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The Corporate Body:
                                                              Liber 118 U.S. 394

                                 by Paco Xander Nathan

                                 I’d like to tell you an almost-completely-true story. Back in 1886, a
                                 strange thing occurred: an entirely new species came into being.

                                 A thing not entirely human was declared to hold practically all the
                                 rights of a human, or at least all the legal rights of personhood.
                                 Something relatively novel… something… fictional. Nonetheless,
                                 something capable of human qualities, such as the ability to speak,
                                 ownership of property, protection from racial discrimination,
                                 participation in the selection of candidates for political office, etc.
                                 Humans hardly acknowledge those qualities among species as
                                 intelligent as dolphins or gorillas, so this new species gained loads of
                                 respect early in its existence.


                                 Now, if you check with the average lawyer on the street, or at least the
                                 ones in the luxury SUVs driving down your street, they’ve probably
                                 never heard of what happened in 1886. Law schools in the US
                                 generally don’t delve into that sort of thing, since it’s not terribly
                                 important in practice. Even so, the case of 118 U.S. 394, pitting the
                                 County of Santa Clara against the Southern Pacific Railroad, set
                                 precedents which notable legal theorists consider to be the greatest
                                                                     th
                                 legal achievement of the 19 century.
   Once upon a time,
                                 Not long after the Civil War ended, a greedy railroad company pissed
corporations in the US
                                 off a small local government while in the process of expanding control
   were not granted
                                 over the local economy. The two parties slammed into conflict – not
 personhood and they             altogether unlike gunfighters in the Wild Wild West. However, in the
  had to exist under a           case of Santa Clara County v. Southern Pacific Railroad (118 U.S.
   constant threat of            394), the railroad company pulled a few strings and pushed their
    punishments —                grievances into federal court. There the justices ruled in favor of the
 specifically death and          railroad, rendering an astonishingly bizarre judgment: that a
taxes — if they did not          corporation must be regarded as a legal person, since it represents
  obey the laws of the           the property of natural persons and acts on their behalf. Voilá! A new
          land.                  species was created, by order of the government of the United States,
                                 science fiction publisher extraordinaire.
Click here for a bigger image.
                                 This twisted legal judgment, in the sheep’s clothing of a mere
                                 semantic slight of hand, granted constitutional rights to all
                                 corporations based in the US, as means for their legal protection. The
                                 heyday of corporate trusts ensued, leading to J.P. Morgan, Standard
                                 Oil, and a whole lot more. Unfortunately, along with those rights came
                                 none of the typical obligations. For example, just about any person
                                 I’ve ever met must live with two inevitabilities: death and taxes. Yet
                                 corporations do not necessarily ever "die" and, in many cases, they
                                 avoid paying taxes. In another example, when a person takes a life or
                                 a large sum of money while committing a crime, they generally face
                                 indictment, conviction, imprisonment, parole, or even execution. Since
                                 a corporation lacks any physical body, it cannot be placed in prison;
                                 this was, in fact, one of the original reasons for creating corporate
                                 charters.


                                 1•2•3•4•5•6•7•8



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Nevertheless, corporate bodies frequently make strategic business
                            decisions that cost lives but render profit. The infamous "Ivey Report"
                            at General Motors stands as one of the most dramatic recent
                            examples of intentional manslaughter-for-profit. In that 1973 report, a
                            GM engineer calculated that human casualties from fuel-fed fires cost
                            the firm a mere $2.40 per vehicle, based on the cost of potential
                            lawsuits. GM executives deemed this acceptable, as part of a
                            cost-cutting initiative, then kept the report secret for 25 years, until
                            they were caught lying about it in front of a federal judge.

                            Rarely do these acts result in criminal charges. Some might argue that
                            antitrust actions seem similar to "capital punishment" for offending
                            corporations, but the rules of antitrust are murky at best, and rarely
                            invoked. Instead, most white-collar crime gets pursued through civil
                            actions, i.e. punished through fines, not convictions. Moreover,
                            consider how the FBI makes a point to track precise crime statistics
                            throughout the US. Their annual reports create media headlines, but
                            strangely enough, corporate crimes are specifically not reported.

                            Let’s take that point a step further. Based on a three strikes rule, some
                                                             th
                            "inner city youth" (see below: 14 Amendment) face serious prison
                            time after subsequent convictions for possession of marijuana worth
                            less than a good steak dinner for our friends driving the luxury SUVs.
                            You can read about those stats in a CNN factoid. However, a
                            corporate body can select a business strategy, knowing it will kill
                            hundreds (in the case of GM with Ivey) or even thousands (in the case
  When a person takes       of Union Carbide in Bhopal) of innocent people, earn immense profits
a life or a large sum of    by employing that strategy, and yet never face a single criminal
    money, they face        charge. You might find a few token examples reported in the press,
indictment, conviction,     particularly the most blatant ones, but you won’t find statistics about
 imprisonment, parole,      these crimes. Even the simple academic pursuit of studying corporate
   or even execution.       crime appears to be one way for a young professor to be denied
  Since a corporation       tenure, or worse.
   lacks any physical
                            Once upon a time, corporations in the US were not granted
   body, it cannot be
                            personhood and better yet they had to exist under a constant threat of
   placed in prison...
                            punishments – specifically death and taxes – if they did not obey the
      Nevertheless,
                            laws of the land. The United States Constitution of 1789 did not
    corporate bodies        mention the word "corporation" within its text, and federal corporate
    frequently make         law simply did not exist. Ostensibly, corporations were hated things in
   strategic business       those days, having been the organizational structure for British
   decisions that cost      colonies, and so they provided a "whipping boy" during the American
lives but render profit.    Revolution. One senses an air of protest against corporations in
                            post-revolutionary America – against them gaining political power in
  Click here for a bigger
                            particular. State legislatures held rigid control over the life and death
          image.
                            (and taxes) of corporate ventures, and they flexed that control under
                            the direct guidance of the populace.

                            However, methinks the Lady Liberty doth protest too much.

                            Consider the story of an English physician named John Locke, whose
                            political theories had profound influences on the American Revolution.
                            Dr Locke argued that corporate bodies represent the political will of
                            their members, and are therefore a fairer and more dynamic structure
                            in the long run than political systems run by hereditary nobility. Some
                            might argue that American colonists were perhaps less upset about
                            their overlords’ corporate practices than they were about not sharing
                            in profits. The leader of the new US government was even called a
                            president, a term previously used not in government, per se, but rather
                            to honor regional executives of the East India Company, the very first
                                                                                             th
                            corporation "born" in London, England on the last day of the 16
                            century.


                            1•2•3•4•5•6•7•8
By the third decade of the US Constitution, President Jefferson’s
                          spending habits had pulled his young nation into severe crises.
                          Corporate interests reemerged in New England states – where they
                          had previously been disdained – justified around the time of the War of
                          1812 as necessary means for feeding and clothing the populace.
                          Within a few years, the US Supreme Court rendered its 1819 landmark
                          decision in Dartmouth College v. Woodward (17 U.S. 518), citing the
                          "contract obligation clause" of the US Constitution – and you can bet
                          that those SOBs in their luxury SUVs will have heard about it! That
                          decision placed charters of existing corporations outside the
                          jurisdiction of states which had chartered them, establishing the first
                          federal corporate law, and effectively nullifying the states’ rights to
                          keep corporate powers in check. So much for death and taxes…
                          Arguably, the point of even having a legislature was pretty well toast by
                          1819, as far as providing any real "checks and balances" to contest
                          the will of corporate interests.

                          The story becomes even more tangled. One outcome of 17 U.S. 518
                          was an inter-regional political dispute that became known as "States
                          Rights." Northern political interests distrusted the Southern economic
                          model as not being able to provide sufficient expansion for their
                          corporate endeavors. Southern political interests distrusted the
                          Northern influence on federal courts for determining how to enforce
                          corporate law – which sounds surprisingly like grassroots arguments
                          against the WTO today. Conflict ensued, popularly known as the US
                          Civil War, and popularly regarded as having been fought over the issue
                          of slavery.

                          Not to wax conspiratorial, but one should not believe the history books
                          issued in public schools (i.e., those produced and subsidized by
   Nothing is             corporate publishers) without asking a few questions. For instance,
omnipotent, unless        what did the US President at the time actually say about slavery and
 you believe so.          civil warfare? What you might not have read, without digging deeply
                          into archives, was that Abraham Lincoln remarked bitterly during the
Click here for a bigger   close of the Civil War about how the conflict had been fought primarily
        image.
                          on behalf of corporations. It can be argued that after 1865, the
                          executive branch of the US government retained almost no further
                          means for contesting the will of corporate interests.

                                                                                               th
                          One immediate outcome of the war was passage of the 14
                          Amendment. On the surface it appeared to provide "equal protection
                          under the law," effectively outlawing practices such as slavery.
                          However, "equal protection" (a.k.a. "civil rights") for African Americans
                                                                                                    th
                          did not even begin to emerge until nearly a century after the 14
                          Amendment was passed. According to Supreme Court Justice Hugo
                                                                             th
                          Black, in the fifty years following the 14 Amendment, less than 0.5%
                          of the case law related to that amendment sought to protect the rights
                          of African Americans, while over 50% sought to extend the rights of
                          corporations. That’s a 100:1 ratio… not good odds, unless your
                          ancestors had bylaws instead of DNA.


                          1•2•3•4•5•6•7•8



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Another ironic point, which the history textbooks might fail to elaborate,
                            was that Justice Black made his observations not long after the US
                            was about to engage in a second civil war. Socialists, communists, and
                            populists of many flavors rose up in pockets of armed resistance
                            against corporate interests during the Great Depression. The US
                            Supreme Court averted civil warfare through a questionable move in
                            1937. In that decision, now called "The Switch In Time That Saved
                            Nine," corporations adopted enough tenets of socialism to avoid civil
                            war: allegedly, they gave employees the right to a 40-hour work week
                            along with some other bennies, and then invented a new tradition
                            called "corporate culture." Though it would take another sixty years to
                            prove, in return we lost the right to a judiciary that can successfully
                            contest the will of corporate interests, except in a few showcase
                            incidents.

                            I could go on about the political and legal fallout of 118 U.S. 394, right
                            up to another landmark year of 1995, but you can read about that
                            elsewhere. Something strange happened in 1886 – something pivotal
                            that rejected a century of major events in US history which had
                            contested the corporate form, and projected ahead into a century of
                            governmental drift until almost no human collective could, through
                            government alone, contradict these new and different beings.

                                                               ***

                            Setting differences aside for a moment, consider how might a biologist
                            describe this new species? As luck would have it, some legal theorists
                            who analyze corporate law actually have applied techniques borrowed
                            from biology. Gunther Teubner, in particular, built on work by social
      Not to wax            theorist Niklaus Luhmann to apply autopoiesis – a biological theory
  conspiratorial, but       used to describe how a system self-organizes. Dr Luhmann suggested
    one should not          that a group of persons tends to exhibit a "group individual" or
 believe the history        zeitgeist, which then perpetuates on behalf of that group, to an extent.
books issued in public      Dr Teubner also examined how some corporate law develops for no
 schools (i.e., those       observable reason other than to perpetuate more corporate law (and
    produced and            by the way, he’s quite a fan of 118 U.S. 394)… in short, observing the
     subsidized by          zeitgeist at work.
corporate publishers)
                            Luhmann’s "group individual" corresponds closely to the "legal person"
without asking a few
                            defined for a corporation. Either notion provides a clear example of
      questions.
                            what is esoterically described as evocation, or in other words, the
                            process of summoning a spirit. Zeitgeist, spirit, demon, djinn, golem,
  Click here for a bigger
          image.            servitor, tulpa – take your pick, depending on the root culture. Each
                            term describes suprahuman sapience and immortal powers (read:
                            freed from either death or taxes) followed by cautionary tales scattered
                            throughout human cultural mythos. Perhaps we could learn a thing or
                            two from the wisdom of the ages.

                            Actually, the notion of evocation runs quite true to the original cast of
                            corporate form. Alchemical advisors to the British Crown during the
                              th
                            16 century appear to have set the stage for creating the first
                            corporations. Their esoteric work focused on a place called the Royal
                            Exchange of London, with the intent of establishing (read: evoking) a
                            contemporary fiction called the "Brytish Impire." Much to the contrary,
                            as of the 1560s the Brits were perpetually broke, let alone anywhere
                            near to becoming an "empire." Nonetheless, certain royal advisors
                            needed cash to be able to keep buying lots of occult books, among
                            other things. Up popped a new belief based on the glory of England,
                            rallying ’round their Virgin Queen, a new hope based upon a fiction –
                            the "Brytish Impire" – printed in manuscripts that were adorned with
                            engravings of the Empress surrounded by alchemical symbols.


                            1•2•3•4•5•6•7•8
Keep in mind that the intelligentsia of the time – in their post-Catholic,
                                 pre-Scientific mezzanine – held quite a lot of regard for bodies: the
                                 body politic, a body of law, the body of the church, celestial bodies,
                                 etc. Artwork of that time focused on the glory of the human body, even
                                 when depicting gods. In another example, most of the better-known
                                 astronomers of the Renaissance earned their living as physicians, not
                                 much unlike our dear Dr Locke a few generations later. Cut a patient
                                 open to examine the placement of bodily organs, in microcosm, then
                                 project that to behold – in macrocosm – the placement of celestial
                                 bodies. Quod est superius est secut quod est inferius: as above, so
                                 below.

                                 Much of the intelligentsia of the time (e.g., in Britain at the Royal
                                 Society) held considerable regard for a worldview known as
                                 Hermeticism, a Hellenistic Egyptian syncretism which is just about the
                                 same as alchemy. Envision a fading echo of wisdom nurtured in the
                                 library at Alexandria, prior to when Christians burnt it down and
                                 murdered the head librarian.
   Corporations may
behave like sentients,           Lost throughout the Dark Ages (at least, lost from anywhere north of
                                 Tangiers and west of Istanbul), the literary body of Hermeticism
    but at about the
                                 resurfaced in Europe through the efforts of the infamous deMedici
  sentience level of a
                                 family, the dynasty immortalized by Machiavelli. In their quest for
 spoiled brat. And, as
                                 power, the deMedici family funded translations of classical works, and
  anyone who’s ever
                                 they sought esoteric secrets from imperial power-mongers of the
    served time as a             classical world. Revisiting classical texts, which the Roman Catholic
 sibling likely knows,           Church had tried to obliterate, seemed like a fairly good strategy.
   knocking down an
  obnoxious, spoiled             This actually worked. Arguably, the translation efforts helped spark
   brat can feel quite           much of the Renaissance itself. Looking back to the stories of
satisfying and yet lead          classical times caused a few notable Italian thinkers to ponder a bit
   to huge "judicial"            differently about their present, thereby manifesting a vastly renewed
  problems; but they             look at the future: tail wagging the dog, the rest of Europe followed.
 can be caused to fall           Those texts and subsequent esoteric philosophy also informed the
  down nonetheless.              establishment of the British Empire, whose military-industrial complex,
                                 with power based on corporate organization, successfully contested
Click here for a bigger image.   the Roman Catholic Church and its allies.

                                 There is a pop culture notion of alchemy that seems to convey some
                                 Disney Corp cartoon scene of costumed mice attempting in vain to
                                 transmute lead into gold. In contrast, the more esoteric focus of
                                 Hermeticism (with texts circulated in Latin, of course) placed
                                 considerable emphasis on embodying spiritual essence, manifesting it
                                 into flesh… rather akin to evocation, mind you. Building things simply
                                 brought one "closer to god," joining in a process of Creation.


                                 1•2•3•4•5•6•7•8



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Now if you take a look at the twenty-three or so canonical operations
                                 from Renaissance-era alchemy – transmuting being only one – you’ll
                                 find incorporatus (Latin for "embodiment", and the root for
                                 "incorporation") as a practice for aggregating component parts into a
                                 corpus (Latin for "body"). What a no-brainer there. I could go into
                                 detail, but one can read about that elsewhere. We were talking about
                                 biology, not demonology…

                                                                   ***

                                 I first stumbled on the phrase corporate metabolism in reference to
                                 Swiss management consultants trying to describe how corporations
                                 adapt to new flows of information. Their obvious analogy equates
                                 information flows inside a corporate structure with energy flows inside
                                 living cells – muddied, problematic thinking, given a more realistic
                                 view of "information," but a potentially useful analogy. If one considers
                                 how corporate form can be compared with a biological system, what
                                 do both share in common?

                                 Consider how the most basic tenet of corporate strategy, creating a
                                 "barrier to entry" to block competition, parallels what a cell wall
                                 provides for the most primitive critters, the single-cell protozoa.

                                 Three necessary conditions for corporate organization – (1) chartered
                                 company, (2) limited liability, and (3) joint stock – provide means for
                                 externalizing risk while perpetuating wealth for shareholders. That’s a
                                 mouthful, but it renders the corporate form valuable. Risk is the big,
                                 hairy problem in business; it generates cost. Risk in the biological
                                 realm has much to do with entropy, i.e., death and extinction.
                                 Strangely enough, one contemporary approach in physics, the study
                                 of dissipative structures, addresses how complex, open systems can
 Consider how the FBI            dissipate or externalize entropy in some cases. In other words, it
makes a point to track           addresses how evolution in physical systems can be modeled.
                                 Biologists find this rather useful. So do corporate bodies; the study of
precise crime statistics
  throughout the US.             autopoiesis in law focuses on such complex, open systems. Math and
 Their annual reports            computer simulations used for researching evolutionary biology may
      create media               become quite useful for modeling how the corporate form develops
     headlines, but              and responds to particular conditions.
   strangely enough,
                                 Early protozoa eventually aggregated together into primitive multi-cell
 corporate crimes are
                                 parazoa, such as sponges… which biologists call "colonial
     specifically not
                                 organisms." The process of incorporating under a charter similarly
        reported.                aggregates business resources into an initial structure that resembles
                                 a sponge. In an odd twist of semantics, the first three or four hundred
Click here for a bigger image.
                                 years of corporate endeavor focused precisely on colonial activities,
                                 much like Nike and others still do today.

                                 Management consultants use taxonomy to categorize the complexity
                                 of corporate structures. So an H-form describes a "holding company,"
                                 like the early days of East India Company, and akin to a sponge. A
                                 more complex U-form describes a "top-down" structure, like Standard
                                 Oil before antitrust, and also akin to an invertebrate. An even more
                                 complex M-form describes the modern "transnational," such as Ford
                                 or Exxon – akin to a spoiled brat.

                                 The applicable analogies go on: metastasis, i.e. cancer, parallels the
                                 dynamics of franchising… corporate self-defense reflexes occur
                                 through a process of sublation… allometric scaling, or multi-
                                 dimensional encoding, parallels how global firms operate in multi-
                                 dimensional spaces simultaneously… bacteriophage as a means for
                                 asexual genetic transfer parallels how corporations exchange their
                                 "genetic" material: contracts, bylaws, patents, etc.


                                 1•2•3•4•5•6•7•8
A detailed list would be far too long. One of the few artifacts to defy
                                 known biology concerns how corporations can share vital
                                 components, but that is a bionic fairy tale for another day. In short, a
                                 qualitative (and perhaps quantitative) biological model emerges for
                                 describing the corporate form. I call this species/model Ceteri.

                                                                    ***

                                 Most all of this story is true, except the part about corporations
                                 becoming another sentient species. There’s no way that could
                                 possibly be true, unless one happens to believe in demons… Authors
                                 of the precursory corporate business plans seemed to have pegged
                                 their hopes and dreams on summoning a helpful spirit or two. The
                                 venerable US Supreme Court gave credence to this belief in a ruling
                                 that was declared without debate and has never since been
                                 challenged. Contemporary legal theory revisits this numinous theme,
                                 in hauntingly familiar echoes of old mythos. As far as the "science" of
                                 corporations-as-species goes, they present a relatively new sentience
                                 which is not quite artificial intelligence, per se, but more like unnatural
                                 intelligence.

                                 In a perverse way, it warms the heart to think of all those happy,
                                 suburban, god-fearing Americans rushing into their two-hour
                                 commute, SUVs jamming metro freeways as they race toward
                                 corporate office complexes, then toiling away for hours of grief in
                                 cubicle hell… in service of the likes of seductive Belial, powerful
                                 Asmodai, mighty Furfur, or even the curiously-named Gäap.

                                 Frankly, I’m kinda fond of demons. Cute little buggers. Who could
                                 resist a name like "Furfur"? I’d much rather learn to work with such a
                                 fiction, since the manipulation of corporate interests almost demands
                                 that kind of belief. It is perhaps more effective, more operative, taken
People must live with
                                 with a large grain of salt, than assuming an uninformed disbelief – à la
  two inevitabilities:
                                 Locke, who helped get us into this political nightmare, or his
death and taxes. Yet             intellectual heirs, who spew a curiously agnostic milieu of corporate
 corporations do not             socialism with religious fervor through the likes of corporately-
necessarily ever "die"           endowed NPR, PBS, etc.
 and, in many cases,
  they avoid paying              On the other hand, protesting in the streets, or in the legislatures,
        taxes.                   does little to slow a demon, and actually tends to feed their ephemeral
                                 maws; something called abulia forms a big part of corporate
Click here for a bigger image.   metabolism. Fortunately, more subtle means exist for bridling such
                                 beings: old fictions and religions inform us about conceits which the
                                 new fictions and religions belie.

                                 Corporations, like the demons of their simile, may behave like
                                 sentients, perhaps, but at about the sentience level of a spoiled brat.
                                 And, as anyone who’s ever served time as a sibling likely knows,
                                 knocking down an obnoxious, spoiled brat can feel quite satisfying
                                 and yet lead to huge "judicial" problems; but they can be caused to fall
                                 down nonetheless.

                                 Nothing is omnipotent, unless you believe so. But that’s an almost-
                                 completely-true story for another day.




                                 Many heartfelt thanks to Ann Walther for help with editing the draft.
                                 For more info and refs to many other excellent resources online, like
                                 rat haus and POCLAD, see the reviews on PXN’s website:
                                 http://famous.aspect.to/study/ceteri/


                                 1•2•3•4•5•6•7•8
[Beach01994] Edward Allen Beach: The Potencies of God(s):
                                 Schelling's Philosophy of Mythology SUNY, 01994, ISBN
                                 0791409732, 317 pages.
                                 [Brest01992] Paul Brest, Sanford Levinson: Processes of
                                 Constitutional Decisionmaking, Little Brown, 01992, ISBN
                                 0316107875, 1576 pages.
                                 [Flowers01995] Stephen Edred Flowers: Hermetic Magic: The
                                 Postmodern Magical Papyrus of Abaris, Weisner, 01995, ISBN
                                 0877288283, 291 pages.
                                 [French01972] Peter J French: John Dee: The World of an
                                 Elizabethan Magus, Ark, 01972, ISBN 074480079X, 243 pages.
                                 [Hegel01807] Georg W F Hegel: The Phenomenology of Mind,
                                 Harper, 01967 (01807), ISBN 0060904658, 814 pages.
                                 [Holland01995] John H Holland: Hidden Order, Addison Wesley,
                                 01995, ISBN 0201407930, 185 pages.
                                 [Lawson01993] Philip Lawson: The East India Company: A History,
                                 Longman, 01993, ISBN 0582073855, 188 pages.
                                 [Locke01690] John Locke: Two Treatises of Government, 01690.
                                 [Maturana01980] Humberto Maturana, Francisco Varela: Autopoiesis
                                 and Cognition, Reidel, 01980, ISBN 9027710155.
                                 [Mathers01904] S L MacGregor Mathers, Aleister Crowley: The
                                 Goetia, Weiser, 01997 (01904), ISBN 087728847X, 134 pages.
                                 [Mokhiber01999] Russell Mokhiber, Robert Weissman: Corporate
                                 Predators, Common Courage, 01999, ISBN 1567511589, 213 pages.
                                 [Morris01996] Jane Anne Morris: "Corporations for the Seventh
                                 Generation: Changing the Ground Rules", Rachel’s Environment &
                                 Health Weekly, #488, 04 Apr 01996.
                                 [Nathan02001] Paco Xander Nathan: "Chasing Egregors", Scarlet
                                 Letter, Apr 02001.
Click here for a bigger image.   [Ohmae02000] Kenichi Ohmae: The Invisible Continent, Harper,
                                 02000, ISBN 0060197536, 262 pages.
                                 [Page01941] Arthur W Page: The Bell Telephone System, Harper,
                                 01941, 248 pages.
                                 [Shaw01950] Archer H Shaw: The Lincoln Encyclopedia, Macmillan,
                                 01950, 395 pages.
                                 [Shumaker01972] Wayne Shumaker: The Occult Sciences in the
                                 Renaissance, Univ of California, 01972, ISBN 0520038401, 284
                                 pages.
                                 [Teubner01993] Gunther Teubner: Law As An Autopoietic System,
                                 Blackwell, 01993, ISBN 0631179763, 203 pages.
                                 [Webster01982] Charles Webster: From Paracelsus to Newton: Magic
                                 and the Making of Modern Science, Cambridge, 01982, ISBN
                                 0760700893, 107 pages.




                                 1•2•3•4•5•6•7•8



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The Corporate Body: Liber 118 U.S. 394

  • 1. The Corporate Body: Liber 118 U.S. 394 by Paco Xander Nathan I’d like to tell you an almost-completely-true story. Back in 1886, a strange thing occurred: an entirely new species came into being. A thing not entirely human was declared to hold practically all the rights of a human, or at least all the legal rights of personhood. Something relatively novel… something… fictional. Nonetheless, something capable of human qualities, such as the ability to speak, ownership of property, protection from racial discrimination, participation in the selection of candidates for political office, etc. Humans hardly acknowledge those qualities among species as intelligent as dolphins or gorillas, so this new species gained loads of respect early in its existence. Now, if you check with the average lawyer on the street, or at least the ones in the luxury SUVs driving down your street, they’ve probably never heard of what happened in 1886. Law schools in the US generally don’t delve into that sort of thing, since it’s not terribly important in practice. Even so, the case of 118 U.S. 394, pitting the County of Santa Clara against the Southern Pacific Railroad, set precedents which notable legal theorists consider to be the greatest th legal achievement of the 19 century. Once upon a time, Not long after the Civil War ended, a greedy railroad company pissed corporations in the US off a small local government while in the process of expanding control were not granted over the local economy. The two parties slammed into conflict – not personhood and they altogether unlike gunfighters in the Wild Wild West. However, in the had to exist under a case of Santa Clara County v. Southern Pacific Railroad (118 U.S. constant threat of 394), the railroad company pulled a few strings and pushed their punishments — grievances into federal court. There the justices ruled in favor of the specifically death and railroad, rendering an astonishingly bizarre judgment: that a taxes — if they did not corporation must be regarded as a legal person, since it represents obey the laws of the the property of natural persons and acts on their behalf. Voilá! A new land. species was created, by order of the government of the United States, science fiction publisher extraordinaire. Click here for a bigger image. This twisted legal judgment, in the sheep’s clothing of a mere semantic slight of hand, granted constitutional rights to all corporations based in the US, as means for their legal protection. The heyday of corporate trusts ensued, leading to J.P. Morgan, Standard Oil, and a whole lot more. Unfortunately, along with those rights came none of the typical obligations. For example, just about any person I’ve ever met must live with two inevitabilities: death and taxes. Yet corporations do not necessarily ever "die" and, in many cases, they avoid paying taxes. In another example, when a person takes a life or a large sum of money while committing a crime, they generally face indictment, conviction, imprisonment, parole, or even execution. Since a corporation lacks any physical body, it cannot be placed in prison; this was, in fact, one of the original reasons for creating corporate charters. 1•2•3•4•5•6•7•8 Contents | Marrow | Freezone | Detritus | Catacombs Sign up for our Announcements List Copyright© 2001 Signum Press. Please do not duplicate. This includes posting whole articles to email lists and web pages.
  • 2. Nevertheless, corporate bodies frequently make strategic business decisions that cost lives but render profit. The infamous "Ivey Report" at General Motors stands as one of the most dramatic recent examples of intentional manslaughter-for-profit. In that 1973 report, a GM engineer calculated that human casualties from fuel-fed fires cost the firm a mere $2.40 per vehicle, based on the cost of potential lawsuits. GM executives deemed this acceptable, as part of a cost-cutting initiative, then kept the report secret for 25 years, until they were caught lying about it in front of a federal judge. Rarely do these acts result in criminal charges. Some might argue that antitrust actions seem similar to "capital punishment" for offending corporations, but the rules of antitrust are murky at best, and rarely invoked. Instead, most white-collar crime gets pursued through civil actions, i.e. punished through fines, not convictions. Moreover, consider how the FBI makes a point to track precise crime statistics throughout the US. Their annual reports create media headlines, but strangely enough, corporate crimes are specifically not reported. Let’s take that point a step further. Based on a three strikes rule, some th "inner city youth" (see below: 14 Amendment) face serious prison time after subsequent convictions for possession of marijuana worth less than a good steak dinner for our friends driving the luxury SUVs. You can read about those stats in a CNN factoid. However, a corporate body can select a business strategy, knowing it will kill hundreds (in the case of GM with Ivey) or even thousands (in the case When a person takes of Union Carbide in Bhopal) of innocent people, earn immense profits a life or a large sum of by employing that strategy, and yet never face a single criminal money, they face charge. You might find a few token examples reported in the press, indictment, conviction, particularly the most blatant ones, but you won’t find statistics about imprisonment, parole, these crimes. Even the simple academic pursuit of studying corporate or even execution. crime appears to be one way for a young professor to be denied Since a corporation tenure, or worse. lacks any physical Once upon a time, corporations in the US were not granted body, it cannot be personhood and better yet they had to exist under a constant threat of placed in prison... punishments – specifically death and taxes – if they did not obey the Nevertheless, laws of the land. The United States Constitution of 1789 did not corporate bodies mention the word "corporation" within its text, and federal corporate frequently make law simply did not exist. Ostensibly, corporations were hated things in strategic business those days, having been the organizational structure for British decisions that cost colonies, and so they provided a "whipping boy" during the American lives but render profit. Revolution. One senses an air of protest against corporations in post-revolutionary America – against them gaining political power in Click here for a bigger particular. State legislatures held rigid control over the life and death image. (and taxes) of corporate ventures, and they flexed that control under the direct guidance of the populace. However, methinks the Lady Liberty doth protest too much. Consider the story of an English physician named John Locke, whose political theories had profound influences on the American Revolution. Dr Locke argued that corporate bodies represent the political will of their members, and are therefore a fairer and more dynamic structure in the long run than political systems run by hereditary nobility. Some might argue that American colonists were perhaps less upset about their overlords’ corporate practices than they were about not sharing in profits. The leader of the new US government was even called a president, a term previously used not in government, per se, but rather to honor regional executives of the East India Company, the very first th corporation "born" in London, England on the last day of the 16 century. 1•2•3•4•5•6•7•8
  • 3. By the third decade of the US Constitution, President Jefferson’s spending habits had pulled his young nation into severe crises. Corporate interests reemerged in New England states – where they had previously been disdained – justified around the time of the War of 1812 as necessary means for feeding and clothing the populace. Within a few years, the US Supreme Court rendered its 1819 landmark decision in Dartmouth College v. Woodward (17 U.S. 518), citing the "contract obligation clause" of the US Constitution – and you can bet that those SOBs in their luxury SUVs will have heard about it! That decision placed charters of existing corporations outside the jurisdiction of states which had chartered them, establishing the first federal corporate law, and effectively nullifying the states’ rights to keep corporate powers in check. So much for death and taxes… Arguably, the point of even having a legislature was pretty well toast by 1819, as far as providing any real "checks and balances" to contest the will of corporate interests. The story becomes even more tangled. One outcome of 17 U.S. 518 was an inter-regional political dispute that became known as "States Rights." Northern political interests distrusted the Southern economic model as not being able to provide sufficient expansion for their corporate endeavors. Southern political interests distrusted the Northern influence on federal courts for determining how to enforce corporate law – which sounds surprisingly like grassroots arguments against the WTO today. Conflict ensued, popularly known as the US Civil War, and popularly regarded as having been fought over the issue of slavery. Not to wax conspiratorial, but one should not believe the history books issued in public schools (i.e., those produced and subsidized by Nothing is corporate publishers) without asking a few questions. For instance, omnipotent, unless what did the US President at the time actually say about slavery and you believe so. civil warfare? What you might not have read, without digging deeply into archives, was that Abraham Lincoln remarked bitterly during the Click here for a bigger close of the Civil War about how the conflict had been fought primarily image. on behalf of corporations. It can be argued that after 1865, the executive branch of the US government retained almost no further means for contesting the will of corporate interests. th One immediate outcome of the war was passage of the 14 Amendment. On the surface it appeared to provide "equal protection under the law," effectively outlawing practices such as slavery. However, "equal protection" (a.k.a. "civil rights") for African Americans th did not even begin to emerge until nearly a century after the 14 Amendment was passed. According to Supreme Court Justice Hugo th Black, in the fifty years following the 14 Amendment, less than 0.5% of the case law related to that amendment sought to protect the rights of African Americans, while over 50% sought to extend the rights of corporations. That’s a 100:1 ratio… not good odds, unless your ancestors had bylaws instead of DNA. 1•2•3•4•5•6•7•8 Contents | Marrow | Freezone | Detritus | Catacombs Sign up for our Announcements List Copyright© 2001 Signum Press. Please do not duplicate. This includes posting whole articles to email lists and web pages. Email editrix@signumpress.com with inquiries.
  • 4. Another ironic point, which the history textbooks might fail to elaborate, was that Justice Black made his observations not long after the US was about to engage in a second civil war. Socialists, communists, and populists of many flavors rose up in pockets of armed resistance against corporate interests during the Great Depression. The US Supreme Court averted civil warfare through a questionable move in 1937. In that decision, now called "The Switch In Time That Saved Nine," corporations adopted enough tenets of socialism to avoid civil war: allegedly, they gave employees the right to a 40-hour work week along with some other bennies, and then invented a new tradition called "corporate culture." Though it would take another sixty years to prove, in return we lost the right to a judiciary that can successfully contest the will of corporate interests, except in a few showcase incidents. I could go on about the political and legal fallout of 118 U.S. 394, right up to another landmark year of 1995, but you can read about that elsewhere. Something strange happened in 1886 – something pivotal that rejected a century of major events in US history which had contested the corporate form, and projected ahead into a century of governmental drift until almost no human collective could, through government alone, contradict these new and different beings. *** Setting differences aside for a moment, consider how might a biologist describe this new species? As luck would have it, some legal theorists who analyze corporate law actually have applied techniques borrowed from biology. Gunther Teubner, in particular, built on work by social Not to wax theorist Niklaus Luhmann to apply autopoiesis – a biological theory conspiratorial, but used to describe how a system self-organizes. Dr Luhmann suggested one should not that a group of persons tends to exhibit a "group individual" or believe the history zeitgeist, which then perpetuates on behalf of that group, to an extent. books issued in public Dr Teubner also examined how some corporate law develops for no schools (i.e., those observable reason other than to perpetuate more corporate law (and produced and by the way, he’s quite a fan of 118 U.S. 394)… in short, observing the subsidized by zeitgeist at work. corporate publishers) Luhmann’s "group individual" corresponds closely to the "legal person" without asking a few defined for a corporation. Either notion provides a clear example of questions. what is esoterically described as evocation, or in other words, the process of summoning a spirit. Zeitgeist, spirit, demon, djinn, golem, Click here for a bigger image. servitor, tulpa – take your pick, depending on the root culture. Each term describes suprahuman sapience and immortal powers (read: freed from either death or taxes) followed by cautionary tales scattered throughout human cultural mythos. Perhaps we could learn a thing or two from the wisdom of the ages. Actually, the notion of evocation runs quite true to the original cast of corporate form. Alchemical advisors to the British Crown during the th 16 century appear to have set the stage for creating the first corporations. Their esoteric work focused on a place called the Royal Exchange of London, with the intent of establishing (read: evoking) a contemporary fiction called the "Brytish Impire." Much to the contrary, as of the 1560s the Brits were perpetually broke, let alone anywhere near to becoming an "empire." Nonetheless, certain royal advisors needed cash to be able to keep buying lots of occult books, among other things. Up popped a new belief based on the glory of England, rallying ’round their Virgin Queen, a new hope based upon a fiction – the "Brytish Impire" – printed in manuscripts that were adorned with engravings of the Empress surrounded by alchemical symbols. 1•2•3•4•5•6•7•8
  • 5. Keep in mind that the intelligentsia of the time – in their post-Catholic, pre-Scientific mezzanine – held quite a lot of regard for bodies: the body politic, a body of law, the body of the church, celestial bodies, etc. Artwork of that time focused on the glory of the human body, even when depicting gods. In another example, most of the better-known astronomers of the Renaissance earned their living as physicians, not much unlike our dear Dr Locke a few generations later. Cut a patient open to examine the placement of bodily organs, in microcosm, then project that to behold – in macrocosm – the placement of celestial bodies. Quod est superius est secut quod est inferius: as above, so below. Much of the intelligentsia of the time (e.g., in Britain at the Royal Society) held considerable regard for a worldview known as Hermeticism, a Hellenistic Egyptian syncretism which is just about the same as alchemy. Envision a fading echo of wisdom nurtured in the library at Alexandria, prior to when Christians burnt it down and murdered the head librarian. Corporations may behave like sentients, Lost throughout the Dark Ages (at least, lost from anywhere north of Tangiers and west of Istanbul), the literary body of Hermeticism but at about the resurfaced in Europe through the efforts of the infamous deMedici sentience level of a family, the dynasty immortalized by Machiavelli. In their quest for spoiled brat. And, as power, the deMedici family funded translations of classical works, and anyone who’s ever they sought esoteric secrets from imperial power-mongers of the served time as a classical world. Revisiting classical texts, which the Roman Catholic sibling likely knows, Church had tried to obliterate, seemed like a fairly good strategy. knocking down an obnoxious, spoiled This actually worked. Arguably, the translation efforts helped spark brat can feel quite much of the Renaissance itself. Looking back to the stories of satisfying and yet lead classical times caused a few notable Italian thinkers to ponder a bit to huge "judicial" differently about their present, thereby manifesting a vastly renewed problems; but they look at the future: tail wagging the dog, the rest of Europe followed. can be caused to fall Those texts and subsequent esoteric philosophy also informed the down nonetheless. establishment of the British Empire, whose military-industrial complex, with power based on corporate organization, successfully contested Click here for a bigger image. the Roman Catholic Church and its allies. There is a pop culture notion of alchemy that seems to convey some Disney Corp cartoon scene of costumed mice attempting in vain to transmute lead into gold. In contrast, the more esoteric focus of Hermeticism (with texts circulated in Latin, of course) placed considerable emphasis on embodying spiritual essence, manifesting it into flesh… rather akin to evocation, mind you. Building things simply brought one "closer to god," joining in a process of Creation. 1•2•3•4•5•6•7•8 Contents | Marrow | Freezone | Detritus | Catacombs Sign up for our Announcements List Copyright© 2001 Signum Press. Please do not duplicate. This includes posting whole articles to email lists and web pages. Email editrix@signumpress.com with inquiries.
  • 6. Now if you take a look at the twenty-three or so canonical operations from Renaissance-era alchemy – transmuting being only one – you’ll find incorporatus (Latin for "embodiment", and the root for "incorporation") as a practice for aggregating component parts into a corpus (Latin for "body"). What a no-brainer there. I could go into detail, but one can read about that elsewhere. We were talking about biology, not demonology… *** I first stumbled on the phrase corporate metabolism in reference to Swiss management consultants trying to describe how corporations adapt to new flows of information. Their obvious analogy equates information flows inside a corporate structure with energy flows inside living cells – muddied, problematic thinking, given a more realistic view of "information," but a potentially useful analogy. If one considers how corporate form can be compared with a biological system, what do both share in common? Consider how the most basic tenet of corporate strategy, creating a "barrier to entry" to block competition, parallels what a cell wall provides for the most primitive critters, the single-cell protozoa. Three necessary conditions for corporate organization – (1) chartered company, (2) limited liability, and (3) joint stock – provide means for externalizing risk while perpetuating wealth for shareholders. That’s a mouthful, but it renders the corporate form valuable. Risk is the big, hairy problem in business; it generates cost. Risk in the biological realm has much to do with entropy, i.e., death and extinction. Strangely enough, one contemporary approach in physics, the study of dissipative structures, addresses how complex, open systems can Consider how the FBI dissipate or externalize entropy in some cases. In other words, it makes a point to track addresses how evolution in physical systems can be modeled. Biologists find this rather useful. So do corporate bodies; the study of precise crime statistics throughout the US. autopoiesis in law focuses on such complex, open systems. Math and Their annual reports computer simulations used for researching evolutionary biology may create media become quite useful for modeling how the corporate form develops headlines, but and responds to particular conditions. strangely enough, Early protozoa eventually aggregated together into primitive multi-cell corporate crimes are parazoa, such as sponges… which biologists call "colonial specifically not organisms." The process of incorporating under a charter similarly reported. aggregates business resources into an initial structure that resembles a sponge. In an odd twist of semantics, the first three or four hundred Click here for a bigger image. years of corporate endeavor focused precisely on colonial activities, much like Nike and others still do today. Management consultants use taxonomy to categorize the complexity of corporate structures. So an H-form describes a "holding company," like the early days of East India Company, and akin to a sponge. A more complex U-form describes a "top-down" structure, like Standard Oil before antitrust, and also akin to an invertebrate. An even more complex M-form describes the modern "transnational," such as Ford or Exxon – akin to a spoiled brat. The applicable analogies go on: metastasis, i.e. cancer, parallels the dynamics of franchising… corporate self-defense reflexes occur through a process of sublation… allometric scaling, or multi- dimensional encoding, parallels how global firms operate in multi- dimensional spaces simultaneously… bacteriophage as a means for asexual genetic transfer parallels how corporations exchange their "genetic" material: contracts, bylaws, patents, etc. 1•2•3•4•5•6•7•8
  • 7. A detailed list would be far too long. One of the few artifacts to defy known biology concerns how corporations can share vital components, but that is a bionic fairy tale for another day. In short, a qualitative (and perhaps quantitative) biological model emerges for describing the corporate form. I call this species/model Ceteri. *** Most all of this story is true, except the part about corporations becoming another sentient species. There’s no way that could possibly be true, unless one happens to believe in demons… Authors of the precursory corporate business plans seemed to have pegged their hopes and dreams on summoning a helpful spirit or two. The venerable US Supreme Court gave credence to this belief in a ruling that was declared without debate and has never since been challenged. Contemporary legal theory revisits this numinous theme, in hauntingly familiar echoes of old mythos. As far as the "science" of corporations-as-species goes, they present a relatively new sentience which is not quite artificial intelligence, per se, but more like unnatural intelligence. In a perverse way, it warms the heart to think of all those happy, suburban, god-fearing Americans rushing into their two-hour commute, SUVs jamming metro freeways as they race toward corporate office complexes, then toiling away for hours of grief in cubicle hell… in service of the likes of seductive Belial, powerful Asmodai, mighty Furfur, or even the curiously-named Gäap. Frankly, I’m kinda fond of demons. Cute little buggers. Who could resist a name like "Furfur"? I’d much rather learn to work with such a fiction, since the manipulation of corporate interests almost demands that kind of belief. It is perhaps more effective, more operative, taken People must live with with a large grain of salt, than assuming an uninformed disbelief – à la two inevitabilities: Locke, who helped get us into this political nightmare, or his death and taxes. Yet intellectual heirs, who spew a curiously agnostic milieu of corporate corporations do not socialism with religious fervor through the likes of corporately- necessarily ever "die" endowed NPR, PBS, etc. and, in many cases, they avoid paying On the other hand, protesting in the streets, or in the legislatures, taxes. does little to slow a demon, and actually tends to feed their ephemeral maws; something called abulia forms a big part of corporate Click here for a bigger image. metabolism. Fortunately, more subtle means exist for bridling such beings: old fictions and religions inform us about conceits which the new fictions and religions belie. Corporations, like the demons of their simile, may behave like sentients, perhaps, but at about the sentience level of a spoiled brat. And, as anyone who’s ever served time as a sibling likely knows, knocking down an obnoxious, spoiled brat can feel quite satisfying and yet lead to huge "judicial" problems; but they can be caused to fall down nonetheless. Nothing is omnipotent, unless you believe so. But that’s an almost- completely-true story for another day. Many heartfelt thanks to Ann Walther for help with editing the draft. For more info and refs to many other excellent resources online, like rat haus and POCLAD, see the reviews on PXN’s website: http://famous.aspect.to/study/ceteri/ 1•2•3•4•5•6•7•8
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