Wednesday, January 28, 2009

State Owned Enterprises and Sovereign Investment in Foreign Economic Entities

Much attention has recently been devoted to the rise of sovereign wealth funds. These entities present great difficulties in the application of current legal frameworks because they straddle the traditional divide between public and private law, between states as market regulators and market participants. Those who oppose their growth tend to privilege their public aspects--principally that they are owned by states--adopting a formalist approach to their analysis. Others tend to privilege their private aspects--that they operate like and are subject to regulation outside their home jurisdictions by public regulators--adopting a functionalist approach to regulation. See Larry Catá Backer, The Private Law of Public Law: Public Authorities as Shareholders, Golden Shares, Sovereign Wealth Funds, and the Public Law Element in Private Choice of Law. Tulane Law Review, Vol. 82, No. 1, 2008.

The usual definitions of such funds reflect the conservative inertia of this conceptual framework. The Americans have sought to define these entities by emphasizing their public nature of these investment instruments. An SWF has been understood to include "a government investment vehicle which is funded by foreign exchange assets, and which manages those assets separately from official reserves." U.S. Department of the Treasury, Press Room, Remarks by Acting Under Secretary for International Affairs Clay Lowery on Sovereign Wealth Funds and the International Financial System, (hp-471, June 21, 2007). The IMF also focuses on the public character of the ultimate owner of the fund. Thus IMF studies would define sovereign wealth funds to include "government-owned investment funds, set up for a variety of macroeconomic purposes. They are commonly funded by the transfer of foreign exchange assets that are invested long term, overseas." International Monetary Fund, Sovereign Wealth Funds--A Work Agenda (February 29, 2008 (prepared by the Monetary and Capital Markets and Policy Development and Review Departments and approved by Mark Allen and Jaime Caruana), at 4. Annex II to this document provides short definitions provided by other stakeholders in the financial system, from Deutsche Bank ("financial vehicles owned by states which hold, manage, or administer public funds and invest them in a wide range of assets") to Morgan Stanley ("An SWF needs to have five ingredients: sovereign; high foreign currency exposure; no explicit liabilities; high-risk tolerance; and long-term investment horizon"). Id., at Annex II, pp. 37-38.

It is that public ownership that serves as the gateway through which further analysis is grounded. Thus, for example, the IMF would distinguish among these funds on the basis of their objectives:
Five types of SWFs can be distinguished based on their main objective: (i) stabilization funds, where the primary objective is to insulate the budget and the economy against commodity (usually oil) price swings; (ii) savings funds for future generations, which aim to convert nonrenewable assets into a more diversified portfolio of assets and mitigate the effects of Dutch disease; (iii) reserve investment corporations, whose assets are often still counted as reserve assets, and are established to increase the return on reserves; (iv) development funds, which typically helpfund socio-economic projects or promote industrial policies that might raise a country’s potential output growth; and (v) contingent pension reserve funds, which provide (from sources other than individual pension contributions) for contingent unspecified pension liabilities on the government’s balance sheet.
IMF, Sovereign Wealth Funds, supra, at 5. This is a framework used in other studies as well. See, e.g., Edward F. Greene & Brian A. Yeager, Sovereign Wealth Funds--A Measured Assessment, 3(3) Capital Markets Law Journal 247-274 (Advance Access publication 10 June 2008) (distinguishing among central banks, stabilization funds, public pension funds, government investment companies and state owned enterprises). American officials have distinguished between two large categories of SWFs, commodity and non-commodity funds. U.S. Department of the Treasury, Press Room, Remarks by Acting Under Secretary for International Affairs Clay Lowery on Sovereign Wealth Funds and the International Financial System, (hp-471, June 21, 2007).

As a consequence, much effort has been expended on measures to control the investment strategies of sovereign wealth funds (understood as another arm of national policy and a possible source of indirect protections of national power abroad), without affecting the level of such inbound investment to states desperately hungry for the funds. See, e.g., Larry Catá Backer, Sovereign Wealth Funds And Hungry States: Adjusting the Borders of Public and Sovereign Activity Across Borders, Law at the End of the Day, June 6, 2008. The result has been a drift to something like a "reasonable investor policy." This approach has been criticized for its over and under inclusion of restraint and its stubborn ignorance of the nature and scope of investment. See, e.g., See Larry Catá Backer, State Subsidies and the Character of the Market Transactions of Sovereigns: The Case of EADS, Law at the End of the Day, May 29, 2008. See, e.g., Larry Catá Backer, Brazil Builds a Sovereign Wealth Fund and Norway Flexes Its Muscles: Private Participation in the Market or Regulation by Other Means, Law at the End of the Day, May 24, 2008; Larry Catá Backer, Extraterritoriality and Corporate Social Responsibility: Governing Corporations, Governing Developing States, Law at the End of the Day, March 27, 2008.

Much of this control has been accomplished informally and on a state to state basis. The recent joint statement among the United States, Singapore and Abu Dhabi provides a recent case in point.

We support the processes underway in the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) to develop voluntary best practices for SWFs and inward investment regimes for government-controlled investment in recipient countries, respectively. International agreement on a set of voluntary best practices will create a strong incentive among SWFs and investment-recipient countries to hold themselves to high standards. We hope that the IMF and OECD's work can build upon these basic principles:

Policy Principles for Sovereign Wealth Funds (SWFs)

1. SWF investment decisions should be based solely on commercial grounds, rather than to advance, directly or indirectly, the geopolitical goals of the controlling government. SWFs should make this statement formally as part of their basic investment management policies.

2. Greater information disclosure by SWFs, in areas such as purpose, investment objectives, institutional arrangements, and financial information – particularly asset allocation, benchmarks, and rates of return over appropriate historical periods – can help reduce uncertainty in financial markets and build trust in recipient countries.

3. SWFs should have in place strong governance structures, internal controls, and operational and risk management systems.

4. SWFs and the private sector should compete fairly.

5. SWFs should respect host-country rules by complying with all applicable regulatory and disclosure requirements of the countries in which they invest.

Policy Principles for Countries Receiving SWF Investment

1. Countries receiving SWF investment should not erect protectionist barriers to portfolio or foreign direct investment.

2. Recipient countries should ensure predictable investment frameworks. Inward investment rules should be publicly available, clearly articulated, predictable, and supported by strong and consistent rule of law.

3. Recipient countries should not discriminate among investors. Inward investment policies should treat like-situated investors equally.

4. Recipient countries should respect investor decisions by being as unintrusive as possible, rather than seeking to direct SWF investment. Any restrictions imposed on investments for national security reasons should be proportional to genuine national security risks raised by the transaction.

U.S. Department of the Treasury, Press Room, Treasury Reaches Agreement on Principles for Sovereign Wealth Fund Investment with Singapore and Abu Dhabi 30 (hp-881, March 20, 2008). And, indeed, the recently embraced so-called "Santiago Principles" embrace this notion of some kind of reasonable investor model for judging the activities of SWF abroad.

My principal interest in this essay, however, is not to explore the principal vehicles through which states are now seeking to invest in the economic activities of others. Rather, I will focus on a potentially confounding vehicle for both economic activity in its own right and activities abroad that might broadly include investment activities usually associated with sovereign wealth funds--state owned enterprises operating as separate legal persons. Greene and Yeager, supra, suggest that these vehicles "may be the most problematic from an investee-country's perspective, particularly when the acquirer and the target are infrastructure companies, because the investments may be seen as a means for gaining political leverage." Id., at 253. For examples, they point to the investment activities of Dubai Ports World and the China National Offshore Oil Company. Id., at 253-254. See, Larry Catá Backer, Missing the Point of the Ports Problem—Getting Foreign Governments Out of U.S. Security Related Business, Law at the End of the Day, March 26, 2006.

But let us consider the problem more closely. The issue of the investment consequences of state owned enterprises whose business is not investment presents issues similar to those of the typical SWF, but with significant differences. From a functional perspective, centered on the state as ultimate owner, there may be little difference between a state owned hotel corporation purchasing a large hotel corporation with principle offices in Chicago and incorporated in Delaware, and a SWF purchasing a controlling interest in the same firm. In both cases the target company is controlled by an enterprise whose ultimate owner is a state. In both cases, the state, as ultimate shareholder, can assert a power of control over the entity that may or may not reflect the sort of values a private shareholder might be expected to assert. Thus, states might be tempted to use their ownership for political purposes--that is to maximize their national interests through their ownership of foreign entities--even if those entities suffer financially as a result. Thus, of example, if the state owned hotel corporation of State A wanted to ruin the competing hotel business of State B, it might cause State A Hotel Corp to purchase State B Hotel Corp for the purpose of either shutting it down or causing State B to make concessions that would preserve the business of the hotels in State A. But this scenario is not necessarily logical, realistic, or peculiar to public entities. First, unless the target entity is wholly owned, the public shareholder would be subject to suit for breaches of duty or abuse of power by the minority shareholders in many jurisdictions (but not all to be sure). Second, all shareholders seek to maximize their personal interest in their investments. It stands to reason that a public shareholder would measure its interests (and its maximization) on a scale distinct from that of an individual or legal person that is not a state. Third, the sort of predatory behavior suggested by the example is usually actionable under the domestic law of the state where it occurs. The evil or disruptive potential of such behavior is only troublesome to the extent that states, as owners of entities that invest in foreign jurisdictions, may evade local law or may avoid treatment as a shareholder like any other.

Yet, under the current system of global economic ordering, a functional analysis does raise some of those concerns. Principal among them is that a large corporation may effectively order its operations so that it effectively regulates itself. See Larry Catá Backer, The Autonomous Global Enterprise: On the Role of Organizational Law Beyond Asset Partitioning and Legal Personality, Tulsa Law Journal, Vol 41, 2006.

We have seen how the territorial principle and the principle of regulatory hierarchy can open the possibility of enterprise self-regulation. Any enterprise that can disperse its assets among a large enough number of regulatory units will transform the relationship between regulator and enterprise. For the traditional relationship that is both singular and hierarchical, globalization permits the enterprise to treat regulation as another factor in the production of wealth. The enterprise, now in a position to shop for regulatory regimes, or even bargain for domestication within the territory of a regulatory territory, can take advantage of the limitations of the territorial principle to minimize the effects of regulation to inhibit enterprise activity. The principle of regulatory hierarchy can then be turned on its head. The ability to commodify regulation makes it at least theoretically possible to construct an economic entity which, through careful planning can take advantage of asset partitioning, cross holdings, and global dispersion of assets to avoid effective regulation by any one political community.
Id. It is in this context that a state owned enterprise, one bent on aggressive investment in other entities abroad, might pose a regulatory danger. It is not just that such entities are owned and perhaps managed in the ultimate interests of a state, but it is that such enterprises, is managed well enough, might also be able to evade local control.

For all that, state owned enterprises are not sovereign wealth funds from a formal perspective. Their functions are quite distinct. State owned enterprises are meant to operate the way their privately owned counterparts do. Their principal objects are consonant with those of private actors. Yet like private actors, they might seek to aggressively insert themselves in the economic life of other states where that has the effect of enhancing their own financial condition, increasing its market share or reducing competitive pressures, among the usual "reasonable actor" objectives. But that very conduct can produce the sorts of interventions that might make states quite nervous where the entity is owned by a state. And indeed, because state owned enterprises are not funds, their investment activities might not fall within the limitations of the Santiago Principles and similar mechanisms.

Thus, the state owned enterprise presents a unique variant on the SWF. Though it is neither a fund, nor was it created for the purpose of investing in other entities, a state owned enterprise might naturally engage in such activities. But it does so in the context of maximizing its own business operations rather than as an end in itself. Yet those business operations, as classically understood, are themselves undertaken to maximize the interests of the entity (and its shareholders). If there is a unity between shareholder and corporate interests (for example where the entity's shares are wholly owned by the state, then it would be logical to assume that the maximization of state value in such enterprises includes the political value of that enterprise's operations. On the other hand, even if that is the case, at least with respect to its global operations, such an entity (and its state owner) would be liable in host jurisdictions, for breaches of duty, abuse of power, looting and the like in its relationships with its foreign owned subsidiaries. Consequently, the similarities in result mask significant differences between state's as owners of SWFs and states as sole shareholders of operating entities that may also inverts in foreign undertakings.

State owned enterprises also presents its own set of unique regulatory problems. As suggested above, the regulatory approaches of the Santiago Principles and other efforts designed to control enterprises in the business of investing have little relevance to enterprises that constitute operating units in other industries but which (like their privately owned counterparts) also engage in investment activities or in the development of a global network of operations grounded in ownership of enterprises in a variety of host states. Indeed, the problem of control is different, and the ability to distinguish between behaviors of state owned enterprises and others much more difficult. The regulatory tools are also cruder--resort to foreign direct investment regimes, and the construction of baroque exemptions for state owned enterprises from free movement provisions available to others. But these probabl do more harm than good. And a state owned enterprise version of the the Santiago Principles--a reasonable private company investment model" would be difficult to articulate and harder to apply with any degree of consistency. Indeed, in the case of state owned enterprises investing abroad, even more so than with SWF, the host states might be tempted to use the difference in ownership for its own purposes. Thus, and perversely, state owned enterprises investing abroad for legitimate purposes , might be subject to regulatory hurdles as a method by host states to manipulate the competitive environment internally in ways that would be irregular if the regulating state had sought to distinguish among privately owned forms.

As a consequence, states as market participants acting outside their territories, especially when operating through wholly owned or controlled state owned enterprises present a unique problem. This presents a class that is formally not SWF but functionally can be as powerful agents of projections of state power abroad as any SWF. The regulatory approaches to such enterprises are unlikely to be found in the control mechanics being developed for SWFs. And indeed, the principles of regulation ought to be based on a different framework. On the one hand, such regulations ought to be strengthened to permit minority shareholders of foreign subsidiaries to protect their interests against actions of state owned enterprises and their owners--including actions against the state owners of the stated owned enterprise, and national laws that ensure that state owned enterprises, acting as shareholders of subsidiaries, must act solely in the interests of the company they control (at least when they act as corporate directors, or when they exercise shareholder power in self dealing transactions). On the other, the host state might take for itself additional power to intervene in the actions of enterprises over which it has regulatory control. Many corporate statutes confer a power on the state to bring an action to dissolve a corporation that exceeds or abuses the authority conferred on it by law. (Revised Model Business Corporation Act, Section 14.30). Moreover, the state is usually granted a right to administratively dissolve a corporation (id., at Section 14.20). Both of those concepts could be used, broadened to fit the context of subsidiaries of foreign state owned corporations, to give a state the power to intervene in such subsidiaries where it might be clear that those who own or control a domestically chartered enterprise are using that enterprise for purposes other than those for which the enterprise was chartered (for example "to engage in any lawful business." Revised ModelBusiness Corporation Act Section 3.01(a)).

But this approach also suggests the smallness of the problem. In a sense the problem of sovereign wealth funds, like that of state owned enterprises engaging in investment activities abroad, can be reduced to issues of abuse. These include the abuse of power, abuse of corporate form, abuse of the corporate franchise, abuse of the market. Much of what is required, then, are rules that ensure that, like their private or individual counterparts, that abuse if controlled and the integrity of markets are preserved., This is both a tall order and a manageable task. But to that end, it requires a reconception of states when they engage in market participatory activities.

Tuesday, January 27, 2009

Smart Power and Soft War: Egypt Versus Syria and Qatar in Gaza

I have written of the great change in American approaches to the management of the its role in the world on the ascendancy of the administration of President Obama. I have suggested how the many aspects of liberal internationalism touched on in that speech suggest great possibilities for advancing an American agenda. Larry Catá Backer, Democracy Part XIV: “For Now We See Through A Glass, Darkly; But Then Face to Face”; On President Obama's Inauguration Speech, Law at the End of the Day, January 21, 2009. I have also suggested the power of the global community trope that appears to be a signature of political line of the new administration. That idea is grounded in the sense that the values of the United States are the most legitimate because the United States can serve as a proxy for the global community because is the only nation that incorporates within it representatives of virtually the entire global community. As such, American values can serve as proxies for legitimate global values.

This is a powerful mechanics of soft engagement, where the object is the control of the principles on the basis of which politics and economics are ordered within the global community. It seeks control of the language of power and the framework within it is deployed. The stakes are high, and the Americans are not the only powerful player seeking to use one or another version of this approach in the global battle for influence and the protection of communal interests. Larry Catá Backer, Global Economic Collapse and the Search for Sources of Values in Economic Theory: The Role of Religion, a Catholic Perspective, Law at the End of the Day, January 7, 2009. That notion of legitimate representativeness is then to be advanced, not by bullying, but by what the oncoming Secretary of State, Hillary Rodham Clinton calls, smart power—the deployment of social, cultural, and economic tools among networks of shifting alliances for the purpose of containing enemies and creating a basis for the naturalization of American (global) vales as the standard for world conduct. Larry Catá Backer, Embracing Networked Managerialism in the Service of a Global (American) Power, Law at the End of the Day, January 26, 2009. It was thus was a great deal of interest that I considered the way in which Egypt has become a devotee of the use of smart power for the preservation of its own regional interests and the preservation of its government. The focus of that consideration is the recent role of Egypt in the recent violence between Israel and the government of Hamas in the Gaza.

Gaza presents not just one but several wars, only one of which has been privileged within the spheres of reality created through media reportage. While the West and much of the rest of the world has been fixated on the by now mandatory recitation of the traditional morality play narrative of the principal conflict, in which Israel plays the villain and the Palestinians play the victims with weapons and a propensity to violence, another war is being waged. Egypt is at war with the Palestinians. Better put, Egypt is at war with the democratically elected government of Hamas in Gaza. The reasons are simple enough. Egypt has a strong stake in the other government of the nascent Palestinian state (Fatah). Hamas has constituted itself a government dedicated to the use of hard military power to achieve its internal objectives (the constitution of an Islamic state) and external objectives (the use of the tactics of irregular war, including the deliberate primary targeting of civilian populations within the State of Israel, for the purpose of destroying that entity and forcibly displacing its people). Hamas has strong links to Islamist elements within Egypt, the goals of which are not dissimilar to those of Hamas but whose objectives include the forcible replacement of the current Egyptian government. Hamas is the proxy military of the Syrian and Iranian states, through which both states project power within the Middle East—increasing their influence in the region on the basis of body counts harvested in the battlefields of Israel and Palestine. Egypt supports the other Palestinian government and has relations with the other principal direct combatant—Israel—from and through which it has also increased its own influence not only within the Middle East but within the European Union and the United States. It is, after all, vital to Egyptian interests to continue to serve as the great host of global meetings about the crisis. Hosting the Israelis and then Palestinians, the various combinations of Muslim majority states, the Quartet and others, enhances Egypt and shores up its state apparatus.

All of this is well known in the region, but hardly worth considering. It is the baseline from out of which media combat is engaged. The reason, of course, is that reality tends to be the first victim of regional conflicts. Soft power targets the control of media and the privileging of certain approaches to understanding events that favor one or another party in a conflict through the production of seemingly neutral reporting the objective of which is to manipulate values in the service of a particular pre judgment. Thus, while Egypt and Syria wage a war using surrogates in Gaza, the wider conflict is ignored and the identity and purposes of the real players is lost.

Interestingly, it is to an Egyptian paper that some credit must be given for a clearer vision of the way in which the Egyptian soft war against it regional rivals. See Dina Ezzat, Same Tactics Apply: Egypt is not Ready to Shift its Policies With Regard to the Palestinian Israeli File, Al-Ahram (22-28 January 2009). The article starts with the usual—the grand goals for the region—a truce, reconstruction of Gaza (in preparation for the next round of violence perhaps), and reconciliation of the Palestinian factions for the purpose of reaching some sort of an accord with Israel. But more interesting still is the admission that Egypt, like the United States, the Saudis, the Europeans and all of the rest, despite the sanctimonious repetition of each of these players to the contrary, has a particular interest in the contest.

In pursuing these objectives, Egyptian officials argue, Egypt will "take note" of the growing sensitivity that Hamas has towards Cairo in view of what the resistance movement claims to be a clear Egyptian bias against it -- "not just in favour of Fatah and Mahmoud Abbas", as one Hamas source said, "but even in favour of the enemy".

Obviously, Egyptian officials deny such bias outright. However, they add that Cairo is willing to "accommodate to a certain extent" Hamas's concerns while refraining from invitations to prove its "unbiased stance". In short, Hamas might encounter more in the way of Egyptian "understanding".
Id. While Egypt is willing to concede certain small points to Hamas, there are others with respect to which its interests and those of Israel converge to some extent. “There are, however, areas where Hamas envoys might confront Egyptian reticence. An obvious issue on which Egypt is willing to offer no compromise is its condition to operate its side of the Rafah crossing only in the presence of representatives of the PA along with a third party (possibly observers from the European Union, Turkey, or other countries) on the Palestinian side.” Id. In the absence of agreement, Egypt is perfectly content to continue to aid in the choking of Gaza—especially since Israel will receive virtually all of the blame by a media apparatus blinkered to its own agenda in the great battles between combatants in this part of the world.

According to this diplomat, General Intelligence Chief Omar Suleiman, who is administering Egyptian management of the Palestinian-Israeli file, and who is personally set to attend the separate talks that Egypt is planning to host, has made it crystal clear to Khaled Mashaal, the Damascus-based Hamas leader, that short of this condition being fulfilled Egypt will not allow the crossing to be regularly open. "If no agreement is reached, we will continue to do what we have been doing since Hamas took control of Gaza in June 2007: operate the crossing for clear humanitarian purposes only, and that is it," the diplomat said.
Id. The base reason is simple—Egypt, like every other Muslim power in the area, does not want to “get stuck” with the Palestinians—better, it seems under Israeli than Muslim control. “‘Egypt is not making any compromises there. None whatsoever. We are not going to get stuck with Gaza. We defied that during the aggression and we will continue to defy it after the aggression. This is a red line,’ commented an Egyptian diplomat on condition of anonymity.’” Id. Now this is smart power!

And, indeed, the Egyptians have to have a care about the war, since it can easily become hot on its side of the border. The insistence on respect for hyper-sovereignty provides a litmus test of sort for internal political battles. The key is the tunnels built by Hamas (as well as ordinary smugglers) between Egypt and Gaza. Egypt might be indifferent to the tunnels but for its utility to the Muslim Brotherhood as a means of escape from Egyptian authorities, as a corridor to training camps, and storage facilities within Gaza. For that reason alone the tunnels are a danger to Egypt. As long as the Israelis served Egypt by destroying them—and also took the brunt of media condemnation for its peripheral effects on “humanitarian” aid--increasingly a code for matters others than the basic necessities in a combat zone among the friends of Hamas (and brilliantly presented by the global press as its own idea of neutral reporting)—all was well enough. The difficulty comes when Egypt is left to do its own dirty work. The solution lies in sovereignty.
The maximum that Israel will get from Egypt on this issue, according to Egyptian officials, is extensive cooperation with "technical teams" that the US and some other European states are offering to send to detect the location of suspected tunnels. Egypt, officials add, would insist that only its authorities would decide how to close such tunnels if the job was to be done from the Egyptian side. "We cannot accept anything that would constitute a direct violation of our sovereignty on our territories. This is a very serious issue for us, and it's a very sensitive matter for the public," the same diplomat stressed.
Id. Now the Israelis, Germans and Americans will be tainted in the world press, and in the service of Egyptian interests in the stability of its current regime. Patsy power is the old fashioned term. And effective, as well.

But that leaves the intra-Muslim battle over Hamas, a battle in which Egypt cannot rely on the cover of the Israelis. That battle pits Egypt, for the moment, against Qatar and Syria. Egypt, it appears, will not permit any but an official role for Hamas, and that only as a concession to get movement on efforts to legitimate the de-facto arrangements between Israel and the dar al Islam.
Egyptian officials say that the prospect of Hamas leaders sitting in a conference hall alongside Abbas -- as Qatar had planned during the Doha summit that it hosted for Arab states last Friday, and that Egypt refused to attend -- is simply "out of the question". "Hamas leaders could be received in Cairo as they have been, but we are not letting them attend any Arab League meetings or consultative summits. This area remains strictly reserved for the legitimate Palestinian Authority. This is not just our position, but also that of the secretariat of the Arab League," the diplomat argued.
Id. It seems that Egypt’s interests within the political battlefield that is the Arab League is tied, to some extent, to the fate of Hamas. “Egypt seems set to cooperate with Saudi Arabia on promoting Palestinian reconciliation. However, it is still not willing to work with either Syria or Qatar, Hamas's direct and indirect allies, on this front. "If the Saudis want to do it they can, but we are not," commented one official who asked for his name to be withheld.” Id.

That battlefield has not been confined to the diplomatic front. It seems that now masters of the use of the media as the great field of combat for Arab and global opinion (and thus as a means of pressure through the representative or ruling state apparatus). And in this battle, Egypt names names. And one name in particular is prominently suggested as a great political player through its use of media power in the service of one of the parties about which it purports to report: al-Jezeera, and incidentally Al-Ahram’s media rival. The irony, of course, is that Al-Jazeera publishes from the relative safety of the West. “Aljazeera Publishing is an independent media organisation established in 1992 in London.”, About Us.

The stakes are high: “For Egypt, this position is not just a reaction to what Cairo qualifies as "an aggressive war that Syria and Qatar led against Egypt through the satellite TV channel Al-Jazeera" during the war on Gaza. It is rather more strategic: "Syria and Qatar are working in tandem with the Iranian regional scheme that aims to fortify the Islamic political movement, and for Egypt this is simply a red line," the official said.” Dina Ezzat, supra.

Thus, the December Gaza conflict provides a window on the use of smart power in the context of a hot conflict. It reminds us that the simpleminded analysis of the press is at times no more than the bullets of an important front in the battle and that the combatants are rarely merely those on whom the press lavishes attention. The war being fought around and through the hot contest in Gaza suggests the framework within which smart policy and soft power will operate. Both the United States and Israel might do well to learn from Egypt in the appropriate manner of deploying power smartly in a world in which military victory does not appear to follow the arrangements of power relationships.

Monday, January 26, 2009

Embracing Networked Managerialism in the Service of a Global (American) Power

The American periodical Foreign Affairs recently congratulated itself for its role in serving as midwife to what appears to be the political line to be taken by the incoming Secretary of State, Mrs. H.R. Clinton. The Origins of Clinton's Soft Power, Foreign Affairs Newsletter, Jan. 21, 2009 ("In a Senate confirmation hearing last week, Hillary Clinton used the term "smart power" more than ten times to argue that in the Obama administration, diplomacy would be at the "vanguard" of how the United States engages allies and adversaries alike. The phrase was first coined in a 2004 essay in Foreign Affairs by Suzanne Nossel, now the Chief Operating Officer for Human Rights Watch."). It seems that "liberal internationalism" (id.) is very much in the air in Washington--"as Senator Jim Webb remarked at the end of last week's hearing, 'I guess the phrase of the week is 'smart power.''" (Id.). Foreign Affairs has a point. And it is worth taking a moment to remind ourselves what this might mean for American outlooks in the coming months. For that purpose I will take a brief look at both the original article in which the notion of "smart power" was birthed and its appropriate by Mrs. Clinton years later.

Suzanne Nossel, smarting from an overabundance of ire at the foreign policy ways of the apparatchniks of the last Bush administration, penned an elegy to her recollection of a different way of approaching issues of America's role in the world. Suzanne Nossel, Smart Power, Foreign Affairs, March/April 2004. She argues that "Progressives now have a historic opportunity to reorient U.S. foreign policy around an ambitious agenda of their own. The unparalleled strength of the United States, the absence of great-power conflict, the fears aroused by September 11, and growing public skepticism of the Bush administration's militarism have created a political opening for a cogent, visionary alternative to the president's foreign policy." Nossel, supra. For that purpose, Nossel draws on what she calls liberal internationalism:
which posits that a global system of stable liberal democracies would be less prone to war. Washington, the theory goes, should thus offer assertive leadership -- diplomatic, economic, and not least, military -- to advance a broad array of goals: self-determination, human rights, free trade, the rule of law, economic development, and the quarantine and elimination of dictators and weapons of mass destruction (WMD). Unlike conservatives, who rely on military power as the main tool of statecraft, liberal internationalists see trade, diplomacy, foreign aid, and the spread of American values as equally important.
Nossel, supra. Liberal internationalism posits a set of goals roughly similar to those of its conservative colleagues, but to be obtained partially, slowly and through the use of a very different set of tools. But that is bad news--the corruption of a set of tools for bad ends. "Conservative appropriation of liberal internationalist tenets might sound like good news for progressives. It is not. By invoking the rhetoric of human rights and democracy to further the aggressive projection of unilateral military power, conservatives have tainted liberal internationalist ideals and the United States' role in promoting them." Nossel, supra. And, indeed, the rhetoric of corruption is not far beneath the analysis of liberal internationalism, as self-affirming critique: "There is a second problem with conservatives' brand of democratization. Having initially rejected nation-building on principle and then ignored the advice of planners and experts on what to expect in postwar Iraq, the Bush administration has proven woefully ill equipped to implement in practice the ideals it purports to champion. The result has been a chaotic and deadly occupation that has deepened doubts about U.S. motives abroad." Id.

In effect, Nossel posits that the ultimate assumptions of conservatives are flawed--there is no possibility of total victory (the underlying assumption of military action), there is only the possibility of managing problems--and outliving them. For that purpose, containment and the tools of soft warfare are most suited. And the ideal of complete victory secondary, at best to the true objects of internationalism--containment, management, and eventually outliving either the conflict or the enemy. See, e.g., Larry Catá Backer, Democracy Part IV, Managing Popular Expression and Democratic Impulse in Sudan, Law at the End of the Day, Nov. 25, 2007; Larry Catá Backer, ETA and the Management of Revolution in a Bureaucratic World, Law at the End of the Day, May 14, 2008; Larry Catá Backer, The Devil’s Advocate: The West, the Invincible Guerrilla, the Value of Violence and the Rise of a Management Model of War, Law at the End of the Day, August 7, 2006. In Nossel's words: "focusing on the smart use of power to promote U.S. interests through a stable grid of allies, institutions, and norms. They must define an agenda that marshals all available sources of power and then apply it in bold yet practical ways to counter threats and capture opportunities." Nossel, supra.

The great model model of liberal internationalism, perversely enough, is that course of conduct that ultimately resulted in the exhaustion and disappearance of the Soviet Union and its empire--a course of conduct best known by its most skillful devotee, Ronald Reagan. "As fascism and communism once did, terrorism and nuclear proliferation today make the liberal internationalist agenda as urgent as ever. Liberal societies are not only less prone to war but also less likely to breed or knowingly harbor terrorists. It is no coincidence that many countries on the Justice Department's terrorist watch list also appear in the Freedom House inventory of the world's most repressive regimes. Progressives, therefore, must refrain U.S. foreign policy according to their abiding belief that an ambitious agenda to advance freedom, trade, and human rights is the best long-term guarantee of the United States' security against terrorism and other threats." Nossel, supra. Though Ronald Reagan lurks in the background of smart power, it is to John Kennedy, that other proxy figure of American values, whom Nossel invokes: "A smart definition of U.S. interest would recast the fight against terror and nuclear proliferation just as Kennedy recast containment, transforming it from a dark, draining struggle into a hopeful, progressive cause aimed at securing an international system of liberal societies and defeating challenges to it." Id.

Networks, institutions and rules now serve as a means of management, and through management the protection of the privileged place of the United States. . . or its survival. "The global order created by Roosevelt and Harry Truman was like an electrical grid that maintains equilibrium across different power sources and users. The nature of today's threats -- rogues and terrorists, not other great powers -- attests to the enduring success of this strategy. The international system they built became so broad and cohesive that outliers became few in number and easily recognized." Id. The bureaucratization and juridification of political intercourse is an essential element of this framework for action. Americans can have it all through a liberal agenda--dominance, power, privilege, and the embrace of its values as a universal grounding for global governance. Thus,
liberal internationalism enfolds the fight against terrorism and rogues into an ideology and set of interests that many U.S. allies already share. By linking today's struggles to long-standing European visions of collective security, liberal internationalism can take advantage of Europe's commitment to humanitarian aid, postconflict resolution, policing, and development. Similarly, by incorporating into the agenda a genuine commitment to free trade and economic development, liberal internationalism can impress Latin American, Asian, and African countries that otherwise view the U.S. antiterrorist agenda as neglectful of their priorities. Moreover, building a broad-based liberal internationalist movement will not force the United States to give up the driver's seat. On the contrary, liberal internationalism has flourished during periods of U.S. preeminence. The key is that other nations must welcome rather than resent U.S. leadership. A new liberal internationalist approach would persuade much of the world once again to contribute its resources and energy to U.S. causes.
Nossel, supra. The object, then, is to revitalize the grid of network and ideological power in the service of American interests as a more effective way to domination than the more crude and ultimately offensive direct approach. But all in the service of the good--that is, the good for everybody.

Hillary Rodham Clinton has morphed Nossel's notions into a platform in a more recent essay, penned during the course of her campaign against President Obama. Hillary Rodham Clinton, Security and Opportunity for the Twenty first Century, Foreign Affairs, Nov./Dec. 2007. Clinton echoes Nossel's points--American militarism has served American interests badly. If the object is the maintenance of domination and the superiority of those values that serve the United States, then methods other than direct military intervention might serve Americans better.
The tragedy of the last six years is that the Bush administration has squandered the respect, trust, and confidence of even our closest allies and friends. At the dawn of the twenty-first century, the United States enjoyed a unique position. Our world leadership was widely accepted and respected, as we strengthened old alliances and built new ones, worked for peace across the globe, advanced nonproliferation, and modernized our military. After 9/11, the world rallied behind the United States as never before, supporting our efforts to remove the Taliban in Afghanistan and go after the al Qaeda leadership. We had a historic opportunity to build a broad global coalition to combat terror, increase the impact of our diplomacy, and create a world with more partners and fewer adversaries.
Clinton, supra. She would invoke that "tradition of global leadership rooted in a preference for cooperating over acting unilaterally, for exhausting diplomacy before making war, and for converting old adversaries into allies rather than making new enemies." Id. She too, would invoke smart power. "To reclaim our proper place in the world, the United States must be stronger, and our policies must be smarter. " Id.

For that purpose, Mrs. Clinton would avoid the crudity of bald militarism. Militarism, as a foreign policy force, has been largely ineffective and anathema since the great victories over militarism in the middle of the last century and the success of the largely American efforts to reduce its conceptual value in foreign policy. Smart power means reducing the militarist option, though by no means avoiding it altogether. "Use our military not as the solution to every problem but as one element in a comprehensive strategy." Id. Like Ms. Nossel, Mrs. Clinton understands the value of networks and institutions as mechanisms through which problems can be managed and issues diffused--long enough to overcome them by inertia if necessary. Mrs. Clinton declares:
Make international institutions work, and work through them when possible. Contrary to what many in the current administration appear to believe, international institutions are tools rather than traps. The United States must be prepared to act on its own to defend its vital interests, but effective international institutions make it much less likely that we will have to do so.
Id. And most important of all, Mrs. Clinton, like Ms. Nossel, understands the value of ideas and their utility in foreign policy. She says: "Stand for and live up to our values. The values that our founders embraced as universal have shaped the aspirations of millions of people around the world and are the deepest source of our strength -- but only as long as we live up to them ourselves. As we seek to promote the rule of law in other nations, we must accept it ourselves. As we counsel liberty and justice for all, we cannot support torture and the indefinite detention of individuals we have declared to be beyond the law. " Id.

The point of all of this is also clear in Mrs. Clinton's mind: produce a stronger America, defeat America's enemies, and reassure its traditional allies. Id. She also posits the utility of networks and containment as the dual cords to be utilized around the necks of American enemies. . . and tightened.

The case in point is Iran. Iran poses a long-term strategic challenge to the United States, our NATO allies, and Israel. It is the country that most practices state-sponsored terrorism, and it uses its surrogates to supply explosives that kill U.S. troops in Iraq. The Bush administration refuses to talk to Iran about its nuclear program, preferring to ignore bad behavior rather than challenge it. Meanwhile, Iran has enhanced its nuclear-enrichment capabilities, armed Iraqi Shiite militias, funneled arms to Hezbollah, and subsidized Hamas, even as the government continues to hurt its own citizens by mismanaging the economy and increasing political and social repression. . . .

On the other hand, if Iran is in fact willing to end its nuclear weapons program, renounce sponsorship of terrorism, support Middle East peace, and play a constructive role in stabilizing Iraq, the United States should be prepared to offer Iran a carefully calibrated package of incentives. This will let the Iranian people know that our quarrel is not with them but with their government and show the world that the United States is prepared to pursue every diplomatic option.

Id. To these ends, networks of rising powers would serve as effective allies. Sounding liberal in a Kissinger kind of way, Mrs. Clinton suggests the utility of Russia and of the People's Republic of China, for the efforts to retain American hegemony on its own terms.
We need to engage Russia selectively on issues of high national importance, such as thwarting Iran's nuclear ambitions, securing loose nuclear weapons in Russia and the former Soviet republics, and reaching a diplomatic solution in Kosovo. At the same time, we must make clear that our ability to view Russia as a genuine partner depends on whether Russia chooses to strengthen democracy or return to authoritarianism and regional interference.

Our relationship with China will be the most important bilateral relationship in the world in this century. The United States and China have vastly different values and political systems, yet even though we disagree profoundly on issues ranging from trade to human rights, religious freedom, labor practices, and Tibet, there is much that the United States and China can and must accomplish together. China's support was important in reaching a deal to disable North Korea's nuclear facilities. We should build on this framework to establish a Northeast Asian security regime.

Id. Of course, the Americans might be late to this point. See, Larry Catá Backer, China’s People’s Liberation Army at 80: Projecting Power and the Shanghai Cooperation Organization, Law at the End of the Day, Aug. 1, 2007. And even liberal internationalism--soft power, can be too crudely applied. But the object remains the same however accomplished--to ensure the "building of the world we want." Clinton, supra. Thus, American "power and might can only be sustained and renewed if we can regain our authority with the world, the authority not simply of a large and wealthy nation but of the American idea. If we can live up to that idea, if we can exercise our power wisely and well, we can make America great again." Id.

Smart power, perhaps. Nossel and Clinton have been right to remind Americans of the realities of the framework within which global power contests are now waged. And Americans, more than anyone else, ought to remember their role in changing the rules under which military action was a first response. The global community now lives in a a world whose conceptual framework was erected to avoid another world situation--and national desires--that arose fully formed in the 1930s. To revert to the forms of action against which Americans fought (along with many others) is certainly ill advised. And that, perhaps, was the greatest error of Mr. Obama's predecessor and his claque. But the greatest irony is the conflation of global and national interests inherent in either smart power politics or liberal internationalism. In a world in which, as President Obama implied, the United States stands as the only proxy for the global community, a politics of inclusion, of networks and smart power, is one in which the universalist agenda of the United States--as global representative, is mopst likely to have the greatest effect. Smart power wqorks for the Amerivcans because, in effect, global values are American values. See Larry Catá Backer, Democracy Part XIV: “For Now We See Through A Glass, Darkly; But Then Face to Face”; On President Obama's Inauguration Speech, Law at the End of the Day, January 21, 2009. It is not for nothing, therefore, that the greatest military-ciultural foes of the Americans are nervous. See, e.g., John Warrick, To Combat Obama, Al-Qaeda Hurls Insults, Washington Post, January 24, 2009.

Ms. Nossel and now Mrs. Clinton remind us that the rules have changed. Or perhaps better put, that ther Americans are reverting to traditional values. They point to what they call smart power, liberal internationalism or similar monikers. They invoke the great patron saints of American liberalism. But the policies and frameworks they advocate are profoundly conservative in the world which has arisen since 1945. Global expectations can no longer be driven by brute force. And why should they? It is to the world of ideas and the example of action, it is to the control of the discourse of global policy that modern global politics--and warfare, now first turn. It is in those contests and on those battlefields that it will be interesting to see how well the Americans perform after an eight year absence.

Wednesday, January 21, 2009

Democracy Part XIV: “For Now We See Through A Glass, Darkly; But Then Face to Face”; On President Obama's Inauguration Speech

The Christian Bible’s New Testament remains a powerful source of guidance in times of trouble in the United States. Recourse to its insights, molded to the tastes of the speaker, have been a hallmark of political speech since the founding of the Republic, especially on the cusp of revolutionary times. And indeed, the manipulative symbolism that marked the event—the focus on Lincoln as multilayered mother to her offspring birthed by and now liberated from her emancipatory womb, and as great protector of the family in time of crisis threatening the foundation of the family (the American Republic)—was much in evidence, from the use of the Lincoln Bible to the rhetorical form of the construction of the speech. The parallels between 1861 and 2009, and the line from the mother of emancipation to the graduation ceremony of his offspring, now come to power, was inescapable.

And so it was with a great deal of interest that I awaited the selection of the Biblical insight that will serve to mark the initial phase of the presidency of its 44th holder. That selection was announced in the course of President Obama's inaugural address. See Barack H. Obama, Inaugural Address, January 20, 2009. President Lincoln had a preference for the Evangelists. President Obama chose that great Jewish architect of Christianity, Paul. And that insight—a reverie on the virtues of the charity and love of a man (and I mean to use this word in its fully gendered sense) for his family and of this nation for its global charge—suggest the character of an administration bent on unity and dominance within a values structures it, like its predecessor, will hold out to the world as the universal foundation of political, moral and social governance. Its essence is Platonic, and consciously so. For ideologues on the left and right, there is much that serves as a warning to a complacency grounded in misguided senses of victory or defeat.

The speech starts, as these sorts of things do, with a polite nod in the direction of the predecessor president and the obligatory expression of gratitude to the masses, but with a twist that serves to remind, from the moment of its commencement, the symbolically powerful representational character of this event and the character of fulfillment, apotheosis and culmination of a national process bound up in the body of the man making the speech. “I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors.” Id. Like medieval monarchs who simultaneously were understood to be person and state, this man reminds us of that connection between himself, his office, history and state—and the augmentation of legitimacy that that triple connection vests in him. A great bundle, indeed, the import of which is made quite clear in passages that follow.

From this multiple layered sources of legitimacy, the speech then sets the stage—“Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened.” Id. But more important still is the crisis of the decline of American global power and privileged place among the members of the community of nations. President Obama acknowledges “a nagging fear that America's decline is inevitable, and that the next generation must lower its sights.” Id. And he provides the basis of solution—a return to original values—“At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forebearers, and true to our founding documents.” Id. But both concepts have been quite malleable in the hands of former holders of this office. What exactly does President have in mind?

Well, to start, he offers himself, as an individual corporeal manifestation, as well as a proxy for a certain apotheosis in American political governance. Through him, it is suggested, lies that path to a certain political grace. “On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.” Id. The old covenants are shattered, the temple is abandoned, and a new basis for universal unity is founded. “On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn-out dogmas, that for far too long have strangled our politics.” Id. A new Jerusalem is risen, we are told, and the culmination of the production of the universal moral/political order, whose portents lie scattered throughout the documents and history of the Republic, has now moved closer to fulfillment. And thus to the heart of the teaching which the President means to convey:

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less. It has not been the path for the fainthearted -- for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things -- some celebrated, but more often men and women obscure in their labor -- who have carried us up the long, rugged path toward prosperity and freedom. Id.
As pundits noted, the essence of the speech is bound up in that passage from First Corinthians (1 Corinthians 13:11). See, e.g., Arianna Huffington, Obama's Sober Sermon on the Steps, The Huffington Post, January 21, 2009; Terry Mancour, Put Away Childish Things, Guardian Commentary (U.K.), January 21, 2009. Some ignored the passage as ornament. See, e.g., Marc Ambinder, Obama's Speech Annotated, The Atlantic Blog, January 20, 2009. Others focused on it in their own way. See, e.g., , Obama's Inauguration Speech, Annotated, Chicago Tribune, January 20, 2009.

But the passage, carefully selected, was not meant to be read out of context in the style of certain contemporary commonplace preachers of the Gospel, or as an anachronistic bauble for the amusement of "culture vultures." Consciously or not, the reference was meant to underscore a world of meaning of some significance within and outside the United States. beyond the simplistic "time to grow up" referent (e.g., "There was something very powerful about watching this relatively young man, one of the youngest to ever hold the highest office in the land, telling the American people to grow up." Arianna Huffington, supra.). The reference was a gateway; it was meant to remind of us the themes Paul raises in this well known chapter: ἀγάπη (agape--love) and the move toward perfection beyond individual self knowledge. The context from which the trigger is derived is worth expanding:

8 Love never fails. Now if there are prophecies, they will be done away with. If there are languages, they will cease. If there is knowledge, it will be done away with. 9 For what we know is incomplete and what we prophesy is incomplete. 10 But when what is complete[c] comes, then what is incomplete will be done away with.

11 When I was a child, I spoke like a child, thought like a child, and reasoned like a child. When I became a man, I gave up my childish ways. 12 Now we see only an indistinct image in a mirror, but then we will be face to face. Now what I know is incomplete, but then I will know fully, even as I have been fully known.

13 Right now three things remain: faith, hope, and love. But the greatest of these is love. I Corinthians 13:8-13 International Standard Version).
The King James Version is always worth considering for the emphasis on the charity aspect of agape, a shade of meaning strongly implicit in the body of the speech:
8 Charity never fails: but whether there be prophecies, they shall fail; whether there be tongues, they shall cease; whether there be knowledge, it shall vanish away. 9 For we know in part, and we prophesy in part. 10 But when that which is perfect is come, then that which is in part shall be done away. 11 When I was a child, I spoke as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things. 12 For now we see through a glass, darkly; but then face to face: now I know in part; but then shall I know even as also I am known. 13 And now stays faith, hope, charity, these three; but the greatest of these is charity.” American King James Version), as is the Greek: (“8 ἡ ἀγάπη οὐδέποτε πίπτει· εἴτε δὲ προφητεῖαι καταργηθήσονται· εἴτε γλῶσσαι παύσονται· εἴτε γνῶσις καταργηθήσεται. 9 ἐκ μέρους γὰρ γινώσκομεν καὶ ἐκ μέρους προφητεύομεν· 10 ὅταν δὲ ἔλθῃ τὸ τέλειον, τὸ ἐκ μέρους καταργηθήσεται. 11 ὅτε ἤμην νήπιος, ἐλάλουν ὡς νήπιος, ἐφρόνουν ὡς νήπιος, ἐλογιζόμην ὡς νήπιος· ὅτε γέγονα ἀνήρ, κατήργηκα τὰ τοῦ νηπίου. 12 βλέπομεν γὰρ ἄρτι δι' ἐσόπτρου ἐν αἰνίγματι, τότε δὲ πρόσωπον πρὸς πρόσωπον· ἄρτι γινώσκω ἐκ μέρους, τότε δὲ ἐπιγνώσομαι καθὼς καὶ ἐπεγνώσθην. 13 νυνὶ δὲ μένει πίστις, ἐλπίς, ἀγάπη, τὰ τρία ταῦτα· μείζων δὲ τούτων ἡ ἀγάπη” Greek New Testament base text is the Westcott-Hort edition of 1881).

Agape--love, charity, truth, completeness, perfection—is the foundation of American perfectibility. “For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.” Id.

But this is not about the individual, but about the construction of a global community within the borders of the United States—the great laboratory for global values and governance. Thus this charity—love—is written on the backs of the many singular individuals who served as the most humble factors in the production of the American cultural and political scene, with the exception, perhaps of our indigenous semi-sovereign fellow citizens:

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life. For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth. For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn. Time and again, these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction. Id.
Thus with the 44th President, the symbolic evolution of the United States from ethnos to universal community comes one step closer to realization. The United States is more than a state, it is instead the symbolic amalgamation of all of the people’s of the world. Its vision is not merely national, but global, and on account of its make up and history, and the realization of the truth of that history, it can stand legitimately for the world.
For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus -- and nonbelievers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace. Id.
No other state can claim this representative legitimacy. But religion has. See Larry Catá Backer, Global Economic Collapse and the Search for Sources of Values in Economic Theory: The Role of Religion, a Catholic Perspective, Law at the End of the Day, January 7, 2009. It follows, that within the United States, the global laboratory now operates to generate a valid new truth for the world, a new global governance covenant. Within this forged new community, a new framework, a new truth—the fulfillment of the old covenant—can now be revealed and advanced for the betterment of the United States and the world. “What the cynics fail to understand is that the ground has shifted beneath them -- that the stale political arguments that have consumed us for so long no longer apply.” Obama Inaugural Speech, supra.

Thus it is, with respect to domestic policy we move from formalist to functionalist analysis—not law but love: “The question we ask today is not whether our government is too big or too small, but whether it works -- whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.” Id. And the keepers of the old law will be held to account, in love. “And those of us who manage the public's dollars will be held to account -- to spend wisely, reform bad habits, and do our business in the light of day -- because only then can we restore the vital trust between a people and their government.” Id. Love matters, values matter, and those insights from Paul will seep into the relationship between state and economic activity in ways that echo much that has been produced within religious and socialist communities: “The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart -- not out of charity, but because it is the surest route to our common good.” Id. I have suggested the contours of this before, both in the search for animating values around which to structure economic governance, see, e.g., Larry Catá Backer, Values Economics and Theology: The Contribution of Catholic Social Thought and its Implications for Legal Regulatory Systems (December 4, 2008), Coalition for Peace & Ethics Working Paper No. 2008-1/1, but also political governance as well. See Larry Catá Backer, Theocratic Constitutionalism: An Introduction to a New Global Legal Ordering (July 28, 2008), Indiana Journal of Global Legal Studies, Vol. 16, No. 1, 2008; Islamic Law and Law of the Muslim World Paper No. 08-44.

Thus it is also with respect to America’s engagement with the world, the same: “our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.” Obama Inauguration Speech, supra. And so we will offer love, the perfection of truth and the new global vision.

Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience's sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: Know that America is a friend of each nation and every man, woman and child who seeks a future of peace and dignity, and that we are ready to lead once more. Id.
This is meant to be a kindly guidance—the essence of agape. Yet it is also one in which the legitimacy of neighbors is to be judged by the standards Americans set for themselves through the clarity of love arising from coming closer to the attainment of perfection. And not merely a passive judgment but one grounded in respect in the expectation of global embrace of the universal truths that emanate from a country that reflects the globe.

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West: Know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist. To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it. Id.
The global duty of the United States is clear. “We are the keepers of this legacy. . . . We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.” Id.

And thus, just as love is the ultimate value for Paul, a political love is at the core of the universal values vision of the American people to be expressed by and used as an instrument of American domestic and global policy. “But those values upon which our success depends -- hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism -- these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility -- a recognition, on the part of every American, that we have duties to ourselves, our nation and the world; duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.” Id.

And thus the new covenant, embedded in the representative body of the 44th American President, takes on a Pauline hue. President Obama is speaking not just about the covenants of citizenship within the United States but has suggested its contours within this country as a template for global governance, a template against which political, social, cultural and economic judgments may be made. “This is the price and the promise of citizenship. This is the source of our confidence -- the knowledge that God calls on us to shape an uncertain destiny. This is the meaning of our liberty and our creed -- why men and women and children of every race and every faith can join in celebration across this magnificent Mall, and why a man whose father less than 60 years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.” Id.

President Obamna thus suggests a world of meaning in the invitation to “put away childish things.” The meaning is clear, though the challenge will likely keep him occupied for some time. He has suggested that the mirror through which Americans have viewed themselves, and the world has viewed them—dimly—must come away in the face of the perfection of the new covenant the symbolic appearance of which having been confirmed with his oath taking. The world might do well to consider Paul carefully over the next four years—it appears that a new house is being built on a hill. “Let it be said by our children's children that when we were tested, we refused to let this journey end, that we did not turn back, nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.” Id.

Ironically, the official spin stressed other things. “Obama aides have let it be known that a key theme will be restoring responsibility - both in terms of accountability in Washington and the responsibility of ordinary people to get involved. Rahm Emanuel, Obama's chief of staff, talks of a ‘culture of responsibility" that would "not just be asked of the American people; its leaders must also lead by example.’” Ed Pilkington, Obama inauguration: Words of History . . .crafted by a 27 year old in Starbucks, The Guardian U.K., January 20, 2009. And the the speech was criticized as the expression of children. Id. (“Jon Favreau, 27, is, as Obama himself puts it, the president's mind reader. He is the youngest chief speechwriter on record in the White House, and, despite such youth, was at the centre of discussions of the content of today's speech, one which has so much riding on it.”). Yet despite efforts to control its meaning or judge its makers, the words themselves suggest a reality now seen “face to face.” 1 Corinthians 13:12.

The campaign revealed only a part of the mind of the new President. But “Now what I know is incomplete, but then I will know fully, even as I have been fully known.” 1 Corinthians 13:12. And with this in mind, we are in a better position to understand the values and outlook that will mark much of what may originate in the White House over the next several years. To the mass of unbelievers, those who prefer the partial comfort of the self-reflection of the political glass, darkly, the speech rang hollow. “The New York Times assembled a panel of former speech writers to presidents Carter, Bill Clinton, Richard Nixon, Ronald Reagan and George H.W Bush. They judged the address everything from mixed to marvellous. But in an editorial the paper declared that Mr Obama’s speech, though lacking the ‘soaring language’ of Presidents Franklin D Roosevelt or John F Kennedy, gave the crowd ‘the clarity and the respect for which all Americans have hungered.’” Catherine Elsworth, Barack Obama inauguration: Bloggers and analysts divided over speech, The Telegraph (U.K), January 21, 2009. But the discomfort might well reflect the message rather than the form of its delivery. It is to the substance of that message that the global community will have to adjust in the coming years.

Sunday, January 18, 2009

Glimmerings of Rule of Law Through the Party Apparatus in Cuba: Raul Castro Speaks

I have been suggesting that it might be possible to construct a legitimately constitutionalist state grounded in single party governance. Backer, Larry Catá, The Party as Polity, the Communist Party, and the Chinese Constitutional State: A Theory of State-Party Constitutionalism (January 10, 2009), Journal of Chinese and Comparative Law, Vol. 16, No. 1, 2009. But that construction requires something that most party-state systems find difficult to achieve during their revolutoionary phase--the institutionalization of power and its bureaucratization through a the institution of rule of law systems administered by a community of people sharing political power under the substantive principles underlying state organization. The adoption of a constitution does not necessarily produce a constitutionalist state. "These include the reflection of the party-state construct (1) in a division of the character of citizenship between economic and social citizenship, claimed by all persons, and political citizenship, which can be exercised through the Party, (2) in an understanding of political organization in which the state power and its institutions are subordinate to political authority, (3) in an institutionalization of political authority within a collective that serves as the source and conduit of constitutional values to be applied by the holders of state authority, and (4) in a system in which Party elaboration of rule of law values is contingent on state and party self discipline." Id. I have suggested the way that the Chinese have been moving toward the realization of such a legitimately constitutionalist state, though one whose values and distribution of power are significantly different (in values andimplementation) form Western democratic systems. See Backer, Larry Catá, A Constitutional Court for China within the Chinese Communist Party: Scientific Development and the Institutional Role of the CCP (November 28, 2008); Larry Catá Backer, The Rule of Law, the Chinese Communist Party, and Ideological Campaigns: Sange Daibiao (the 'Three Represents'), Socialist Rule of Law, and Modern Chinese Constitutionalism, Journal of Transnational Law and Contemporary Problems, Vol. 16, No. 1, 2006.

But while China has been moving forward in the constriuction of a constitutionlaist state grounded in Marxist Leninist principles, Cuba has lagged. It remains, to a great extent, struck at the moment of its founding--its revolutionary experience. The Americans have contributed greaty to this stagnation--its opposition to the government has permitted its leaders to adopt a permanent state of revilutionary struggle. The Cuban state apparatus, and the Cuban Communist Party under whose guidance it is supposed to be operated, can continue to adaopt the pose of outsider, rather than of a state apparatus now half a century in power. In Havana, as in Miami, the clock stopped on January 1, 1959. And that is a shame.

Yet things are slowly changing, vene within the apparatus of the Cuban Communist Party. One gets a very small sense of the possibilities of this change, and its reflection of the Chinese approach, in recent remarks of Raul Castro to a Plenum of the Cuban Communits Party. Raul Castro Ruz, Intervención del Segundo Secretario del Comité Central del Partido Comunista de Cuba, compañero Raúl Castro Ruz, en las conclusiones del VI Pleno del Comité Central del PCC, efectuado en el Palacio de la Revolución, La Habana, el 28 de abril de 2008, "Año 50 de la Revolución" reprinted in Granma Internacional, January 18, 2009. The language is still laced with the aesthetics of 1959--the Party continues to exist in revolutionary times:
Lo examinado hoy en el Pleno y los acuerdos adoptados constituyen un paso importante en esa dirección, y también en la de afianzar el papel del Partido como vanguardia organizada de la nación cubana, que lo situará en mejores condiciones para enfrentar los retos del futuro y, como ha expresado el compañero Fidel, para asegurar la continuidad de la Revolución cuando ya no estén sus dirigentes históricos. Id.
The Revolution of 1959 remains fresh--the touchstone of of the work of the Party, in its search for perfection as the vaguard organization of the Cuban people. As such "no hay otra alternativa que la de trabajar unidos por seguir adelante, avanzando con el mismo espíritu de lucha y firmeza de estos casi 50 años de Revolución, transcurridos en medio de constantes agresiones, amenazas, guerras y hostilidades de todo tipo a que nos ha sometido el imperio." Id.

Yet Raul Castro also suggests the need for movement. "En ese empeño tendremos, como meta principal, seguir mejorando nuestro aún imperfecto pero justo sistema social, en medio de la realidad actual, que sabemos en extremo compleja y cambiante, y todo indica seguirá siéndolo en el futuro." Id. And it is in this context that one encounters something new--a suggesiton for institutonalization of Party power and state organization along new lines.


En estos tiempos, y los que están por venir, resulta necesario y decisivo contar con instituciones políticas, estatales, de masas, sociales y juveniles fuertes. Reafirmo lo que expresé el pasado 24 de febrero: mientras mayores sean las dificultades, más orden y disciplina se requieren, y para ello es vital reforzar la institucionalidad, el respeto a la ley y las normas establecidas por nosotros mismos.

Los acuerdos que hemos aprobado dan fin a la etapa de provisionalidad iniciada el 31 de julio del 2006 con la Proclama del Comandante en Jefe, hasta el mensaje en que nos expresó su propósito de ser sólo un soldado de las ideas, vísperas del 24 de febrero del 2008. Durante esos 19 meses, trabajamos colegiadamente, junto a otros compañeros, sobre la base de la delegación de funciones que él realizó. A esto me referí con más amplitud en el punto de la agenda sobre la Comisión del Buró Político. Id.
Raul Castro here raises the spectre of rule of law governance--not just for the state, but for the Party. He also references the delegation of state power through a bureaucracy. It is possible ot see very hazy parallels between this line of development and the recent suggestions crystalized in the more sophistacted form of scientific development described by Hu Jintao. Hu Jinato, Report at 17th National Congress of the Communist Party of China (Oct. 15, 2007) Section VI.
And maybe that institutionalization is necessary to continue to develop both CCP and State: from a system in which the CCP represents a collection of individuals who together comprise a revolutionary vanguard (to which political power over the state and its organs might be appropriate) to a system in which the CCP becomes the source and protector of the core values of Chinese society to which an ever broadening base subscribes. That is, the CCP moves from a revolutionary vanguard party outside the system, to become the system itself—the values and principles that ground the construction and operation of all organs of political power in the nation. Backer, Larry Catá, A Constitutional Court for China within the Chinese Communist Party: Scientific Development and the Institutional Role of the CCP (November 28, 2008);

Rule of law based institutionalization, even one based on a rule fo law based Party structure, ought to be encouraged if the state is to survive in it present form. The real quesiton is whether the very limited reference to institutionalization and rule fo law governance portends significant changes in the form of the organization of Party-State power in Cuba, or whether it is meant to serve as a power for the continuaiton of the sort of siege rule that hasd characterizede the organization of the Cuban state since 1959. If the revolution is to survive its principal progentors it will have to move beyond January 1, 1959 and beyond the limits of its organization along Soviet lines. Raul Castro suggests that this may be possible in Cuba. The quesiton will be whether the Party-state apparatus can be reformed in time.