Gangs of America

Book Review: Gangs of America by Ted Nace

Dave Kinnear1-On Leadership, Book Reviews

I found this to be a fascinating book, well researched and documented. Mr. Nace traces the history of the American Corporations from the earliest years of our union. It would be easy to draw the conclusion that Mr. Nace is anti-business, but that is not how I read his position. Instead, what he is suggesting is that we have created a monster with our catering to the “personhood” of corporations at the expense of focused small businesses.

The premise is that corporations have now gained more rights than human persons have in our society. Along with longevity – corporations need not die – corporations have gained other “rights” not available to people. According to Mr. Nace, corporations enjoy a long list of such rights: limited liability for shareholders, perpetual existence, virtual location, indefinite entity or “shape shifting,” minimum standard of treatment, national treatment and compensation for regulatory takings (such as NAFTA rulings, etc.). In addition, we have allowed corporations to enjoy rights equal to those of people, such as: Equal protection, due process, freedom from unreasonable search, jury trial in a criminal case, compensation for government takings, freedom from double jeopardy, jury trial in a civil case, commercial speech, political speech, Negative speech (the right to abstain from association with the speech of others).

Armed with these rights and deep pockets, many corporations are formidable opponents in competing with people for resources, political access, and redress of real or perceived injustices. Nace argues that without restriction of companies through the Corporate Charter (articles of incorporation), we have turned a monster loose on society which we are now almost powerless to contain. Corporations have lives of their own and little to fear from governments – they simply do business elsewhere should they find the environment undesirable. The consequences of this evolved capitalist model are that we have a concentration of power and a polarization of wealth. The most insidious result of this creation is that democracy is no longer in the hands of the people; it is in the hands of large corporations and big government which is now a big business. They have no incentive to relinquish their power.

Mr. Nace does not recommend radical solutions to this situation. Instead he advocates the “more hopeful scenario in which the pendulum swings toward a softer variant of corporate capitalism. Under this course, the corporation as we know it does not radically change, but society gets better at pushing back against its influence and excesses. Environmental regulation becomes stricter. Wealth taxes blunt the worst extremes of wealth and poverty. Antitrust regulations break up the largest corporate empires. Restrictions on corporate political activity revitalize democratic institutions.”

Regardless of your position on business in general or big business in particular, this book will provide food for thought and you will gain knowledge of how we have come to be in this place.

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