While popular perception sees corporations as the engines of development, another analysis leads to different conclusions.

Corporations were chartered in England and other parts of modern Europe, growing out of large and powerful mercantile communities at the beginning of the Industrial Revolution.

As every person associated with the third world and any global history buff knows, at the very onset itself, they were the drivers of colonization globally, engaging in extreme cruelty and oppressive social and economic strategies to attain access of markets, resources and labor in these colonies across Asia, Africa and South America.

However, it is important to recognize that all of these policies were first implemented in England (and some other parts of Europe) while these corporations were still large consolidations of mercantile communities.

As economist Karl Polanyi presents in The Great Transformation, the Industrial Revolution needed three key components – ready access to labor, ready access to markets, and ready access to resources. In the absence of all there components, production and sale would be intermittent and the mercantile community was unwilling to make investments without ensuring constant access to all three. While the colonies provided all three after colonization, the processes to gather these were in fact home grown. One of the most critical was the passage of Enclosure Laws.

Production in rural England was based on the labor of landless peasants who worked for the local manor and supplemented their income with access to the commons (common pastures or forests which helped sustain some animals). The Enclosure of the Commons were proposed and engineered by the mercantile community through the English Parliament ensuring that rural peasants would have no more access to these commons.

With the end of such access peasants could not sustain their lives in rural communities and flocked to the cities. Thus, the mercantile community socially engineered a glut of always available labor that the mills could access at whatever price they liked. On the other hand, the life of the peasants (now laborers) was worse than those of animals.

These were the same laws that were promulgated in the colonies including taking away all community ownership of forests, pastures, water bodies, and mines. In India, it affected the lives of millions. Tribal communities who mined and made metals found themselves engaged in illegal activities. Tribal and other communities living in and on the edge of forests were now criminals for living off the forests. Water bodies being maintained by communities fell into desuetude.

In addition, tariffs were passed that made economically unfeasible numerous livelihoods in the colonies, especially those engaged in textile industries, in salt manufacture, and in local trade.

Not only were corporations engaged in exploitative policies from the very onset, their precursors were also engaged in such practices. Thus, the idea of legalizing unethical policies or laws that would oppress were formulated and put to practice even before the charter of the first corporation by the same mercantile communities.

Today, corporations are ubiquitous in all aspects of ‘democratic’ processes. Media in the USA is almost completely owned by less than half dozen corporations. World over, the situation is slightly different. Thus, ‘news’ is completely manages, even produced, as Noam Chomsky argues. In Manufacturing Consent, he presents various filters through which news gets manufactured by the corporate sector. For one, news media in all form is completely owned by corporations. Second, subscriptions have become an insignificant source of income for media houses - advertising is the big one. Hence, news media has to be sensitive to the needs of the corporate sector or lose out on profits.

Corporations also wield an inordinate amount of power on institutions of political power. With significant contributions to campaign funds and a ready accessibility to the corridors of power, corporations influence government and public policy almost entirely at the cost of diminishing influence of citizens of a country. The systematic bribing of Congressmen in United States was instituted by Mark Hanna, sugar trust magnate Henry O. Havemeyer, and Senator Nelson Aldrich and their associates as detailed in Jonathan Shepard Fast and Luzviminda Bartolome Francisco, Conspiracy For Empire, Big Business, Corruption and the Politics of Imperialism in America, 1876-1907 (Quezon City, Foundation for Nationalist Studies, 1985), p. 92-97. Through this influence, they control international policy, policies of financial institutions, etc. Thus, as IMF and World Bank driven structural adjustment programs have most benefited corporations, one cannot but make these connections. In his book (The Best Democracy Money Can Buy) Greg Palast describes in great detail the influence corporations wield. Michael Moore also makes the case in his movies and the movie “Corporation” reinforces these arguments with more evidence.

The list of violations by large corporations (http://www.misfortune500.org/) is long and cites not just financial innovativeness but includes cruel exploitation, union busting through assassinations, deliberate destruction of communities, inhuman work conditions and fatal negligence. While many of these continue to be fought in various courts of law, often those making these charges are doing so under grave threat to life and in the absence of the amount of financial spending that can afford keeping these cases going. These include allegations against Exxon, Chevron and Shell of using militia and violence to bring down opposition from local communities in Africa and Asia to their plans of expansion, to influencing governments, allegations against Dole of using militia to break up unions and terrorizing its laborers, of making its laborers in South America work in slave like conditions, allegations against Dow of deliberately marketing dangerous chemicals in markets outside US and Europe where they are banned, allegations against a host of companies including Dow, Lever, and Aventis of dumping toxic pollutants instead of treating them to keep costs low, allegations of sexual harassment and discrimination, of inappropriate compensations and of influencing laws and lawmakers in various countries to continue to act in this fashion against numerous companies. And we have not even spoke of Walmart.

In numerous cases, allegations were proven but neither does the mainstream media carry such news, and nor does the corporation always comply. For example, the Supreme Court Monitoring Committee of India found that Aventis India had formed a subsidiary that dumped toxic waste into landfills inside the plant. While the SCMC has asked for action, local administration has been unwilling to comply and the media has not carried any report on this. Similarly, a local court in India has held Coke responsible for innovative accounts resulting in tax evasion – the company has yet to pay the amount three years since the verdict and the Indian media is quite unwilling to anger Coke and risk ads that Coke places in these newspapers.

In Nigeria, Shell was found guilty and the Nigerian Senate fined the company $1.5 Billion for its excesses in the Niger Delta. The company has ignored the verdict and it has the political and financial clout not to care. Meanwhile, none of these transgressions have been reported in US media.

Most communities find it difficult to challenge exploitation of large corporations. Their financial clout often ensures that political representatives are favorable to corporate interests. Even when cases are filed, communities usually do not have the finances nor the ability to keep up with an army of lawyers and millions of dollars available to corporations.

Perhaps, the biggest twist in democratic processes is the establishment of Corporate Personhood (http://en.wikipedia.org/wiki/Corporate_personhood). Through a process of incremental changes in laws and interpretations using numerous attorneys and judges, corporations have now claimed access to a large set of rights that belong to a citizen. Thus, corporations now claim the ability to present laws, amendments and bills just like a citizen. Thus, in California, for example, a consortium of industries introduced a motion that was put to vote in the county election. Once such a motion is put on the ballot, a company spends over half a million dollars in that county running a media campaign for that motion. In a recent case bordering on ridiculousness, Walmart has claimed that a class action suits should be thrown out because it violates the ‘civil rights’ of the organization. Increasingly, then, corporations are successfully hijacking democratic processes.

This vignette, using but a few examples, presents the menace that corporations have become vis-à-vis democratic processes and ethical social functioning. Their access to funds, often more than the GDP of most host nations, allows them to significantly influence the processes of these nations subverting wishes of people in democratic processes.

In a globalized world, the menace of transnational companies operating through a variety of countries is even more threatening. On one hand, they are often not accountable to any one community or country. Thus, Shell is unwilling to be accountable to political processes or efforts in Niger. Similarly, Union Carbide was unwilling to be accountable to judicial processes in India with its CEO ‘absconding’ from Indian courts while living in one of the most expensive communities in the USA. On the other hand, they are able to use laws of the country of convenience. Thus, Bechtel, with merely an office in Netherlands was able to use Dutch treaties with Bolivia as a basis to sue the Bolivian government for throwing Bechtel out owing to unethical pricing of water.

One can argue that despite all evidence of unethical practices against numerous companies, any generalization that ‘Corporations are Evil’ is unfair. That would be as true as arguing that Monarchies are Evil. Surely there were monarchs and kings who were benevolent and just. However, the reason human civilization eventually rejected monarchies was owing to the immense injustice and exploitation possible with such acute concentration of power. That argument is even truer for corporations. The power they wield through the resources they control is often orders of magnitude more than kings of the past. And they use that power to make unjust decisions, to exploit, and to oppress when necessary for them to profit. It is for these reasons that the influence of corporations must be checked.

This can be achieved through the following processes

1. Ending corporate personhood.
2. Ensuring that corporations cannot profit through dumping externalities and in the even to externalities being dumped, all assets of the corporation becoming owned by the community till the impact of the externalities has been resolved
3. Making corporations accountable to local communities within which they operate.

After all, corporations are only tools for the welfare of human civilization. They must therefore exist in a way where they are accountable to the larger society, not to a few who own the corporation. Laws must also ensure that individuals cannot use laws that are special to corporations to perpetrate violence and injustice in ways that they could not as individuals. A mode of development that does not make the processes and institutions accountable for the ‘undevelopment’ they cause and the cost that they thrust on communities for this development is unjust – no rhetoric can right that, no period can accept it as ethical.