Sunday, July 30, 2006

Direct Shareholder Democracy: Reflections on Lucian Bebchuk

In a recent opinion piece published in the Financial Times and widely distributed to academics, (Lucian Bebcuk, “Investors Must Have Power, Not Just Figures on Pay,” The Financial Times July 27, 2006), Lucian Bebchuk, a professor of law, economics and finance and director of the program on corporate governance at Harvard Law School, lauded the recent action by the U.S. Securities and Exchange Commission to increase the disclosure requirements for executive compensation in companies whose securities are traded in securities markets under American jurisdiction. Power to the investor, he says, is good, and information is a good way to vest such power in investors. So far no surprises. This sort of approach has been the touchstone of American securities regulation for more than three quarters of a century. And this is the sort of academic intervention in the popular media that serves well the public policy underlying the American Securities Acts by continuing to lend public academic support to the legitimacy of the policy encapsulated in those Acts.

This is hardly worth noting, but Professor Bebchuk then goes on to something infinitely more interesting from my perspective. He writes “In Wednesday‘s meeting, one of the SEC commissioners expressed the hope that improved disclosure would enable investors to cast votes in a more informed way. For this to make a difference, however, shareholders need more voting power.” He goes on to suggest a number of provision he believes are worthy of adoption by shareholders, few of which have managed to find their way into the corporate governance of many public companies. “For example, companies have largely continued to adopt arrangements providing soft landings for executives pushed out due to utter failure; to establish minimum levels for bonuses, however poor performance is; and to design option plans rewarding executives for gains from market-wide and industry-wide movements rather than managers’ own performance. Similarly, in spite of repeated calls for change, companies have largely failed to adopt claw-back provisions that enable the reversal of compensation based on accounting figures that have had to be restated as well as limits on executives’ broad freedom to exercise vested options.”

For him, then, disclosure is hardly enough. The market has proven inefficient in fixing these problems. The solution must be based on a governmental intervention producing a forced shift of power to shareholders. “To ensure that directors focus on shareholder interests, they must be made not only independent of insiders but dependent on shareholders.” The road to shareholder power lies in adoption of rules to make it easier for shareholders to propose slates of candidates for the board of directors, to require all directors to stand for election annually, to require the receipt of a majority of votes cast for election, to impose a secret balloting rule for voting, Moreover, Professor Bebchuk would import from the public sector the power of ballot initiative, and would require shareholder approval of compensation plans.

Professor Bebchuk has for many years advanced this position in favor of greater shareholder direct democracy in corporate governance (e.g., Lucian Bebchuk, The Case for Increasing Shareholder Power, 118 Harvard Law Review 833 (2005)). This, he posits, is the most efficient method for ameliorating the great abuses of corporate managers and the weakness of directors in the face of managerial excess. Shareholder direct democracy provides the great antidote to managerial tyranny and directorial weakness, especially in public companies.

I am a great fan of corporate democracy. Shareholders, like citizens of any other community, whether political, religious, economic, academic or the like, ought to have a great power to directly participate and affect the conditions under which he is forced to accept the conditions of member ship in that group. But I wonder, rhetoric aside, about the focus and value of direct shareholder democracy of the sort advocated. Or rather, if power is to shift from managers and directors, to shareholders, where exactly might it go? It certainly will not go to individual shareholders for the most part. Academics have long pointed to the collective action problems of the individual shareholder (e.g. Robert Charles Clark, Corporate Law” 1986, pp. 388-95). In the U.S., individuals tend to view their shares as property, and fairly liquid property at that. The most efficient way of dealing with this sort of property, is to dispose of it whenever it is possible to acquire something of greater value. Market liquidity privileges exit over loyalty and participation. That, as Justice Scalia once noted in dissent, “is the deal” reinforced by the securities laws (Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990)).

But power taken from managers and directors must go somewhere. If not to the individual shareholder, then where might it go? A likely resting place is with institutional investors. We are told that by 1999 institutional investors held nearly half of the outstanding stock of American public corporation (The Conference Board, Institutional Investment Report, Financial Assets and Equity Holdings, Vol. 4(1), November 2000). Institutional investors are particularly active in holding shares of the largest 1,000 corporations (The Conference Board, Institutional Investment Report, Equity Ownership and Investment Strategies of U.S. and International Institutional Investors, Vol. 4(2 and 3)). But American institutional investors act for their own investors. And their primary obligation is to increase the value of the holdings they manage. That goal may require more attention to liquidity in the form of diversification rather than participation in the governance of a more limited group of corporations in which investment can be higher (John C. Coffee, Liquidity versus Control, The Institutional Investor as Corporate Monitor, 91 Columbia Law Review, 1277 (1991))). On the other hand, institutional investors might also serve whatever other articulated goals of their investors. In addition they may be created to further certain non directly monetary goals, for example good governance, avoidance of violation of international human rights norms and the like. And because investment managers may belong to the same social group as the managers of the corporations in which they invest, personal and other ties may act to limit the vigor of any inclination to become active in corporate management (Edward Rock, The Logic and Uncertain Significance) of Institutional Shareholder Activism, 79 Georgetown Law Journal 445, 468-70 (1991)).

But if institutional investors are more inclined to judge funds in terms of “investment objectives, long term preference and risk” (Edward D. Johnson, III and John J. Brennan, “No Disclosure, The Feeling is Mutual,” Wall Street Journal, January 14, 2003 at A14, describing investment manager opposition to SEC proposal requiring mutual funds to disclose their proxy voting policies and actual proxy votes cast), then to who would power likely trickle? One answer, of course, is to those individuals and entities who seek to participate in markets for corporate control. Direct shareholder democracy adds another and very interesting level of complexity to the gamesmanship possible in contests for corporate control. In one sense it might make effective control cheaper avoiding the need to actually buy shares. At a minimum, it adds layers of action possible in contest for control. Less likely, though it is fun to think about, is the incentives such shareholder democracy might create for the establishment of Japanese style cross holdings among a group of corporations, each thus watching each other’s back, at least to some extent (though clearly the sort of tight knot control of the Japanese model would not be possible in the more market oriented American context).

A potentially more interesting beneficiary of power devolution might be organized elements of civil society who seek to change corporate behavior on the basis of one or another cause. It would be those nonprofit and other social, political and religious organizations seeking to involvement themselves in corporate management who would profit mostly from this sort of proposed direct corporate democracy. They would perform the same function, in the context of corporate policies and governance that was once played by the individual shareholder with respect to compliance with shareholder disclosure obligations under the old derivative action regimes. Shareholder activism of this sort was substantially suppressed by federal legislation in the 1990s. And thus it would be ironic indeed if one sort of shareholder power, now focused on institutional shareholders and institutional elements of civil society, was created to replace the sort of individualized and small holder shareholder power recently reduced.

In this sense, Professor Bebchuk really furthers corporate governance institutionalism in fact in the name of the small shareholder, whose power remains marginal and whose interests are not addressed by a focus on direct shareholder participation in governance. On the bright side, the institutional side effects of this proposal also has the effect of destabilizing the privileged position of the shareholder supremacy principle on which so much corporate law has been based. Ironically (again) this will be done in the name of furthering shareholder primacy. In a world in which stakeholder groups, working within the intuitional framework of aggregated investment vehicles can further their own positions in the name of shareholders, it will be stakeholders rather than shareholder, for the benefit of which corporate governance will be focused. But that will be fine, as long as the formal requisites of share ownership are maintained.

But in any case, Professor Bebchuk raises one of the most interesting issues of corporate law in the early 21st century: why hold shares? The market in the U.S. has tended to answer that question in one way—that shares are held as property in which liquidity os privileged. But Professor Bebchuk reminds us that the market was able to develop that answer because the state permitted it. He reminds us that the market need not necessarily decide the answer to that question. Indeed, he suggests that the state ought to impose a different answer, that shares are bundles of citizenship rights in an economic community to which the shareholder has certain participatory obligations and in which participation rather than exit is privileged in the rules. This view has been, in other contexts, very popular over the last decade. Broadening the obligation of corporations to respond to one or another of its stakeholders has been the object of the international human rights community (see my article Multinational Corporations, Transnational Law: Corporate Social Responsibility as International Law, 37 Columbia Human Rights Law Review 287 (2006)), of local labor organizations, and other groups. As corporations have become more powerful, the tendancy has been to treat them more like states (see my article Ideologies of Globalization and Sovereign Debt: Cuba and the IMF, 24 Penn State International Law Review 497 (2006)). Professor Bebchuk reflects these trends in a narrow but important context—from within the most traditional parts of corporate law and regulation. It seems that corporate institutionalism is coming, the focus on the corporate entity must reduce the centrality of the individual shareholder. The aggregate or institutional shareholder as the conception of shares will replace the solitary shareholder, as the foundational ideal of shares as property becomes encrusted with the institutional overlay of rights and duties. In lieu of discipline by exit, shareholding will give rise to greater obligations to manage. Neither conception is wrong. Both serve economic development well enough. Each reflects cultural and social sensitivities in the conceptualization of economic entities. These conceptions shift over time and over cultures. But that this is done in the name of the individual shareholder, who ultimately loses power relative to an increasingly autonomous entity to and from which obligations flow, adds irony to the mix.

Friday, July 28, 2006

Air Travel and Globalization

Much has been written about the critical role that free movement of capital has played in the development of globalization, some of it positive (Thomas L. Friedman. 2000. The Lexus and the Olive Tree. New York, Anchor Books), some of it loving but critical (Joseph Stiglitz. 2002. Globalization and Its Discontents. London, Penguin Books), and some of it critical (Leslie Sklair. 2001. The Transnational Capitalist Class. Oxford, Blackwell Publishers). All of these works tend to focus on capital and its movement. Fewer popularizing works on globalization focus on the importance of people in "activating" this capital in global economic markets. Michael Mussa , for example, emphasized the importance of migration, the movement of peoples, in fostering globalization of trade (Michael Mussa,. 2000. "Factors Driving Global Economic Integration"). Mussa also emphasized the importance of cost and reliability in driving economic trade. The cheaper and more reliable the avenues of trade, the easier the facilitation of movement of goods and people, the more densely integrated trade and economic activity might become. People make globalization happen, as consumers and traders. The greater the impediments to the facilitation of the movement of people in trade, the greater the threat to global economic integration.

It was with that in mind that I sat in one of the busiest airports in the world as it shut down in the early afternoon in the middle of a work week as a result of weather related trouble occurring some hundreds of miles away. As tens of thousands of people scrambled to find alternative means of travel, or to postpone business meetings, or reschedule work that was scheduled to be done, or to find shelter for the night (or two), a number of thoughts came to mind:

1. Economic integration, for all its robustness is fragile. Something as simple as thunderstorms over the American Oho Valley can have substantial effects on trade at the micro level. The aggregate of constant disturbances to the flows of trade can have a tremendous effect on aggregate trade either by affecting its flow (or more likely perhaps) by affecting its cost.

2. One person’s cost is another’s profit. Disruptions in trade provides benefits and opportunities. The inefficiency of air travel in the face of weather disruptions revealed a tremendous efficiency between air carriers and local retail establishments (restaurants, clothing stores, and hotels). Local business profits a great deal whenever an airport shuts down. And at this airport in particular, the systems designed to funnel passengers from airport to nearby waiting stations were efficient and likely highly profitable. They were also designed to ameliorate the loss from travel disruptions, providing methods of communications designed to facilitate the continuation of transactions even if not in person. The only losses that could not be minimized were those requiring the actual delivery of goods or the presence of persons.

3. Trade disruptions facilitates commercial transactions. And not just local ones. The businesses making money were as likely to be the local operations of multinational enterprises, or enterprises owned by people with transnational connections, as they might be purely local affairs. Indeed, as some scholars have already suggested, multinational enterprises prefer dealing with other like sized entities in making business arrangements (John A. Matthews. 2002. Dragon Multinational: A New Model For Global Growth). In this case, multinational food and hotel chains were as likely to profit from local disruption as local firms.

4. It is not always the weather. Weather can affect travel. But sometimes the effects of weather can be multiplied by bad planning, or perhaps better put, by planning that is indifferent to the possibility of disruption caused by weather. In this case, there was a sense that a conscious overreliance on certain types of travel scheduling, combined with the implementation of operations grounded in a necessary assumption of constant ideal weather conditions, fully utilizable personnel and equipment eternally in the best working order, contributed ion no small measure to the ease with which the system collapsed on the development of thunderstorms near an important spoke in the transportation network. While such potentially sub optimal planning might require change in this context, the existence of exogenous ready amelioration devices relieves the air carriers (and the airports) of this necessity. Why plan around bad weather (or personnel and equipment failure) when there is an efficient system of housing and feeding delayed passengers, the costs of delay can be reduced by technology (for example facilitating communication via cell phones, faxes, conferencing and the like), and passengers in any case would be unlikely to pay the increased costs of transportation systems better well planned for storm related disruptions.

5. Trade systems built around reliance on exogenous mitigation networks are vulnerable to failure. So, people gamble. They are said to prefer lower travel fares based on systems positing perfect transportation conditions, gambling that they will not be on the airplane when the assumptions (one or more of them) fail. And they further gamble that the systems of mitigation in place (through transnational hotel, food and telecommunications networks) will reduce their transaction costs in the event they are caught in a transportation failure of the sort I suggested. This system is elegant in theory and quite messy in practice. Just watch tens of thousands of people scramble for hotel rooms near midnight on a week day in a large city that plays an important role in transnational trade. Just listen to the frustration of missed transaction opportunities as mobile phne networks freeze, or are disrupted by the same forces contributing to the disruption of the transportation networks. Just work through the longer term effects as it takes more than a day to get people to where they are going, disrupting the flow of commerce over a much longer term. These sorts of failures can be tolerated only to a certain point. When they become routine, when they must be planned for, then their effect on economic systems may become too large to ignore.

6. Correction is difficult. When an airport, to continue with my example, shuts down with too much frequency, and thereby causes great disruption to trade, an inefficiency has been created requiring correction. That correction may come from several sources. The market may correct the inefficiency, people may choose to travel through airports less likely to fail, they may be willing to pay more for a greater assurance of non failure, they may seek protection through insurance schemes, they may seek alternative means of travel. Innovation may make the site of inefficiency obsolete. People do not travel by ship anymore for the most part. Technology may solve the problem of airport failure. Teleconferencing, global systems of spot production or assemblage, combined with alternative transport, may reduce the value of airports to trade. States may intervene. This may produce short term amelioration at great cost (regulation is costly to produce, inherently clumsy and slow to react to changes in patterns of market conditions). Or the market may fail. Transportation systems are a soft underbelly of global integration. They might be seen by some as the perfect place to strike at the power of the states benefiting most from this economic integration. That these forces have not struck yet is a mystery but might be due in part to the difficulty of affecting the entire global system of transportation in any meaningful way (destroying an airport or two, while spectacular, is not likely to significantly affect the way goods and people move in the aggregate). But credible threats to transportation centers can under extreme condition, paralyze the system as a whole.

I would add more but the air carrier’s personnel have just started calling names on a standby list, I have been at the airport for two days, cannot get a confirmed flight until tomorrow and would really like to get to where I am going because I have a meeting I must attend . . . . . . . .

Thursday, July 27, 2006

Miscausation in the International Law of Conflict Resolution: The Possibility of Error in Conceptions of the Israel-Hezbollah Conflict

In the recent past I posited a "Führer Principle" of international law (Larry Catá Backer, "The Fuhrer Principle of International Law: Individual Responsibility and Collective Punishment, Penn State International Law Review 21:509-567 (2003). It posits a necessity of error in the constitution of individual authority and communal power. Communities - the nation-state, religious communities, terrorist organizations - are arranged through a cultivation of error: mistaking causes for effects, assuming a false causality, creating an imagined causality, and assuming a free will. These errors of causation, these miscausations, have been offered as a means through which leaders or leader classes - the judge, the priest, the king, the president, the charismatic leader of violent sub-national communities - maintain authority. In contrast, the community itself, those who are led, dominated, controlled, manipulated, are considered only in the passive. They are the victims, the weak-willed, the powerless, the sheep, the herd. They obey because they must. But authority is not power, and reality is more subtle and layered than what appears on the surface of relationships. Just as the priest, the leader uses miscausation to create the illusion of power and so protect and expand individual authority, so the community uses miscausation to assert communal power - over the priest, the president, the judge, the leader - through the illusion of weakness. The strong leader does not usurp power from the communal weak; the herd, for its own preservation as a herd, demands the appearance of overlordship of the leader. The cult of the leader, of the individual solely responsible for her acts, and of communities consisting of passive amalgams free from responsibility, serve as the foundation for modern human rights and humanitarian law. But the cult of the leader itself constitutes a titanic act of miscausation in four parts: (1) that communities are protected not because they are weak, but because they are strong, to protect the community against blame for action committed in its name by its leaders; (2) that the leader is dependent on the community; the leader acts in conformity to the wishes of the people; (3) that the leader then serves as proxy for the community; the doctrine of personal responsibility for communal acts protects a community by sacrificing its leaders for acts of communal wrongs; and (4) that the community, the sheep, are in actuality the Shepherd in a world arranged to minimize the costs of inter-community conflicts for power. For modern political and legal theory, this misunderstanding unveils the perversity of the logic of grounding modern international humanitarian law in the personal responsibility of individuals for their acts.

Miscaustion as a basis of international relations, and the legal framework through which it has been institutionalized (to some extent at least), is not derived from the "usual sources" of international relations theory. Precisely because these usual sources serve as the basis for the miscausation of international relations, and the legal framework through which it finds expression, it was necessary to look beyond that framework to its roots. For that purpose, the insights of Nietzsche provided a useful source. Nietzsche developed the insight of four great errors of causation that, to a great extent, served as the organizing foundation for communal power (Friedrich Nietzsche, Twilight of the Idols, in The Portable Nietzsche 464, 492-501 (Walter Kaufmann, trans. Viking Press, 1972).

The first of these errors is the confusion of cause and effect. Nietzsche explains "The newspaper reader says: this party destroys itself by making such a mistake. My higher politics says: a party which makes such mistakes has reached its end; it has lost its sureness of instinct.” Nietzsche, supra, at 493-494.

The second of these errors is the creation of false causality. In explaining the methods by which the appointed interpreters of communal norms maintain their dominant position, Nietzsche provides an example: “He even took the concept of being from the concept of the ego; he posited ‘things’ as ‘being,’ in his image, in accordance with his concept of the ego as a cause. Small wonder that later he always found in things only that which he had put into them. The thing itself, to say it once more, the concept of thing is a mere reflex of the faith in the ego as cause.” Nietzsche, supra, at 495.

The third of these errors, the creation of imaginary causes, is particularly potent in the manifestation of a
führer principle. “Thus, one searches not only for some kind of explanation to serve as a cause, but for a particularly selected and preferred kind of explanation—that which has most quickly and most frequently abolished the feeling of the strange, new, hitherto unexperienced: the most habitual explanations. Consequence: one kind of positing of causes predominates more and more, is concentrated into a system, and finally emerges as dominant, that is, as simply precluding other causes and explanations.” Nietzsche, supra, at 497-498."

The last error, the falsity of free will, suggests a more subtle insight. “Today we no longer have any pity for the concept of ‘free will’: we know only too well what it really is—the foulest of all theologians’ artifices, aimed at making mankind ‘responsible’ in their sense, that is, dependent upon them. . . . The entire old psychology, the psychology of will, was conditioned by the fact that its originators, the priests at the head of ancient communities, wanted to create for themselves the right to punish—or wanted to create this right of God.” Nietzsche, supra, at 499.

The term führer principle was chosen deliberately. In its descriptive sense, the term invokes the principle of a (false) active leadership and passive political community, which serves as the lynchpin of international humanitarian law. It's roots stretch back to Biblical understanding of the relationship between a political community and its leader. The use of the
German terminology provides a subtextual, and naughty, reminder of the perversity and corruption of the condition to which the term refers. The modern manifestation of a führer principle of governance originated in Germany during the period of Nazi rule, 1933-45, to describe principles of democratic governance, centering on the notion of the leader as embodiment of the sovereignty of the people (Arthur Kaufmann, "National Socialism and German Jurisprudence From 1933-1945," 9 Cardozo Law Review 9:1629, 1637-41 (1988) (law was an expression of the democratic will of the community as embodied in Hitler). Having vanquished, at great cost, the socio-political community which held to and acted on this principle, the West appears to have adopted an inverted variant of the premise of this "Leader Principle" (again) as the foundation of modern humanitarian law. The West now distinguishes between a community that educates and prepares its members for the commission of violent or criminal acts, and the individual who actually effectuates the act. The individual actor is treated as an actor free of any connection with or service for communities that might have made his actions possible in tangible and intangible ways.

It was with these notions in mind that I read a recent editorial in the American national newspaper, U.S.A. Today ("Lebanon's Past is No Model for Its Future," U.S.A. Today, July 27, 2006 at 11A). My sense is that this editorial represents the mainstream thinking of the American elite, and especially the assumptions the American elite relies on its conceptualizing the nature of the conflict in the Middle East and the scope of appropriate responses. To some extent, the views represented also reflect, though in less provocative form, the thinking of elites across the developed world. Yet those assumptions, so well articulated in this editorial, also clearly reveal the way in which Nietzsche's errors of causation have, to some great extent, also permeated thinking about international problems and the legal framework through which they must eventually be resolved. For that reason, the editorial is worth working through.

What does this editorial suggest? The editorial starts with a call to the great principle that history repeats itself. It reminds the reader that in 1978 an Israel "desperate to defend itself against terrorist attacks along its Northern border" invades Lebanon resulting ultimately in a U.N. call to withdraw and the deployment of a temporary international observer force to watch the border between Israel and Lebanon. It then suggests that the situation is worse today because, as a result of this initial invasion, a return invasion four years later, and a long term occupation of a security zone in southern Lebanon, Israel "spawned" Hezbollah, "a far more powerful threat than the isolated Palestinian terrorists it replaced." The editorial applauded Secretary of State Rice's deflection of the usual calls for an immediate cease-fire and call for a more lasting peace enforced with an international force of some kind. But the editorial then notes pessimistically that even with all of Israel's military strengths, it has met with a "cunning guerilla force dug into warrens, caves and tunnels, all under the noses of U.N. observers." And it notes that though Secretary Ricer has proposed an international force, no countries have stepped forward to volunteer (though days after a number of states--France, Turkey, Norway and others indicated a willingness to participate). The editorial alludes, without actually suggesting, that the cause of this reluctance might be the death of the 241 American servicepersonnel killed in Lebanon in 1982 (no nation wants to send military personnel to a war zone and risk death it seems) and suggests that disarming Hezbollah is unlikely by any U.N. force. Consequently, the editorial suggests its own solution: the United States must engage in dialogue with the combatants--principally Israel, Hezbollah, Syria and Iran. The editorial suggests a critical distinction between what it terms "negotiation" and what it suggests can be classified as "communication" so necessary to maintain "leverage" in the Middle East (though it is not clear what, if anything, this leverage concept means). The editorial then invokes the necessity of maintaining "the democracy that seemed so promising in Lebanon just a few months ago." The editorial suggests that "communication", which has for this part of the editorial been relabeled, remarkably enough, "negotiations for a ceasefire" provide a chance to open a dialogue that might exploit differences between Syria and Iran (Hezbollah's principal backers) "first to stop the killing and rein in Hezbollah and then for other reasons." This, the editorial concludes, is the only way to prevent history from repeating itself.

While the language of the editorial is very pretty indeed, it reveals the possibility of the sort of backwards logic suggested by Nietzsche. I do not necessarily advocate a particular view; I do, however, suggest that Nietzsche's insights suggest a great caution when grand proposals are made. Let me suggest a few examples:

1. The confusion of cause and effect.
Cause and effect are nicely confused in the editorial's suggestion that negotiation with Hezbollah, Syria and Iran is necessary to preserve democracy in Lebanon. It might be equally true that democracy in Lebanon will never take root as long as it is necessary to negiotiate with non-state parties (Hezbollah) and other state actors (Syria and Iran). Another is the editorial's suggestion that the reluctance to volunteer troops for a peacekeeping force in southern Lebanon is grounded in part on the power of Hezbollah to successfully resist such forces. It might be equally true that military intervention, even at the international level, is impossible because Hezbollah reflects the will of the Shi'a Lebanese people, and is actively supported by large segments of the Lebanese civilian population many of whom might be counted on to actively help Hezbollah resist any foreign intervention. This last point is as much a history lesson ignored by the editorial as the more facile historical assertion it makes.

2. The creation of false causes. There are a number of false causes deployed in the cause of negotiation and articulated in the editorial. For example, the editorial suggests that Hezbollah retains its power only as a vassal of Syria and Iran. But it may be as likely that Hezbollah derives its strength from its close connection with the Shi'a people of Lebanon. Syria and Iran merely provide aid, and may even be able to influence Hezbollah among choices any of which might be acceptable to Hezbollah. But neither state has the power to effect the disarmament or dismemberment of the organization. Nor is it likely that Hezbollah, now a potent political, institutional, and religious force within Lebanon, likely to be willing to self-destruct. The connection between cause and effect may be loose, indeed.
Likewise, it is possible that the editorial's assertion that Hezbollah was able to develop into a great military force effectively serving as the government of southern Lebanon despite the presence of U.N. observers is an exercise in false causes. It may be as likely that Hezbollah was able to develop into a strong military and institutional presence in Lebanon as a consequence of, with the passive aid of, and congruent with the policies of the United Nations as conveyed to the observer forces.

3. The creation of imaginary causes. Imaginary causes are grounded in the search "
not only for some kind of explanation to serve as a cause, but for a particularly selected and preferred kind of explanation—that which has most quickly and most frequently abolished the feeling of the strange, new, hitherto unexperienced: the most habitual explanations." Nietzsche, supra, at 497-98. There are a number of examples of imaginary causes in the editorial: fear of casualties keep states from committing military forces to a war zone; that any Israeli action will produce a reaction of equal or greater force; that a U.N. force would be ineffective. Perhaps the greatest imaginary cause, in this sense, is the all too facile resort to history--and especially historical tragedy--to explain away a policy determination. In this case, the foundational assumption of the editorial--like that of many in the Western elites--is that military intervention always spawns insurgency, that this insurgency quickly develops from defensive to offensive activity, and that that can not be halted by international military efforts. Yet history lessons can as often serve as a veil covering unpalatable rationalizations. That might be the case here, where the position of the editorial staff of a fairly "middle of the road" American newspaper seeks to advance a position contrary to that of the federal executive. Moreover, lessons can be so subjective that they can reveal more about the fears of those who resort to a particular history lesson than about history or its lessons. Again, the editorial is revealing here for the way in which American exceptionalism continues to shape the beliefs of elites. This exceptionalism here takes the form of a sense that American power or persuasiveness is the necessary ingredient leading to the resolution (or more likely containment) of the current military manifestation of an intractable conflict. But it is as likely that the parties have relied as much on this sense of American exceptionalism to keep the conflict alive (the reference to the failed Clinton Administration talks between the Israeli's and Palestinians is telling). Why?; to retain the possibility that their position may ultimately be successfully adopted. Both Israel and the Palestinians have played the game of delay masterfully, enabled by a series of complicit American Administrations which failed to grasp the larger picture, or an appropriate lesson from history. Don't misunderstand. I believe in the value of history as a useful instrument of policy. But history's lessons are far less clear than the proponents of particular versions might be inclined to believe.

4. The error of free will.
The editorial's suggestion of the necessity of American intervention, and of the need for American diplomacy to negotiate with it enemies nicely evidences the error of free will. American elites induce these errors because it seems to be in their interests to do so. In this respect, they may, like their Iranian counterparts, prefer to establish a foundation for conflict management rather than resolution. Unlike their Iranian counterparts, who may see in conflict management, a step toward the fulfillment of a peculiar religious vision (a topic on which I have written before), the West adopts the same position for the opposite reasons--to postpone an otherwise bloody resolution of conflict. Thus the great perversity of modern international relations--one segment of public international society seeks to foment, contain and manage conflict to hasten the resolution of all conflict, while the other seeks to contain and manage conflict to postpone their resolution (in the hopes that time will solve the problem). In this global context, the communication to which the editorial refers will be a greater exercise in (perhaps conscious) miscommunication for opposite ends. This suggests, in great measure, the most potent of Nietzsche's error of causation--the error of free will.

Taken together, the potential of error piled on error suggests a miscausation of titanic proportion. Tragically, miscausation can have significant effects on American interests. Getting back to the question posed by the editorial: what then is to be done. The answer may well be nothing more than containment. Like all conflicts, this one will eventually resolve itself. It is less likely to resolve itself with the active meddling of outside parties who seek to advance their own interests. But it is also likely that no state actor will be able to resist intervening. There is just too much history, too much blood, too much guilt to make it possible to avoid meddling. But with an appropriate understanding that the combatants have irreconcilable positions, that the conflict is international rather than fraticidal, and that the civilian populations of all sides all all equally committed to the struggles advanced by their military forces, then containment policies might be crafted to maximize the American, rather than Iranian or Syrian, positions.

Wednesday, July 26, 2006

Japanese Buddhism in India: Of Subordination and the Politics of Amelioration

It is with some interest that I read a recent story in the English edition of the Asahi Shimbun/International Herald Tribune—Yukifumi Takeuchi, “Japanese Buddhist Reaches Out to India’s Untouchables,” Asahi Shimbun/International Herald Tribune, July 26, 2006, Asia Section at 26. The article describes the work of 70 year old Shurei Sasai, a naturalized Indian citizen of Japanese origin who, for the last nearly 40 years, has been leading a resurgence of Buddhism in India. Known as Saint Sasai (Bhanteji Sasai) by Indian Buddhists (who number more than8 million in a nation of over a billion people), Sasai has worked to convert Indians from Nagpur, an early center of Mahayana Buddhism (that emphasizes works of virtue and compassion rather than asceticism and contemplation). Sasai’s work has produced thousands of conversions (as many as 20,000 during a six month period recently) and the recognition by majority Hindus of a Buddhist presence in the management of Mahabodhi Temple in Buddhagaya, where Buddha was spiritually awakened—no mean feat—after protests and a political awakening of the Indian Buddhist community in the 1990s. Sasai has become prominent enough to earn a place on a government created “minority committee” charged with aiding in efforts to reduce religious conflicts in India.

The story, though, is far more interesting for lawyers than this story might otherwise suggest.

1. The focus of the conversions is on India’s untouchable caste. Sasai has chosen to continue the work of Bhimrao Ramji Ambedkar, formerly of India’s untouchable caste, who led the first mass conversion of untouchables to Buddhism in 1956. Ambekar sought to eliminate the discrimination against untouchable caste Hindus by having them exit from Hindus entirely—through conversion to Buddhism—and then requiring the state to protect these adherents of a minority religion, to equal rights. This strategy continues to have great appeal to the untouchable caste.

2. Affirmative action programs aimed at untouchables have made the actual counting of converts to Buddhism difficult. The article suggests that untouchable caste converts might continue to identify themselves as low caste Hindus in order to take advantage of the current system of affirmative action put in place by the Indian state.

These two elements of the story reveal the strong political and legal implications of Sasai’s efforts and the role of religion in Indian politics and social life. These implications are tinged with a substantial bit of irony. First, the social framework of Indian life clearly makes existence for lower caste Hindus difficult. And because social practices based on religious status within Hinduism is so deeply ingrained within the social fabric of society, social organization itself could be said to be fundamentally tinged with subordination based on religious status. Critical race theory in the United States has done much to reveal the difficulties of eliminating systemic prejudice or subordination based on race. The story of conversion of untouchable caste Hindus to Buddhism reveals the way in which the insights of critical race theory can be used to explain subordination in the developing world as well. Prejudice, subordination and its systemic effects is not limited to the United States and its race problem. It can manifest itself in other forms of differentiation as well. For low caste Hindus, the system produces a situation in which exit—through conversion to Buddhism—becomes a (and perhaps the) principal responsive option.

Of course, this is not the first time the world has seen this sort of cause and effect. Christianity in the Mediterranean world was said to profit from the difficulties of less established sectors of society within the Roman world. Merchants, immigrants from other parts of the Mediterranean, freed slaves, rising middle class people—all those subordinated segments of society proved to be a primary market for early Christianity. The dynamic was similar. Having been excluded from local society—and the political, economic and social structures of that society—these elements of the population made a choice to set up their own self-sustaining (and ultimately competing) social organization. Untouchable caste Hindus converting to Buddhism may face the same social dynamic.

On the other hand, while converts embrace a new supportive community, they continue to face the systemic subordination from majority Hindus. They may, for example, continue to be treated as untouchables, or they may suffer prejudice directed against minority religions. In a society that might be built on majority religion privilege, conversion creates an internal support system but can do little to eliminate the very real effects of subordination in the form of discrimination in economic and political life.

Second, while conversion may alleviate social subordination, political intervention by the state complicates the value of conversion. Untouchables suffer great discrimination. Untouchables convert in order to seek relief from this subordination by placing themselves outside the social/religious system producing this subordination. The state intervenes by seeking to coerce a greater degree equality for untouchables through legislation that distributes social, economic and education goods to untouchables. But this political intervention is available only to those who have remained members, in fact, of the subordinated group. This presents converts with a dilemma. If they proclaim their conversion they may lose whatever governmental benefits they might enjoy against subordination. But if they do not convert, they lose the benefits of a protective community. Yet, whether or not they convert, they will continue to suffer subordination like untouchables. What to do? They must “pass.” Critical race theory again provides insights into the politics and sociology of passing—focusing on passing in the racial context of American society. Yet in the Indian context we see again how the idea of passing can work outside the race context of American life. In this case, untouchables—now Buddhists—must continue to pass for Hindu to benefit from the little protection extended by the state or continue to suffer the systemic consequences of subordination.

Third, the necessity of passing highlights my last point—the difficulty of using political devices like affirmative action to tweak the effects of systemic subordination, the foundations of which remain protected by the state. India may be purchasing majority Hindu privilege by conceding limited and state based benefits to subordinated groups. In return, the state is freed of any obligation to confront the systemic subordination itself. For those who believe that this dynamic is either tied to the West, or to race, the story of Sasai and his Buddhist converts reminds us of the difficulties of mediating between majority and minority in plural societies built on the norms of a single group.

Saturday, July 15, 2006

Proportionate Response and the Management of Violent Conflict in International Law

As the war between Israel and Hezbollah continues, the European Union and certain segments of the Western media (by trotting out, for example, the former American Ambassador to Lebanon John Kelly) have been advancing the theory of proportionate response as a criticism of the Israeli action and seeking to use this idea as a basis for coercing Israel to call off its current warlet with Hezbollah. Even Vladimir Putin of Russia has echoed this proportionality theory in calling for a stop to Israeli actions in Lebanon.

The idea underlying this theory of proportionality in international relations is certainly appealing as theory. In the current situation it suggests that while Israel might have been justified in acting to seek the return of its two soldiers, kidnapped by Hezbollah agents, that response had limits. To the extent that Israeli action is not narrowly targeted (judged by the subjective standards of a vaguely constituted international community, it is to be presumed) to obtaining the release of these men, the action would not be proportional and therefore not legitimate. In this context, it is supposed that the Israelis should have taken their cue from American and European responses to kidnappings in Iraq over the last several years, as well as the pattern of responses to similar kidnappings by Hezbollah in the recent past. According to this view, the kidnappings ought to be viewed as a sort of low level banditry requiring some stern verbal measures, perhaps a bombing or two, perhaps even targeted killing (if no civilians are involved), and negotiations leading to prisoner exchanges (if the past is to serve as a guide, then several hundred prisoners in exchange for the two men).

There is a certain logic to this position. It tends to contain conflict. It reinforces patterns of violent behavior that minimizes its collateral effects. It provides both militaries with face saving methods of engagement, and it permits the fighting to continue toward the day when negotiation will lead to a resolution of the underlying conflict. There is a strong socio-political pull for this position within Europe and the United States. Both societies have crafted highly complex and successful legal regimes based on notions of proportionality, due process, fairness and civility. These notions, applied to the internal construction of democratic systems in the E.U. and the U.S. have been extraordinarily successful in ordering the internal life of those political communities, as well as serving as a useful basis for a system of political morals and ethics. Much of what forms the heart of the rules of war and humanitarian law also reflects this notion of proportionality, partially crafted to avoid the excesses perpetrated during the Second World War in Europe.

Indeed, Israel's prior conduct has more or less indicated a willingness to transplant these rules to its conflicts with its neighbors. And it has worked reasonably well, but only to perpetuate conflict a respectably low level, but not to resolve it. And that may be the rub. Systems of conflict resolution designed for communities sharing values, goals and objectives may not translate well to mediate interactions among parties who share little other than the desire to destroy each other. Applied to conflicts like those between Israel and Hezbollah, Shi'a and Sunni Islam in Iraq, or even among the combattants in Sri Lanka, this approach does little more than keep conflict simmering, postponing or even making resolution impossible, or at least not in the interests of the combatants or their allies.

Consider Hezbollah: it has no territorial claims against Israel (except perhaps for the Saba Farms area of the Golan Heights occupied by Israel and claimed by Syria), it primary purpose in its relations with Israel is to work for Israel's destruction and the expulsion of its Jewish citizens. It is also dedicated to the advancement of the Shi'a nation within Lebanon. These positions are foundational and divinely based. Hezbollah has integrated itself institutionally with the state of Lebanon. It is supported passively and actively by wide segments of the Lebanese population.

Assuming that these understanding are roughly correct (and remembering that reality is fuzzier and more nuanced), what does proportionality gain the parties? In this case Hezbollah loses some infrastructure and personnel (through targeted bombing and killings), but infrastructure can be repaired (giving work to the underemployed in the region) and personnel can be recruited (and increasingly so as Hezbollah is portrayed as strong enough to "go against" the "mighty" Israelis). Hezbollah returns a couple of soldiers and receives credit for liberating perhaps hundreds of others. From their perspective Hezbollah has gained much and lost little. It has increased its legitimacy and the support of the population through evidence of its power, through its distribution of jobs and benefits and through its role in the liberation of people who have strong ties to the local population. All of this may also increase its value to other states that might perhaps be looking for a non-governmental entities to do their dirty work for them, in this case Syria and Iran are likely candidates. But Israel gains as well--it has obtained the release of its kidnapped soldiers, it has been able to destroy infrastructure and kill combatants (though because combatants are usually so well embedded in civilian areas will also lose a bit as the number of civilian casualties rise--especially through the death of children and the elderly) and it has maintained at least its own legitimacy within its voting age population. More importantly, it has preserved its relationships with its own set of foreign states interested in managing the events in the area--principally the United States and the European Union (Russian institutional anti-Semitism seems to make them less viable as a partner though more valuable to Israel's adversaries). The United Nations has provided for it an important and open ended mission as monitor/referees within these conflict areas. In addition it can serve as the site of the verbal front of the conflict--a very valuable role indeed. That verbal front, of course, is shared with the global media, for which contained conflict provides a valuable source of viewership, and for local leaders, a global forum (consider the utility of CNN in transmitting the Lebanese Prime Minister Siniora's speech on July 15, 2006 (simultaneously translated for the American audience to which it was broadcast) respnding to the Israeli invasion by calling on the international community to rescue it, and rebuild it). And from the perspective of the management of civilian populations (and especially their utility in the production of communal value), the "innocent" profit since casualties are minimized until the resolution of the conflict in some indefinite future.

From the bigger picture, then, everyone profits to some extent. But nowhere in the analysis is there a sense that such proportional actions will do anything other than reinforce a cycle of these types of activity. It remains in Hezbollah's best interests to kidnap from time to time (or engage in other well modulated acts of violence) and it remains in Israel's best interests to perform proportional negotiation for the benefit of its patrons and the consumption of its electorate. But there is no end in sight, absent the destruction of the State of Israel or that of a military arm of Shi'a Islam. The former American Ambassador, Mr. Kelly, in his CNN interview today, suggested that indeed, this is the consequence, but apparently an acceptable consequence given a fear of the alternatives--large scale regional war.

Perhaps this is the best war to manage conflict which is irresolvable. The emerging legal infra-structure of international law perhaps ought to be focused on the creation of institutions designed to manage conflict rather than resolve them. There are Western models that may prove of value in institutionalizing this reality of international relations: the rules of engagement in Renaissance Italy certainly provides a model of self-perpetuating conflict that never really boiled over very much or very often. There are many benefits to state and non-state actors. But perhaps the greatest benefit is the most frustrating one--postponement of resolution. There is a little of the counter-intuitive here. Why might postponement be a positive value, especially where the parties continue to engage in bounded and sometimes violent conflict in the meantime? But there is a logic to this position. Negotiation can succeed only where differences between the parties to the conflict are not irreconcilable. In the face of irreconcilable differences, the parties might have to be left to their differences, perhaps for a long period of time. This requires a toleration of conflict within strict boundaries. Resolution then becomes possible only when, through changes made manifest over time, the basis of the conflict becomes irrelvant or obsolete. The world can then go about its business. That, in essence, appears to be the European approach as it seeks to institutionalize its approach to crisis management.

But there are risks. An international relations framework of conflict management could easily slide into an international relations of chaos. Conflicts are easier to contain in theory than in fact. The world is littered with examples of containable conflict bursting its boundaries in the Balkans, in Rwanda and Uganda, in South Asia, and the like. The risks may be acceptable for Europe--managing conflict can be profitable and postpone more painful issues. Risks can be useful to Russia, especially as it seeks to firm up its relationship with Shi'a Islam in Iran and cut a deal on its own irreconcilable conflict in Chechnya (a conflict in which application of the rule of proportionality is very much not in evidence). But for the people being "managed," the status quo may be uncomfortable indeed. Yet management appears to be the coin of the realm in the field of international law and relations. To the extent that the global economic system is not threatened, irreconcilable conflict must be left to fester within acceptable boundaries increasingly sketched out by law, custom and practice.

The Isreali response rocks the foundation of this nascent international system of conflict management. From the Israeli perspective, this response might have made sense. It is engaging Shi'a rather than Sunni Islam in Lebanon and it is attempting, by destroying the capacity of segments of the Lebanese population to engage in state and non-state sponsored violence, to make it possible to focus on the resolution of the conflict with the Palestinians (and hopefully aid in the creation of a viable Palestinian state). It may have gambled that its actions would play well among its closest allies and within the Israeli population and that it will be rewarded by its role in the global war by proxies with Iran. And it likely realizes that in the long run, managed conflict based on the current status quo will be disasterous for Israel given the demographic imperatives of the region. Ironically, Hezbollah may welcome this heating of conflict as well--as a means of testing its new military equipment and troops, as a way of cementing its relations with Iran, as a means of destabilizing the Lebanese state and increasing its power within the Lebanese state apparatus, and in its gamble that the rules of conflict management will eventually stabilize the situation well before any disasterous military defeat at the hands of the Israelis. And both sides will use the heated activity in the verbal front of the conflict--in the media, in the halls of the organs of the United Nations, in the press, on authoritative internet sites. Perhaps the success of the Israeli response will be measured by its effect on the status quo from which the conflict with its neighbors will be managed. The coming months will be telling indeed.

Friday, July 14, 2006

Iran’s’ Mahmoud Ahmadinejad, the Hojjatieh Society, and a Chaos Theory of International Relations

The Hojjatieh Society (1) was founded as a religious group dedicated to the destruction of the Ba’hai faith, (2) proved useful to the former Shah for violent and covert assignments, (3) was initially suppressed by the theocratic government of Iran because of its refusal to sanction clerical theocracy, but (4) has made a comeback of sorts now that its members (or at least those sympathetic to parts of its aims have assumed high positions within the clerical and political structure of Iran). For an excellent summary of the origins of the sect, see Mahmoud Sadri’s entry on the Hojjatieh Society in the Encyclopedia Iranica available at

Much has been made lately (and mostly on the Internet, of course) about the Iranian President’s connections to the Hojjatieh Society. See, e.g., Paul Hughes, “Iran’s President’s Religious Views Arouse Interest,” Associated Press Release, Nov. 17, 2005; John von Heyking, “Iran’s President and the Politics of the Twelfth Imam,” Guest Commentary, Ashbrook Center for Public Affairs at Ashbrook University, November 2005; “The Growing Threat to Bahai’s: What is the Hojjatieh Society?". There were suggestions, not universally accepted, that

“Ahmadinejad and Mesbah-Yazdi [an influential Iranian cleric] allegedly back a messianic interpretation of Islam, in which they hope that the 12th imam, known also as the Mahdi and who is in occultation, will return and restore justice to the world. According to the Islamic Republic News Agency (IRNA), Ahmadinejad told a 16 November national conference of Friday prayer leaders that "our mission is paving the path for the glorious reappearance of Imam Mahdi." The replacement of state officials by Ahmadinejad appointees, furthermore, has led to claims that the Hojjatieh Society, which was banished in 1983, is enjoying a revival. This society espouses similar views on the return of the Hidden Imam, and this would not be the first time that there are claims of a Hojjatieh comeback.” Bill Samil, “Iran: Preparing for the Next Big Vote,” RadioFreeEurope, Radio Library, December, 2005, reproduced by permission at the website of GlobalSecurity.Org.

Much of what has been written is not unusual for groups of this kind—they are rumored to have close ties to the Iranian political and religious elite; they have connections with insurgency groups all over the global fronts between the dar al islam and the dar al harb ((territory of war or chaos, and the name for the regions where Islam does not dominate, where divine will is not observed—though over the last few centuries Muslims scholars and the reality of a divided world have produced a more nuanced set of religious descriptors, see, including Hamas and Hezbollah; and that they have become a strong force of global anarchism tinged with a religious imperative that makes negotiation difficult.

Much of the discussion about the Hojjetieh Society and its connection with the Iranian Presidency has focused on its effects on Iranian politics—and is especially served up to “explain” the violent anti-Semitism and anti-westernism of the current Iranian president. At worst, the Western media has treated the pronouncements as bad manners (included in things you can believe but must not say in public) or as the machinations of Iranian internal politics (of the sort “he doesn’t mean what he says, this is “code” for some sort of internally necessary political dialogue).

My purpose today is not to dispute the failing of Western analysis, nor its cynical and pathetic forms of pandering manipulation of its own populations for the purpose of preserving some sort of peace at what it deems to be an acceptable price. Instead, I wish to note, with a great deal of interest, the utility of Hojjatieh Society norms as a framework for a different model of international relations. The current Iranian President has suggested that it is possible to ground politics within a framework of preparation for the return of the Mahdi. He has also suggested, as have some adherents of organized groups within Shi’a Islam (including but not limited to the Hojjatieh Society) that it is possible to suggest an interpretation of that political framework that posits that it is in human hands (and perhaps the highest calling of humans) to focus all activity on actions that will create the conditions necessary for the return of the Mahdi. If such conditions include some sort of social, political, cultural or other forms of chaos, then the focus of state action becomes clear.

A model of international relations based on the imperative that chaos must be created on earth in order to accelerate the time of the coming of the Mahdi might consider it valuable to preserve those areas of tension, especially at the fault lines between lands (and peoples) already claimed for the Mahdi and other places (and people). The focus of external relations would not be on peace and ethics, but on conflict and instability. The point of negotiation would be to prolong the space available for preparations necessary to sustain tension rather than to reach consensus and resolution. Equilibrium in world affairs would not be measured by the resolution of conflict but by the amount of conflict that could be maintained smoldering. Internal politics could operate in the same way. A politics of formal toleration would cover the fanning of tension between the righteous and others.

The point of international relations would not be war—war is unnecessarily expensive and decisive. But rather, international relations would have as its focus the maintenance of smoldering conflicts, burning brightly from time to time, but never resolved. For that purpose, modern, western inspired, international law norms—including the human rights and humanitarian law, and the laws of war—could prove immensely useful. These rules tend to limit the intensity of conflict—and to manage the civilian population for the benefit of the ultimate winners (or for the duration, the combatants in control) . Modulated use of incidents, reprisals, accusations of low level acts of human rights or humanitarian law violation all would tend to keep conflict fresh and to involve a large portion of the world community. Where such activity occurs in multiple flash points, then one can easily extend the potential effects of conflict and chaos far beyond the site of actual conflict. When combined with seeming acts of random violence directed at the protected segments of the population (the “innocent” civilians), one might be able to produce a global system of self-sustaining low level conflict, insecurity and chaos of the type that might serve to bring the world closer to the appearance of the Mahdi. Of course, this is not the first time that a cleric, or clerically trained leader, has pursued a policy of contained chaos deploying the tactics of fanning low-level constant violence and instability for national ends. Cardinal Richelieu’s policies in the Holy Roman Empire come to mind. But in modern form, this simple tool of traditional statecraft, wed to religious imperatives, now serves a very different end. No longer a simple tool of state action, it has become the framework itself from which tools are developed and deployed to govern the relations between states and other quasi-state collectives (such as religious communities).

It is with this in mind that one might view from a fresh perspective the shape of current Iranian foreign policy, and its manifestation in the support (of what type remain necessarily murky) of the recent kidnappings of IDF soldiers from the Northern and Southern border areas of Israel, of the bombings in Mumbai, of the break-up of Iraq along ethnic lines, and the recent (so easily forgotten in the Western media after the end of tourist season) resumption of violence in Sri Lanka. From the perspective of the Iranian President, perhaps, resolution of conflict, especially one as distracting and globally consuming as that between the Jewish people and the Arab Islamic nation, focused on claims to control of Israel, would be disastrous within the framework of state centered chaos. All out war is unnecessary and dangerous, but a sustained, and sometimes high level, of conflict, is to be welcomed. To the extent that a hotter level of conflict produces the inevitable civilian casualties, instability is extended well beyond the borders of the conflict. And because of the geographic position of the conflict, its effect on the underbelly of Western power—economic globalization based on a deep and sustained system of peace, security and free movement—is significant.

Currently, the localized “hot” conflict between Hezbollah in Lebanon and Israel provides an excellent example of contained conflict in the service of chaos. The conflict is contained because the combatants were carefully chosen—Hezbollah represents a Shi’a presence in the heart of the Sunni Arab nation. It represents the interests of Iran (and Syria) against those of the core regional Sunni states: Saudi Arabia, Egypt and Jordan. A hot fight between the Jewish people and Shi’a serves the purposes of Israel but also those of the Sunni nation. Most important, it distracts Israel from its recent push to destroy the Hamas led government of Palestine. At the same time, the conflict permits verbal condemnation by all Islam. But all this serves a Hojjatieh perspective well—it serves to destabilize a skittish West, disrupts patterns of international trade, kills Jews, confounds European foreign policy (including the accession policies toward Muslin states like Turkey), divides Islam, and furthers acts of martyrdom that together may help hasten the return of the Mahdi. To some extent it may also serve to deepen the war between Sunni and Shi’a Islam in what is left of Iraq, signaling the willingness of the Sunni Arab nation to protect its own. More chaos. To the extent that the conflict remains active, and contained, it serves the interests of Hajjatieh. For them, negotiation is a necessary tool in the efforts to continue to keep conflicts of this scale smoldering. The object of negotiation (that will inevitably proceed) will be to institutionalize the basis of conflict rather than to find a resolution. An international relations of chaos sees the object of negotiation as the establishment of conflict sustainability.

For states that do not share this view of international relations, this hypothetical position of the Iranian President (and other portions of the Iranian elite) could pose a problem. Where states involved in conflict do not share the same foundational understanding of conflict, where such states do not share the same value of conflict resolution, and may not share the same vision of the optimal relations between peoples, resolution may become impossible. In such a case, where state action is actually produced by millions of individuals, larded throughout society and contributing to the implementation of one or the other framework of international relations “on the ground,” it may be impossible to strive for resolution as we have come to understand it in the West (and I do not mean to suggest either an orientalist perspective or a necessary East/West division; I merely acknowledge the origin and basis of current international relations and law principles in Western concepts and values). For one perspective on this conundrum, see Larry Catá Backer, The Fuhrer Principle of International Law: Individual Responsibility and Collective Punishment, Penn State University International Law Review, 21:509 (2003).

Of course, it seems clear that most organized communities would tend to avoid at least a formal embrace of a chaos theory of international relations. What the past several weeks has demonstrated, however, is that most organized states cannot resist (1) cultivating this theory among sub-groups within their or allied with their state system, and (2) thinking that chaos-theory-embracing organizations can be used as instruments of state power (to be put away when no longer convenient). But history seems to suggest that this is a risky strategy indeed, and modern international law has been moving toward the position that indirect supporters of global action that is inimical to basic human rights and humanitarian law may or should be held responsible as principles. The recent almost completed trials of Slobodan Milosevich suggest a possible framework for this approach, though I am suspicious of its application in that case.

But three are really no incentives for states to avoid recourse to the adherents of chaos theory to “cheat” outside the rules of modern international law and international relations. Sadly, what the next several weeks will demonstrate instead is (1) that no state is willing to give up the power to use chaos theory when it suits them, (2) that the use of such power is extremely risky, especially where its adherents might be happy to see the destruction of the entire state system as a long term goal, and (3) that no state will actually be called to account for setting chaos theory groups in motion, whatever the nature of these groups’ violation of the laws of war, of human rights or humanitarian law.

With no incentives available against states that are effective, it may be time for international law to pay more attention to non-governmental organizations. The events of the coming weeks should suggest that, just as in the economic sector the international community is moving to vest economic collectives (especially multinational corporations) with status as subjects of international law, so should international community vest as subjects of international law those non-governmental organizations acting as agents of or otherwise exercising political powers traditionally exercised by states. The result would complicate the state system, perhaps even explode it as a formal matter. But global organization has been moving in that direction for decades, and certainly since the end of the Second World War. Internationalization and devolution of power is very much in the air. The obligations as well as the privileges of asserting political power, and especially the coercive power of violence, ought to be devolved and internationalized as a formal matter to the same extent.

Monday, July 10, 2006

Corporate Institutionalism and Fiduciary Duty: On Professor Katsuhito Iwai's Nominalistic and Realistic Corporations Model

I recently had the opportunity to reread the article by University of Tokyo Faculty of Economics Professor Katsuhito Iwai, "The Nature of the Business Corporation: Its Legal Structure and Economic Functions," The Japanese Economic Review, 53(3):243-273 (2002). I was particularly intrigued by a number of points raised in that paper that I thought were worth reporting.

Professor Iwai's use of organizational theory to deepen the analysis of “nominalistic” and “realistic” corporations was quite useful. The institutional analysis he suggests provides a necessary counterpoint to the substantially one-dimensional perspective of American law and economics work (Id. 246-256). He builds on the opposing notions of corporations as property (shares in the hands of shareholders) and corporations as entities (juridical personalities owning property, including other corporations, in their own right) to develop two models of corporate character. The first--the nominalistic corporation, is common to market based societies like the United States. The emphasis is on the property character of corporations and transnactions in interests in the corporation. Corporations are things through which money is made. In this environment, law and economics theories of corporations as nexi of contracts make sense. But they fail to explain variations in the free market model in other capitalist states. In thse states, Japan for example, a more institutional model of corporate character better explains the nature of economic organization. In these states, the realistic corpore model predominates. The emphasis is on the institutional character of the entity. These are entities that can, in some circumstances, own themselves (Id., at 254-256). "We have now reached the paradigm of corporate realism. What we have seen is that, by extensive cross shareholdings, a group of corporations can rid themselves of their thingness and become an association of self determining subjects, that is full persons, in the system of law" (Id., 256).

This last insight has tremendous repercussions for the regulation of corporations at the international level. The United States continues to embrace the notion that all corporations are inherently "nominalistic" and that consequentially, the only appropriate form of corporate regulation is state based and limited to the economic function of shareholder profit maximization. Many parts of the rest of the world, however, tend tto view corporations as having more of the character of "realistic" corporations. The regulatory consequences can be significant. The current global "corporate social responsibility movement" is grounded, in part, on the sense that corporations are autonomous economic actors with social and political obligations independent of that of their shareholder "owners."

Professor Iwai uses this distinction between "nominalistic" and "realistic" corporations to apply the organizational theory distinction between corporations whose conception is instrumental in nature and those which are autonomous in nature. "I believe that these two opposing conceptions are not mutually incompatible characterizations of their ideal type, but equally valid representations of their two polar empirical types. SOme organizations are merely instrumental while others are fully autonomous, though most of the organizations we observe in actual society occupy positions in between" (Id., at 262) . Though he argues that the key value of autonomous corporate entities is their "organization specific human assets," (Id., at 264), I wonder, whether it is not possible, at least in some cultures, to maintain a market for these “organization-specific human assets” consistent with his value theory of corporate institutional autonomy. Suppose, for example, that organizational culture posits an ideal type of organization in any given industrial sector. Suppose further that organizations, precisely because they are autonomous, are constantly seeking to “perfect” themselves by adapting their organizational form and culture to approach this ideal type. In such an environment, there might be intense competition for individuals who are perceived to be key members of organizations deemed closer to the ideal type. These individuals would be valuable precisely because of their perceived ability (whether or not the potential can be realized is of course an other matter entirely) to import “organization specific human assets and not for other skills. In societies in which markets for such skills are culturally permitted, institutional autonomy would be strengthened by a healthy market for individuals with organization specific “capital” useful in perfecting less well organized entities.

Professor Iwai also makes the point that the classical agency model doesn’t work in the corporate context because the principal, in this case shareholders, can’t completely eliminate, or at least act, without the agent. This is a valuable insight that often is hardly stressed in the American context. In the rush toward a free-floating contract model, many forget the effect of the state on otherwise free markets for contractual relations. From an institutionalist perspective, he suggests, in effect, that the agent exists as an instrumental actor basic to the organizational form of the corporation (the board of directors) rather than as individual actors (the directors) and that this institutional actor is beholden to the state (the ultimate institutional shareholder) rather than to the individual shareholders themselves as is usually taught. It is the state, rather than the shareholders, that shapes the basic character and duties of the board of directors as institutional agents. And it is the courts, rather than shareholders, who help give context to the obligation of the board of directors as an institution and to directors as individuals. Individuals have a double indirect relation to economic organizations like the corporation—first as shareholders whose power to direct the agent is limited and then as voters who may direct the state itself to affect corporate organizations. This complication is most useful for demonstrating the dependent autonomy of non-political organizations operating among nation-states.

This last point about the role of courts and the fiduciary behavior of directors he elaborates most usefully in Section 8 of the paper (Id., at 260-261). For me, this serves as one of the most important parts of the analysis. Just as directors must be understood as components of an institution with multiple and possibility inconsistent ties, so must officers and managers be understood in their institutional context. What is most interesting about the analysis, and from an American perspective, mostly neglected, is the idea that an absence of self-dealing is impossible among managers because they inevitably always stand of both sides of the monitoring transaction. Of course, this had enormous implications for American law, all of it bad. For example, this insight might well suggest that the whole thrust of the monitoring specific parts of the recently enacted Sarbanes-Oxley Act will be ineffective. Sarbanes-Oxley is grounded in the notion that the state, through a series of rules and formulae, produce in corporations, managers able to act independently. More interesting still, from my perspective, is the value of this insight for duty of loyalty analysis, as it has been developing under the fiduciary duty law of Delaware. Professor Iwai's solution, relying heavily on outsider stakeholders such as banks, employees, suppliers and customers (see Id., 261) is echoed in much of the work of the U.N.’s human rights organizations, which have proposed systems of corporate monitoring relying heavily on elements of civil society.

It will be interesting to see how the Delaware court's struggles with fiduciary duty, and especially with the concept of independence, continues to flounder for failure to confront the reality that, at least at some level, independence is unrealistic. Professor Iwai's insight should serve as a starting point for a different sort of analysis of fiduciary duty and its conception. The same, of course, applies to the great federal law project of imposing standards of independence in the black letter of securities law. Even in the United States, where corporations are conceptualized more as property than as entity, the move toward independence standards may reshape the characterization of the corporate form (perhaps pushing it more towards an institutional model).

Sunday, July 09, 2006

On the Death of Kenneth Lay: Frustrating the Rituals of Condemnation

On the Death of Ken Lay: Frustrating the Rituals of Condemnation

Kenneth Lay, the former head of Enron and the great sacrificial figure of American corporate corruption of the late 20th century, has died on the eve of sentencing after conviction of securities fraud. It is possible that, a s a result of the timing of his death, Lay’s conviction will be erased, substantially complicating the government’s efforts to recover millions of dollars from Lay (Greg Farrell, Elliot Blair Smith and Edward Iwata, “Lay’s Death has Legal Ramifications,” USA Today, July 6, 2006 at 1B).

Lay’s death brought a measure of frustration to his survivors. In particular, some of the people who felt that he had a hand in the destruction of Enron regretted that his death made it impossible for him to face punishment in life. Prosecutors and others were concerned that the somewhat exquisite timing of his death might have the effect of denying the State a formal judgment. Id. What has emerged is a strong sense that death was too good for Mr. Lay, and that he should have been required to endure a bit more on Earth before passing on the ultimate judgment.

What was most striking about this set of reactions was its similarity to the reactions on the death of Slobodan Milosevich, the former President of Serbia on the eve of the end of his trial in The Hague on charges of crimes against humanity. Again, the sense was that death robbed people of the satisfaction of punishment.

Both sets of reactions, so similar in many ways, remind us of the peculiar relationship between punishment and those with the power to punish. It suggests how little human societal desire has progressed since the late medieval period. Though much maligned, Michel Foucault probably provides the greatest commentary on this lust for the drama of punishment (Michel Foucault. 1975. Discipline and Punish: The Birth of the Prison, Paris, Editions Gallimard. Trans. Alan Sheridan, 1977 (Vantage Books)).

The desire to exact punishment on the body of the person identified for punishment serves a number of important social purposes the least importance of which is concerned with the particular individual on whom punishment is to be exacted. In the pre-Enlightenment period, Foucault suggests that “The public execution is to be understood not only as a judicial, but also as a political ritual. It belongs, even in minor cases, to the ceremonies by which power is manifested.” (Foucault, supra, at 47). But Foucault reminds us that global society no longer focuses on the rituals of torture and justice meted on the body of the condemned. Rationality and social husbanding has reformulated the rituals of disciplining behavior and the character and nature of the ritual of punishment. “In the old system, the body of the condemned man became the king’s property, on which the sovereign left his mark and brought down the effects of his power. Now he will be rather the property of society, the object of collective and useful appropriation.” (Id., at 109). In the case of both Lay and Milosevich, though, one sees both the value of each man as a proxy for the great social wrongs for which each serves as proxy. I have written about this in the context of the construction of modern international law. See Larry Catá Backer, The Fuhrer Principle of International Law: Individual Responsibility and Collective Punishment, 21 Penn State International Law Review 509 (2003), available at But one also feels a bit of the old notion—the need to assert a power over the very body of the condemned, this time by the “people” rather than an individual sovereign.

Foucault reminds us that these ostensibly psychological considerations are intimately tied to law. Law supplies the framework through which the rituals of punishment, and the social control tied to it, are organized. “The law is reformed: it takes up its place on the side of the crime that violated it. The criminal, on the other hand, is detached from society, he leaves it. . . . The society that has rediscovered its laws has lost the citizen who violated them. Public punishment must manifest this double affliction: that a citizen should have been capable of ignoring the law and that one should have been obliged to separate oneself from a citizen.” (Foucault, supra, at 110). This separation is described as a ceremony of mourning. “Posters, placards, signs, symbols must be distributed, so that everyone may learn their significations. The publicity of punishment must not have the physical effect of terror; it must open up a book to be read.” (Id., at 111). And so the investigation, arrest, and confinement of both men served critical ritual purposes—recalling the crime, publicizing the law, teaching the sovereign’s interpretation of that law, demonstrating the need for punishment, deepening that understanding through the parade of victims, and justifying the penalty sought in the narratives of criminality that are widely disseminated through the organs of information transmission—television, newspapers, the internet. The ritual purposes of the public trials are even more exquisitely finely tuned. These are the great sites for the performance of law and the memorialization of social practice, of behavior norms to eb rewarded or punished. I have written of the critical role of the judiciary in the production of culture. See Larry Catá Backer, Chroniclers in the Field of Cultural Production: Interpretive Conversations Between Courts and Culture, 20 Boston College THIRD WORLD LAW JOURNAL 291 (2000).

Ironically, then, the deaths of Milosevich—for the political sphere—and Lay—for the economic sphere—provided similar difficulties for a culture in which law substitutes for morality and the bodies of the criminal serve as the material on which socially important discourse is written. “Discourse will become the vehicle of the law: the constant principle of universal recording. The poets of the people will at last join those who call themselves the “missionaries of eternal reason”; they will become moralists. ” (Id., at 112). Deprived of the bodies of Kenneth Lay and Slobodan Milosevich, society can not reinforce the connection between law, morals and behavior. For the immediate victims, there will be the frustration of those deprived of any pre-modern satisfaction of seeing justice done on the body of the condemned. For the state, other bodies will have to be found to satisfy the rituals required for the maintenance of law. “This legible lesson, this ritual recoding, must be repeated as often as possible; the punishments must be a school rather than a festival; an ever open book rather than a ceremony.” (Id., at 111). For this purpose there are many others available. We look forward to the trials of the former leader of Liberia and future corporate criminals.

Tuesday, July 04, 2006

Some Thoughts On The American Declaration Of Independence And Its Irish/European Connections At Century's End

Every Independence Day, many Americans take their Declaration of Independence out of its shroud, admire it, procliam their allegieance to its principles, congratulate themselves on their constancy in applying those principles, and then put the document away for another year. Many other Americans wrap themselves in the language of the Declaration, or at least in well chosen selected portions of that language, to push any one or more projects of change to the structure of the Republic or its policies. The Declaration of Independence remains on of the great revolutionary documents of our time. It's ideas remain as dangerous as they have been useful. For this 4th of July, I thought it useful to reproduce a speech I gave in Ireland in 1999. The full text was reprinted in the Tulsa Journal of Comparative and International Law, 8:87 (2000).

Some Thoughts On The American Declaration Of Independence And Its Irish/European Connections At Century's End

Larry Catá Backer

Copyright © 2000 Tulsa Journal of Comparative and International Law; LarryCatá Backer

I want to thank the Dún Laoghaire Fourth of July Festival Committee for their kind invitation to address you today. I also want to wish you, and all the friends of the people of the United States of America, a happy Fourth of July.

We are here to celebrate the American Declaration of Independence. American Independence Day commemorates the day on which the revolutionary representatives of the people of the several American colonies declared their intention to form sovereign states. As a consequence, a long, bloody, fratricidal war ensued from out of which emerged thirteen sovereign states that eventually came together to form an American Union. Ireland shares our pattern of revolutionary history, though in many respects its particularities were more brutal. Much as we did over a century earlier, Ireland proclaimed its intention to join the community of independent states in the midst of a bloody, often fratricidal, conflict to throw off the political rule of the United Kingdom. Instrumental in the intellectual front of the American and Irish efforts were the declarations of intention that we have come to know as the American Declaration of Independence, the Irish Easter Proclamation, and the Irish Declaration of Independence. Each has long outlived and outgrown the circumstances of its creation. All continue to assert great influence in the world.

This longevity, this outgrowing, has proven to be as troubling as it has been valuable to our respective societies. I will argue here today that these declarations of independence, these statements of political theory, these products of single minded and singular revolutionary movements, are dangerous. They are especially dangerous when, as now, in the closing moments of this century, they exist unmoored from their historical foundations. Thus floating free, the principles of these declarations can be mobilized, over and over again, against the very political covenants--the constitutions--which were created to implement the socio-political reality emerging from out of the violent wake of the revolutionary movements that produced the declarations. These principles are particularly dangerous to established governments and nation-states bereft of social, political or communal consensus. Such pronouncements of political theory, like the revolutions which such statements are used to justify, can as easily be bent to the will of those who would undo the work of the founding parents of our respective republics as they can be used to support them. Like Biblical verities preached in the house of Satan to undo the work of the Divine, broad declarations of principle or political theory can be used to justify any horror, if the people who control their interpretations can bend chapter and verse to their will.

Thus, we do our respective republics a grave injustice to concentrate on our declarations of principles to the exclusion of the social and political covenants that we have created as the foundation stones on which we have built our democratic, humane, and tolerant societies. Yet, documents like the American Declaration of Independence and the Easter Proclamation of 1916 tend to get all the attention. The celebrations of the American 1789 Constitution or the Irish 1937 Constitution remain mooted indeed. I believe there should be less celebration of declarations of independence and more celebration of the constitutional norms that represent the rich fruit of those declarations. In truth, we must celebrate our great good fortune that those who were charged with the construction of our political structures chose wisely among the political options that each declaration permitted. Let me expand on this theme in a little more detail.

The American Declaration of Independence was drafted to serve a variety of purposes. Though we think of it now primarily as a statement of general principles of union and disunion, the Declaration of Independence was also meant to work as a judicial document. It was written by a lawyer. It was to be a complaint laid before the court of British and world opinion. Its purpose was to persuade those in a position to judge that the actions of American revolutionaries were justified both as a matter of law, that is, as a matter of general principles of political and moral theory, and as a matter of fact, that is, on the application of these principles to the specific acts of mistreatment suffered by the American colonies at the instigation of the government in London.

The Declaration begins by declaring its purpose: justification for rebellion against lawful governmental authority. "When in the course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another, . . . a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation." Its most famous section follows, a long paragraph in which the theory of political separation, of self-determination, is elaborated. Self-evident truths are paraded:

“We hold these truths to be self-evident; that all men are created equal; that they are endowed, by their Creator, with certain unalienable rights; that among these are life, liberty and the pursuit of happiness. That to secure those rights, governments are instituted among men, deriving their just powers from the consent of the governed; . . . . “

People who are denied these self-evident rights by other people acquire other rights. "But when a long train of abuses and usurpations, pursuing invariably the same object, evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such a government, and to provide new guards for their future security."

The third, and by far the longest section, provides us with a detailed listing of the facts that prove the case for separation. Its purpose is to convince those listening that the "history of the present King of Great Britain is a history of repeated injuries and usurpation's [sic], all having in direct object the establishment of an absolute tyranny over these states." Its last section is written in the form of a proclamation. Having applied the law to the facts, the case for self-determination of a newly differentiated people is made. As such, "appealing to the Supreme Judge of the World for the rectitude of our intentions, . . . in the name and by the authority of the good people of these colonies," the signatories declare the independence of each of the former colonies, united only in their determination to resist further British tyranny.

The Irish Easter Proclamation of 1916 as well as the Irish Declaration of Independence of 1919 owe much to their American predecessor. Like their American progenitor, both have also served as sources of tremendous inspiration to politically oppressed communities. Sadly, and also like their American parent, both have well served as instruments through which the good people of Ireland have sometimes seemed to reap the whirlwind. Read together, the two documents comprise a declaration very similar to the American Declaration.

The passion belongs to the Easter Declaration--its stirring beginning the equal of the American Declaration of Independence: "Irishmen and Irishwomen: In the name of God and of the dead generations from which she received her old tradition of manhood, Ireland, through us, summons her children to her flag and strikes for her freedom." It declares the right of the people of Ireland to the ownership of the island and of the right to rid the island of those who had until then usurped the rights of its true owners. It guaranteed the rights of all members of the Irish nation and takes on the enormous task of creating an Irish society in which equal rights and equal opportunities are afforded its diverse and heretofore divided citizenry. This is to be done, if necessary, by force of arms.

The Irish Declaration of Independence was written under vastly different circumstances and on the eve of the first bloody attempt to resolve long simmering differences between Irish patriots. Written in the form of a statute or corporate resolution, it sets forth the legal effect of the history of British usurpation and tyranny in Ireland, the actions leading to the General Election of 1918, and the authority of the declarants to act on behalf of the ancient Irish people in parliament assembled--an assembly fully the counterpart in dignity and effect to the Imperial Parliament in Westminster. On that basis, and in reliance on the authority cited, it declared Ireland an independent republic with sole power to govern the island and its people, which power would be defended to the full extent of the powers of the people of Ireland.

The American Declaration of Independence created wonderful but detachable principles that can be used for a wide variety of purposes. As the eminent historian Bernard Bailyn has remarked, "[t]he Declaration of Independence set forth a philosophy of human rights that could be applied not only to Americans, but to peoples everywhere. It was essential in giving the American Revolution a universal appeal." [1 Bernard Bailyn et al., The Great Republic: A History of the American People 256 (4th ed. 1992).] Conventional thinking about the political theory underlying the American Declaration of Independence would have us believe that the Declaration of Independence is the preeminent statement of American political theory and the cornerstone of the American system of government. It owes much to John Locke as well as to the mostly Protestant political covenant theory of thinkers such as Johannes Althusius. At least since Althusius in the 17th century, European political theory had been concerned with the optimal size and constitution of political associations. [Johannes Althusius, Politics Methodically Set Forth, and Illustrated with Sacred and Profane Examples, at ix (Frederick S. Carney trans., 1964) (1614)] The refinement of these principles was the product of the French Enlightenment as well as of developing American indigenous tradition. The French provided the world, among other things, with theories of just governance, of the necessity for revaluing the old hierarchy of social and political positions of citizens of modern nation-states, and of the nature of the proper relationship between free people and their government.

Yet the radical implications of the Declaration of Independence are rarely acknowledged, especially around the Fourth of July. The Declaration's expression of general principles of the inalienable political rights of every identifiable group of people

“not only antedated the existence of government; they were superior to it in authority. As John Dickinson [a contemporary of the American Revolutionary period] expressed it, 'our liberties do not come from charters; for these are only the declaration of preexisting rights. They do not depend on parchments or seals; but come from the King of Kings and Lord of all the Earth.'” [Althusius, supra, introduction]

No government may limit or control the inalienable rights described in the document. No people may impose restrictions on recourse to those rights by others. Those rights have become so self-evident, so important, so transcendent, that they have been invoked by every group purporting to act on behalf of the people of any political community. Thus, these principles have been invoked by the founders of the American, French and Irish Republics. They have also been invoked by the political opposites of the founders of those republics--that is, by those who established the most rank republics of the 20 th century in Germany, Italy, Cambodia, and other places that we have come to label fascist or totalitarian. Consequently, the meaning of the inalienable rights of the American Declaration of Independence, and their application to the people in any particular time and context, has not been subject to a singular and uncontested reading. Indeed, history demonstrates that the very opposite of stable and unitary meaning has been the rule.

In this context, the second great set of principles of the Declaration of Independence, that government is created to secure a people's inalienable rights and only with the consent of the governed, produces other radical effects. Who, after all, can constitute a single unit of the governed has become a most vital question in our time. Europeans are well aware of the consequences of the answer as they see devolution of powers in Spain, and, more pointedly, in places like Yugoslavia. Prior to the 1750s, it would have been hard to argue that the American colonies were populated by a group of people, the socio-politically dominant group of which were not English. The colonists were English by birth (in England or the colonies) or by migration; all belonged to the same family--the same volk. After 1776, and by a political act, two different peoples existed where only one had existed before, at least as far as the colonists were concerned. Their English siblings, of course, disagreed. Only by force of arms was this disagreement resolved.

What applied to the American colonists then applies today to any number of communities who determine that they now constitute a group separate and apart from another, and who determine that their inalienable rights have been usurped by a government serving others. The Declaration of Independence teaches these newly self-conscious communities that each may seek to "assume, among the powers of the earth, the separate and equal station to which the laws of nature and of nature's God entitle them." No nation-state, no group hitherto or hereafter recognized as such has an eternal or inalienable right to continued unitary existence. Thus, like the meaning of those inalienable rights that are to be protected for the benefit of the people, the notion of peoplehood is also highly fluid. Your countryman today may well be an alien in your midst tomorrow.

The fourth great principle of the Declaration of Independence--rebellion and separation--follows from the others. Revolution is a right reserved to the people when the government established to serve them breaches the contract under which it was established. A complete breach permits the people, even a people heretofore part of a greater group, to forfeit their loyalty to the government of that now alien group.

“[W]henever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles, and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.”

Any group feeling itself the subject of the tyranny of others has the moral authority, on the basis of the principles of the Declaration of Independence, to seek to join the community of nations as an equal, separate and apart from those who had oppressed it. The ultimate mechanism for the resolution of disputes, for the satisfaction of grievances, is separation. The great principles of the Declaration of Independence provide no other remedy for the resolution of fundamental disputes among those who, living together within a political union, believe themselves the victims of the tyranny of others. The 20th century's preoccupation with the political dignity of ethnic, religious, racial, sexual, intellectual and cultural groups, is testament to the power of the principles of the Declaration of Independence as a force for political fracture and political vindication. Groups form and reform in a never-ending swirl of difference discovery, and the principles of the Declaration of Independence provide the principles by which each is politically empowered--if each has the strength of will and arms to support a separation.

Both the great principles and the interpretive radicalism possible in the Irish Easter Declaration and Declaration of Independence mirror that of the American Declaration: that people can be governed only with their consent; that usurpations and tyranny, if severe enough, are justification for one people to throw off the bands of allegiance to such a government; that certain inalienable rights must be guaranteed by a government, including the right to religious and civil liberty, equal rights and opportunities for all citizens, and the happiness and prosperity of the entire nation. The documents also attempt to define authoritatively the composition of those people who belong to the Irish nation, eliminating religion as a basis for separating Irish people one from the other. The basis of any such difference, the document declares, is necessarily the product of a false consciousness perpetuated on its victims and constituting another pernicious form of imperial tyranny.

In these forms have the principles so eloquently situated within these documents become powerful verities in the world since the 18th century. These principles have escaped the bonds of the quasi-legal document of which they form the introduction. Yet this very transformation from the parochial to the universal has created both the promise and the danger for political unions in the coming century. The problem, of course, is in the application. Here we confront a problem as old as our religion--universal principles loosen their mooring after their first utterance. Even the word of God can become lost or distorted within the many interpretive masks humanity has been so adept at constructing.
It is no surprise then that grand, general principles, such as those in the Declaration of Independence and the Easter Proclamation, can be bent to further aims and goals inimical to the basis of the social and political organizations of our Republics. Cut loose from the circumstances which gave them life, and detached from these historical documents, the principles espoused therein can look frightening indeed. I recall the apocryphal story of the people who had retyped the American Declaration of Independence on an old typewriter in the form of a petition and then attempted to get people on the street to sign their "petition." As they presented their petition on the streets of America they encountered a generally scandalized citizenry. Many people refused to sign the document, believing that the document espoused dangerous principles of communism.

Moreover, the universal principles of the American Declaration and the Easter Proclamation loudly shout to every man and woman of every nation that each of them has the authority to invoke their principles against those who purport to act for the people and to rupture the bonds of loyalty and brotherhood which bind one to the other. Every person, every one of you in this room, has the power of the revolutionary within you. This power is consecrated by the blood of our forebearers and sanctified with the imprimatur of the general principles of the American Declaration and the Irish Proclamation. The power of the revolutionary is the power to judge and to act. Action is not limited to the democratic machinery, which the Declaration and Proclamation suggest may sometimes become a part of the corruption to be excised. Victory depends, as it has often depended, on eloquence and arms.

Thus it is that both the American Declaration of Independence and the Easter Proclamation have been used as a sword and shroud by those brothers and countrymen who would invoke their principles to support absolutely contrary positions. In the United States, its principles were, of course, invoked by its framers to support disunion with Britain. Yet those who would remain loyal to the Crown and Parliament in London would have invoked those same principles against the revolutionaries.

Those who fought on opposite sides of the American Civil War also invoked the great principles of the Declaration of Independence. The seceding states of the Confederacy invoked the great principles of disunion. They presented a case against their northern brethren which paralleled the indictment of the abuses of Britain toward the American colonies less than a century earlier. The Union states invoked the Declaration of Independence for the universal principles of free status of individuals, and on that basis, as justification for the breach of an important covenant on which the American Union was formed--the protection of the right to hold slaves. Each side in the conflict thus embraced one set of the fundamental principles of the Declaration of Independence to justify both the alteration of the original covenant creating one nation and the disbanding of the Union itself.

Moreover, the principles of inalienable rights, and of rebellion in their furtherance, are no longer limited to grievances between people forming separable nations. The principles apply now with equal force within any nation to those who feel subordinated within it. Communal separations are no longer marked only by political borders within a geographic space. Thus, for example, those who fought for the civil rights of women and racial minorities have invoked the Declaration of Independence since the start of the Republic. It was invoked in the 19th century by the women's rights movement and by the anti-slavery movement. Abraham Lincoln famously invoked it in his attack on the institution of slavery by arguing that black people were entitled to "all the natural rights enumerated in the Declaration of Independence, the right to life, liberty and the pursuit of happiness." [Bailyn, supra at 576-77] Elizabeth Cady Stanton and Lucretia Mott modeled the Declaration of Sentiments issued by the first ever women's rights convention in sought to lay out an indictment of males which paralleled the indictment of the tyranny of Britain against the American colonies outlined in the Declaration of Independence. It exclaimed that "the history of mankind is a history of repeated injuries and usurpations on the part of man toward women, having in direct object the establishment of an absolute tyranny over her." [Bailyn, supra at 444] On the other hand, advocates of slavery and women's inferior status invoked the Declaration of Independence as well. The American Supreme Court judges in the Dred Scott decision [Dred Scott v. Sanford, 60 U.S. (19 How.) 393 (1856)], which expressed the view that African-Americans were not citizens of the United States even if free, contended that the Declaration of Independence was never meant to apply to African people. Thus we have one Declaration, yet two strongly held incompatible views. In the 20th century, the Declaration of Independence has provided the intellectual justification for the civil disobedience of the civil rights movement of the 1960s and the protests against the Vietnam War of the 1960s and 1970s.

Ireland also is not without examples of great principles invoked to opposite effect. The conflict arising over the treaty establishing the Irish Free State is a case in point. Michael Collins argued that "[t]he Treaty gives us freedom, not the ultimate freedom that all nations desire and develop to, but the freedom to achieve it." [Eion Neeson, The Birth of a Republic 262 (1998)] As such it constituted an important step in the achievement of the ultimate aim of the Easter Proclamation. The anti-treaty proponents argued that the treaty would require the Irish to do what 700 years of colonization had failed to procure--the voluntary relinquishment of Irish independence. [Neeson, supra, at 269] "[James] Connolly himself made the obvious point when he advised his troops to keep their weapons in the event of victory since 'those who are our comrades to-day [sic] we may be compelled to fight tomorrow." ' [Neeson, supra, at 188-189] On this disagreement, in some respect, the tragedy of the Irish Civil War rested.

Moreover, several of the declarations of the Easter Proclamation have yet to be realized. Among the most important is that which declares that "[t]he Irish Republic is entitled to, and hereby claims, the allegiance of every Irishman and Irishwoman" --an integral part of the Proclamation. And from the perspective of those who would apply the principles of the Proclamation --" the right of the people of Ireland to ownership of Ireland and to the unfettered control of Irish destinies" --its eventual fulfillment remains important. Yet its fulfillment requires the defeat of a notion that Irish control or Ireland does not require the establishment of a single state, that two Irish communities, divided by culture or religion, can co-exist on the same island, represented by different, though Irish, governments. From out of a proclamation can come the source of support for irreconcilable positions.

Thus, at the end of the day, what seems more important than great principles is the manner in which a society can provide for the resolution of interpretation and implementation of those great principles in the day to day lives of its citizens--not merely a mere majority of its citizens, but a majority of all of the disparate groups comprising the citizenry of the nation. This is especially critical where, as often happens, the people of a nation ascribe to the great principles of the Declaration of Independence and the Easter Proclamation, but few of them can agree on the application of the principles in fundamental situations of governance and the ordering of society. Declarations and proclamations are of little help for this great task. Declarations and proclamations are as much documents of rupture as they are witnesses to the birth of nations and people.

Principles, like law then, ultimately must be judged only by the work of those who have the power to impose these principles on or for the people on whose behalf they engage in such work. The servants of the people, on whom have been delegated the powers of the master, also have the master's power to coerce a particular vision--for good or ill--on those whom they serve. For that, both the American and Irish nations have much to offer us in the form of their respective constitutions.

Constitutions are embodiments of social and political implementation; they are a memorialization of the structures of fairness from which conflicts between and among the various people of a nation-state may be resolved. These are not declarations of separation and rebellion but of the possibility of the attainment of unity within difference. The resolution of differences between siblings within a nation is what a good constitution is meant to do. Both the American and Irish constitutions engage in this task masterfully. Both are constructed as variations on a singular theme first sounded by Montesquieu and the thinkers of the French Enlightenment. These themes have produced governments of limited power based on principles of separation of powers, of checks and balances between three independent branches - an executive, a judiciary and a legislature--and of a suspicion of the doctrine of bare majority rule.

Declarations and proclamations thus bear fruit only through the creation and maintenance of strong covenants designed to resolve difference and to give voice to all of the great disparate leanings of the individuals making up the people of a nation. It is only when those mechanisms fail that resort to the great principles, and to the principles of power and armed struggle, must follow.

We would do better, then, to treat as the subject of our intense solemnization our great social and political covenants, our memorializations of those fundamental rights and obligations of the people of our nations to each other, growing out of our generalized declarations of principles, yet representing a particularized institution of those principles among us.

I come here, then, this evening to celebrate the constitutional principles of democratic self-governance forged in revolutionary fires rather than the revolutionary fires themselves. Fires burn all who touch them; once started they are hard to put out; they easily rage out of the control of those who start them. But fire also brings warmth and comfort; fire provides the critical ingredient for the crucible in which the prophets tell us that our human mettle can be purified and from out of which the dross can be discarded-- thus its value and its danger. Principles unanchored and unrestrained, dark interpretations and a propensity toward hyper-separation, may be dangerous indeed. Constitutions, scrupulously observed in letter and spirit, along with the institutions for the building of consensus within a people wholly similar, yet not identical, provide the only framework within which the fires of declaratory principles may be usefully contained.

I wish you all a happy Fourth of July.