass.” These wealthy
individuals have created a type of Wall-Street Republic where
office-holders have become a commodity (or security) to be bought and
sold like any other commodity. To be sure, those that are supposed to
represent the people have instead become an investment that the
wealthiest amongst us use to perpetuate their own affluence.
Wars are fought for the dual-purpose of creating a market for the
investment of surplus capital as well as for gathering that which is
needed to fuel (at times, literally) the commanding heights of the
economy, i.e., land, labor and resources. Solvable politico-economic
problems, from global warming to expensive private health care, persist
because putting an end to them would also put an end to the profits of
those who benefit from their continuance. This great gathering of
wealth translates into unmatched political power within US society which
in turn has made it possible for the wealthy to pursue their own
interests without regard to how it may impact the rest of the world.
Their pursuit of evermore riches is sowing the seeds of not only their
own destruction but possibly the great mass of humanity as well.
Alas, we must ask, then, what can be done? The answer is the same as it has always been throughout history –
we,
the people, must fully grasp the enormous power the few have over the
productive forces of society which has created a situation where wealth
is so entrenched in the political system that the current
political-economic arrangement is beyond reform. In so doing, we will
see that there are only two choices in front of us – continue down the
existing path which will inevitably end with an ethically and fiscally
bankrupt republic or bring into existence a political and economic order
founded on justice and equality. Unfortunately, the economic elites of
our day have left us with no other choice.
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[1] Kwame Nkrumah,
Neo-Colonialism: The Last Stage of Imperialism (New York, NY: International Publishers, 1966), 69.
[2] Haing Ngor with Roger Warner,
Survival in the Killing Fields (New York, NY: Basic Books, 2010), 75.
[3]
The number of Iraqi deaths is based on two separate studies. The first
study was produced by the John Hopkins Bloomberg School of Public
Health, “Updated Iraq Survey Affirms Earlier Mortality Rates,”
John Hopkins Bloomberg School of Public Health 11 October 2006,
http://www.jhsph.edu/publichealthnews/press_releases/2006/burnham_iraq_2006.html (24 September 2013). Published in its
Lancet Report,
the university concluded that by late 2006 some 654,000 Iraqis had died
since the war began in March of 2003. Two years later, a second
study was completed by the independent British polling firm Opinion
Research Business (ORB). ORB concluded that by the beginning of 2008
more than one million
Iraqi’s had died as a result of the US war on Iraq. The actual number
was likely higher as ORB was only able to survey 15 of Iraq’s 18
provinces due to high levels of violence in two regions – Kerbala and
Anbar – and because they were refused a work permit in a third – Arbil.
Today, the number is likely higher still as the war has continued for
at least four additional years since the ORB study was conducted.
Information about the ORB study in this note is gathered from:
Reuters, “Iraq conflict has killed a million Iraqis: survey,”
Reuters Edition: US, 30 January 2008,
http://www.reuters.com/article/2008/01/30/us-iraq-deaths-survey-idUSL3048857920080130 (24 September 2013).
[4]
In fact, the United States has been involved in nearly 100
“interventions” since 1945 with not one formal declaration of war by
Congress. For a complete history of US interventions from 1945-2003,
see: William Blum,
Killing Hope: US Military and C.I.A. Interventions Since World War II (Monroe, Maine: Common Courage Press, 2003).
[5] Alexander Hamilton, James Madison and John Jay,
The Federalist with an Introduction and Notes by Robert A. Ferguson (New York, NY: Barnes and Nobles Books, 2006), 382.
[10] As quoted in Kwame Nkrumah’s,
Towards Colonial Freedom: Africa in the struggle against world imperialism (London, UK: Heinemann, 1962), 3.
[11] While it is common knowledge that the US military “secured oil fields” after the war began,
The Guardian reported that according to the US State Department, plans were made as early as January of 2003 (
two months before
the beginning of the war) to “secure” Iraqi oil fields as “issue number
one.” In the same article, a US military spokesperson states that
plans were “already in place” to protect oil fields from any type of
destruction similar to the 1991 Gulf War when Saddam Hussein set afire
hundreds of oil wells to prevent them from being brought under the
control of the United States. For the full article, see: Julian Borger,
“US begins secret talks to secure Iraq’s oilfields: fears that wells
will be torched if regime falls,”
The Guardian: News: World News, 22 January 2003,
http://www.theguardian.com/world/2003/jan/23/usa.oil (19 October 2013).
[19]
After the surrender of Japan in August of 1945, the United States
government helped establish the International Military Tribunal for the
Far East (more commonly known as the Tokyo War Crimes Trials) to address
the suspected war crimes of Japanese soldiers. At the conclusion of
the proceedings the United States government found guilty and
hung
a number of Japanese soldiers for using the torture technique of
waterboarding against American POWs and other Allied personnel during
the war. For additional discussion, see: PolitiFact.com: Sorting out
the truth in politics, “History supports McCain’s stance on
waterboarding,”
The Tampa Times, 2013,
http://www.politifact.com/truth-o-meter/statements/2007/dec/18/john-mccain/history-supports-mccains-stance-on-waterboarding/ (25 October 24, 2013).
[20]
In addition to Dick Cheney’s KBR and Diane Feinstein’s Husband’s firm
Perini, the war in Iraq has seen more than 100 firms awarded more than
7,000 contracts worth billions of dollars. For a complete look at the
top private military firms operating in Iraq and their ties to the
United States government, see my:
Private Military Firms and the
United States War with Iraq: An Examination of the Top Private Military
Firms in Iraq and their Impact on Democratic Government (Köln, Germany: Lambert Academic Publishing, 2009).
[23] Charles Beard,
An Economic Interpretation of the Constitution of the United States (New York, NY: The Free Press, 1986), 149.
[34] Huffington Post, “CEO-To-Worker Pay Ratio Ballooned 1,000 Percent Since 1950: Report.”
[38] Joseph Stiglitz and Linda J. Blimes,
The Three Trillion Dollar War: The True Cost of the Iraq Conflict (New York, NY: W.W. Norton & Company, 2008).
[40] Michael Parenti,
Against Empire (San Francisco, CA: City Lights Books, 1995), 89.
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