If businesses can't pay a living wage, they should get the corporate death penalty. 

Doing business in America – and pretty much every other developed country in the world – is a privilege, not a right.

In order to do business, you, or you and a group of participants, must petition a Secretary of State for a business license. 

If your petition is granted, you will be given to set of privileges ranging from the ability to deduct from your income taxes the costs of your meals (if you discuss business), to a whole variety of special tax breaks, incentives, and immunities from prosecution for things that, had you done them as an individual, you might otherwise go to prison for.

When we set up this country more than 200 years ago, we established some of these privileges, and associated with them some pretty heavy responsibilities.

Up until the 1890s, a corporation couldn’t last more than 40 years in any state – which prevented them from being used as a tool to accumulate massive and multigenerational wealth. A corporation had to behave in the public interest, and when they weren’t, thousands of them every year were given the corporate death penalty, their assets dissolved and their stockholders losing everything (but nothing more than) they had invested.

Over the years, as the Supreme Court has given more and more power to wealthy individuals and corporations, these responsibilities receded so far into the background that in one state, Delaware, your articles of incorporation can be a single sentence stating that you intend to “Do whatever is legal in the state of Delaware.” Which is probably why more than half of all the companies listed on the New York Stock Exchange are Delaware corporations.

The reason we originally allowed businesses to do business in this country was that some benefit would come to society from it. But since the era of New Deal economics was replaced by Reaganomics, the principal rationalization we use to give limitations of liability and privileges to corporations and their masters has changed from, “What is best for society?” to, “How can somebody best get rich quick?”

This is a perversion of the entire concept of why nations allowed people and corporations to do business, and why we facilitate that activity by providing at public expense: stable currencies and a stable banking system; predictable and fair court systems; transportation, electrical, water, septic, and communications infrastructure; a criminal justice system to enforce the rules of the game of business; and a workforce educated at the public expense and protected with a public pension called Social Security. We do all these things so the business will provide some good to the public while, in the meantime, enriching its owners.

But a new business model has emerged in the United States. Companies still get the privileges, but they no longer have to conduct themselves in ways that inure a net positive to the public.

Companies are now free to demand not just huge welfare payments, tax breaks, and subsidies, but can actually play one state off against another in a competition for which state this most willing to transfer the most dollars from the taxpaying individual people to the corporations and their billionaire CEOs. Similarly, corporations routinely use “Right To Work For Less” laws empowered by the Taft-Hartley Act to pit workers in high-wage states against workers in low-wage states, producing a national race to the bottom.

Boeing, for example, is participating in both of these practices right now, having just taken billions from Washington State and now playing their workers against desperate workers in old Confederate states. Senator Bernie Sanders has recommended that when States participate in letting corporations play states off against each other, both states should lose federal highway funds.

That, or any other remedy, is pretty unlikely as America continues to race from being one of the world’s wealthiest nations pre-Reagan, to a post-Reagan dystopia; the first modern, fully developed, industrialized nation to actually de-industrialize and move in the direction from First World status toward Third World status as a result of 32 years of Reaganomics.

Finally, a particularly pernicious form of this new business model has emerged, in part out of the radical restructuring of welfare systems in the 1990s led by Newt Gingrich and Bill Clinton. 

Because welfare reform in the 1990s tide the ability to receive welfare to having to work,  low-wage employers discovered that as long as they kept their employees’ pay below the poverty level, you and I, through our tax dollars, would pick up the rest of their employees cost-of-living through food stamps, Medicare, etc. The result is higher taxes for us, and billions in additional money for the CEOs and stockholders of America’s largest companies.

This is not how business should be done in America. If a company refuses to pay – or, their business model is so bad, that they can’t pay – at least a living wage, they should not receive the privilege of doing business in this country.

Thom Hartmann is an author and nationally syndicated daily talk show host. His newest book is The Last Hours of Humanity. 

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