Company Responsible for Major Chemical Spill Is a Great Candidate for the Corporate Death Penalty
It’s time to kill some companies.
When businesses operate in ways that are clearly detrimental to the public interest - they should be dissolved and their assets should be distributed to the people they hurt
This will create a marketplace opportunity for a company that behaves in a more reputable fashion.
Take what’s going in West Virginia right now for example.
Around 300,000 people in 9 counties across West Virginia still don’t have access to clean water today as state and federal officials continue to try and clean up a massive leak of toxic chemicals.
State officials started restricting water use on Thursday after it was discovered that almost 7,500 gallons of MCHM, a chemical used to clean coal, had seeped out of a storage facility owned by company called Freedom Industries into the Elk River, a major local source of drinking water.
The short-term effects of contact with MCHM include itchiness, burning of the eyes, diarrhea, and, in some cases, vomiting. The long-term effects are still pretty much a mystery.
West Virginia’s governor, Earl Ray Tomblin, has declared some areas safe for drinking, but West Virginia isn’t home free just yet.
There’s still a long ways to go before the spill is cleaned up.
In order for the state to declare water supplies safe, samples have to show that MCHM contamination is at or less than 1 parts per million.
And as of yet, the state has provided no specific timetable for when areas affected by the spill will be cleared for everyday water use.
Meanwhile, West Virginian public officials have some explaining to do.
The plant where the leak started has not been inspected by any kind of state or federal agency in more than two decades.
In a state like West Virginia, this kind of hands-off approach to regulation is, sadly, kind of expected.
The coal industry is a huge part of the local economy and holds a stranglehold over local politics.
In an environment like this, companies like Freedom Industries feel like they can act without any regard for public safety or the environment.
And they pretty much can.
Unlike many states, West Virginia doesn’t even require inspections for chemical storage facilities.
What happened at Freedom Industries’ Elk River facility is a perfect example of why we need government regulation and the corporate death penalty.
Private for-profit industries cannot be trusted to regulate themselves, and so it’s left up to government agencies - agencies that are accountable to “We the People” - to keep them in check.
But that’s only half the story.
For the first century-and-half or so after the founding of the republic, it was common practice for state governments to give corporations the corporate death penalty.
The idea behind the corporate death penalty was - and still is - pretty simple.
If a corporation did something blatantly against the public interest, like gambling away people’s life savings or polluting local water supplies, the government would revoke its charter - the thing that gave it a right to exist as a private, for-profit business.
Banks were shut down in Ohio, Massachusetts, Mississippi, and Pennsylvania for behaving in ways that were “financially sound.”
Oil corporations, match manufacturers, whiskey trusts, and sugar corporations were given the axe in Michigan, Ohio, Nebraska and New York.
By the 1870s, nineteen states had amended their state constitutions to give lawmakers the power to “execute” corporations that violate the public’s safety and trust.
The longstanding practice of giving businesses the corporate death penalty only really stopped when President Warren G. Harding was elected president in 1921 with the promise of putting “less government in business and more business in government.”
It goes without saying that we need stronger regulations on companies like Freedom Industries whose activities threaten the health and safety of the general public.
And we also need to make sure that state, local, and federal agencies actually enforce those regulations.
But regulations alone aren’t enough.
We need to make sure that corporations know that if they violate the public’s trust that they will face serious consequences.
It’s high time we brought back the corporate death penalty.