Friday, May 4, 2012

The "Founding Father" Approach to Combatting Tax-Dodging Corporations

"Since the general civilization of mankind, I believe there are more instances of the abridgment of the freedom of the people by gradual and silent encroachments of those in power, than by violent and sudden usurpations; but, on a candid examination of history, we shall find that turbulence, violence, and abuse of power, by the majority trampling on the rights of the minority, have produced factions and commotions, which, in republics, have, more frequently than any other cause, produced despotism. If we go over the whole history of ancient and modern republics, we shall find their destruction to have generally resulted from those causes." --James Madison--"Notes on the Secret Debates of the Federal Convention, 1787."

  One of America's leading Founding Fathers was James Madison of Virginia. He  acted as a moderating force between the future Federalists and anti-federalist factions during the founding of our nation at the Constitutional debates at Philadelphia in 1787.  He also was a major force in getting the key states of Virginia and, (through his co-authorship of the Federalist Papers) the state of New York to adopt the Constitution leaders of both main political parties revere today. 

   "The Father of the Constitution" (and, later, Fourth President of the United States from 1809-1816)  guided his fellow delegates by reminding them of the pluses and minuses of past governments going back to the time of the Ancient Greek city-states, the Roman Republic and the leagues and confederacies and kingdoms that emerged after its fall  in Western Europe. 

Many today, looking at the qoute above,  might be tempted to see that his remarks about "the majority trampling on the rights of the minority" is  aimed at a class of people who would bring down civil society from below.  Perhaps that was a fear in 1787.   But who really is "the minority " in Washington today?  We are!


 I submit that, in an era where huge corporations are  considered  persons and legal-eagle  lobbying mouth-pieces have more power than constituents in the Congress and the state capitals, we are threatened.  It is the ordinary public citizen who is "out-voted" by the fiat of unlimited campaign cash. 


  I wonder if Madison would be surprised by the current state of affairs in the proliferation of big-money Super PACs and large-scale  lobbying and "earmarks" and loopholes and of-shore accounts for big business?  How much would he big shocked by all these corporation situated technically in places like Nevada and Delaware but solely for tax purposes?

And all the other off-shore money schemes we see rich individuals and companies like Appleand Google--who make most of their profits in the USA engage in shady loopholes to evade taxes through moving about from the Cayman Islands or Bermuda or, in Google case,  Ireland? 

 Perhaps not all that much.

Alex Marshall in an editorial in today's "New York Times:  "Someday, Madison warned, companies could grow so large they “would pass beyond the authority of a single state, and would do business in other states.” To make sure the companies remained accountable to government, he said the federal government should “grant charters of incorporation in cases where the public good may require them, and the authority of a single state may be incompetent.”

In other words, a National Companies Act." 

Maybe companies who want to do business in the largest economy in the world---and are protected and enhanced by state local and federal government supports and the American citizen as worker and consumer--- should pay for the privilege just as ordinary citizens do. 



 See article in the link below:


  1. Sounds about right for whats going on today in our country Doug, the rich keep getting richer and the poor, well how much lower can they go? Money, Greed and too much power is the problem affecting all of us today. I bet those earlier presidents would probably turn over in their graves if they could see what is happening right now. Or maybe not!!!

  2. We cannnot be totally sure, Marty, of course and each signifigant Founder of that long-ago time was an individual with all the strengths and weaknessess we'd find today. But I believe Madison saw the need to expand government oversight to ensure the general welfare of the public--he could only see so far, but he saw farther because he knew his history.

    And who, past or present, wouldn't alarmed at the state of influence of money in creating legislation and in poitical campaigns?

  3. I really believe they would be outraged perhaps not so much by the corporations but rather by the unreasonable support, almost worship, the corporations receive by politicians and most recently the US Supreme Court.

  4. I think you hit about just about right, Mike. Too much power in unaccountable hands would have made anyone who had built a new government nervous.

  5. I think all the ads going on and how despicable they are against the president would probably put all those early presidents off. The amount of money spent is intolerable and I am wondering if these huge corporations would spend it on the economy instead of hate ads, how much better this country would be.

  6. I just heard Gingrich say that Obama was one of the most leftists Presidents we have ever those people really believe that? or is the right under some type of evil delusion? the truth or reality seems to almost totally evade them.

  7. Mike, they will say anything they can to make this president look like a dufus...and the right will probably believe it all. Even if they didnt really believe it...those "in control" will tell them what to say and believe. Like Rove and the Kochs etc.

  8. A very interesting post Doug with some very telling quotes from James Madison. He like all the founding fathers of America was a classical liberal and the ideology is obvious in every quote.

    Madison assumes a top-down enlightened governance of the ever threatening "majority" the sans-culottes, the 'great unwashed' who ride roughshod over minorities and who must be controlled. Pure Whiggery really I think.

    The paternalism of the classical liberal and capitalist aspirations of Madison of the much vaunted Founding Fathers has set the tone for the political evolution of the United States which has I believe delivered it to its current impasse, which I don't think can be resolved until the founding principles are critically deconstructed and are no longer taken at face value.

    Rehumanising the Founding Fathers is the first step I think and taking people like Madison off their pedestals in order to reconsider their failings as well as their successes, is I think vital to that endeavour.

    Before going further in any critical deconstruction of James Madison himself, I think we need to consider the context in which he lived and especially the political make up of the Founding Fathers.

    I think that tells us much about America today and how it got to be where it is in the world.

    Wikipedia helps us here, but if we just take the material details of who the Founding Fathers were and how they made their living, the entire blueprint for contemporary America and indeed transnational globalist capitalism is revealed in its embryonic form.

    Occupations and Finances

    The 1787 delegates practiced a wide range of high and middle-status occupations, and many pursued more than one career simultaneously. They did not differ dramatically from the Loyalists, except they were generally younger and less senior in their professions.

    Thirty-five had legal training, though not all of them practiced law. Some had also been local judges.

    At the time of the convention, 13 men were merchants: Blount, Broom, Clymer, Dayton, Fitzsimons, Shields, Gilman, Gorham, Langdon, Robert Morris, Pierce, Sherman, and Wilson.

    Seven were major land speculators: Blount, Dayton, Fitzsimons, Gorham, Robert Morris, Washington and Wilson.

    Eleven speculated in securities on a large scale: Bedford, Blair, Clymer, Dayton, Fitzsimons, Franklin, King, Langdon, Robert Morris, Charles Cotesworth Pinckney, and Sherman.

    Twelve owned or managed slave-operated plantations or large farms: Bassett, Blair, Blount, Butler, Carroll, Jenifer, Jefferson, Mason, Charles Pinckney, Charles Cotesworth Pinckney, Rutledge, Spaight, and Washington.

    Madison also owned slaves.

    Eight of the men received a substantial part of their income from public office: Baldwin, Blair, Brearly, Gilman, Livingston, Madison, and Rutledge

    Three had retired from active economic endeavors: Franklin, McHenry, and Mifflin
    Franklin and Williamson were scientists, in addition to their other activities.
    McClurg, McHenry, and Williamson were physicians, and Johnson was a college president.

    America was founded by the pioneers of Banksterism as an enlightenment experiment in limited government and thereby the opportunity for the evolution of direct democracy was strangled in the cradle by these fathers of our current crisis.

  9. Gingrich is a species of poliitcan who will say anything to further his quenchless ambitions; anything could come out of his mouth to get a leg up on what he wants. His powers of exaggeration are astounding to me.

    The man simply cannot make a statement about an opponent--Romney, Obama, Clinton, Pelosi--without putting his opponents view in the worst possible light. He could make the most committed moderate "trimmer" sound like a revolutionary zealot.

    Richard Nixon said it best about Gingrich shortly before his death. "He's a bomb thrower, but we (the GOP) need a few bombthrowers around".

    Quoth R. Milhous Nixonius: the master of character assassination.

    Thanks Marty and Mike for adding good analysis to this short blog.

  10. Yes, AA, I think Madison's notions are useful but he and other Founding Fathers were living at a very different time. The fear he had for a "unwashed" majority should be applied to a different group of people who derive their power not from mobs of people but mobs of multi-national influence and cash.

    I will try and expand a bit on economic interpretations of the Founders later here as time permits.

    Thanks, AA, for adding the background I omitted about the other main actors at the Consitutional Convention.

  11. I like the word "rehumanizing" you use regarding the Founders, AA. They had their share of division over issues they were just as contentious and sometimes as personal as today.

    One of the best eyeopeners I had on this subject came at university from Charles Beard's book on the backgrounds of these men.

    From Wikipedia: " 'An Economic Interpretation of the Constitution of the United States' is a 1913 book by American historian Charles A. Beard. It argues that the structure of the Constitution of the United States was motivated primarily by the personal financial interests of the Founding Fathers. More specifically, Beard contends that the Constitutional Convention was attended by, and the Constitution was therefore written by, a "cohesive" elite seeking to protect its personal property (especially bonds) and economic standing.

    "Beard examined the occupations and property holdings of the members of the convention from tax and census records, contemporaneous news accounts, and biographical sources, demonstrating the degree to which each stood to benefit from various Constitutional provisions. Beard pointed out, for example, that George Washington was the wealthiest landowner in the country, and had provided significant funding towards the Revolution. Beard traces the Constitutional guarantee that the newly formed nation would pay its debts to the desire of Washington and similarly situated lenders to have their costs refunded."

    From the very start there were differences on how to deal with representation, debt obligations and the factionalism between the manufacturing and trading power blocks in the New England and Mid-Atlantic and the "slave power" of the Southern interests. The country has changed greatly and the amendment process needs to be brought to bear against the rise of corporate power, something that "classical liberals" in the 18th and pre-Civil War 19th Century only saw as a distant threat.

    Of course just saying the Founders "voted their pocketbooks" is sometimes missing some key details, nevertheless it explains a great deal. All those who stayed at the Convention to sign the document wanted a place in the new nation, one where their interests and those of their region would be protected. Beard's analysis has been biffed about since the 1950's, but he has only been improved upon in my book, not refuted.

  12. That sounds like a very interesting study Doug, I had never previously come across Charles Beard or his book which sounds fascinating. I think if we trace the vested interests in any ruler's past we are able to piece together unstated motives that rarely feature in the finished product, the official account of the lofty ideals and personal bravery of the pioneers. As they said during the Watergate affair "follow the money" and when we do that we find a whole new subtext, sometimes we find the evidence of crimes having taken place, but more often than not we find only self-serving acquisitiveness, where there was once only honour and duty in the tale.

    Thanks for adding Mr Beard's account and those who have added to it since, I do think going back to first causes does help to identify evolutionary strands in the unfolding of history. I will have to look him up Doug so thanks again for the reference!

  13. I agree on first causes, AA.

    You are most welcome on the recommendation. Beard's book is something I should reinvestigate myself, in light of corporate power now being reassessed with new proposed Constitutional Amendments such as the recent proposal for a "People's Rights Amendment" which was started in the state of Massachusetts, the "Cradle of the American Revolution."