On July 4, 1776, Americans rejected the divine right of kings, declaring self-evident truths: All men are created equal. Legitimate government is founded on consent of the governed. Government exists to support our pursuit of life, liberty and happiness—not to save our souls or pursue military glory. Now, those principles of limited government can tame imperial CEOs.
In 2021, opposition to freedom comes not from a foreign king and his aristocratic courtiers but from our own domestic elites—the uber-rich of the New Gilded Era and the multi-national corporations that dominate our economy. The new "malefactors of great wealth" (as Teddy Roosevelt called their predecessors) seduce politicians and regulators with the promise of lucrative jobs, and terrorize them with threats of negative campaign ads.
The result is crippling. Neither democracy nor markets can work if economic incumbents can transform their wealth into rules that guarantee them still more wealth.
Since 1980, median and minimum wages have lagged far behind productivity growth, even as growth slowed disappointingly. Simultaneously, corporate executives pay themselves dynastic sums—the average CEO of a publicly-traded company now takes home millions of dollars annually, 274 times median employee pay. The CEO of Palantir was paid over $1 billion during the pandemic—not bad for government work (half of Palantir’s revenue).
At this pay, imperial executives live in a different world. And it shows in the corporations they run. Instead of focusing on good jobs for Americans, useful products and services or the common welfare, our firms treat us as mere tools to their pursuit of profit—as if they were colonial occupiers and we their subjects. Seeking to extract as much as possible from employees and consumers alike, they campaign to keep wages low while dodging responsibility for pollution, safety or taxes. Lord Acton said that power corrupts and absolute power corrupts absolutely. Beyond corruption, unchecked power generates unchecked incompetence: leaders surrounded by sycophants or purchased loyalists mismanage our institutions. We should be able—like every other rich country—to provide medical care to those who need it, not just fatten the wallets of big pharma, insurers, and hospital executives. Self-rule depends on an informed populace, not disinformation from oil, tobacco, or finance companies protecting dangerous products, conspiracy mongering by clicks-for-profit algorithms, or politicians corrupted by the carrots and sticks of enormously wealthy institutions.
We created corporations, like governments, to help in our pursuit of life, liberty and happiness. Yet they’ve escaped our control. In effect, we’ve let our creations rule us. But we need not remain enthralled to these modern idols.
The first step towards a more decent society is to extend the lessons of the Enlightenment’s liberal revolutions. They abolished the divine right of kings and the notion that government officials owned their offices. Now we need to defeat pretenses that executives are the corporations they run or that corporate profit is sacrosanct.
To start, we must clarify that the U.S. Constitution grants rights to people, not organizations. In Citizens United, the Supreme Court held—contrary to text and logic—that the Constitution requires allowing executives to use corporate money to influence elections. That is taxation without representation, not free speech. When we buy products or work for corporations, we entrust our money to corporate leaders for limited purposes—not to corrupt our politics or economy. The same is true of other rights the Court has invented for corporations: rights for firms generally disempower citizens.
Corporate power is our power, not the CEO’s. No free people could allow its governmental officials to rule without popular elections, to make all decisions behind closed doors, to disregard countervailing popular sentiment, or to force subordinates to follow the officials’ religion.
Corporations are created by ordinary statutes, not constitutions. Ordinary law should also direct, restrain, and reform them. If the Court won’t allow this, we should amend the Constitution, as suggested by groups like Move to Amend, to reclaim the power of Congress and state legislatures to set corporate rights and responsibilities. Or, states should demand businesses waive the Court’s invented rights as the price of corporate privilege.
Then, we need to extend the rest of the democratic-republican revolution to our giant corporations. Twitter and Facebook are too important for their executives to have unchecked power to decide whom to allow or exclude on their platforms. CEOs should be servants, not masters; employees and customers should be citizens, not subjects; free debate, open meetings, and job security should be the rule, not the exception.