The short version goes like this:
Once upon a time there was a king. He wanted to get richer. He used charters to divide his lands into provinces run by lords.
The charters allowed the king to retain ownership of his lands, and require the lords make regular payments to the king and protect the king's land.
The charters worked quite well for the king and his lords; they became wealthier. Other kings followed suit, and they became richer, too. But suffering increased for serfs. Before charters, they only had to make kings rich. Now they were forced to make kings and lords rich.
Serfs complained. They sought help from the courts, but found no justice. The first order of business for “equity courts” was to protect kings’ charters. Common citizen’s concerns were secondary.
After centuries of oppression, people revolted and created democratic governments. Kings’ charters were nullified. In the US, authority over charters was given to each state.
Initially, the states took charters seriously. They specified what corporations were allowed to do, and required corporations to serve the general welfare.
But the states did not create new equity codes to enforce their people-centered charters. Instead, they deferred to British equity code, which was heavily biased in favor of the wealthy few. Consequently, state efforts to regulate corporations were consistently undermined by the courts.
Eventually the states gave up. They allowed corporations to create charters that emphasized shareholders and ignored the interests of common citizens.
After more than a century of growth in corporate power, the US was crippled by the Great Depression. A massive effort to reduce corporate power was launched by FDR. Scores of liberal laws were written. More importantly, they were enforced by FDR’s eight Supreme Court appointees. An era of widespread prosperity was launched, and it lasted for thirty years.
But FDR’s Court appointees were gradually replaced by conservatives. Eisenhower had two appointments, and Nixon added four more. The balance of power on the Court radically shifted in favor of corporations. Since Nixon, the Court has consistently ruled in favor of corporations, culminating in recent decisions such as Citizens United and WalMart.
History teaches us that the road to serfdom is ultimately paved in conservative legal code; code that places the interests of the wealthy few above the interests of the general welfare.
There have been scores of people’s revolutions. They have nullified corporate charters, passed sweeping laws governing corporations, and appointed liberal judges. But such measures were never enough.
The essential ingredient is a liberal equity code that consistently places the interests of the many over the interests of the few. Only then can we reverse centuries of legal precedent favoring the wealthy few, and hope to enjoy centuries of prosperity for we the people.