Why did the United States government abandon its principles of serving the American people by putting corporations first?

in #history2 months ago

Let’s be honest, the U.S. has always served the interests of the wealthy elites and the original 13 colonies that became the U.S. were settled by corporations so it never abandoned any founding principles. Prior to the 19th century most business interests were organized under proprietorships, partnerships or joint stock companies where the owners had unlimited liability for all business debts (i.e. could lose more than their investment in the company). Prior to the 19th century corporations were only created through special legislation under republics or royal charters under monarchies to engage in trade, provide public services or complete projects usually as a monopoly. By the end of the 18th century the U.S. only had about 300 corporations most of them fulfilling the aforementioned roles of providing public services or completing projects like building roads and harbors or digging canals with only a handful engaged in manufacturing. The industrial revolution is what made corporations the default bushiness model and state legislatures expedited incorporation in the early to middle 19th century by liberalizing the process and allowing principals to obtain charters from secretaries of state through an apolitical filing and certification process. However, early 19th century corporate charters typically stipulated the minimum size, operations, capital amount and structure, governance, and the duration of a corporation’s existence usually between 20–30 years and some did not even grant limited liability to shareholders. Corporations didn’t become the dominant business model until the late 19th century when the scale of production made it infeasible for principals to manage their entire operation, which was now more frequently carried out in multiple locations, without a separate managerial class with no ownership stake in their company. And as production was carried out on larger economies of scale they also became more capital intensive requiring larger upfront investments from more sources. Big business worked around the restrictions imposed on corporate charters by establishing holding companies and trusts (e.g. Standard Oil). At the tail end of 19th century state legislatures once again liberalized incorporation and allowed companies to define the scope of their charter and have perpetual life. None of the legal privileges attached to incorporation are bad in themselves and frankly the U.S. and the world would have a much lower standard of living if the economy was restricted to cottage industry production of proprietors, partnerships and the occasional joint stock venture given a monopoly over their activity. Of course, no reform is fool proof and those legal privileges have been abused to protect executives from beginning brought to justice for their criminally negligent and fraudulent behavior especially in the financial and pharmaceutical industries. That is not an indictment of incorporation itself but the need for corporations that repeatedly engage in criminal behavior to be judicially dissolved more often instead of paying criminal settlements that allow them to go about business as usual.

Coin Marketplace

STEEM 0.20
TRX 0.13
JST 0.029
BTC 66426.55
ETH 3459.91
USDT 1.00
SBD 2.62