Corporatism

From 1895 onward, industry underwent major reorganization that had long term impacts on the structure of businesses. Smaller firms began to consolidate into giant firms with a large market share. These mergers involved mass producers of homogeneous goods that exploited efficiencies of volume production.

As businesses grew larger, new bureaucratic hierarchies were necessary. Various levels of managers were established, clear lines of authority were devised, and formal rules were created to govern the company's operations. Corporatism was born.

At first, corporations had to apply to a state legislature for a charter, which restricted the scope of the company's operations, limited the amount of investment, and even specified how long the charter would be in effect.

But as the pace of economic activity quickened, it proved cumbersome for legislatures to grant individual charters. As a result, state legislatures adopted general incorporation acts which allowed any business to incorporate and removed limits on capitalization.

Corporate Personhood

Corporations as we know them came to being in Britain with an 1844 Act allowing them to define their own purpose. The power to control them thus passed from the government to the courts. In 1855, shareholders were awarded limited liability: their personal assets were protected from the consequences of their corporate behaviour.

In 1886 a landmark decision by a US court recognized the corporation as a 'natural person' under law. The 14th amendment to the Constitution: 'no state shall deprive any person of life, liberty or property' -- adopted to protect emancipated slaves in the hostile South -- was used to defend corporations and strike down regulations.

StreetCar Conspiracy

Ironically, while GM was mobilizing the Third Reich, the company was also leading a criminal conspiracy to monopolistically undermine mass transit in dozens of American cities that would help addict the United States to oil.

In 1922, according to GM's own files, a specialized unit within the corporation was charged, among other things, with the task of replacing America's electric railways with cars, trucks and buses.

At the time, 90 percent of all trips were by rail, chiefly electric rail; only one in 10 Americans owned an automobile.

Virtually every city and town in America of more than 2,500 people had its own electric rail system.

GM, for decades, was the nation's largest shipper of freight over railroads, which controlled some of America's most extensive railways. By wielding freight traffic as a club, GM persuaded railroads to abandon their electric rail subsidiaries.