Leadership without Domination: Oppenheimer's Theory of Organisation Revisited

Franz Oppenheimer is known to English readers for one early book, The State, and largely through its libertarian afterlife. His theory of organisation has stayed out of view. This note assembles it from three pieces: the distinction between economic and political means (1907), the law of transformation of producer cooperatives (1896), and the pair of cooperative and domination set against Weber (1922–1931). Oppenheimer separated leadership from domination as ideal types and held that leadership never turns into domination from causes inside a group: domination enters from outside, when exploited labour enters the group or when a leader can rest on a subordinate or outside group against his peers. In 1926 he used this distinction to answer Michels's iron law of oligarchy directly: permanent leadership is unavoidable, but it becomes domination only where a leader can play one group against another. "Machtverhältnis" (1931) restated the theory in general form. The note sets out this reply and states the disagreement with Michels as testable propositions about the constitution among the heads of a group. Version 0.2 adds a third route to rule, through assets held outside the common organ and amplified by common rules, and a third outcome when a patron is lost: the heads wait for a new one. The note names three test fields: groups that live from no exploited outsiders, where the two authors' predictions diverge; historical organised crime, where closed groups of heads repeatedly faced attempts at one-man rule; and legal peer orders, here the Rhenish-Westphalian Coal Syndicate and Lloyd's of London. A further section names the mechanisms of peer pressure that each proposition assumes.