Redistribution Within Collective Organization

Collective organizations are common in all areas of human endeavor. In this essay, I shall take a look at the various rules that govern three different types of private collective ventures: the corporation, the condominium or cooperative, and the labor union (especially as it is constituted under the National Labor Relations Act of 1935 and its successor statutes). Once that is done, I shall reflect on the implications of that analysis on the proper scope and function of the largest collective venture of them all—government.

The order in which I consider these organizations is not randomly chosen. The first organization on the list, the corporation, is an entity which is initially controlled by a single party, but later be-comes a vehicle in which multiple parties have discrete stakes. The emergence of the corporation can usefully be considered an exercise in voluntary contracting between the original founder of the corporation and its subsequent shareholders—both those who buy in at the original offering and those who purchase shares from previous shareholders. The condominium and cooperative exhibit similar structures in which the developer, like the corporate founder, is the fulcrum for the future organization with its highly dispersed membership. The two relationships differ from each other in this important feature: in the corporate structure, each individual share-holder has a partial claim on the assets that are in corporate solution (i.e., held directly by the corporation), but only on those assets. However, with a condominium or a cooperative each member of the organization has a private interest—the house or apartment unit—as well as a share in all the common elements of the overall facility. The interplay between the private and public elements creates a conflict of interest that does not arise in corporate settings, where no such private assets exist.

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