Why Theory Matters – even to lawyers

A thoughtful analysis of the effect of the history of co-operative law in the UK on the way co-operatives see themselves and function has recently been published by Tara Mulqueen of Birkbeck College London:

Tara Mulqueen, “When a business isn’t a business: law and the political in the history of the United Kingdom’s co-operative movement” Onati Socio-Legal Series v 2 n. 2 (2012)Tara argues, essentially, that the corporate status of co-operatives in law has tended to move them away from the possibility of social transformation. Over the nineteenth and twentieth century, the emphasis moved to their role as businesses in a capitalist market place. Their potential to reshape the social interaction between people by operating on the basis of community and showing what could exist if the economy were organised differently was underemphsised. They were, she argues, depoliticised by being defined “primarily in commercial terms as corporate bodies” (p40).

The paper looks at the idea of community from a theoretical point of view and highlights the writers who argue the emptiness of its modern use in the phrases such as “the business community” or the “national community”. Co-operative history is based in the early nineteenth century sense of community as a distinct grouping depending on mutuality. Robert Owen’s Co-operative Communities and the idea of mutuality as a vision of “fully liberated humanity” contrasted with the competitive market system was critical and subversive. Retail and the divi were less subversive.

The corporate status of societies as singular legal entities, the paper argues, tended to marginalise the idea of co-operatives as a group of individuals who came together for mutual aid. The example of the changing position on the taxation of societies from the period of the Ritchie Committee in 1905 to the 1980’s is an interesting example explored in the paper. Are co-operatives to be seen as business structures or “as alternative forms of association which have the potential to open our thinking about the very organisation of the economy and to merge the economic, the political and the social”? that is the point posed in the conclusion of the paper and it goes to the core of one of the dilemmas faced by co-operatives.

Reading Tara’s paper brought home to me the importance of the history of the legal developments. That is especially true in areas such as tax, where the pressure from other businesses to deprive co-operatives of what were seen as “unfair” advantages was important – and maybe still is. Maybe this is what our continental legal colleagues mean when they refer to the double identity of the owning group as an association and operating it as a business. Common lawyers tend to ignore such theoretical issues but that has its dangers. The Law affects and influences the way we all see things. It contributes to the radicalisation or de-radicalisation of people. It forms society and ways of thinking as well as regulating activities. Our legal assumptions can blind us to other ways of seeing things and, especially in the Common Law tradition, make pragmatists and formalists of us.

We are, as Keynes said of theory in the economic context:

“ruled by little else. Practical men who believe themselves to be quite exempt from any intellectual influence are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air,are distilling their frenzy from some academic scribbler of a few years back.”

J. M Keynes, General Theory (1947 ed.) Ch 24 from Angela Partington (ed.) Oxford Dictionary of Quotations 4th Ed 1992 p395

So “academic scribbling” has its value after all. It can take us outside our usual way of thinking and remind us of the ideals that lie behind co-operatives and the possibility of social change that they demonstrate.

© Ian Snaith 2013 This work is licensed under the Creative Commons Attribution-NonCommercial-Noderivs 2.0 England and Wales Licence. To view a copy of this licence visit Creative Commons or send a letter to Creative Commons, 559 Nathan Abbott Way, Stanford, California 94305, USA

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