Proposal For A New Constitutional Amendment: A Separation of Corporation and State

July 28th, 2004

by Nova Spivack
Originally published on July 28, 2004; Updated on October 10, 2011

Should there be a Constitutional Separation of Corporation and State?

Today our American democracy faces a new threat to its integrity, a threat even greater than terrorism in the long-term. This threat is the corporation. In this essay I propose that it may be time to introduce a new principle into our democracy and a new amendment to our Constitution – a formal “Separation of Corporation and State.”

To illustrate this point, consider an earlier “separation” that has been essential to our democracy — the Separation of Church and State. What would America be like if the Constitution did not provide for the separation of Church and State? Would it be a nation that protects and celebrates freedom, equality and pluralism? Or would it be a nation, not so unlike those presently under the sway of fundamentalism, run by religious lobbies, religious police, and fanatical extremists?

I have nothing against religion – in fact I am religious myself – but I don’t think religion should have anything to do with government, or vice-versa. This is in fact one of the key ideas in our Constitution. Many of our Founding Fathers were deeply religious, but they recognized the need to make a clear distinction between their religious ideals and their political ideals. Thus over time a Constitutional separation of Church and State was formed — a separation that would not only protect the integrity and objectivity of government, but also that of religious institutions.

However, although they were well-aware of the risks of mixing politics and religion, our nation’s early Constitutional scholars were not as concerned with the risks of mixing politics and business. And why should they have been? At the time corporations were not nearly as independent or influential as monarchies and the Church. They were not considered threats. It would not be until later in the Industrial Age that corporations became a serious political force to reckon with. But one might well wonder whether our Constitution would have included protections against corporate influence had corporations been more of a force at the time it was devised.

Today corporations are becoming the single most powerful force shaping our societies and governments. While corporations have great potential to benefit society and even governments, they are entirely selfish entities – they have no accountability to the public, and no responsibility to ensure the public good. A government that is influenced by corporations can easily become a government that caters to corporations, a government that is effectively run by corporations. Such a government is not representative of its people anymore. It is therefore not a democracy.

Corporate influence on government, if not carefully regulated, is a threat to democracy. It is a threat to the American way of life. This threat to democracy may not be as dramatic as terrorism, but in the long-term it may be far more damaging to society. In fact this threat was foreseen by some of our most visionary leaders:

“The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic State itself. That, in its essence, is Fascism — ownership of government by an individual, by a group or by any controlling private power.”
— Franklin D. Roosevelt

Because this threat was impossible to envision at the time our nation was formed, our Constitution was not designed with specific countermeasures and as a result our leaders, our government, our democracy, and our citizens, are presently without protection from political influence and manipulation by corporate interests. The danger of this is that our government may be run by corporations, or at least key decisions may be based on commercial interests. But is it democratic for national decisions to be driven by corporations that are only responsible to their shareholders? Are We The People represented by the corporate decision-makers and politicians they fund?

Are we living in a true democracy when many of our highest elected officials continue to receive money from, and hold stock in, large corporations they formerly worked for, or may work for when they are out of office? Are we living in a true democracy when our leaders are able to award lucrative no-bid contracts to their former employers? Are we living in a true democracy when public policy is influenced by corporate-backed political lobbies that spend millions of dollars to influence key decisions and elections? Are we living in a true democracy when the same people who start and run our wars also benefit financially from lucrative military industrial contracts? Is this ethical? Is this what our Founding Fathers intended, or is our Shining City on the Hill starting to get a bit tarnished?

I ask you then: Is it time to modify the Constitution to specifically provide for a formal “Separation of Corporation and State” in our democracy? And if we don’t take action, can our democracy survive?

One viewpoint on the matter is that we should not enforce a specific Separation of Corporation and State but rather seek to provide ethical guidelines to corporations and politicians — in other words, we should simply trust politicians and business people to maintain ethical boundaries and act appropriately. But can we really rely on them to self-regulate? Can we trust the foxes to guard the hens? After all if politicians require corporate endorsements and funding, or at least the absence of corporate interference, to win elections and stay in power, and if corporations in turn require political influence to cut costs, increase profits and beat the competition, can we really trust them to not do deals with one another?

As America and the world enter the twenty first century there appears to be a blurring of the distinction between capitalism and democracy. Many Americans, let alone others around the world, may not even be aware that there is any distinction at all! In fact, capitalism is not a form of government – it is an economic framework while democracy is not an economic framework, it is a social system. They are not one entity, they are two complementary systems. While they are often found together and have the potential for profound symbiosis (and in fact cannot really thrive without one another), neither is a sufficient substitute for the other.

For example running a corporation exclusively according to the rules of democracy is probably not good for the bottom line, but neither is running a nation exclusively according to the rules of capitalism good for society. These two forces must be balanced appropriately. In a corporation, democracy must take second place (although I argue elsewhere that perhaps corporations should be at least more democratic than they presently are). In a society however, democracy must take first place; it must never be overwhelmed by capitalist interests.

If there was no separation of Church and State in America, both our government and religious institutions would suffer. Similarly, in the case of the tension between capitalism and democracy, the only viable, sustainable, and effective path is to maintain a very precise balance. If this balance is not maintained, neither democracy nor capitalism can function with full effectiveness and everyone loses in the long-run. Short-term thinkers may gain temporary benefits by taking advantage of imbalances of this nature, but only at the expense of the many, and ultimately even at their own expense.

From the perspective of John Stuart Mill, who advocated the philosophy of “the greatest good for the greatest number,” we must not give in to the temptation to seek short-term gain at the expense of long-term sustainability. Ensuring that this does not happen is essential to the sustainability both of democracies and free markets. Unrestrained capitalism is a cancer – ultimately it consumes everything in its path.

At the same time, unrestrained democracy can easily devolve into socialism and economic gridlock – the death of the free market economy, and stunted growth. Only a very delicate, precise, and carefully enforced balance between capitalism and democracy can ensure both long-term homeostasis AND growth – a sustainable civilization.

The issue of the Separation of Corporation and State runs deep – it is not only our problem, it is everyone’s problem because America is now leading the world. Our American democracy is the template for new democracies, an example for others to follow. And now that we are in the business of seeding new democracies it is even more important that we practice what we preach. What kind of democracies are we really making in other countries? And what kind of democracy are we ourselves really living in now? What kind of standard – what kind of a template – are we providing for others who would emulate us?

What makes this nation so great is that it stands for something – it always has. We stand for freedom, we stand for equality, we stand for justice, we stand for tolerance, we stand for opportunity, we stand for human rights, we stand for democratic principles – and in fact, we stand for balance.

Balance between opposing agendas, opposing priorities, opposing points of view, has always been the heart of our nation’s underlying philosophy. This willingness to live by, and fight for, these basic rights and principles is what has made us great, what has given us moral authority on the world stage. It is also what has made the idea of America – our cultural meme – so contagious. If we forget this balance or fail to preserve it, we may lose everything we have worked for, everything we have attained, and the whole world will lose alongside us. What a lost opportunity that would be.

Americans need to think about this issue carefully. The very heart of American democracy and capitalism is balance. To preserve this balance, we must adapt and evolve our nation in the face of change. Today that balance is threatened – some would argue it is already gone – due to corporate influence over the political process. In other words, our nation is at risk of losing its heart.

The question is not therefore, “should there be a Separation of Corporation and State” but rather “how can we realistically and practically ensure a Separation of Corporation and State?” Should we add new protections to the Constitution in some way? Should we legislate? Should we simply “let the market sort it out” or trust our leaders and corporations to self-regulate and do the right thing?

I am a dedicated capitalist; I have benefited from the free market and I believe in self-organization, creative chaos, and bottom-up emergent solutions to complex distributed problems. So I would not advocate restraining capitalism to such an extent that it loses its edge. Capitalism is a reflection of nature, of evolution itself – a basic creative process that leads to innovation, growth, optimization, and development that can benefit individuals and societies in incalculable ways.

Without capitalism democracies lack energy and cannot thrive, grow, innovate and reproduce. Yet at the same time, I believe deeply in democracy and the basic principles that America stands for. Without democracy – true democracy – capitalism becomes malignant, destructive, and cannibalistic.

I would not want to live in a non-capitalist society – how boring, how complacent, how uninspiring and uncreative that would be. But neither would I want to live in a world controlled by corporations that are solely conditioned by profit motives – that would be a world raped of every natural resource, polluted to the point of being uninhabitable, commercialized and dumbed-down to the point of total conformity and cultural decay — a world completely for sale and thus completely sold out.

Because neither of these extreme futures — democracy without capitalism, or capitalism without democracy, is acceptable, I believe it is time to really address this issue of the Separation of Corporation and State as a society, and as a marketplace. Because if we don’t find a new balance between capitalism and democracy we will lose both.

But is it too late? Is it futile to address this issue? Some would argue the Great Sell-Out happened long ago. Others might even go so far as to suggest that it is not even a meaningful question anymore — that nations are no longer the primary actors in the world, but rather that we have already begun evolving a new world order that transcends nations altogether – a world governed by interacting transnational corporations – what we might call corpocracies that are the new units of civilization. But I hope that’s not the case. I believe we still have a chance at restoring the balance we’ve lost.

It is not too late to save democracy. We can and must evolve our democratic system to adapt and survive in a world of giant global corporations. While it is impossible to prevent interactions between government and corporations, or between our political leaders and corporate entities, we may be able to find ways to protect governments and politicians from corporate influence.

What would be some concrete steps to implement this proposed separation of corporation and state? As a first step, I think there should be a serious effort to revise or eradicate the concept of corporate personhood.

Beyond that, we could perhaps require that government officials sever their financial relationships to corporations while they serve in office, and perhaps even for a year or more after their service ends (provided the government still pays them during that grace period). For example it might be considered unethical and unacceptable for a top government official to leave office and immediately go to work for a major lobbying firm, or to receive huge payments for speaking or doing other favors for corporations, at least within some period of time after they serve in office.

In the case of certain high elected or appointed officials such as presidents, vice-presidents, members of Congress and the House of Representatives, cabinet members, chief regulators, and Supreme Court justices, the rules might even be a bit stricter. For instance, in the case of Supreme Court justices for instance, it might be time to require that not only they, but even their spouses, should have no financial connections to corporate influences.

A more moderate approach would be to allow financial connections to corporations while serving in a top government role, but simultaneously to more tightly regulate and monitor them — even for some time after a person serves at a high level in government.

We could also apply stricter controls to corporations and how they fund political lobbies and campaigns, and how they promote and sell products and services to the government. What these controls might actually be, and how to police them, is a topic for further thinking and debate.

These are just a few example ideas, and I’m sure much better solutions could be proposed. Beyond merely pointing out the imperative we face, and providing some examples, I do not have the answer, I do not know the formula for the balance we need to create. This is a question for people far more qualified and knowledgeable than myself to address – a question for our political leaders, our business leaders, our political scientists and Constitutional scholars, and our community activists.

But one thing is certain: The separation of corporation and state, or lack thereof, is an issue which will have the most profound effect on our nation, our society, and the rest of the world. It is perhaps the key challenge that America must address as we enter the twenty-first century.