Law, Institutions and the Public/Private Divide
| Author | Charles Sampford |
| DOI | 10.1177/0067205X9102000202 |
| Published date | 01 June 1991 |
| Date | 01 June 1991 |
| Subject Matter | Article |
1991] Law, Institutions
and
the
Public/Private
Divide
LAWJINSTITUTIONS AND
THE
PUBLIC/PRIVATE DIVIDE
CHARLES
SAMPFORD*
185
1INTRODUCTION
Rhetorically and ideologically, the nineteen eighties has been adecade in
~hich
the individual has
held
centre
stage. From American Express
idvertisements to the assumptions
of
neo-classical economists (and back
19ain!l), Western society is imagined
to
be, and justified as, asociety
of
lutonomous self regarding individuals.2Yet for all that, we remain asociety
of
institutions.3
We
live our lives largely in (and, to asignificant extent, through)
~he
institutions where
we
grow up, work, play and procreate. Institutions
10minate virtually every area
of
social life and simultaneously sustain and
infuriate us by providing the best and the worst experiences
of
our daily lives.
We
seem to be forever complaining about them and often seek to change
or
~upplant
them. But few believe that we should,
or
even could, do away with
i.hem
and recreate asociety
of
free willing individuals without institutional links
BA, LLB (Melb), DPhil (Oxon), Foundation Dean and Professor
of
Law, Griffith University,
Queensland. This paper was completed while Iwas Principal Research Fellow and Deputy
Director, Centre for Philosophy and Public Issues, Philosophy Dept, University
of
Melbourne.
It was first read to the plenary session on "The PubliclPrivate Distinction
in
Legal Thought" at
the 1990 Conference
of
the Australasian Law Teachers Association, Canberra, September
1990. Iwould like to thank Tom Campbell, Will Barrett, Tony Coady and David Wood who
read and commented on the paper. Most
of
all Iwould like
to
thank Ms Moira Taylor, a
research assistant at the Centre employed under aUniversity
of
Melbourne Special Initiative
Grant for the larger project
of
which this paper fonns apart. She researched much
of
the
considerable and varied literature on the various subjects touched on by the paper, proof-
read, commented and tidied the draft and did the bulk
of
the citations.
It is remarkable how small the mental shift appears to be!
Cynics might say that
in
the nineteen eighties the selfishness
of
the "me generation" was
justified and celebrated by economists and philosophers performing their time honoured role
of dipping into ancient texts
to
ease the consciences
of
the currently powerful. But who would
admit to such cynicism -even in afootnote?
It is not necessary
to
derme institutions for the purposes ofthis paper
as
the kinds
of
institutions
which Iwill be discussing easily fall within most definitions. However, Icontinue
to
adopt the
sense in which Iused the
tenn
in
The
Disorder
of
lAw: "the web
or
matrix
of
social relations
between aset
of
persons
in
closer, more frequent and more intense interaction with other
members
of
the set than with non-members ... Corporations, government departments, courts,
prisons, trade unions, political parties and individual families are examples" CSampford, The
Disorthr
of
lAw
(1989) 194, and see discussion 193-203). This use is
to
be distinguished from
"the institution
of
marriage"
or
"the institution
of
wage labour" which refer
to
aparticular set
of social relations often found between pairs
of
people. There is, however, one potential point
of
defmitional disagreement. Many would seek
to
limit the use
of
the term "institution" and
would prefer
to
use only the term "organisation" to refer to individual corporations etc.
Eg
Klaus Ziegert objected at the ALTA plenary session
to
which this paper was first delivered
that he would only use the term "institution"
if
the organisation performed an agreed social
function. The problem with this is that social functions are inherently controversial in that
there will
be
dispute about the nature
of
the function and indeed whether it does
or
should
serve any social function
at
all.
On
this basis there would be no institutions at all and Iuse the
term "institution" for those organisations where there is debate about the social function. For
this reason Iadopt the above definition. One
of
the consequences is that
most
human
organisations can be characterised as institutions with the corollary that the word organisation
could
be
just as easily be substituted. Isuppose that one
of
the reasons for preferring the word
institution is that
it
does keep the social effects
of
human organisations at the forefront -
sOOlething
Ihave to admit causes
me
no
disquiet!
186 Federal Law Review
[VOLUME
201
and ties. Those who want to get rid
of
the family generally want more egalitariani
and supportive structures. Those who want to get rid
of
corporations want newI
economic institutions controlled by the national government, the localI
community
or
employees. And those who want
to
get rid
of
government
orl
statutory bodies want them replaced by,
or
transformed into, so-called "private"r
institutions.
Thus it comes to pass that many
of
the problems
of
the late twentieth centuryI
are about institutions. The problems
do
not lie in getting rid
of
institutions butl
in making institutions work. The problems involve avoiding the harm while:
seizing the benefits that only institutions can provide -making institutionsl
operate to enhance rather than reduce the life
of
the individuals they
are:
supposed to serve. This is true
of
the institutions
of
government, business
andl
the family. It is certainly true
of
our universities with which so many
of
us havel
love-hate relationships.4
Law has acrucial role in those institutions. Law governs the conditions
fO[1
their creation and operation. Law also provides one
of
the theatres
of
war in the
continuing conflicts over the control
of
institutions and conflicts between
institutions. This is true
of
the institutions we are used
to
calling "public" andl
those we are used to calling "private." Constitutional law provides the legall
basis for the existence
of
the major government institutions
of
legislature;
executive departments and courts and sets out the powers
of
those institutions:
including the power to create more government and semi-government'
institutions. Administrative law is an attempt to regulate these bodies, ensuring!
that they exercise their powers for the ends for which they were established
and!
do so in amanner that does not unfairly impose burdens on others. Companyl
law provides the legal basis for the existence
of
large non-government economic'
institutions and there are arange
of
laws that attempt
to
prevent activity that
i~'
deemed undesirable.
As law has acentral role in creating these institutions, so it can and must
play acrucial role in addressing the problems
of
those institutions. The
solutions to late twentieth century problems lie in acombination
of
legall
regulation, ethical standard setting and institutional design but each
willi
generally fail
if
tried on its own.5
However, the ability
of
law
to
conceptualize institutions and to deal
witt
their problems is hampered by the tendency to divide institutions into "public'·
and "private" and to treat each
of
them very differently in both theory
ane'
pnv;tice.
This paper will look at the various levels at which the supposed divid(
between public and private institutions operates.
It
will discuss the basic
political idea that divides life into public and privale spheres and the values
thai
attach to the division. It will look
at
the difficulties
of
distinguishing betweer
public and private institutions and the doubtful claims
of
corporations to b(
4How many
of
us
have
not
complained bitterly about the failings
of
universities
in
the
laSI
month, week, thirty minutes? Yet how many
of
us
do
not still believe that universities car
achieve far more than the aggregate
of
our
individual and isolated
effons
outside of such ar
institution?
Each one is insufficient, leading
to
failure and despairing resignation when auempted by itself
If
we
just
pass laws, there is the lament that law is insufficient
to
produce behavioural change
If
we suggest improvements
to
ethical standards, the reply is that this only creates aknaves
charter. However, even the
best
combination
of
laws and ethical standards
will
be
defeatec:
by
an institutional environment which is not conducive
to
legal and ethical compliance.
1991] Law, Institutions
and
the Public/Private Divide 187
treated as "private" and hence to benefit from the values it connotes. It will look
at
how the public/private divide affects constitutional and jurisprudential theory
and how
it
operates in law -carving
out
completely different areas for
constitutional and administrative on the one hand and corporate and regulatory
law on the other. At all these levels the division and its use will be criticised. In
the last section Iwill consider three strategies for overcoming the problems that
this imagined division
of
institutions into public and private has caused. As
indicated, the supposedly "private" institutions with which Iam primarily
concerned are corporations. However, many
of
the issues raised and points made
are applicable to amuch wider range
of
institutions as is indicated in the
discussion and
the
examples given.
2PUBLIC AND PRIVATE SPHERES
OF
LIFE
The terms "public" and "private" are used
to
divide life and law into different
spheres. They are contrasted in various overlapping and generally re-enforcing
ways depending on the discipline and context concerned.
The inner privacy
of
one's own thoughts is contrasted with the public nature
of
political debate. The moral demands
of
an individual's conscience are
contrasted with the universal claims
of
law. The intimate relations between
individuals are contrasted with the open relations between those in public life. In
Hegel's political thought, the
private
world is seen as grounded on personal
affection, personal antipathy and individual satisfaction and is contrasted with
the state which operates by coercion. Private property is property over which
individuals have rights
of
use and exclusion to be compared with
public
property which is owned by the state and used for communal purposes
or
generally available for the non-exclusive use
of
citizens. The private enterprise
of
individuals using their own property for personal gain is contrasted to the public
enterprise
of
the state using communal property for social purposes. The
supposedly voluntary membership
of
"private" clubs and companies is contrasted
to the involuntary inclusion in the body politic. Above all the supposedly
individual nature
of
private decision-making is contrasted with the collective
nature
of
public decision-making. The private sphere is frequently portrayed as a
spontaneous order built on cooperation, consent and contract compared with the
coerced order.of the state created by legal regulation. As such it is seen as more
"natural"
than
the contrived and constructed order
of
the state.
Our own profession sees private law as regulating affairs between individuals
and contrasts it with public law which regulates relations between the state and
individual citizens.
These
contrasts
and
the "public/private" distinctions to which they
supposedly give rise are subjected to intense criticism, especially from the left.6
The idea that the "private" is not subject to legal regulation is frequently and
6See KKlare, "The PubliclPrivate Distinction in Labor Law" (1982) 130 Uni Pennsylvania L
Rev 1358; AFreeman and EMensch, "The Public-Private Distinction
in
American Law and
Life" (1987) 36 Buffalo LRev 237; RMnookin, "The PubliclPrivate Dichotomy: Political
Disagreement and Academic Repudiation" (1982) 130 Uni Pennsylvania LRev 1429; G
Turkel, ''The PubliclPrivate Distinction: Approaches to the Critique of Legal Ideology" (1988)
22 Law
&.
Soc Rev 801; FOlsen, "The Family and the Market" (1983) 96 Harvard LRev
1497; DKennedy, "The Stages
of
the Decline of the PubliclPrivate Distinction" (1982) 130
Uni Pennsylvania LRev 1349; MHorwitz, "The History
of
the PubliclPrivate Distinction"
(1982) 130 Uni Pennsylvania LRev 1423.
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