Recent debates on “populism”, “pluralism”, and “democracy” tend to offer a monochromatically bleak picture. Prominent theorists of populism such as Jan-Werner Müller, Nadia Urbinati, and Yascha Mounk have filled bookshelves with sermons about populists’ opposition to pluralistic institutions, democratic norms, liberal sensibilities, and constitutional safeguards. Typifying populism as an “exclusionary form of identity politics”, for instance, Müller has claimed that populists adhere to a “monistic vision of the people” as a perfectly unified bloc, pitted against its enemies and hostile to any intermediary institution between leader, individual, and state. Populists, Nadia Urbinati argues analogously, condemn “intermediary institutions like parties and parliaments”, promote “personalistic forms of representation”, and “call for strong executive power”. Jason Frank critically summarizes this literature with the claim that such a populism is “directed against the false and deadening mediation of the constitutional state … in favor of the enlivening immediacy of popular and oppositional identifications”–or what Carl Schmitt, proto-populist theoretician, termed “direct expression of democratic substance and power”. Instead of public assemblies, populists prefer unchecked executive power, mainly endorsed through plebiscitary instruments over deliberation in public assemblies. [1]
Such a diagnosis of populism’s opposition to intermediary bodies has also been applied to the nineteenth-century big bang of populist politics: the 1891 foundation of the American People’s Party, the first self-declared “populist” movement in modern history. Gathered in organizations such as the Greenbackers, the Farmers’ Alliances, the Grange, and, finally, the 1891 People’s Party, the American Populist movement is here cast as an example of a “naturalist democracy” composed of white settlers who expound a vision of “the people” as a geographically rooted community of producers opposed to the mediating activity of middlemen and merchants.
Most prominently, American Populism pitted itself against the most revolutionary mediator of the nineteenth century: the newly conceived capitalist business corporation. In the 1950s scholars such as Richard Hofstadter, Irwin Unger, and Oscar Handlin drew connections between “small p” populism’s opposition to the intermediary (a tendency they saw at work in the McCarthyite movement) with “big p” Populist rejections of the business corporation, focusing especially on its acquisition of corporate personality. In the late nineteenth century, corporations became increasingly prevalent in the banking and railroad sectors, two spheres classically castigated by agrarian radicals.
The connection between this anti-mediational ethos and anti-corporate feeling is not surprising. As purported proponents of settler communities of “natural individuals”, the farmers in the People’s Party objected to the existence of corporations precisely because of the forms of mediation they entailed, and how they constituted a violation of a “pre-representative” people. Corporations were an inevitable scourge on populism since they were units that could only achieve “concrete” agency through an act of abstraction (a charter that summons a group of individuals into an aggregate entity capable of acting in concert), and also since they mediated an individual’s relationship to the state and weakened the latter’s claim to exclusive sovereignty. If there are any bodies Populists opposed, it must have been corporate bodies existing besides the state.
The question here is whether contemporary theorists’ habit of juxtaposing populism and the intermediary does justice to the real nature of the late nineteenth-century Populist movement. In the 1880s, for instance, Populist thinkers eagerly deployed corporate bodies in their own visions of American statecraft when they sought recognition from states for their organizations (mainly co-operatives) qua corporations. This usage reflected an interesting ambiguity at the heart of Populism. Although historically wedded to a Jeffersonian individualism, it also saw the logistical possibilities offered by new corporate creatures. In the areas of co-operative farm organizing and legislative reform, Populists sought to recuperate elements of corporate organizing (including notions of corporate personality) as mediating organs between the state and the individual, while seeking to preserve democratic accountability.
Both of these solutions began with an initially pessimistic diagnosis: corporations were a scourge on the republic. As the future vice-presidential candidate Thomas E. Watson informed a group of Georgian farmers about the greatest danger facing the American polity:
In the tremendous oppressiveness of our System, the chief factor of cruelty, greed, corruption and robbery is the Corporation. … Whenever half a dozen men made up their minds to swindle somebody, they always went and incorporated themselves.
Like Norris, Watson thought that corporate personhood (the attribution of a distinct and largely unified legal status to corporations, including their ability to hold property separate from shareholders, managers, and directors) was nothing more than a veil for brigandage. In such a system, Watson claimed, individual actors could conceal their avaricious aims under a layer of abstraction, thereby escaping individual accountability. The corporation, Watson claimed, was “a convenient cloak for the rascality of the individual”: “his share in the profits has no limits save the amount of the profits; while his share of the losses is confined to the stock he subscribed for”, thereby “escaping individual odium”. (Watson was also a lawyer by training, and thus deemed himself qualified to speak on the matter.)
This made for an unjustifiable contrast with individual offenders, Watson claimed. “When Jones steals a horse”, he noted, “Jones must face the music. But when a corporation composed of Jones and thirty-nine other thieves steal a Railroad, the Corporation gets the money.” “The natural person”, Watson claimed, “takes his place in the community with the understanding that his status may be altered by the community at any time”. “A corporation”, however, “occupies a higher and better position than a natural person. The status of the latter may be changed by law; that of the former cannot.” Not only did the corporate form permit the pursuit of illegal aims and muddle the boundary between private and public law. It was also impossible to fight the corporation on its own terms, since “cussing the Corporation … doesn’t hurt Jones. It is like fighting a man’s coat while the man is a mile off.” [2]
For Watson, the fact that corporations had attained the status of persons was not only a legal aberration, or a perversion of republican principles. It was also a daring act of genetic erasure by which entities that owed their very existence to the state sought to cover up this dependency. “A corporation born into the world”, Watson noted, “is artificial and was created by law. It should have no greater rights than are acknowledged by those citizens who come into the world in the course of nature.” Subsequently, Watson made an unabashed call for the re-establishment of state supremacy over its unnatural corporate derivatives–“the state granted every one of the charters”, and “what the State gave, the State can take away.” [3]
Watson’s speech indicated the sweeping changes that had taken place in American corporate governance in the last decades of the nineteenth century. From the 1850s onwards, American lawyers and judges had steadily eased restrictions on corporate formation, whittling away at the strict oversight that characterized the post-Revolutionary and Jacksonian eras. Although this rarely involved granting corporations “natural” personhood–a development that would come to the fore after the Populist era–it implied a dramatic change in hierarchy among those who controlled corporate formation for entities such as railroads, oil companies, and later churches. As Katharina Jackson notes, prior to the so-called “free incorporation” regime, corporations were created on the initiative of the state, thereby privileging “government” over “society” in the process of corporate formation. [4]
From the 1850s onwards, this causality came to be reversed. Corporations were now able to gain legal privileges and concessions that allowed them to untangle themselves from the grip of the state. These privileges and concessions included granting them statutory rights such as legal immortality, attenuation of the rules governing the conduct of corporate executives, offers of limited liability to directors and shareholders in the event of bankruptcy, and subsidies and land leases to corporate contractors.
Courts quickly followed suit. In a series of landmark Supreme Court cases in the late 1800s, judges ruled that corporations were private entities (e.g. Trustees of Dartmouth College v. Woodward, 1819), that they were entitled to representation in courts and could hold property (Society for the Propagation of the Gospel in Foreign Parts v. Town of Pawlet, 1823), and that they enjoyed full constitutional rights as “citizens” in accordance with the Fourteenth Amendment, which granted freedmen the right to vote in several Southern states (Santa Clara County v. Southern Pacific Railroad Company, 1886). Such allowances, Chief Justice John Marshall stated in 1819, enabled “a corporation to manage its own affairs, and to hold property without the perplexing intricacies, the hazardous and endless necessity of perpetual conveyances for the purpose of transmitting it from hand to hand”, while, “by these means”, “a perpetual succession of individuals” became “capable of acting for the promotion of the particular object like one immortal being”. The most enduring consequence of this development was that corporations were now “conceived as being pre-State and pre-law natural persons”, spontaneously created by “the mere association of individuals” and not brought to life by governmental fiat. Although this story was reasonably self-congratulatory–corporations continued to rely heavily on state aid in order to function–it constituted a handy narrative for managers to justify corporate expansion. Most of all, it naturalized a process that was in fact intrinsically political.
Resistance was forthcoming, of course. American reformists responded by appealing to local governments, which had granted corporate personhood to businesses in the first place. In their view, states had betrayed their popular foundations when they mixed “natural” with “artificial” persons in civil life. “Of our fundamental law”, the Populist presidential candidate James B. Weaver claimed in his 1892 election pamphlet, “the individual is the only rendering which should be tolerated. Men and women–not corporations–are the glory of the state.” [5]
Artificiality was not only noxious on a societal level, however. Weaver also claimed that a state that turned itself into a corporate body, chiefly by issuing bonds and accepting the procurement of public debt, negated its primary bond with the propertied people. Public banks, for instance, turned the government into a “corporation [which] may be regarded as existing in perpetuity”, while those banks themselves had “grown to be … a very important part of the Government itself”. “Surely we should expect strong reasons to authorize”, he concluded, “the continuance and increase of such a gigantic manpower, with soulless existence, moving, acting and dealing in the walks of men”. [6] It was to this problem of how corporations acted as intermediary bodies between individual farmers, markets, and the state that Populism saw itself providing an answer.
Two issues were at stake here for Populist theorists. The first concerned the status of corporations as organizational forms. Could their logistical features–limited liability, managerial authority, legal personality–be recuperated, even though corporations themselves were regarded as unreliable as “soulless monsters”, unable to take oaths and form bonds? The second issue concerned the nature of the relationship between corporations and the state, and how the former’s existence affected the latter. Could corporate bodies count as valid bodies besides the state, potentially mediating and even splitting the latter’s sovereignty; and if yes, what exact role were states to fulfil? Both of these problematics became visible in the organizational sequences undergone by Populist organizations in the 1880s and 1890s: from society to state, from association to legislation, or, as they themselves put it, from “counter-monopoly” to state monopoly.
Since 1886 at least, figures in the orbit of the Midwestern Populist movement had sought to counter the corporate problem with greater institutional specificity. The Texas lawyer and autodidact economist Charles Macune, for instance, sought to construct a parallel system of distribution and circulation to the one set up by corporate actors, which allowed a group of wealthy conglomerates to control railroads, telegraphs, and capital stock. Macune was also seen as one of the prime theorists of the so-called “Alliance exchanges”, which offered farmers the possibility of stocking grain at convenient rates and bypassing large transportation hubs and extortionate freight costs.
Macune and other Populists’ ideal-typical vision of the Alliance was as a “business organization for business purposes”. As they saw it, the Alliance should stay out of party politics and focus instead on fighting corporate actors on their own terrain. The farmer’s main task, Macune thought, was to form his own “combinations”, preferably in co-operatives and brotherhoods that could sidestep railroads and banks and obtain better deals for products in Atlantic markets. This, again, could be achieved through Alliance exchanges in which farmers stocked grain, bought inexpensive equipment, and used cheaper transportation facilities. Macune here opposed the Alliance’s “agricultural collectivism” to the “fiduciary trusteeship” of corporate administrators, in which producers were separated from their product and absentee landlords could cull the fruits of their labour. [7] As the Midwestern Populist William Peffer put it, railroad companies had “united their forces years ago for the purpose of making money”, even as “their individual and local interests are separate and distinct from one another”. Farmers, he suggested, should do the same.
In this sense, the anti-corporate ethos of the Populists was deeply equivocal. Although they technically counted as trusts, Alliance exchanges could not serve as monopolistic cartels. Since corporations were “soulless”, they were unable to take oaths and were unreliable as political and economic agents. The Alliances, in turn, were “brotherhoods”–legal entities modelled as a “community of people linked by a common interest, religion, or trade”, more akin to trade unions and churches than business syndicates. Initiation into an Alliance, for example, was often a highly ritualized process, with members taking oaths in ceremonial settings to create a sense of cohesion beyond the merely contractual. Hybridity was in the genetic code of the Alliance.
At the same time, Alliances could not function as voluntarist clubs or secretive freemasonries. They remained “business organizations”, as Macune called them, and were encouraged to exploit the machineries of corporate forms in the face of competitors. These devices included legal personality, joint-stock companies, delegated appointees, and trusted stewardship. They also involved a certain degree of cartelization and monopoly in which farmers pooled resources to cut transaction costs and sidestep middlemen (e.g. railroads, banks, merchants). The inversion of corporate principles this implied can best be illustrated by citing a conversation between a lawyer and a Populist in the late 1880s, featured in a Texas journal:
Mary B. Lesesne of Llano County, Texas, an ardent supporter of the Farmers’ Alliance, had a discussion with a prominent lawyer about the organization’s business principles. The lawyer asked her, “What is the platform of the Farmers’ Alliances?” She responded, “They are opposed to monopolies.” To which the lawyer tellingly observed that the Alliances “are forming one of the grandest monopolies that the world ever saw.” Lesesne conceded the charge. “It may become a great monopoly,” she replied, “but we predict it will use its power wisely.” [8]
Lesesne’s ambition also expressed itself practically. Macune’s exchanges lobbied state legislatures to enact their charters and hand out lower capitalization rates. His first exchange was capitalized at $500 000, for instance, with each Alliance member contributing a $2 “Exchange assessment”. As noted by the historian Charles Postel, investments of this size also “reflected new thinking about the cooperative future”, in that the steady elimination of middlemen and the “match[ing] of the power of the corporation” required the “creation of even larger and more powerful combinations”. [9] Organizationally, such action yielded promising results. In March 1893, the North Carolina Populist Marion Butler engaged in a stand-off with Democratic legislators who sought to revoke the Alliance’s charter. In the Dakota Territory, the Territorial Alliance was incorporated as a joint-stock company, while several “Colored Farmers’ Alliances” applied for charters throughout the 1880s. By early 1887 the Alliance already counted no less than 200 000 members in over 3000 chartered sub-alliances, while the Black Populist organization would grow to 1.2 million members by 1892. [10]
American Populism’s co-operative moment tells us much about what might be awry with today’s automatic association between “populism” and “anti-pluralism”. In the late nineteenth century, Populist theorists expounded a vision of association and state centralization that remained thoroughly “pluralist” by contemporary standards. They accepted parliamentary representation, recognized the need for bureaucratic expansion, and affirmed the basic tripartite structure of US government. Although Populists advocated the democratization of some federal organs (visible, for example, in their proposals to make Supreme Court judges subject to popular recall) and occasionally toyed with notions of unicameral governance, they never questioned the legitimacy of checks and balances themselves. “I believe in law”, Watson stated during a tour of Georgia in 1892, and “I believe that when there is civil disturbance the peace should be preserved by an impartial magistracy, not by the armed belligerents on either side”. [11] Rather than seeking to curtail the power of legislatures in favour of presidential action, Populists believed that parliaments needed to regain the sovereignty they had ceded to private actors while at the same time allowing for the flourishing of intermediary bodies under their watch–a striking contrast to today’s populist stance. American Populists thereby pioneered a specific mode of “denaturalizing” the power relations buried in the corporate form. This tactic went beyond a mere rejection of corporate artificiality in favour of settler nostalgia, as has often been claimed by historians. [12]
The question of “corporations and democracy” has been a constant in debates about the relationship between pluralism and corporate personality, particularly in the context of the question of how the latter can be said to provide legitimating cover for entrenched economic interests. Despite the undeniable strangeness of the corporate form, corporations have survived as some of late capitalism’s most prominent actors, now bringing a large chunk of the world economy under their supervision. Grietje Baars has drawn attention to the corporation as capitalism’s “masterpiece of legal technology” from “city-states and colonial times to the present multinational” age. “The symbiosis between law and capital” exemplified by the corporation, she claims, has become ever more pertinent in the context of ongoing debates about corporate accountability (Elizabeth Warren), campaign finance (Citizens United v. Federal Election Commission, 2010), and directorial and managerial prerogative, and has thrown up questions about how radicals should position themselves vis-à-vis the corporate form.
American Populism was no species of Marxism–despite the ultimate political destinations of some of its members, most famously Eugene V. Debs. What the Populist debate on corporate personality does reveal, however, is how deeply this debate was intertwined with a debate about the social power of law, and how far we have digressed from the vitality of such populist critiques. Rather than adopting an identity-based, descriptive vision of representation, Populists insisted on the necessary separation between the people and its agents through the creation of intermediary bodies in which interest-aggregation could take place. Although Populism in no way offered a unique answer to corporate discipline, their plan does stand in striking contrast to current accounts of populism as a simple “revolt against intermediary bodies”. [13] Rather than a blunt preference for direct democracy, nineteenth-century American populism offers a candid assessment of the promises of maximalism and the intermediary, in the spheres of economics and politics alike.
How much has been lost in contemporary discussions of populism and intermediary bodies can again be gauged by looking at some mid-century Marxist debates. The Weimar scholar Franz Neumann diagnosed the dangerous effects of corporate personality on democratic life quite acutely in Behemoth, his 1941 book on the Nazi state. In the opening section of this book, Neumann discussed the curious recuperation of Otto von Gierke’s theory of “natural personality” in the corporate arrangements of the Nazi state. As Neumann noted, once the doctrine of corporate personality reduced the state “to just another social agency”, “deprived of its supreme coercive power”, only “a compact among the dominant independent social bodies within the community [was] able to offer concrete satisfaction to the common interests”. Without an overarching “consensus on ends” in German society, and by virtue of “the fact that society [was] still antagonistic”, liberal pluralism would inevitably “break down sooner or later”, with the “various groups paralyz[ing] and neutraliz[ing] one another”. Neumann saw that instead of offering room for free association, the naturalization of group life implicit in Gierke’s corporate form merely served the interests of society’s predatory powers. “The concept of the legal person”, Neumann claimed, remained simply “the economic mask of the property relationship”, just as “the abstract equality of the partners to a contract conceal[ed] their economic inequality”, obfuscating “the fact that social groups and individuals rule over others”. [14]
In the late nineteenth century, Neumann’s lessons were not lost on the likes of Macune and other Populists, who recognized the doctrine of corporate personality for what it was: economic power hidden under the mask of free association. Unfortunately, the same cannot be said of contemporary populist theory.
[1] See Nadia Urbinati, “Antiestablishment”, in Carlos de la Torre (ed), The Routledge Handbook of Global Populism (London: Routledge, 2018), 46; Jan-Werner Müller, “‘The People Must be Extracted from Within the People’: Reflections on Populism”, 21 (2014) Constellations 482; Jan-Werner Müller, What is Populism? (Philadelphia: University of Pennsylvania Press, 2016); Paul Taggart, “Populism and the Pathology of Representative Politics”, in Yves Mény and Yves Surel (eds), Democracies and the Populist Challenge (London: Palgrave Macmillan, 2002), 62.
[2] Thomas E. Watson, “The Dartmouth College Decision”, in Thomas E. Watson, Sketches: Historical, Literary, Biographical, Economic, Etc. (Thomson, GA: Jeffersonian Publishing Company, 1916), 200, 223, 307.
[3] Watson, “The Dartmouth College Decision”, 200.
[4] See, e.g., William Novak and Naomi R. Lamoreaux, Corporations and American Democracy (Cambridge: Harvard University Press, 2018); Katharine V. Jackson, “Towards a Stakeholder-Shareholder Theory of Corporate Governance: A Comparative Analysis”, 7 (2011) Hastings Business Law Journal 309; Philip Pettit, “Two Fallacies About Corporations”, in Subramanian Rangan (ed), Performance and Progress: Essays on Capitalism, Business, and Society (Oxford: Oxford University Press, 2015), 379; Ewald Engelen, “Corporate Governance, Property and Democracy: A Conceptual Critique of Shareholder Ideology”, 31 (2002) Economy and Society 391.
[5] James Weaver, A Call to Action (Kansas: People’s Party Press, 1892), 107.
[6] Weaver, A Call to Action, 107.
[7] Jeffrey Sklansky, Sovereign of the Market: The Money Question in Early America (Chicago: University of Chicago Press, 2017), 180.
[8] Cited in Sidney A. Rothstein, “Macune’s Monopoly: Economic Law and the Legacy of Populism”, 28 (2014) Studies in American Development 89.
[9] See Charles Postel, The Populist Vision (Oxford: Oxford University Press, 2007), 121.
[10] See Omar H. Ali, In the Lion’s Mouth: Black Populism in the New South, 1886–1900 (Jackson: University Press of Mississippi, 2007), 192.
[11] Quoted in Norman Pollack, The Just Polity: Populism, Law and Human Welfare (Chicago: University of Illinois Press, 1987), 205.
[12] Grietje Baars, The Corporation, Law and Capitalism (London: Brill, forthcoming).
[13] Urbinati, “Revolt Against Intermediary Bodies”.
[14] See Franz Neumann, Behemoth: The Structure and Practice of National Socialism (Chicago: Ivan R. Dee, 2009 [1942]), 448–49.
Anton Jäger is a PhD student working on populism and intellectual history at the University of Cambridge. His doctoral thesis, titled “Populism and the Democracy of Producers in the United States, 1877–c.1922”, seeks to provide a new, revisionist intellectual history of the Populist movement in the late nineteenth-century United States.
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