Tara Mulqueen – Neither Public Nor Private: An Historical Perspective on Co-operatives and Mutuals

                                                                   

Event Date: 30 April 2014
The Institute of Advanced Study
Millburn House
Millburn Hill Road
University of Warwick Science Park
Coventry
CV4 7HS

The Kent Law School presents:

The Public Life of Private Law

An ESRC Seminar Series

Seminar 4: Protest, Precarisation, Possibility

Increasingly, private law appears in the the government of unruly political movement and resistance – through the privatisation of public space and the designation of protest as trespass; through the contractualisation of public services and the discipline of labour; through the generation of private spheres where government power is deployed in unanticipated ways.  How should we characterise the experience of government through private law? What vulnerabilities does  private law highlight in those it governs? To what extent does private law confer overlooked capacities on troublesome actors, which can generate new strategies of resistance?

Tara Mulqueen –  Neither Public Nor Private: An Historical Perspective on Co-operatives and Mutuals

By now, the phrase “Big Society” has been reduced to near meaninglessness, a bad joke at best.  Never a terribly convincing plan or rhetoric to begin with, the concept fell into disuse almost as quickly as it arose. Not only did the programme fail to (ultimately) capture the public imagination, for many it was always apparent that it was little more than a back door to privatisation, rather than a genuine effort to promote and empower local communities, and to strengthen the politically elusive “third sector.”  Indeed, the flagship effort to mutualise public sector services, the Post Office, failed before it left the ground. Even the co-operative movement, which was initially lured in by the proposition of mutualisation in the public sector, eventually distanced itself and disparaged the programme, in defense of the integrity and authenticity of co-operation as a practice with considerable historical standing.  In and of itself, the Big Society programme was little more than a continuation of the preceding four decades of neoliberalism in Britain, yet there remains something peculiar about it.
The Big Society, intentionally or unintentionally, raised the question of what it would mean for co-operatives and mutuals to provide ‘public’ and other services, and why, at least in terms of rhetoric, it is an attractive, or at least intriguing option, across the political spectrum. It is no coincidence, I think, that as the Big Society was proclaimed by government, the emphasis on community has also been a hallmark of recent political trends on the Left, from the Occupy movement, to efforts that emphasize a process of social change which begins locally.  Co-operatives and mutuals confound the distinction between private and public. which means that they can be regarded as either or both, while simultaneously undermining the distinction as such. Historically they have been contained by but also eluded modes of categorization, legal and otherwise, such that although they are usually treated as modified forms of company, they can also present a political challenge to the state. Even though many contemporary co-operatives are virtually indistinguishable from companies—the Co-operative Group, with all of its recent travails, is a case in point—co-operatives were historically understood to form a “state within a state.” Co-operation remains a critical political resource outside of its more institutionalised forms, and it does so for fairly specific historical reasons.
As many will no doubt appreciate, the line between public and private is one which is of great political significance, and it is one which has shifted considerably over time. At a time when if anything, private corporate influence on the ostensibly public realm has become the norm, it is questionable that the distinction ever had much more than a purely instrumental meaning. Legal realists were perhaps among the first to challenge the distinction between private and public which had become so important in the late nineteenth century, as private, corporate power began to consolidate and undermine the state.  The divide between public and private continues to sure up the dominance and supposed neutrality of the ‘free market’ as that which presides over the private sphere. However, the idea of corporations as private is relatively new. Until 1844, corporations could only be created by Royal Charter or Special Act of Parliament, and were considered to be arms of the state.  Mostly, they were formed to undertake large ‘public works’ which required substantial finance.  Joint stock companies, on the other hand, were largely without state protection (except where organised as trusts), and generally poorly regarded. The law of corporations was a narrow public affair, rather than a vast private one, as it is today.
This relatively tight-fisted approach to incorporation was mirrored in other areas where associations were heavily controlled. Friendly societies and trade unions were carefully policed, if not entirely prohibited, under the Combination Acts, in the last stages of a process through which the modern state, in England and elsewhere, consolidated its own authority. Gradually, over several centuries, property-based medieval configurations of power such as the guild and the township were overcome, as other associational forms were delegitimized and subordinated until there was no authority between individual and state.  As Frederic Maitland recounts, the Roman doctrine of persona ficta, as it was adopted in the later stages of the medieval era, states that any personality which the corporation has is purely the “gift of the prince.” He explains that “what was understood to be the Roman doctrine of corporations was an apt lever for those forces which were transforming the medieval nation into the modern State. The federalistic structure of medieval society is threatened. No longer can we see the body politic as communitas communitatum, a system of groups, each of which in its turn is a system of groups. All that stands between the State and the individual has but a derivative and precarious existence.”
The legal recognition of co-operatives which occurs in the mid-nineteenth century must be understood in the context of the formation of the modern state, as described by Maitland. Co-operatives, when they received legal recognition under the Industrial and Provident Societies Act of 1852, were treated largely as companies. Co-operatives had to adhere to certain principles, and have them embodied in their rules, in order to receive recognition as an Industrial and Provident Society. This placed them, somewhat oddly, between business and charity. Yet this was always an inadequate designation—co-operatives were regarded as being neither state nor market—between capitalism and socialism—and were frequently regarded as “a state within the state,” in a way that suggests an older, medieval distribution of power.  This was owing no doubt in part to the crucial social function carried out by many co-operatives, particularly in the wake of the New Poor Laws of 1834, which dramatically reduced the state provision of poor relief and introduced the infamous workhouse system.
Reading the Select Committee Reports from 1850 and 1851 which dealt explicitly with co-operatives,  it becomes immediately apparent that a large part of the reason they received the legal support they did was because granting this was seen as a way of appeasing the working classes, to keep them from agitating any further.   Thus, in the case of co-operatives, granting legal personality, while in one sense enabling the growth of co-operative enterprise, was explicitly a mode of containment.  Co-operation, rather than being the means and ends of a movement, became a way of characterizing the internal activity of what was basically a company. Thus, co-operatives have always sat uneasily in this category, as they are not singular, unitary entities competing on a market, but rather—or at least can—operate to institute their own ‘public’, which is subordinate to, but has the capacity to challenge the state.
This uneasy position of co-operatives can also be explored through the question of ownership. In the modern distinction between private and public, there is a separation between conceptions of ownership and sovereignty, which was described by Cohen as something which had to be overcome from the medieval era, when ‘dominium’ equated to ‘imperium.  As Cohen describes it, “[o]wnership of the land and local political sovereignty were inseparable.”  According to Horowitz, one early manifestation of the distinction between private and public in the formation of the modern state was the distinction between the King’s private property and that which he could not alienate.  The corporate body form, insofar as it is a vehicle for property ownership, is one which also manifests this separation, making it such that members only have a personal right against the corporation, rather than a direct claim to the assets.  Denying ownership rights to the individuals in the co-operative society—and granting this ownership (of land as commodity) only to the fictitious legal body of the corporation—denies them a guaranteed connection to it, making their tenure precarious, and vulnerable to the market. Cohen, in the seminal essay “Property and Sovereignty” describes a precariousness with the transition from a landed to a money-based economy, explaining that “[t]he same kind of talent which enables Jay Gould to acquire dominion over certain railroads enables Mr. Harriman to take it away from his sons.”  In other words, in the modern money-based economy, wealth can easily change hands, whereas under feudal arrangements, property would remain within families. Without wishing to romanticise feudalism, there is something to be said for an enduring attachment to the land which, for all intents and purposes, is presently the near-exclusive privilege of the state. This is an attachment which appears to be precluded by current conceptions of the body corporate.
Returning to the concept of the Big Society and the political ambiguity of the third sector, it may be tentatively suggested that, while sharing an interest in them, the Right and the Left may view co-operatives differently. From a conservative perspective, they are a way to promote community as a ‘value’ and to achieve goals of reduce public sector expenditure, but there is no desire to transfer political power to such associations. For conservatives, co-operatives are not so different from charities and businesses. On the Left, in contrast, co-operatives present the possibility of a new public and a radical political claim.

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