Separation within Society?

Patrick Quanten

 

Is there an alternative to the kind of society we currently are living in? And if not everybody wants society to be different from what it is now, can people be allowed to organize an alternative whilst the current society continues to exist? It doesn’t appear as if the authorities are going to allow people to simply say they want something different and that space will be created for them. The current fear for diseases being passed on from person to person is based on a false view of health and diseases but it is the only way authorities allow us to live our lives. It appears as if they prefer to create a segregation society whereby there is a divide between the majority, living in fear, and others who prefer to have the freedom to make decisions for themselves. Although we all seem to agree that a society in which one group of people is reduced to second class citizens is despicable, we are heading for exactly that, since governments everywhere are making a conscious choice to elevate some to a higher status and denigrate others to be ‘bad people’. We disapprove when certain regimes have made black people into second class citizens or Jews or the Native Americans, but we think it is the right thing to do when people don’t want to get vaccinated. At source, such an attitude is always born out of feeling threatened by the others. This seems, as history has proven, a recipe for disaster. 

Yet, most of us don’t realize that within our society, where we believe that everybody is equal as far as the law is concerned, there are exceptions to this rule of equality. There are parts of our society that are not having to follow the same rules with regards to employment, taxation and economics. Indeed, our world allows different rules to some, so they have advantages ordinary people do not have. Our society already knows segregation. In our society there already exists various layers within the population. It makes me think that maybe those people, who do not want to live in a society where everything is determined for them, have an opportunity to make use of the very same system that turns them into second class citizens in order to ‘escape’ the ruling authority. 

I am talking about corporations. A corporation is a single entity which may be comprised of individuals or companies, but is separate from its owners. Among the most important features of a corporation is limited liability, which means that its owners can participate in the share of profits, but not the corporation’s liabilities. This is different for ordinary citizen where we all are held responsible for our actions, mainly the bad ones. Along with limited liability, corporations possess the ability to own assets, enter contracts, sue or be sued, and borrow money. So the corporation is in principle liable as all other individuals are but as it turns out corporations have a bigger impact on society, brings more power to the table, than an individual has. Almost all well-known businesses are corporations, including Microsoft Corporation, the Coca-Cola Company, and Toyota Motor Corporation. Some corporations do business under their own names and also under other business names, such as Alphabet Inc., which famously does business as Google. 

There are two major types of corporations we want to consider here: Subchapter C corporations, which are larger organizations owned by multiple shareholders, and these themselves can also be other businesses, and Subchapter S corporations, which are often (but not always) smaller businesses owned by an individual shareholder. 

Forming a corporation varies according to both the state that one resides and lives in and the state that the business is conducted in. This too is different for all individuals as we, in general terms, live in the same country as we generate our income in. However, before creating a corporation, consider what you hope to gain from establishing this separate entity. The biggest advantages of having a corporation are:

  • As with some other types of businesses, corporations provide liability protection for its owners, who are called shareholders. This would mean personal protection for individuals who belong to the company.
  • Companies hoping to raise money from investors will have an easier time as a corporation, which can sell ownership shares. This would mean that as a corporation assets can be easily moved from one person to another.
  • Corporate profits are taxed, but at a lower rate than the personal income tax rate individuals pay. This would mean that individuals would pay less tax and the corporation, the entity of all individuals together, would be taxed at a different, lower, rate.
  • Potential employees may find working for a corporation, with the prospect of ownership benefits, to be more appealing than working for a privately-held company. This would mean that individuals within the corporation can be stakeholders and profit from shared benefits.
  • The corporation can offer a medical reimbursement plan, deducting the cost of providing insurance to employees while allowing employees to use the benefit tax-free. This would mean that individuals within the corporation could be exempt from national health insurance contributions when the corporation takes care of all their medical needs. 

Now suppose you wanted to live in a different world where the focus lies on the individual and on the good a person can do, helping another individual in that same world in his/her efforts to live a healthy life. One could set up a non-profit corporation and create such a world. A non-profit must be created in support of a specific cause, generally one that's public, specifically for members of the non-profit, or for groups of people. Non-profit corporations are tax exempt, paying no corporate taxes whatsoever. They're also permitted to receive funding from a wide variety of sources: grants, public donors, private donors, and corporations. So supporting money could flow into the corporation without the corporation having to pay any taxes on it. Further separating non-profits from for-profit corporations, donations to non-profits are typically tax-deductible for donors as well. If you're passionate about helping others and your focus is to maximize the good you do, not the profits you make, a non-profit is the best way to see your mission through. 

Let’s take a closer look at what is generally said about non-profit organisations. It is a legal entity organized and operated for a collective, public or social benefit, in contrast with an entity that operates as a business, aiming to generate a profit for its owners. A non-profit is subject to the non-distribution constraints: any revenues that exceed expenses must be committed to the organization's purpose, not taken by private parties. As long as the profits remain in the hands of the organization and do not end up in private pockets, a non-profit organization is allowed to make profits. The key aspects of non-profits are accountability, trustworthiness, honesty, and openness to every person who has invested time, money, and energy into the organization. That in itself is completely different from the organization you and I currently belong to as governments are all but accountable, trustworthy, honest and open. 

There exists several different formats for non-profit organizations within the existing law. For England and Wales, for example, it works as follows. A “registered society” means an organization registered by the Financial Conduct Authority under the Co-operative and Community Benefit Societies Act 2014. There are two kinds of registered society: a “community benefit society” and a “co-operative society”. 

A cooperative society is a voluntary association that started with the aim of the service of its members. It is a form of business where individuals belonging to the same class join hands for the promotion of their common goals. A cooperative society trades for the mutual benefit of its members and not for the benefit of the wider community, but it cannot be “a society which carries on, or intends to carry on, business with the object of making profits mainly for the payment of interest, dividends or bonuses on money invested or deposited with, or lent to, the society or any other person”. The mutual benefit served by a cooperative society could, for example, be to run a bowling club from premises belonging to the society. But a cooperative might benefit its members financially too.

  • As it is a voluntary association, the membership is also voluntary. A person is free to join a cooperative society, and can also leave at any time as per his desire. Irrespective of their religion, gender and caste. Membership is open to all.
  • It is compulsory for the cooperative society to get registration. The cooperative society is a separate legal identity to the society.
  • It does not get affected by the entry or exit of its members.
  • There is limited liability of the members of cooperative society. Liability is limited to the extent of the amount contributed by members as capital.
  • An elected managing committee has the powers to take decisions. Members have the right to vote, by which they elect the members who will constitute the managing committee.
  • The cooperative society works on the principle of mutual help and welfare. Hence, the principal of service dominates its working. If any surplus is generated, it is distributed amongst the members as a dividend in conformity with the bye-laws of the society. 

The other kind of registered society is a community benefit society which must trade for the benefit of the wider community and not just the members who own it. A community benefit society will tend to satisfy the definition of “housing association”. A community benefit society (but not a co-operative society) may adopt a “restriction on use” of its assets. Community benefit societies conduct business for the benefit of their community. Profits are not distributed among members, or external shareholders, but returned to the community. 

Key characteristics of a community benefit society are:

  • They are set up with social objectives to conduct a business or trade.
  • They are run and managed by their members.
  • They must submit annual accounts.
  • They can raise funds by issuing shares to the public.
  • They can be established as charities, providing they have exclusively charitable objects that are for the public benefit, allowing them to raise capital through public grants and charitable trusts. If approved, they're known as exempt charities - reporting to the Financial Conduct Authority (FCA), not the Charity Commission. 

There are distinct differences between a community benefit society and a cooperative and they should not be confused with one another.

  • Cooperatives operate for the mutual benefit of their members and may or may not be a social enterprise, depending on their activities and how they distribute their profits. Community benefit societies reflect commitment to the wider community, with profits being invested back into the business.
  • Cooperatives cannot be established as charities. Community benefit societies can be established as a charity as long as it has an asset lock. 

There are similar setups in every country which would allow a group of people to join up with a common goal in life, being able to operate as a group and being protected as a group. In this manner people could potentially organize specific living and working conditions for themselves, which could be different from those conditions generally experienced in the world around them. In principle, it should be possible to live in an environment of trust, honesty, openness and freedom, almost separate from the big world of control, manipulation, dishonesty, corruption and surveillance. It would give people a valid choice in life. 

Corporations are an integral part of the political set-up through which the state governs. Corporations are created by the state, or at least given their existence and their various privileges from the state. In the contemporary economic and political context, the corporation occupies a paradoxical function. While it is the state that creates, recognises or confers its legal existence, at the same time the corporation appears to be something outside the state, threatening and challenging its power, and lying beyond its control and regulatory competence. 

In seventeenth century England, corporations were vital in managing hospitals, alms houses, schools and other philanthropic endeavours, and also increasingly the reorganisation of the colonial and imperial commerce through trading companies. The corporate charter became a mechanism through which to govern central aspects of social life, and to ensure public welfare. Through the corporate charter, the state recognised, created, encouraged and regulated corporations by granting them legal privileges, immunities and exemptions, because this privileged status benefited the common good. However, the earlier writings on corporations highlight the paradoxical role of the corporation as being both inside and outside the law. The corporation falls between traditional categories of public and private, making it hard to grasp. Corporations are not entirely private because they are politically constituted and their existence depends on the state, but nor are they entirely public because they are run on private initiative and financing.  Evidently, modern corporations are much less accountable to national laws and do not require a direct government charter in order to exist. Private regulation has exploded since the 1980s, reducing state capacity to protect the public interests, people, communities, and the environment from corporate excess and malfeasance. However, this has not been matched by the curtailment of the state’s protection of corporations and their interests. It is still national law that incorporates companies, gives them the rights and protections of legal persons, and provides them with favourable tax regimes, limited liability, entity shielding, and a host of other privileges. The corporation is the primary creator of wealth and growth in a neoliberal world and is its ideal subject – perfectly economically rational and free to move in pursuit of profit. This is why the corporation is granted privileges and exemptions from regulations and laws, and is privileged through favourable tax regimes, international mobility and special economic zones. A separate entity within a state. Over the last few decades more and more power has been concentrated within corporations, as governments had to back off because of the enormous economic and social power some of these corporations have generated. We are now talking about corporate states because they have gained so much independence that they can be viewed as organizations with a separate taxation, separate social structure, separate judiciary, separate education system, separate working conditions. It is the recognition of the state, government, having lost control over these corporations, whereby the balance of power has now definitely shifted away from parliament towards large corporations. 

By accepting that the state actually governs through corporations and corporate forms, and has always done so, we acknowledge that the ultimate power of government lies in the hands of the corporations. However, that in itself also creates a possibility of enforcing the production of a different kind of corporate subject than the shareholder-driven, publicly traded, for-profit corporation. Rather than attempting to contain corporations within the economic sphere, we should devise ways to foster alternative corporate forms that promote more desirable values and interests. We should be using the opportunities corporations have created for their own benefit and use them to our own benefit. We could, in principle, use the same structure in order to create a different world inside an existing world. 

A variety of communities could potentially form itself, each with their own specific rules and aims and each having their own structure and management. They could trade with one another or not, as they themselves decide. They could form alliances or not, as they themselves decide. Do you feel a sense of freedom of choice within this? 

And there is another very important freedom attached to these forms of communities. They are voluntary. Membership is voluntary and this means that if and when a person changes his or her mind about the community or indeed personal circumstances have changed drastically and they decide they no longer want to or can be part of the community, they can simply leave. They are free to enter and free to leave. A person no longer is owned by the community. No country that holds you to ransom. No religion that owns your soul. No profession that owns the right to license you to practise. You are indeed free to come and go as you please. You voluntarily commit to a project, a goal in life, a way of living, but you have the freedom to change your mind without any personal consequences hanging over your head. No small print that is incomprehensible or even necessary. If you don’t understand, you do not join or if you have already joined, you leave. 

A society that no longer allows personal choices, personal opinions, personal requirements is not fit for purpose.

A society that does not consider the needs of every single individual should not have any power over any individual.

A society that does not intent to support every individual to achieve their full potential is not worth belonging to.

A society that does not trust its members is a prison for its members with around the clock surveillance and control.

A society held together with restrictions and walls of fear is not a community. 

You have an opportunity to create a different kind of society and provide yourself and others with a life of freedom. You can own your own life again. Do with it whatever you would like to do. Take responsibility for your choices. Have the freedom to join a group and honour their ways for as long as it suits you. 

It is about trust and honesty amongst the members.

It is about personal responsibility towards your fellow men.

It is about commitment towards a greater goal.

It is about working together, not about competition.

It is about equality of opportunities to reach the full potential. 

Most of all it is about personal freedom of choice.

 

 

April 2021


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