Revised and Updated Manuscript: The Cooperative as Proletarian Corporation

I have been writing about the development of new theoretical and legal approaches to cooperatives, as the experiment is unfolding in Cuba. I first presented this paper this past summer at the The Association for the Study of the Cuban Economy 22st Annual meeting and Conference in Miami August 1-4, 2012.

(Pix from Marcelo Vieta, Cuba's coming co-operative economy?, Links, July 18, 2012)

I have revised the paper extensively to incorporate the newly promulgated regulatory framework for cooperatives unveiled by the Cuban government in December 2012. (See, Cuba Issues New Cooperatives Regulations: Tentative Experiment in Socialist Market Enterprise or a Privatization of State Management?) The article also connects these regulatory innovations to theoretical developments among Cuban academics. (See Camila Piñeiro Harnecker on Cooperatives and Socialism in Cuba)

The revised manuscript may be accessed here. The manuscript will be published under a modified title as Backer, Larry Catá, "The Cooperative as Proletarian Corporation: Property Rights Between Corporation, Cooperatives and Globalization in Cuba", the final version of which will be published at the  Northwestern University Journal of International Law and Business Vol. 33(3) (forthcoming 2013).

The revised abstract follows

Regulatory Incoherence and the University

Penn State has been subject to a series of governance shocks over the last years.  It is now an excellent laboratory for the ways in which large and complex institutions respond to stress.  The effects of these stresses on university faculty, as an autonomous unit of governance, are among the most interesting. The role of the faculty at a university suggests the ways in which changes in the cultures of governance and in the forms of administration in collaborative governance structures, that is changes in the internal governance culture of an institution, can put substantial stress on the viability of formal systems.  In the university, in particular, the reluctance to change formal structures even as the realities of governance culture changes preserves the appearance of a governance role even as it is effectively reduced. 

 

("Sleeping Dog", pix (c) Larry Catá Backer 2013)

This post links to my comments of these issues as they relate specifically to the changes at Penn State.

Salar Ghahramani on The Role of the State on University Boards of Trustees

My colleague Salar Gharamani, Assistant Professor of Business Law and International Law & Policy, Penn State University, has just posted a paper titled "Fiduciary Duty and the Ex Officio Conundrum in Corporate Governance: The Troublesome Murkiness of the Gubernatorial Trustee's Obligations Toward a University." 

The paper examines the role of nonprofit corporate directors in general and analyzes the governor's role as an ex officio trustee of Penn State in particular. The paper is worth a careful read and some discussion, not just among academics but within the Senate and the Board of Trustees. Ghahramani concludes that "the constant tensions that the current paradigm condones (those between public governance objectives and private corporate governance principles as defined by centuries of fiduciary law), cannot be sustained."

Read more here: Salar Ghahramani on Fiduciary Duty and the Governor as a University Trustee

Sovereign Wealth Fund Center: Bi-Annual Legal Report (Oct. 2012)

The Sovereign Wealth Funds Law Centre, directed by Fabio Bassan,  gives assistance to Sovereign Wealth Funds and their home states, to host states and local administrations, to companies seeking SWF as investors, in assessing the legal risk in recipient countries legislation, the relevance of immunity protection and of Bilateral Investment Treaties in force.

(Pix (c) Larry Catá Backer 2013)

This past October, it published its Bi-Annual Legal Report 2012 (October 2012).  

Cuba Issues New Cooperatives Regulations: Tentative Experiment in Socialist Market Enterprise or a Privatization of State Management?

I have been writing about the development of new theoretical and legal approaches to cooperatives, as the experiment is unfolding in Cuba.  Backer, Larry Catá, The Proletarian Corporation: Organizing Cuban Economic Enterprises in the Wake of the Lineamientos — Property Rights between Corporation, Cooperatives and Globalization 33 Northwestern Journal of International Law and Business —(forthcoming 2012-2013). 

 (Pix FromTranslation: Granma article on cooperatives, Cuba's Socialist Renewal, Oct. 9, 2011)

The new approach was an important element in Cuban efforts to reform their economic model that found expression in the Linemientos adopted during the Cuban 6th Party Congress. (e.g., Cuba's 6th Party Congress and the Lineamientos (Guidelines) For Structural Change In Cuba, Law at the End of the Day, May 17, 2011).  It is meant to solve a conceptual problem for a state that sought to reserve for its public organs the right to aggregate capital, but at the same time was seeking a mechanics for developing private markets, and with it the possibility of aggregating productive effort. Cuba is seeking to develop a four part economic model--(1) public and state managed operation of most productive capital through traditional state owned corporations, (2) private markets limited to the production and delivery of consumer goods and services through cooperatives and sole proprietorships, (3) national markets of state and private sector enterprises managed through state organs, and (4) regional economic development operated on the basis of state to state operations supporting limited private consumer markets.    (Backer, Larry Catá, The Proletarian Corporation: Organizing Cuban Economic Enterprises in the Wake of the Lineamientos, supra)

For Cuba, the most innovative part of this economic reconstruction project was the development of a  new governance framework for cooperatives, which embrace notions of aggregation of effort, not aggregation of capital. But this is innovation that the Cuban state is embracing tentatively and with substantial reservations, despite its potential. After a long period of gestation and with the strong support for an innovative approach form influential academics and others at the University of Havana, on December 11, 2012, the Cuban government published the long awaited regulations on cooperatives. Gaceta Oficial de la República de Cuba, No. 53 Extraordinaria, CE DL. No. 305, 306; CM D. No. 309; MEP 570/12; MFP 427/12 (December 11, 2012). The regulations may be accessed HERE (in Spanish) and an analytical summary of which follows below.   The cooperative form holds much potential for Cuba (and other developing states) as it seeks, however tentatively, to trust its people to remain true to its political system even as they sort their economic relationships within a highly controlled environment. But this experiment will not succeed if the regulatory framework used to manage it seeks merely to replicate and privatize the system of state management the failures of which, acknowledged by the highest levels of the Party,was the very impetus for the reform reflected in the new socialist cooperative.

State-Party Constitutionalism in China--WANG Keren on "Reexamining the Bo Xilai Affair under the Investigation Regulations for the Discipline Inspection Organs of the Communist Party of China"

We have been looking at the issue of Shuanggui within the context of Chinese constitutionalism, and more generally, constitutional theory.See, e.g., Communist Party and State Discipline in China: Exploring Shuang gui 双规 and Shuang kai Part I, Law at the End of the Day, Aug., 2, 2011; Communist Party and State Discipline in China Part II: Brief Introduction to Shuang Kai and Pix Inside Shuang gui Facility, Law at the End of the Day, Sept. 17, 2011; and Communist Party and State Discipline Part III: Chinese Scholars' Views of Shuang gui Inter Party Discipline System,Law at the End of the Day, Sept. 23, 2011. The legal framework of Shuanggui can be found in English at Investigation Regulations for the Discipline Inspection Organs of the Communist Party of China -- An English Translation, Law at the End of the Day, Dec. 29, 2012.

 (Pix from Tom Phillips, Former student at University of Leeds to defend Bo Xilai in court,The Telegragh (UK) (Jan. 13, 2013) ("Beijing-based lawyer Li Guifang confirmed this week that he would represent Bo Xilai, the former Communist Party chief of Chongqing, at his forthcoming trial for corruption and an alleged role in the murder of British businessman Neil Heywood. The confirmation came as speculation mounted that Mr Bo's day in court was approaching. . . . . Last September state media outlined the charges Mr Bo should face at his eventual trial. They include, taking "advantage of his office to seek profits for others" and pocketing "huge bribes personally and through his family".  . . . . Last Wednesday, China's official Xinhua news agency broke a two-month silence on the Bo Xilai affair, announcing his case had been "transferred to judicial organs". "))

My graduate assistant WANG Keren, has written a perceptive essay on the application of the theory and practice of Shuanggui to Bo Xilai. This is part of a larger project that we are completing on the constitutional theory of Shuanggui and the context for its application within the framework of Chinese constitutional norms.

The Norwegian Sovereign Wealth Fund Reconsiders Observation of Siemens--Changing Behavior Through Investment One Entity at a Time

Acting on the earlier recommendation of the Council of Ethics, the Norwegian Ministry of Finance has just announced that the Norwegian Sovereign Wealth Fund, the Government Pension Fund (Global), will end the observation of Siemens. Norway, Ministry of Finance, Press Release: Observation of Siemens concluded, January 11, 2013.

 

 Siemens Dirty Rotten Scoundrels, Pizzazz,January 14th, 2009("The First Annual Bernie Madoff Award for Global Business Chutzpah goes to Siemens, Europe’s largest engineering firm which just copped a plea to bribery and corruption charges involving public officials and politicians on 4 continents.")

The action concludes an interesting chapter in the development of a jurisprudence of global corporate governance standards relating to issues of corporate corruption and appropriate standards of corporate monitoring and surveillance obligations to minimize its threat. See  Part XV: Developing a Coherent Transnational Jurisprudence of Ethical Investing: The Norwegian Sovereign Wealth Fund Ethics Council Model,  Law at the End of the Day, Feb. 15, 2011); Backer, Larry Catá, Sovereign Investing and Markets-Based Transnational Legislative Power: The Norwegian Sovereign Wealth Fund in Global Markets (November 18, 2012). Consortium for Peace & Ethics, No. 2012-11/11.

The Finance Ministry Press Release and the Ethics Council Recommendation: Recommendation to remove Siemens AG from the watch list of the Norwegian Government Pension Fund Global, 15 June 2012 are set out below. 

Joel Slawotsky : " Rethinking Financial Crimes and Violations of International Law"

Joel Slawotsky, lecturer at the Radzyner School of Law, Interdisciplinary Center, Herzliya, Israel; and the Law and Business Schools of the College of Management, Rishon LeZion, Israel has written an excellent essay: Rethinking Financial Crimes and Violations of International Law.

(Pix from Financial Crimes, FBI Releases Annual ‘Report to the Public’, March 7, 2007)

The essay follows below.

Abolishing Laojiao 劳动教养 in China; is Shuanggui Next?

The Chinese State organs continue the long term project of constructing state institutions with Chinese characteristics that remain true to the founding political ideology of the political order.  To that end the Chinese government has announced  the abolished the Laojiao (劳动教养), or "re-education through labor" system (often referred to as the "Chinese labor camp" system in the West).

(A photograph of Shayang Re-education Through Labor camp in Hubei province, from the archives of the Laogai Museum)

This is an important development.  It comes at a time when a number of  Chinese netizens were scrutinizing that "extra-judicial" system.

MERCOSUR at Middle Age: Welber Barral on Current Challenges

(Pix from UFSC,Welber Barral recebe medalha da Ordem de Rio Branco do presidente Lula nesta quinta, May 6, 2009)

Welber Barral is the former Brazilian Secretary of Foreign Trade (2007-2011) under President Lula da Silva, has recently written about the future of MERCOSUR, the Common Market of the Southern Cone. He has recently written an essay about the future of MERCOSUR that si worth careful consideration.  Welber Barral,  El Mercosur y la predicción maya, La Nación (Argentina) , Jan. 2, 2013.  MERCOSUR serves as a model of the potential and the potential irrelevance of regional trade organizations in this century. Anachronism, basis of strong regional political-economic integration, instrument to amplify state interests, these are the critical questions for this century.

Jinghao Lu on Chinese Outbound Investment in Africa

My former student Jinghao Lu has some interesting things ot say about the new wave of Chinese investment in Africa.  His most interesting insights are the character of outbound investment (small and medium sized private companies) and the extent of public subsidy (increasing but targeted help from Chinese state authorities). More importantly, it suggests the significance of Chinese macro-economic planning on both the character of Chinese outbound investment and the extent of support for such investment from Chinese state organs. 

His interviews is set out below

Religion, Social Norms, and the State--The 2013 Letter of the Sacerdotes Mayores de Ifá of Cuba

Last year, I wrote of the annual letter of the Cuban Council of the High Priests of Ifá (Consejo Cubano De Sacerdotes Mayores De Ifá), the practitioners of traditional religion brought over from West Africa with the slave trade and now naturalized as a powerful indigenous religion throughout the Caribbean and growing in the United States.  Religion, Social Norms, and the State--The 2012 Letter of the Sacerdotes Mayores de Ifá of Cuba, Law at the End of the Day, Jan. 3, 2012).

 

The Consejo Cubano De Sacerdotes Mayores De Ifá just released their annual letter for 2013; La Letra del año 2013. On the history and purpose of the letter in Nigeria and the New World.  These annual letters suggest  the nature of divine will and advice for a propitious year ahead.  It serves the state the way all priestly  interventions are meant to--advice, connection with the divine, and authoritative means of conveying the appropriate forms of responding to events. Because these indigenous religions ought to be accorded equal dignity with the religions brought to the United States by other immigrant communities, I thought it useful, as we contemplation the New Year's messages of the world's religious leaders (e.g., Pope Benedict XVI sends New Year wishes to the world, The Telegraph, Jan. 1, 2013), that we ought to heed these messages as well. 

New Paper Posted: "Realizing Socio-Economic Rights Under Emerging Global Regulatory Frameworks: The Potential Impact of Privatisation and the Role of Companies in China and India"

I recently posted about the International Conference on “Realisation of Socio-Economic Rights in Emerging Free Markets: Perspectives from China and India” hosted by Centre for Chinese and Comparative Law (RCCL) of the School of Law of City University of Hong Kong, which took place  on 29-30 November 2012.  See International Conference on the Realisation of Socio-Economic Rights in Emerging Free Markets: Perspectives from China and India, Law at the End of the Day, Dec. 2, 2012.

(Pix (c) Larry Catá Backer 2012)

My contribution for that conference was entitled Realizing Socio-Economic Rights Under Emerging Global Regulatory Frameworks: The Potential Impact of Privatisation and the Role of Companies in China and India.  The Power Point of this presentation has been posted and can be ACCESSED HERE.  

A more elaborate version of the conference paper has just been posted to the Social Science Research Network website and can be accessed here under the title: Privatization, the Role of Enterprises and the Implementation of Social and Economic Rights: A Comparison of Rights-Based and Administrative Approaches in India and China. 

The post includes the Abstract and the Introduction of the paper, which follow.