Once upon a time, if a corporation was irresponsible they would have their charter revoked by the government. The corporation’s operations would cease. Over a month after the BP oil gusher it has become quite clear that this corporation should no longer exist.

The oil from the BP oil spill is now washing up a shore. Birds like the pelicans above are going to die. People are seeing first hand the devastating results. Life in the ocean is experiencing oil plumes in the Gulf of Mexico “as large as 10 miles long, 3 miles wide and 300 feet thick.” An engineer from Purdue University has calculated that 90,000 barrels a day are spewing into the ocean. He says it was quite simple to calculate once the underwater pictures of the oil well were released. 

The funniest take on the spill by far has been Jon Stewart (a must watch). As he says, this ain’t a spill, it is a gusher. Stewart pokes fun at the pathetic response by BP. Clearly BP had no emergency response plan. BP (and other corporations like Haliburton, who cemented the oil well) are not even taking responsibility, they are just taking part in the blame game.

For those who have read or seen The Corporation, BP is exhibiting the traits of a psychopath. With this, BP should not even be allowed to exist.  As outlined in The Corporation, at one time such behaviour would have resulted in the rescinding of one’s corporate charter. It is time to revoke BP’s corporate charter.

In the US, corporations were initially used just for one-time community projects like building a bridge. Murray Dobbin in his book ‘The Myth of the Good Corporate Citizen’ noted that even by 1809, Virginia still made it clear that if a corporate charter “is merely private or selfish; if it is detrimental to, or not promotive of, the public good, they have no adequate claim upon the legislature for the privileges.” In 1857 alone, the state of Pennsylvania dissolved 10 banks because they did not promote the public good.

The Civil War changed everything though. By selling guns, ammunition etc. during the Civil War and making obscene profits in the process, the concentration of wealth was now tipped heavily in favour of war corporations. War corporation owners exercised their new found power to change the legislation of corporations through the court system. States like New Jersey and Delaware were the first to expand corporations’ rights.

In order to prevent a domino effect of corporations moving to these two states, other states quickly placated their corporations by expanding their corporation’s rights too. Overnight corporations were free of their legislative shackles and were now able to invest in a buffet of projects for longer durations and could now even buy shares of other corporations.

Many could foresee the consequences of letting corporations roam around free. Abraham Lincoln once said, “Corporations have been enthroned. An era of corruption in high places will follow….until wealth is aggregated in a few hands….and the republic is destroyed.”

Since corporations were for the common good, they were given limited liability. This was controversial because investors, unlike a sole proprietorship or partnership, could only lose what they had invested in the corporation. The limited liability of corporations was made into law in England in 1856 and soon spread to United States. Many at the time argued that limited liability would allow unscrupulous people to neglect their moral responsibilities to society.  

The court case of Dodge v. Ford (1919) made it the legal duty of a corporation to put shareholders’ interests above all others. What this meant was that the duty of a corporation above all else was to maximize profits for shareholders.

It is time that limited liability be removed from corporate charters. Investors should become personally responsible for any corporate negligence. This would better ensure that investors would only invest in responsible corporations. The current investors of BP, who demand that BP maximizes profits, must also be held accountable. They should be sued too.

As Ray Anderson, founder and chairman of Interface, Inc., the world’s largest commercial carpet manufacturer, has noted, “we never gave a thought to what we were taking from the earth or doing to the earth in the making of our products” for we were operating under the misguided belief that “nature is unlimited, the earth….a limitless source for raw material, a limitless sink into which we can send our poisons and waste.” Anderson later went on to say that “Someday people like me will end of in jail.” Lets hope so.  Jail BP executives.