Saturday, July 26, 2014

The Customer May Not Always be Right, but He is the Customer

Res Publica
The Customer May Not Always be Right, but He is the Customer
By David Trumbull -- July 25, 2014

Last week I wrote about Uber and Lyft, two relatively new car services that are making a big dent in the taxi business. The services are wildly popular with riders who, for years, have been stuck with not much alternative to broken down wreck taxis, driven by surly drivers who refuse to put on the air conditioning in the summer, pad the bill, refuse to accept credit cards, and are so engaged in their loud mobile phone conversations in foreign languages that they don't pay attention to the road and put the passengers at risk of serious injury.

Passengers see Uber and Lyft as the solution to poor quality taxi service. Local governments see Uber and Lyft as the problem. The Peoples Republik of Cambridge has tried repeatedly to ban Uber and Lyft. Cambridge is not alone in opposing giving riders the options they want. But, in city after city, the politicians have had to back down. They are learning that they cannot stand athwart history yelling STOP. The people want Uber and Lyft and will not tolerate elected and appointed officials abusing their offices to come to the aid of the old taxi monopoly.

It is, for me, exciting to watch a supposedly immovable object, the taxi company/municipal government symbiotic relationship, get pushed aside by the irresistible force that is People Power. People Power is being asserted elsewhere, in the current struggle over the future of the Market Basket chain of food stores.

The Greek drama that is the quarter-of-century-old Demoulas family feud over control of the business that Athanasios and Efrosini Demoulas started in Lowell in 1916 is worthy of a made-for-TV miniseries. The family lawsuit in the early 1990s over ownership nearly destroyed the business, but it survived, and indeed thrived.

Market Basket customers love the store. We love the low prices. We love that although it is a chain, the selections in store are tailored to the local community -- the Methuen store abounds in Italian delicacies, the North Andover store serves the Syrian community, the Chelsea store is a little Latin America. The employees are extremely knowledgeable, helpful, and cheerful, making marketing a pleasant experience. As for the employees, they are well paid and treated with respect by management. Who needs a union when your boss makes you feel like a family? This model of low prices, great selections, and a happy staff has worked, making the Demoulas family one of the richest in the Boston area.

By now you have seen the news -- massive walkouts of Market Basket employees, a widespread customer boycott, and rallies across the state demanding the re-instatement of Arthur T. Demoulas as CEO. How will it end? I don't know. But however it ends, the board of this closely held, family-owned business will be forced to act in response to a spontaneous outburst of People Power.

I have not seen anything in America quite like it in some time. Next year will mark the 30-year anniversary of the Coca-Cola Company's disastrous launch of New Coke. Then, too, a corporate board learnt the lesson that there is someone more powerful than the stockholder; that is the Customer.

Saturday, July 12, 2014

Persons, not People

Res Publica

Persons, not People
July 11, 2014

My Facebook friends on the political left are, once again, in the wake of the Hobby Lobby decision riled up over the Supreme Court and clamoring, again, for a constitutional amendment to say that, "Corporations are not People," thus, they believe, over-turning the 2010 Citizens United decision.

Well, of course corporations are not people! No one ever said they were. Okay, I concede, Mitt Romney did say that during the 2012 presidential campaign, but Romney never did strike me as being very bright. People, from the Latin populus, means human beings taken as a group, whether construed as a singular or plural noun. Clearly, corporations are not people, as they are not human. Liberals demanding a, "Corporations are Not People" amendment might just as well call for a, "The Moon is Not Made of Green Cheese" amendment. Corporations are, however, persons, something that, for centuries until 2010 was never doubted.

A person (from the Latin persona) in the eyes of the law, is an entity with legal standing. A person can sue and be sued, own property, enter contracts, and employ other persons. As far back as ancient Roman law and through the English Common Law that forms the basis for American law, corporations have been recognized as artificial persons. If Hobby Lobby and Citizens United were not "persons" they would have had no standing to sue, nor would the laws they were protesting have applied to them, as the law operates on persons only.

The doctrine of corporate personhood was explicitly enunciated by the Supreme Court nearly 200 years ago in the celebrated Dartmouth College. In the 1819 Dartmouth case the legislature of New Hampshire attempted a hostile takeover of the school, a private corporation, in order to treat it as a public institution and run it as the state saw fit. The brilliant Daniel Webster argued for the corporation that "...its rights stand on the same ground as those of an individual."

The Court agreed, and Associate Justice Joseph Story in his concurring opinion wrote (emphasis added): "An aggregate corporation, at common law, is a collection of individuals, united into one collective body.... It is, in short, an artificial person, existing in contemplation of law, and endowed with certain powers and franchises which, though they must be exercised through the medium of its natural members, are yet considered as subsisting in the corporation itself, as distinctly as if it were a real personage.

Law, not nature, created corporations, and the law may operate differently toward corporations than toward individuals. For example, corporations cannot vote, be drafted, or serve as public officers. The question is what rights of a natural person do we give to artificial persons. I believe the court decided correctly in the Citizens United and Hobby Lobby cases. Others, including some of the Supreme Court Justices, disagree. But the solution, if you think the court erred, is to address the specific errors, not throw what has served us well for hundreds of years -- the legal doctrine that Corporations are Persons.

Thursday, July 3, 2014

Citizens, Not Subjects.

Res Publica
Citizens, Not Subjects.
July 4, 2014 -- by David Trumbull

On this date in 1776 the delegates to the Second Continental Congress declared that the people they represented were citizens of the United States and not subjects of His Britannic Majesty, George III.

The document by which this shift of allegiance and status was proclaimed is tripartite. The preamble contains a general justification of self-government. It ends with the formal declaration of severance of ties to Great Britain and the establishment of the United States of America. Between the beautiful prose of "When in the Course of human Events..." and "We hold these Truths to be self-evident…" and the precise legal statement of the resolution for independency in the final paragraph lies an enumeration of the outrages of King George III which justify this revolutionary act.

To declare that men and women are not subjects of a monarch but citizens of a republic was both revolutionary and prophetic. To quote part of a prayer for Independence Day "...The founders of this country won liberty for themselves and for us, and lit the torch of freedom for nations then unborn..." It was also rooted in history.

The Founders looked back to the ancient democracy of Athens, the republic of Rome, and to the words of the Hebrew prophet Samuel. In Chapter 8 of the First Book of Samuel we are told that the elders of Israel came to Samuel and asked him make them a king like all the nations. Samuel relayed this request to God, and the Lord said to Samuel:

"Tell them this will be the manner of the king that shall reign over you:

"He will appoint him captains over thousands, and captains over fifties; and will set them to ear his ground, and to reap his harvest.... (1 Sam. 8:12) and

"He will take your daughters to be confectionaries, and to be cooks, and to be bakers." (1 Sam. 8:13) and

"He will take your fields, and your vineyards, and your oliveyards, even the best of them, and give them to his servants. (1 Sam. 8:14) and

"He will take your menservants, and your maidservants, and your goodliest young men, and your asses, and put them to his work. (1 Sam. 8:16)

Compare those verses to this indictment of King George III in the Declaration of Independence: "He has erected a multitude of new offices, and sent hither swarms of officers to harass our people, and eat out their substance."

The Declaration continues: "He has kept among us, in times of peace standing armies, without the consent of our legislatures."

Now compare that to:

"He will take your sons, and appoint them for himself, for his chariots, and to be his horsemen; and some shall run before his chariots. (1 Sam. 8:11) and

"He will appoint him captains over thousands, and captains over fifties; and will set them ... to make his instruments of war, and instruments of his chariots." (1 Sam. 8:12)

The Declaration goes on to indict the King for: Imposing Taxes on us without our Consent."

The Lord, through Samuel, had something to say about that as well"

"He will take the tenth of your seed, and of your vineyards, and give to his officers, and to his servants. (1 Sam. 8:15) and

"He will take the tenth of your sheep: and ye shall be his servants. (1 Sam. 8:17)

The passage from the Old Testament ends: "And ye shall cry out in that day because of your king which ye shall have chosen you; and the Lord will not hear you in that day." It would be many centuries before men and women would live as citizens rather than subjects. That is why we celebrate the Fourth of July.