I think the problem is corporations. In fact, I think corporations have f-cked up capitalism.

The American people have good instincts. In August 2024, 81% percent of all voters, including a majority of Republicans, agreed with the statement “I am concerned that big corporations and businesses are becoming too powerful” (only 18% of voters outright disagreed). Regionally, that argument was strongest with voters in the Rust Belt region.

More than instinct, this point of view is so deeply rooted, it dates back to the colonial era.

From the 1787 Constitutional Convention all the way through the Civil War, Americans refused to grant corporations any power.

The Civil War left the American people drained and exhausted and weak, and corporations seized that moment to rebel. By the 1880s, the old corporate system was near collapse.

By 1900 the corporate revolution had succeeded in dismantling the old system and replacing it with a new, revolutionary form of the corporation. For the first time in history, corporations became independent, global entities that respected no flag, pledged no allegiance, and took action without fear of consequences. Corporations were untouchable.

Today, I think it pays to remember America's old corporate system. To that end, here are a few highlights of that old, corporate system.

After the Constitutional Convention, the system that emerged for chartering corporations flipped the English system upside down. Instead of the monarch using corporate charters to grant special monopoly privileges to men of wealth, the American system placed the chartering function in the hands of the various state legislatures (NOT the federal government) and placed an emphasis on restrictions and accountability measures, rather than on privileges. State constitutions and statutes reinforced the restrictive stance toward corporations.

State's corporate charters tended to be granted sparingly, in keeping with the widespread belief that the potential for corporations to accumulate power rendered them inherently dangerous to democracy. Most corporate charters were reserved for quasi-public projects like toll roads, bridges, canals, banks, and other sorts of infrastructure. Charters were not issued in situations where non-chartered businesses already operated. In other words, corporations were not allowed to compete with businesses.

The old corporate charter system took direct aim at the tendency of the corporation to accumulate wealth and power over time by placing restrictions on the term of each charter. Terms of twenty to thirty years were typical for most corporations, after which time the directors would have to seek a new charter.

State legislatures explicitly rejected limited liability. For example, in 1822, Massachusetts passed a law that read, “Every person who shall become a member of any manufacturing company … shall be liable, in his individual capacity, for all debts contracted during the time of his continuing a member of such corporation.” In fact, most states used a “double liability” formula, which made shareholders liable for twice the value of their investment in the company. Some states required that shareholders in manufacturing and utilities companies be specifically liable for employee wages.

Corporations were prohibited from engaging in any activities not specified in its charter.

Under the legal principle known as ultra vires, any contract that dealt with activities beyond a corporation’s charter would not be enforced by the courts.

Corporations could not own stock in other corporations.

Most states placed limitations on the amount of capital a corporation could raise.

Most corporations were not allowed to operate outside their home state, and in some cases outside of their home county.

Corporations were typically forbidden to own property not directly needed for their authorized activities.

Anti-corporate sentiment enabled state attorneys general to wield the stick of charter revocation, the equivalent of a death penalty for scofflaw corporations or for corporations that did not live up to the performance requirements in their charters.

My point in offering this review is kind of simple. I think it’s time to start limiting corporations again. While we, the people move forward, its time to send corporations back where they belong. If it were up to me, corporations would be constitutionally illegal.

Now, imagine our country today, if we had maintained our old corporate charter system.

If that system was still in place, there would be thousands of grocery chains instead of Walmart, thousands of tech companies, internet providers, twitters, facebooks, social media companies and, dozens of car manufacturers, etc. Such vigorous competition would have kept prices low, super-charged productivity and innovation, eliminated waste and maybe, even found a cure for cancer.