Delaware Chancellor William B. Chandler III Speaks on Corporate Director Issues; Worth a Listen for Its National and Transnational Insights

In some quarters it is commonly assumed that American corporations tend to develop behavior norms solely by reference to a fairly narrow formal legalistic approach, beyond which corporations act amorally, opportunistically in accordance with some sort of pathological law of the jungle at odds with the best interests of the communities in which they operate or which they affect.  

 "Never try to teach a pig to sing. It's a waste of your time and it annoys the pig". Image: Halas and Batchelor's Animal Farm. From Animal Farm: The Musical And (Other) Massive Flops

 

It is becoming clearer, though, that even American corporations are deeply embedded within governance frameworks beyond the formal requirements of law.  These governance frameworks, consisting of standards of behavior that affect the way in which corporate conduct is assessed by key corporate stakeholders within and outside the corporate management structure, are assuming a more distinct and autonomous form.  It is this understanding that underlies the current efforts to provide a transnational governance framework for business and human rights.   See, e.g., Report Of The Special Representative Of The Secretary-General On The Issue Of Human Rights And Transnational Corporations And Other Business Enterprises, John Ruggie, Guiding Principles For The Implementation Of The United Nations ‘Protect, Respect And Remedy’ Framework, (Draft 22-1-2010). 

These distinct forms are also being institutionalized, at least informally.  In the U.S., for example, a fairly extensive infrastructure of extra legal institutions are emerging that serve to create a framework for the development and implementation of social norms.   These organizations, some of which comprise members of key corporate stakeholder classes, have emerged as an important source of governance norms for corporate actors that may be substantially affecting the understanding of the form and limits of legitimate conduct.  One of these organizations is the National Association of Corporate Directors.  

The NACD's vision statement suggests the central element of governance animating the organization.

• NACD aspires to a world where...
• Businesses are sustainable, profitable and trusted. 
• Shareowners believe directors prioritize long-term objectives and add unique value to the company.
• Directors provide effective oversight of the corporation and strive to deliver exemplary board performance.
• ...and NACD is providing the tools, resources and voice to advance this vision.

The NACD mission statement well captures the norm framing governance role of the institution:

NACD advances exemplary board leadership - for directors, by directors.  Our team provides the information and insights that board members rely upon to confidently navigate business challenges and enhance long-term shareowner value. Importantly, directors and boards turn to NACD to gain the knowledge and wisdom to become a strategic asset to their companies, and NACD amplifies the collective voice of directors in the national dialogue on board governance issues.  NACD is the Voice of the Director. This is not corporate speak: Our entire organization is focused on meeting the needs of board members, and supporting directors to perform more effectively and efficiently.

For that purpose it publishes a number of guides, and engages in a number of other related activities publicized through its website, including the production of knowledge through the preparation of targeted reports, education services, networking opportunities for socialization, and related services, : NACD Directorship. For a recent example see, NACD Directorship, What Society Thinks About Boards, the 2011 NACD/Deliotte What Society Thinks? survey seeks participation to determine how boardrooms appear to those on the outside ("The objective of the What Society Thinks? survey is to establish a baseline that, reviewed over time, will record changes in perceptions and point to where education and reform are needed in the eyes of the public.").

From Distracted Directors and the Impact of Technology in the Boardroom: The mixed blessings of iPads, Blackberries, and Webex

Most importantly, NACD provides monitoring, review and evaluation services.  NACD Customized Board Evaluations ("Our clients recognize NACD as a trusted and non-biased third-party facilitator. NACD's customized In-Boardroom evaluation programs put you in charge of establishing a benchmark and enhancing your board's effectiveness.")

Among its more interesting activities are efforts to maintain communication with the producers of the most important interpretations/applications of the formal rules enforced through the domestic legal order of the states in which NACD directors work.  This communication is crucial both for the development of the social norm rules that directors (and related stakeholders) embrace and enforce--through decisions about corporate director elections, investment in corporate debt and equities and other corporate transactions . 

Chancellor Chandler illustration,  From http://www.directorship.com/ Jan. 21, 2011

At the end of 2010, NACD Directorship published an interview by Jeff Cunningham with Delaware Chancellor William B. Chandler. Boardroom Justice, Interview by Jeff Cunningham of Chancellor William B. Chandler III (Dec. 17, 2010). Cunningham notes at the start of the interview:

In a wide-ranging interview with NACD Directorship’s Jeff Cunningham, America’s leading corporate jurist, Delaware Chancellor William B. Chandler III, explains his legal philosophy, concerns about liability, where he sees the line drawn between the federal branch and the Delaware Court, the impact of the Disney case on director behavior, the powerful new mediation alternative and more. 

The interview is well worth reading for its insights on the views of one of the more influential jurists in the United States with respect to matters of the application of law-state rules to business enterprises.  

 Beyond its insights into the relationship of Delaware corporate law to corporate governance in general and the structure of American law, the Chancellor offers some particularly useful insights into the relationship between law-norms and social-norms from the perspective of the state.  

Has the court shifted the balance of power toward shareholders and is this in any way related to the profound shift in public anti-business sentiment?
Well, my hope is that the Court is never viewed as deciding cases based on perceptions of public opinion; our job is to decide cases based on the facts and the law. That is, the members of the Delaware courts try to make decisions based on the legal and well- known equitable principles that have been developed over time. The Court of Chancery has the luxury of a rich body of decisional law and the five members on this court have a shared background and legal experiences that help ensure an even and coherent body of decisions. The other special characteristic is that decisions are offered in a candid manner, describing precisely what is improper so that there is certainty about what corporate planners can or cannot do in the future. So, you can rely on the fact that this Court will not be swayed by public sentiment of the moment; our job is to provide a dispassionate and objective answer. That, I think, is and should be the defining characteristic of court.
Why not be swayed by public opinion?
Litigation is not a referendum on popular opinion. Our job— the job of any tribunal—is to apply the law fairly and impartially to the facts of a dispute. That’s the definition of the Delaware Court of Chancery. Our law holds directors and managers responsible or accountable for their decisions and establishes the right of stockholders to have a role in holding directors accountable— either through exercise of the stockholder franchise or via the litigation process. Plainly speaking, an enormous body of law defines our law and that law will not shift based upon public opinion polls. That is the certainty and predictability that Delaware law and the Court of Chancery uphold as part of the contract with investors and with directors. That is the certainty and predictability that Delaware law and the Court of Chancery uphold as part of the contract with investors and with directors.
Can you relate that to a more specific instance, the Disney case?
Disney encouraged directors to consider best practices but pointed out that directors cannot be held liable for not following a particular best practice. Our fiduciary law is a floor for director conduct, essentially a standard below which they may not fall without risking liability. It would be unfair and counterproductive to hold directors to a standard of care or liability that doesn’t exist at the time they make a decision or at the time a director decided not to take an action. Holding a director to a standard that didn’t exist at the time would be a perverse rule, and no doubt would cause any rational person to reconsider serving in such a capacity.
Is there a bright line here for directors?
What I was hoping to say in Disney is merely that it’s highly unlikely that they would ever be found liable if directors followed a path of best practices. You could look at these best practices similar to a safe harbor provision. But best practices in any endeavor constitutes an aspirational norm rather than a requirement, which hopefully will inspire as well as guide and inform directors in their decision-making.  (From Boardroom Justice, Interview by Jeff Cunningham of Chancellor William B. Chandler III (Dec. 17, 2010)).

Consider the points the Chancellor makes. The Chancellor reminds his listeners of the fundamental structural limits of law-state governance.  Law might well be a political act in its inception, reflecting the political will of those representatives of the holders of sovereign authority within a territory, but once enacted (or incorporated into the decisional law of a jurisdiction) it stands autonomous of that popular will until changed.  Judge Chancellor describes the essence of the rule of law presumption of the American law-state, "you can rely on the fact that this Court will not be swayed by public sentiment of the moment; our job is to provide a dispassionate and objective answer. That, I think, is and should be the defining characteristic of court." (From Boardroom Justice, Interview by Jeff Cunningham of Chancellor William B. Chandler III (Dec. 17, 2010)).  That autonomy and rationality also provides strict limits on the authority of the courts to respond to perceptions of abusive conduct that do not fall within the letter or spirit of the law.  And it suggests a recognition that not all conduct can fall within the letter or spirit of a law.  More importantly, it suggests the boundaries of the relationship between popular will, law, the state judicial apparatus and the corporation, a relationship founded on contract. "That is the certainty and predictability that Delaware law and the Court of Chancery uphold as part of the contract with investors and with directors." (id.).

And it is this understanding of the relationship between state, law, court public opinion and corporation that informs the construction of limits beyond which law cannot be effective.  That was the thrust of suggestion in the Chancellor's discussion of the Disney case. "It would be unfair and counterproductive to hold directors to a standard of care or liability that doesn’t exist at the time they make a decision or at the time a director decided not to take an action." (Id.). Yet the Chancellor also suggests that the law of the jungle does not determine behavior beyond law.  Rather, the Chancellor acknowledges as well the possibility of rule sets that may govern corporate behavior beyond law.  Absent a lawful extension of the law-state system, Courts may not hold corporate actors accountable for breaches of such rules, but other stakeholders, of course, can. More significant, though, compliance with social norm rules would enhance the ability of corporations to resist legal actions against them.  "What I was hoping to say in Disney is merely that it’s highly unlikely that they would ever be found liable if directors followed a path of best practices. You could look at these best practices similar to a safe harbor provision." (Id.).  Effectively, the Chancellor suggested that if stakeholders were unhappy with the conduct of the Disney Board, they could have shown their displeasure by their purchasing and sale decisions--of Disney stick and products. 

These views reflect the position taken at the international level.  See,  Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, John Ruggie, Business and Human Rights: Further steps toward the operationalization of the “protect, respect and remedy” framework, A/HRC/14/27, Human Rights Council, 14th session, Agenda item 3, Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development.  It also suggests the importance of these social-norm frameworks for guiding corporate action that touches on issues of race and class.  For a view of the Disney litigation from the perspective of directorial independence, and the relationship of independence to assumptions about race and class, see,   Backer, Larry Catá, Director Independence and the Duty of Loyalty: Race, Gender, Class and the Disney-Ovitz Litigation. St. John's Law Review, Vol. 79, 2005. Available at SSRN: http://ssrn.com/abstract=780244

Harmonizing Transnational Corporate Governance--Communication Among CSR Soft Law Framework Systems

One of the most interesting developments in Corporate Social Responsibility (CSR) is the elaboration of chains of authority among the very distinct frameworks that are being developed by both public and private international organizations.  Private actors tend to produce networks of systems that are informally connected and which seek through communication and overlap to move toward convergence.  Theirs tends to be a functional approach to CSR, arranged within orders that are informal and tied to norm-governance frameworks. Public actors tend toward the construction of more formally institutionalized relationship, arranged within an order that tends to be vertically oriented and ultimately tied to the law-state system.  The object here is convergence.

Change Management focuses on people to ensure that change is brought about smoothly, effectively, and with minimum resistance. Our Change Management activities are directed toward the identification and mitigation of the people-oriented risks associated with accomplishing the change objectives. (From PBSI, Change Leadership /Management).

Recently the United Nations has been taking more active steps to suggest the relationship between the U.N. Global Compact and two potentially influential efforts to elaborate CSR governance  frameworks.  The first is between the Global Compact and the International Organization for Standardization (ISO), International Standard ISO 26000 Guidance on Social Responsibility. See United Nations Global Compact, An Introduction to Linkages Between UN Global Compact and ISO 26000 Core Subjects (2011).  The second is between the Global Compact and the Global Reporting Initiative and its G3 Guidelines.  See, UN Global Compact and Global Reporting Initiative Form Strategic Alliance  (2006).

The ISO is a hybrid organization.  It is private in the sense that it is not the creature of any state, or of the conventional complex of international organizations.  On the other hand, many of its members are agents of states.  ISO thus describes itself as

the world's largest developer and publisher of International Standards.  ISO is a network of the national standards institutes of 163 countries, one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system. ISO is a non-governmental organization that forms a bridge between the public and private sectors. On the one hand, many of its member institutes are part of the governmental structure of their countries, or are mandated by their government. On the other hand, other members have their roots uniquely in the private sector, having been set up by national partnerships of industry associations. (ISO, About ISO).

The ISO's organization reflects both its hybrid character and a necessary complexity govern the ambitions of its programs straddling public and private governance realms.   Its 163 members are divided into three categories, Member bodies, correspondent members and Subscriber members.  (ISO, ISO Members).  A member body "of ISO is the national body "most representative of standardization in its country". " (ISO, ISO Member Bodies).  A correspondent member "is usually an organization in a country which does not yet have a fully-developed national standards activity."  (ISO, ISO Correspondent Bodies) It information but not participation rights.  (Id.). In the United States, the member body is the American National Standards Institute, whose "membership is comprised of a broad range of businesses and industrial organizations, standards setting and conformity assessment bodies, trade associations, labor unions, professional societies, consumer groups, academia, and government organizations " (ISO, About ISO, ISO Members, USA ANSI).  Norway's member body, Standards Norway, follows a similar model.  On the other hand, for example,  the Ukrainian member body, the State Committee of Ukraine on Technical Regulation and Consumer Policy, is a governmental agency, as is the Standardization Administration of China, and the Russian Federal Agency on Technical Regulating and Metrology.  Brazil's Associação Brasileira de Normas Técnicasis is a hybrid private body subject to special legislation, as is the Standards Institution of Israel (a public non profit statutory organization).

ISO Structure

The Global Reporting Initiative is a network of private actors with substantially fewer  formal or informal connection to the law-state system.  It describes itself as 

a network-based organization that pioneered the world’s most widely used sustainability reporting framework. GRI is committed to the Framework’s continuous improvement and application worldwide. GRI’s core goals include the mainstreaming of disclosure on environmental, social and governance performance.(From Global Reporting Initiative, About GRI, What is GRI?).

Join GRI

Like the ISO, the GRI develops standards from the bottom up, "through a consensus-seeking, multi-stakeholder process. Participants are drawn from global business, civil society, labor, academic and professional institutions."  (Id.). The heart of the GRIU organization are its participating organizations, each of which participates in governance and contributes financially to the organization. GRI, then, is an organization of organizations--in a sense very much like a private version of classical international organizations, which are constituted as an supra-national organization of politically constituted nations.  GRI's "Organizational Stakeholder (OS) Program is located at the center of the global multi-stakeholder network that constitutes GRI. By putting their name to the GRI mission, products and processes, and broadening participation around sustainability and transparency, OS provide a key basis for legitimacy to GRI and reinforce our common commitment as a network to change." (GRI, Join GRI/OS).

ISO Standard 26000, Guidance on Social Responsibility, is described as a "harmonized, globally relevant guidance for private and public sector organizations of all types based on international consensus among expert representatives of the main stakeholder groups, and so encourage the implementation of best practice in social responsibility worldwide."  ISO, ISO Standard 26000, Project Overview.  The objectives of ISO 26000 include the development of international consensus on the meaning of CSR, developing guidance principles for the implementation of a consensus derived framework for CSR, and controlling the evolution and implementation of CSR best practices. (Id.).

The Global Compact organization has noted the most significant points of harmonization between its principles based framdework and the functional project of the ISO 26000 project as follows:

1.  Human Rights

The UN Global Compact Principles 1-2
PRINCIPLE 1: Businesses should support and respect the protection of internationally proclaimed human rights.
PRINCIPLE 2: Businesses should make sure that they are not complicit in human rights abuses.
ISO 26000, Human Rights  (6.3), Issues 1-8
1. Due diligence 2. Human rights risk situations 3. Avoidance of complicity 4. Resolving grievances 5. Discrimination and vulnerable groups 6. Civil and political rights 7. Economic, social and cultural rights 8. Fundamental principles and rights at work.   (An Introduction to Linkages Between UN Global Compact and ISO 26000 Core Subjects, supra, at 4)

B. Labour

The UN Global Compact Principles  3-6
PRINCIPLE 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.
PRINCIPLE 4: Businesses should uphold the elimination of forced or compulsory labour. PRINCIPLE 5: Businesses should uphold the effective abolition of child labour. PRINCIPLE 6: Businesses should uphold the elimination of discrimination in respect of employment and occupation.
ISO 26000, Human Rights  (6.3), Issue 8
8. Fundamental principles and rights at work Box 7: Child labour
ISO 26000, Labour  Practices (6.4), Issues 1-5
1. Employment and employment relationships 2. Conditions of work and social protection 3. Social dialogue 4. Health and safety at work
5. Human development and training in the workplace   (An Introduction to Linkages Between UN Global Compact and ISO 26000 Core Subjects, supra, at 7)

C. Environment

The Global Compact Principles 7-9
PRINCIPLE 7: Businesses should support a precautionary approach to environmental challenges PRINCIPLE 8: Businesses should undertake initiatives to promote greater environmental responsibility
PRINCIPLE 9: Businesses should encourage the development and diffusion of environmentally friendly technologies
ISO 26000, The Environment (6.5), Issues 1-4
1. Prevention of pollution 2. Sustainable resource use 3. Climate change mitigation and adaptation 4. Protection and restoration of the natural environment (An Introduction to Linkages Between UN Global Compact and ISO 26000 Core Subjects, supra, at 11)

D. Anti-Corruption

The UN Global Compact Principle 10
PRINCIPLE 10: Businesses should work against corruption in all its forms, including extortion and bribery.
ISO 26000, Fair Operating Practices (6.6), Issues 1, 2, 4
1. Anti-corruption 2. Responsible political involvement 4. Promoting social responsibility in the value chain (An Introduction to Linkages Between UN Global Compact and ISO 26000 Core Subjects, supra, at 14).

Sphere of Influence ("we have examined ‘Sphere of Influence’, which is a key concept that relates to all 10 of the UN Global Compact principles. The Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment, and anti-corruption. "). Module: SPHERE OF INFLUENCE Section: Review of Learning

The GRI-Global Compact initiatives  evidence a similar effort at institutional convergence.  "The UN Global Compact and GRI announced an important collaboration and signed a Memorandum of Understanding on 28 May 2010 at the Amsterdam Global Conference on Sustainability and Transparency. A special event was then held during the UNGC Leaders Summit in New York on 24 June 2010, to highlight this collaboration between the UNGC and GRI and begin action. " See, GRI, UNGC and GRI enter into a new alliance (May 28, 2010). "The GRI Sustainability Reporting Guidelines (G3) can be used to produce the Global Compact’s annually required Communication on Progress (COP). The COP is the mechanism through which UNGC participating companies demonstrate progress towards attainment of the ten UNGC Principles. "  Id.

Under the terms of a Memorandum of Understanding signed on 28 May 2010, GRI, subject to due process, will integrate the Global Compact’s ten principles and issue areas centrally in the next iteration of its Sustainability Reporting Guidelines. At the same time, the Global Compact will adopt the GRI Guidelines as the recommended reporting framework for companies to communicate on progress made. The two initiatives will also join forces to develop guidance on the use of GRI for the Global Compact and collaborate at the local level on outreach and training.

The alliance, articulated during the UN Global Compact Leaders Summit 2010, is a crucial step in ensuring convergence in the area of corporate sustainability and will allow both initiatives to focus on their respective and complementary strengths – the Global Compact’s mainstreaming of universal principles and UN goals in business, and the GRI’s comprehensive reporting framework. (From UN Global Compact, News Release, GRI and UN Global Compact Forge New Alliance, 24 June 2010)

The Amsterdam Conference 2010

 In both cases, the Global Compact suggests  both convergence, and the organization of that convergence under the leadership of the United Nations.  Thus, for example, the subordinate position of the ISO 26000 standards are made clear in the introduction to the Global Compact's Linkages document.  "The release of “ISO 26000: Guidance standard on social responsibility” gives a boost to ongoing efforts by the UN Global Compact to establish widespread common understanding of corporate responsibility principles. ISO 26000 and the UN Global Compact are connected by a fundamental belief that organizations should behave in a socially responsible way."  (An Introduction to Linkages Between UN Global Compact and ISO 26000 Core Subjects, supra, at 1).  Indeed, there is an intimation that the ISO Standards are legitimate and worthy precisely because they conform to the United Nation's standards.   

 This short publication provides a high-level overview of the key linkages between the UN Global Compact’s Ten Principles and the core subjects of social responsibility defined by ISO 26000 (human rights, labour practices, the environment, fair operating practices, consumer issues, community involvement). While not an exhaustive review of the numerous areas of alignment between the two initiatives, this publication shows that there is clear consistency – and that all UN Global Compact Principles are included in ISO 26000. (Id.).

 American Joblessness and the Social Responsibility Pyramid

These efforts suggest the importance, not so much of convergence, but of institutional engagements over precedence and influence in the construction and management of systems of economic governance.  But it also suggests something more.  With respect to GRI, it also evidences a drive to discipline manage private governance within a public institutional framework, that is, to domesticate private governance within the umbrella of the law-state system in its supra national forms, suggests the contours of a struggle for control over the levers of governance between public and private governance organs as the push toward institutionalizing supra national economic governance moves forward. 

 United Nations in Syria, Global Compact (on complexity and institutionalization in governance framework elaboration, an example) 

More importantly, these recent efforts suggest both the utility of public and private projects for the the  construction of CSR frameworks and the importance of supra national public actors as the institutional framework through which these substantive governance  rules can be managed and implemented.  See, e.g., Earth Charter in Business: New Guidance Paper on the Earth Charter, GRI and Global Compact (March 2, 2008).

The next great project will be to harmonize these efforts with the Protect-Respect-Remedy framework for business and human rights, the general principles of which are being considered by the United Nations this coming April.  According to John Ruggie, its principle architect, the Protect-Respect-Remedy framework has already taken on a life of its own.  See, Hugh Williamson, Conflict zone pressure rises on companies, FT.com, Jan. 12, 2011.

John Ruggie, United Nations special representative for business and human rights, told a London audience on Tuesday evening that a framework of tougher standards he had drafted “has acquired a life of its own” even before it is voted on in the UN’s Human Rights Council in June. . . .

The draft framework is included in ISO26000, a new international industry standard on social responsibility, and is likely to be part of revised guidelines on MNCs produced by the Organisation for Economic Co-operation and Development, Mr Ruggie said. There has also been an “outburst of activity among leading companies to determine if their policies are ‘Ruggie-proof’,” and export credit agencies are considering the framework, the UN envoy added. (Id.).

Of Palestinos and Blood Libel: Appropriating and Decontextualizing Markers of Subordination

Most cultures insist that they are immune from the deleterious effects of subordination based on markers of race, class, religion, ethnicity and the like.  But the power of subordination is strong.  And it tends to find expression even within cultures and societies that may appear homogenous to outsiders.  More importantly, it may find expression even in the face of official political ideology that strongly opposes such subordination methodologies.

This move toward subordination has been affected by globalization. The globalization of subordination hierarchies is not always easy to see clearly.  But sometimes a particular relationship acquires transnational and trans-cultural power to describe subordination that appears "natural" to societies and which consciously contradicts its fundamental substantive ordering frameworks.  Many on the left like to believe that this is a problem of the old colonial powers, and a disease of majority white societies--the United States in particular.  Many on the right refuse to acknowledge either the possibility or power of this system of functional subordination within societies.  Yet it appears that this simplistic approach no longer describes reality very well.

 From London Latin America

Consider the transformation of the term "Palestinian." Once a way of describing a member of a group of people united by ties sufficiently coherent to hold themselves out as a political community worthy of sovereign rights over a defined territory,  the term "Palestinian" has become a means of identifying a community of people within a larger community who hold a position of subordination based on characteristics of race, class and geographic origin. So re characterized, it has become a general term used to identify groups within political communities who are the subject of subordinating social, cultural or other non-official rules, even in the face of official disapproval of such subordination.  That, at any rate, is what has transpired in Cuba. Osama Qashoo has provided a fascinating documentary journey into the reality of  Osama Qashoo, Witness--Soy Palestino, al-Jazeera, 13 Dec. 2009.

When Osama Qashoo, a Palestinian filmmaker, travelled to Cuba in 2007, he arrived at a time of feverish political uncertainty as Fidel Castro suddenly seemed to be on the point of stepping aside.

Osama learns that "Palestino" is derogatory Havana slang for people from the rural east

 When Osama introduced himself as a Palestinian to the Cubans, people looked at him in disbelief.

He soon discovered that Havana had its own Palestinians - mostly poor black migrants without any documents.

In fact, he found that in Cuba, "Palestino" is a term of racist abuse used to describe the people coming from the rural east of the island to the capital, Havana.

He decided to embark on a journey to discover whether the Palestinians of Cuba had anything in common with his own people back home.

The first "Palestino" Osama met ran off with his notebook and the struggle to retrieve it led to a unique friendship with an extraordinary man.

Louisito sings poignant, heart-rending songs about his status as a social outcast

  Louisito is a singer and musician who lives in a small wooden box on wheels, covered with instruments made from junk.

He entertains other homeless "Palestinos" with songs and comic routines.

Louisito had not been home to see his mother for seven years, and so they set off together to meet his family in the east of the island, Cuba's Palestine.

On a musical-comedy journey into Cuba's politics, Osama Qashoo lifts the lid on this untold aspect of Castro's Cuba. Inadvertently, and purely as a result of introducing himself as a Palestinian, Osama had stumbled on a hidden underclass in this staunchly socialist society.  (Id.).

The video can be seen in two parts: 

Part 1 HERE . 

Part 2 HERE.

Soy Palestino reminds us of the power of subordination, even within a diligently policed political framework.  It also suggests how globalization is providing an internationalized set of descriptors of the conditions off subordination.   These descriptions serve as a shorthand for the actions  and as a means of avoiding internal contradictions of subordination by externalizing its referents.   Thus, for Cubans,  both describe the characteristics of subordination by reference to a universal referent, and a class of people to which these characteristics apply within their own society.  To be a Palestinian has become complicated. But as a consequence, the terms become detached from their historical and political context.  To be a Palestinian anywhere suggests a lived subordination to the people within whose territory they might reside--whether that territory is characterized as  a Muslim or Christian majority state, or the State of Israel.  But anyone now can be a Palestinian--even apparently a Cuban from the Eastern edge of the Island who climbs over the regulatory "separation barrier" to reside elsewhere.   The Palestinian has become de-natured and reconstructed as a "type".

Ironically, the Jewish people have also provided a universal referent to subordination, not as to the subordinated character of a people but as a communal character taint that suggests human inferiority.  This one is of a more sinister kind, more directly connected to death (both of the "victim" and eventually of the "perpetrator").  Consider the cultural and power implications of the transformation of "blood libel" from an indictment of the inhumanity of the Jewish people and an animating condition of Jewish existence in a world in which they are always the voracious "alien", to a globalized referent for the abuses of dominant position by one group against a subordinated "other" in the context of the political fighting generated by the attempted killing of Congressperson Giffords in Arizona. 

Sarah Palin has not retreated in the face of accusations that her heated political rhetoric, peppered with gun references, played a role in the killings in Tucson at the weekend. Instead she reloaded and opened fire with a charge of "blood libel" against her critics, prompting fresh criticism.

Palin showed that she has no intention of toning down the confrontational language in a video released three days after the shootings by Jared Lee Loughner that killed six people and wounded 14 others, including the target for assassination, congresswoman Gabrielle Giffords.

"Especially within hours of a tragedy unfolding, journalists and pundits should not manufacture a blood libel that serves only to incite the very hatred and violence they purport to condemn. That is reprehensible," said Palin.

"There are those who claim that political rhetoric is to blame for the despicable act of this deranged, apparently apolitical criminal. And they claim political debate has somehow got more heated just recently. But when was it less heated? Back in those calm days when political figures literally settled their difference with duelling pistols?"

Her use of the phrase "blood libel" was immediately questioned because, historically, it refers to the false accusation that Jews killed Christian children to use their blood in religious rituals. Giffords, who remains in critical condition after being shot in the head, is the first Jewish congresswoman from Arizona. (From Chris McGreal, Sarah Palin sticks to her guns after Arizona shootings and accuses her critics of 'blood libel', Guardian U.K., Jan. 12, 2011).

Gabrielle Giffords: Tea Party Target, The Daily Beast, Jan. 8, 2011.

Like the Palestinians, the Jewish people have lost a subordination marker personal to them, and powerfully so, to a process of globalization that abstracts a condition personal to a group situated in a historical context and denatures it to represent a universal condition of subordination.  This transformation and its implications was not lost on Abraham Foxman, the national director of the Anti-Defamation League. “'It was inappropriate at the outset to blame Sarah Palin and others for causing this tragedy or for being an accessory to murder,' Abraham Foxman, the group’s national director, said in a statement. 'Palin has every right to defend herself against these kinds of attacks.' But Mr. Foxman added that 'we wish that Palin had not invoked the phrase ‘blood-libel.’' He called it a phrase 'fraught with pain in Jewish history.'” Michael D. Shear, Palin Calls Criticism ‘Blood Libel’, The New York Times, Jan. 12, 2011.  Just as anyone can now be a Palestino, it seems that anyone can be libeled and dehumanized in the "Jewish fashion" now.

There is a connection, as well, between the Cuban Palestino and the members of certain political communities in the United States against whom the blood libel is asserted.  The Palestino is the subordinated other: the blood libel suggests the physical expression of a cultural and and moral inhumanity.  The first separates the community, the second provides the justification for the destruction of that community. And ironically, the globalization of both blood libel and the modern rootless subordination of the "tag" Palestinian, refashioned and internationalized, have rerturned to their original home in new and powerfully destructive ways that both de-nature and re-nature the notion in new ways. 

Prime Minister Ariel Sharon is shown drinking from a goblet labeled "The Palestinian Children's Blood." From Anti-Defamation League, Anti-Semitic Incitement: Political Cartoons in the Arab Media 5/29/02 - 7/24/02. 

      

Lars Klöhn: On Law and Economics Principles and the Role of Public or Private Enforcement of Law

The state in general, and law-state systems in particular, have been waging aggressive campaigns of late on several fronts.  Well known to transnationalists is the great battle over the privileging of law over governance, and the law-state system over polycentric governance regimes, for the management of behavior. But the law-state system itself is transforming its internal organization.  At the heart of this transformation is a great battle over the authority of individuals to enforce law, the rise of the regulatory state as an alternative to the traditional law-state enforcement mechanisms of the state applying its police power through public law and the individual enforcing her rights through the judicial mechanism. See, Edward L. Glaeser and Andrei Schleifer, The Rise of the Regulatory State, Journal of Economic Literature XLI:401-425 (2003).

Traditionally private law was grounded on the assumption that while the state provided the standards and the mechanisms for enforcement, individuals were expected to protect their own interests.  The state could facilitate that activity, and it might also seek to protect its own interests (that is, the public interest) against law breakers (through civil and criminal proceedings), but but individuals protecting their rights were at the heart of systems of enforcement.   By the mid 20th century, that system has been substantially supplemented, but not displaced, by an enormous  machinery of government that engaged in much more comprehensive management of private behavior by a combination of regulation, monitoring, enforcement and dispute resolution.  Glaeser and Schleifer, supra.  Almost a government within a government, what has become the administrative state extended the state's power to manage behavior beyond the pronouncements of law and the serendipity of judicial decision making through cases.    

But the tendency toward supplementation  through administrative mechanisms did not produce a new equilibrium.  Instead, the end of the 20th century saw a renewed effort, this time not so much to supplement the traditional role of individuals as protectors of their own interests, but to substitute the state for the individual for whose benefit law is enacted and the administrative mechanism operates. This has been well illustrated in the changes to the enforcement mechanisms in U.S. securities law, a process that was well formed by the time of the passage of the Sarbanes Oxley Act. See, Larry Catá Backer, Surveillance and Control: Privatizing and Nationalizing Corporate Monitoring after Sarbanes-Oxley. Law Review of Michigan State University, 2004.  Yet the process is not exactly linear.  The state  was moving on three fronts.  The first I have described already--the effort to substitute the state for the individual in the vindication of individual rights under law.  The second and third were meant to make that process more efficient and to protect the integrity of the system created. These involved the nationalization of authority over the issues to be managed in the federal government.  See, Larry Catá Backer, The Sarbanes-Oxley Act: Federalizing Norms for Officer, Lawyer and Accountant Behavior. St. Johns Law Review, Vol. 76, pp. 897-952 (2002).  The other was to change the role of the individual--from the principal source of enforcement through private law actions in court, to state agents.  See, Larry Catá Backer, The Duty to Monitor: Emerging Obligations of Outside Lawyers and Auditors to Detect and Report Corporate Wrongdoing Beyond the Securities Laws. St. John's Law Review, Vol. 77, No. 4, p. 919, 2003.  

By the start of the 21st century, then, the law-state moved from the source of normative values and the forum for private enforcement to serving as the agent of individuals for the vindication of their individual claims, now amalgamated with the state interest in its regulatory system.  But it retains the rhetorical tropes and structures of the traditional law state.  And sometimes it suggests a nostalgia for a regulatory environment which it abandoned with the turn of the last century.   It is in this context that one can better understand the importance of the law and economics movements in law.  As the structure of government, and its relation to the production and deployment of law, changed from the old model (pronouncement and public-private enforcement) to a new governance model geared to the management of behavior.  Law and economics can suggest a framework for determining the appropriate mix  of public and private enforcement of law and regulation for the most efficient regulation of behavior.

 Professor Lars Klöhn

Some recent work from Europe has begun to spotlight some of the issues that result from this socio-legal state of things in a very useful and refreshing way.  Among those working in this area is Lars Klöhn, Professaor of Law at the Institut für Handels-, Wirtschafts- und Arbeitsrecht at Philipps-Universität Marburg.  He has recently distributed an interesting paper, “Private Versus Public Enforcement of Laws - a Law & Economics Perspective,” which was presented at the conference “Compensation of Private Losses – The Evolution of Torts in the European Business Law” on November 25, 2010 which will be published in a conference volume edited by Professor Reiner Schulze (University of Münster).

When should laws be enforced by private actors and when should society rely on law enforcement by public authorities? This question has been analyzed in great detail in law & economics scholarship. This article surveys the literature and outlines a framework of criteria for deciding whether private or public enforcement of laws is preferable. To exemplify the criteria, the framework is then applied to some “real-life” enforcement issues. As there are several contributions on specific areas of law such as antitrust, securities regulation, consumer protection and so forth in this book, this exemplification is limited to two rather obvious cases – the enforcement of contract law and criminal law. (Klöhn, supra, at 1).

The issue, of course, is efficiency, an appropriate privileging for a system grounded in the techniques of aggregate management.  Klöhn suggests that it is not yet time to completely substitute the state for the individual, and pubic for private enforcement.  He explains, "there seems to be little dispute that the choice between public and private enforcement means searching for a “second-best solution,” requiring complex considerations of various criteria as well as being dependent on the factual context of regulation."  (Id., at 6).  He posits a framework of criteria, grounded in the efficiency principles of law and economics, for determining under what conditions either public or private enforcement might better) in a world in which structural inefficiency makes "best" solutions impossible.

Klöhn argues that "Private incentives to enforce the law seem to be optimal when private parties are the victims of the violation of the law." (Id., at 9).  But such enforcement must be appropriately managed if it is to approach optimality.  

First, the incentives of private enforcers might be set at the right level if the state provides them with some monetary compensation. . . .  Second, setting compensation at the right level involves a valuation problem. Regulators would have to determine the money value of evading prison to the average perpetrator. . . Third, the above mentioned argument assumes that private parties will be driven to enforce the law only for monetary rewards. Therefore, the problem of under-enforcement might not be as severe if we assume that people are driven by some desire for fairness, as is clearly the case in some areas of law such as environmental law. (Id., at 9-10).

 Interior, U.S. Supreme Court Building

This is no easy task.  "regulators would be forced to solve complicated, almost impossible calculations such as measuring the external damage from drug use or the monetary value of a loss in faith in the integrity of capital markets." (Id., at 10).  But then, this tends to strengthen the policy assumptions behind public takeover of enforcement.  Or it buttresses arguments for an enhanced administrative environment which would create a public body to monitor and set the appropriate levels of compensation to ensure private action optimality. But at that point, is there much private left in enforcement?

But the bigger problem is the inefficiency of private attorneys general.  The state is efficient because it can bring a single action and resolve a regulatory issue or sanction misbehavior.  But individuals tend to avoid collaboration.  They tend, therefore, in the aggregate to clog the courts.  Though each is legitimately asserting rights in the protection of their distinctive interests, from a regulatory management perspective,these actions are wasteful. That, in essence, suggests the policy determinations in two decades worth of American legislative efforts to limit private securities lawsuits under the federal securities laws.  Klöhn makes the American case well:  "While this danger is present in public enforcement of laws as well, it does not seem as high because public law enforcers do not profit monetarily from their enforcement, have a limited budget, and are held politically accountable for their actions." (Id., at 11).

But Klöhn also reminds us of the dangers of efficiency in public policy--corruption.   "Private enforcement renders it almost impossible to cooperate with regulated industries and to incentivize regulated industries to adopt self-regulation. It is true that private litigation remedies the capture problem when an agency is inclined to collude with those regulated against society." (Id.).  But the state cannot control private enforcement,  It may just react to it.  That puts the state in a passive and reactive position.  The state enacts law (or regulation), the individual seeks the protection of her rights in courts, courts make a determination of the application of law in rendering judgment in private disputes, those individual decisions have a collective effect both on behavior and the understanding of law, and in the aggregate  serves to control behavior.   The legislature can intervene only by changing law, and in this way influencing the perspective of disputes and their resolution.  Where the state both legislates and enforces (for the benefit of the individual and the collective), it avoids this issue of regulatory management.

And thus Klöhn restates the current conventional case for private enforcement:

Assuming that private actors bring more suits to court than public agencies, the judiciary will have more opportunities to refine vague and general standards contained in the law. This can create a public good and might well be worth the litigation costs not internalized by the plaintiffs. Of course, this is a consideration which can be taken into account by public enforcement agencies when exercising discretion not to enforce a law. However, some scholars argue that private parties are more likely than agencies to develop novel legal theories, creative approaches to dispute settlement and new techniques of investigation and proof. (Id., at 13).

And Klöhn restates the case against private enforcement regimes. The primary case for public enforcement is efficiency (minimizing the social and economic costs, to the state and society, of attaining policy objectives) and effectiveness (the likelihood that the state will focus on the attainment of aggregate welfare maximizing activity rather than individual welfare maximization that may reduce overall welfare).  Under private enforcement regimes there will likely be more suits than under a public enforcement system (efficiency).  This individual and self serving litigation is both good (the traditional role of private litigation as producing public goods without investing public funds int he process) and bad (inefficient) to the extent there is excessive litigation (that is where the social value of litigation is small compared to its social costs, even where individual value continues to be positive).  This inefficiency can be reduced where individuals litigation can be aggregated (and self interest subsumed to some extent to communal value).  But even here, the business of non-governmental public interest enterprise, creates its own set of self-serving incentives because. Public interest litigation enterprises seek to build their reputation (and increase their reputation, income and status, what Klöhn might describe as the entity's "notoriety") by engaging in litigation.  This problem of the excessive in enforcement is less severe under public enforcement regimes (though not absent there--again for the reasons of institutional survival and the personal agendas of individual actors within the state apparatus) because of constraints in budgets and the political constraints on the basis of which a government operates.

The result, of course, is mixed.  Private enforcement regimes appear to be most efficient in contract law (id., at 14).  It is least efficient in criminal law (id.).  For everything else, mixed regimes may serve society best.  But the construction and regulation of that mixture will remain contentious. This conclusion is both sensible and a reminder that ideology, either of private or public enforcement, taken to its limits, can produce a disconnect between theory and practice that is likely to produce disaster.

From Autoblog.

This might be well illustrated by the assumptions and tensions inherent in the notions of efficiency.  Klöhn correctly notes the connection, in the private enforcement context, between the amount of litigation and efficiency concerns (and also effectiveness concerns as a second order consequence).  The notion of litigation optimality becomes a central concern of law and economics approaches to the management of enforcement and the distribution of enforcement power among individuals, non-governmental organizations, and the state.


But "excessiveness" becomes a curious concept in this case.  The principal reason is the underlying assumption that efficiency requires that law is not always to be enforced.  One of the most interesting consequences of a law and economics approach, when grounded in the efficiency of the state as the managers of the collective welfare of a political society, is that the law is not meant to be uniformly applied.    

Another disadvantage of private enforcement is that it renders it almost impossible to exercise discretion not to enforce the law when non-enforcement is beneficial to society. This point assumes that laws are usually overinclusive. Taken literally, they cover cases which the legislator would have chosen not to cover if it had known the particular case in advance. . . . Such tailoring is left to ex-post adjudication of individual cases by the courts. Private enforcers have no incentive to exercise discretion with regard to overinclusive laws. Profit-driven private enforcers will seize the opportunity to enforce the law any time a positive return on the investment of enforcement costs can be expected. In contrast, a public enforcement agency can choose not to enforce the law in cases in which the social costs of enforcing the law exceed its benefits. (Klöhn, supra, at 12).

The principal problem, of course, is that in the face of regimes of individual legal rights, individual action to vindicate those rights cannot be efficiently coordinated or managed by the state (except perhaps in the most clumsy way).  In common law states, like the United States, this inefficiency used to be understood as structurally efficient, in the sense that it preserved the connection between customary law practices and the state apparatus.  This consideration, though, may trouble civil law states less. But this management suggests a tension between law and economics' focus on welfare maximization and the ideological constraints of "rule of law" that is worth further study.   "Rule of law" objectives may be maximized only at the cost social welfare maximization.  Jesús Alfaro Aguila-Real suggested this in his own reflections on Klöhn's essay.  He notes in a recent consideration of Klöhn's essay:  "¿Recuerdan eso que dicen nuestros tribunales continuamente acerca de que no hay igualdad fuera de la Ley? Pues eso. Que hay que permitir a los public enforcers un cierto grado de discrecionalidad en la persecución de las infracciones. Curiosamente, en ese punto, el control de los tribunales europeos sobre la decisión de la Comisión Europea de iniciar o no un procedimiento es bastante intenso" Jesús Alfaro Aguila-Rea, Public vs. Private Enforcement, Derecho Mercantil, Dec. 24, 2010 (translation: "Recall that our courts continuously remind us that  equality does not exist outside the law? That's it, then. One must enable public enforcers a degree of discretion in the prosecution of infringements. Curiously, on this point, the control by the European courts of the European Commission's determination on whether or not to initiate proceedings is quite intense" Id.). And that may be the ultimate lesson of the exercise of law and economics approaches to issues--law and economics insights will invariably lead its practitioners astray as and to the extent that its utility as a tool of analysis is transformed into an ideology the imposition of which can be, itself, inefficient.

"Anonymous": Organizing Collective Action and Coercive Power Beyond the State

Traditionally, it is commonly assumed that an institutionalized organization is necessary for the organization and deployment of collective power.  When organized in the form of a political state, such power is assumed to be at its greatest, including the legitimate use of organized violence for the attainment of political ends.  In the absence of organization, the deployment of power, especially against well organized states, was considered sub-optimal.   People, individually, and mass movements of people, were assumed to act legitimately only by acting upon or through the state within the frameworks of whatever institutionalized apparatus was constructed for them from out of either the consent of their fore bearers or on the basis of some legitimating  foundation-ideology. Legitimate individual political action, or mass mobilization, could not be effectuated outside the state or its authorized institutionalized frameworks (non-governmental organizations, corporations, supra-national entities--all nice and tidy and constructed in imitation of the state apparatus to political effect), in form or function.

But times change, and that change has been accelerated by the changing context in which  human communities have been coming to organize their activities outside the state.  The rise of al-Qaeda and other non-governmental communities has provided evidence that the apparatus and legitimacy framework of a state is unnecessary for the organization and deployment of power--even military power. See, e.g., Miles Kahler, "Collective Action and Clandestine Networks:  The Case of al Qaeda," in Networked Politics: Agency, Power, and Governance (Miles Kahler, ed.) Cornell University Press, 2009.

But globalization has permitted the successful growth not merely of non-governmental organizations structured in a way that mimics the state, but of other forms of organization that express temporal and objectives related aggregations of individual will for collective action.  These temporary but powerful aggregations of action are organized around fidelity to ideologies that serve as the foundation for action.   The power of these amalgamations and their effectiveness in actions against other non-state actors, and even states, has been recently evidenced in the reaction to the concerted activities against Julien Assage and his efforts to disclose secret information obtained principally by those who work against the interests of the United States and its allies.

 Bank of America Hit By Anonymous DDoS Attack, Current.com

Among the most interesting forms of coercive action collectives that have emerged from the Assange affair has been a collective (I do not call them a group) that styles itself "Anonymous."   

Anonymous is not an organization. There are no official members, guidelines, leaders, representatives or unifying principles. Rather, Anonymous is a word that identifies the millions of people, groups, and individuals on and off of the internet who, without disclosing their identities, express diverse opinions on many topics. To be Anonymous does not imply thinking or acting in concert with others who are Anonymous; rather, it describes a way of communicating and promoting social change. . . . We continue to believe that diverse individuals who share common ideals can progress beyond the temporary satisfaction of retaliation and toward efficient, targeted and sustained activism. Together, we can shed a beacon of hope that will illuminate our defense of freedom and our consciousness of shared humanity. (Why We Protest).

So begins the self-description of a collective that exhibits some of the more transformative power of globalization when combined with the political culture of mass democracy and the politics of mass mobilization framed around ideology. These are the very structures and tools that have been successfully deployed by the state in the construction of both the social state of the 20th century and the framework for supra-national economic ordering of globalization. Cf. Edward Hallett Carr, Nationalism and After (London: MacMillan, 1945).  It has served as a template for large non-state actors for the management of the masses. 

Kim Jong Il is Healthy (well, at least, on canvas), Where the Hell Am I, Sept. 30, 2008 (quoting David Heather: "As important tools in the mobilization of the masses, posters have to have an instantaneous impact on the viewers' understanding and their desire to act upon this understanding. Their message has to be accessible, clear and direct; informative and explanatory, as well as exhortative. The link between contemplation and action is crucial.").

This "functional internationalism"  was once viewed as utopian in the absence of  an organized power guaranteeing it operation.  ""It must, however be admitted that this idealistic view of a functional internationalism, based on the conception of international order as association not between nations as such but between people and groups of different nations, and realized through an indefinite number of organizations cutting across national divisions and exercising authority for specific and limited purposes over individuals and functional groups, would be utopian if it failed to take into account  from the outset of the unresolved issue of power." (Carr, supra at 50-51).  But this framework is precisely the sort that has served as a conceptual foundation for transnational organization and governance among public and non-state actors, traditionally organized.  See, e.g., Gunher Teubner, Global Law Without a State (Darthmouth: Aldershot, 1997); Gralf-Peter Calliess and Peer Zumbasen, Rough Consensus and Running Code:  A Theory of Transnational Private Law (Oxford University Press, 2010). See also Larry Catá Backer, Governance Without Government: An Overview and Application of Interactions Between Law-State and Governance-Corporate Systems (March 1, 2010). Penn State Legal Studies Research 10-2010. One wonders whether, in the form of Anonymous, we are discovering now that it can, as easily be used by mass collectives against the state. 

Thus, Anonymous describes itself as

a collection of individuals united by ideas. You likely know Anonymous, although you don't know exactly who we are. We are your brothers and sisters, your parents and children, your superiors and your underlings. We are the concerned citizens standing next to you. Anonymous is everywhere, yet nowhere. Our strength lies in our numbers. Our will as a whole is the combined will of individuals. Our greatest advantage is a knowledge of the fundamentals we share as human beings. This knowledge is a fruit of our anonymity. (More About Anonymous).

It serves as a limiting form of mass organization--positing an equality among individuals, it frames action around ideology and the mobilization of responses to  ideological challenges.  It accomplishes this through the aggregation of the actions of individuals coordinating, in an uncoordinated way, responses to ideological challenges and framing objectives in precise and very narrow  ways.

Anonymous is comprised of people from all walks of life and has no rigid hierarchy or leadership. Our organization is accomplished entirely through the voluntary action and collaboration of individuals, many of whom do not know each other directly. . . . The leadership of Anonymous is non-existent. We have no controlling party. We fall under the sway of no individual or organization. We are directed only by the decisions of the whole. Guidance comes from the message, not from the individual. (More About Anonymous).

Christina Grammatikopoulou, On Becoming A Hacker: A new political and cultural practice, Interartive.

Thus mobilized, this aggregation of individual, this mass democratic movement unmanaged by the state or the apparatus of other state or non-state actors, will seek to act in concert to achieve an objective understood as advancing the imperatives of the jointly embraced ideologies around which mass mobilization is centered.

The FBI has seized a server in Texas as part of its hunt for the groups behind the pro-WikiLeaks denial-of-service attacks launched in December against PayPal, Visa, MasterCard, and others, according to a report. . . .Anonymous has claimed responsibility for deluging the Web sites of PayPal and others with data in order to bring the sites down. The attacks, the group says, were a response to actions taken by the site holders against WikiLeaks, after WikiLeaks publicly released a slew of confidential U.S. diplomatic cables. PayPal, MasterCard, and Visa all decided to prevent WikiLeaks from collecting donations via their financial networks. 4Chan has said it was behind an attack to shut down the sites for Swiss bank PostFinance and lawyers in Sweden prosecuting sex allegations against WikiLeaks front man Julian Assange.  Report: FBI seizes server in probe of WikiLeaks attacks, CNet News, Jan. 1, 2011.

And it has attacked the state apparatus itself.  See, David Smith, Anonymous hackers target Zimbabwe government over WikiLeaks, The Guardian (U.K.), Dec.31, 2010. Anonymous activists target Tunisian government sites, BBC News Online, Jan. 4, 2011 ("Sites belonging to the Ministry of Industry and the Tunisian Stock Exchange were amongst seven targeted by the Anonymous group since Monday. Other sites have been defaced for what the group calls "an outrageous level of censorship" in the country. . . . In an open letter published online, Anonymous said that it had launched distributed denial of service (DDoS) attacks to highlight a spate of recent riots that have taken place over youth unemployment in the country as well as net and press censorship." Id.).

Anonymous thus presents a new form of institutionalized governance that appears to embody in a new form the consequences of the movement toward mass democracy a century in the making.  It represents disorganized organization, a potential state always at the ready, that becomes whole for brief periods and against specific objectives.  It is governance without either government or apparatus (institution).  It is activated by the processing of judgments that derive from its monitoring.  Anonymous suggests Foucault's gaze turned outward.  The inmates of the Panopticon do not merely monitor inward (themselves), they monitor outward as well (the people and institutional structures around them). Now better understood through the less threatening language of "transparency", the (self) governance effects can be profound.  Cf., Matt Hannah, "Imperfect Panopticism: Envisioning the Construction of Normal Lives," in Space and Social Theory:  Interpreting Modernity and Postmodernity 344 (Georges Benko & Ulf Strohmeyer, eds., Oxford: Blackwell, 1997).  There is a sense of this in the pivotal role that non-governmental organizations already play int he construction and maintenance of non-state governance regimes.  See, Larry Catá Backer, From Moral Obligation to International Law: Disclosure Systems, Markets and the Regulation of Multinational Corporations. Georgetown Journal of International Law, Vol. 39, 2008. 

Its form is discerned by the strong framework provided through a shared set of beliefs.  This is not a singular ideological frame, but a cluster of sub-frames.  Anonymous embraces  a core ideology with a large number of more specifically applicable sub-ideologies (or consequerntialist ideologies). These ideologies are consequentialist in the sense that they provide the means for measuring the actions of others and for assessing the legitimacy and possibility objective for which of mass mobilization is necessary and the collective aroused. Yet its strength, in shared ideology, may also prove its weak point.  Ideology might roam freely through mass movement communities.  But it is also something to which many contribute.  One can expect that if ideology triggers mobilization and determines both its character and objectives, the power to move ideology, even a little bit, would be quite important.  See generally, Pierre  Bourdieu, "The Market of Symbolic Goods," in The Field of Cultural Production 112-141(Randall Johnson, ed., New York:  Columbia University Press,  1993).  But, even within a more conventional multi-institutional transnational context, that is a project shared by many with diverse and antagonistic positions.   See,  Larry Catá Backer, Economic Globalization and the Rise of Efficient Systems of Global Private Lawmaking: Wal-Mart as Global Legislator. University of Connecticut Law Review, Vol. 39, No. 4, 2007.

As the actualization, at least in very early form, of what may be a new form of non-state actor with governance power (and certainly with the ability to project power against other non-state actors and even against states) the constellation of mass mobilization known as "Anonymous" is worth considering.  That cross border mass mobilization is possible, and can be made effective against state and non-state actors, that such mobilizations can be harassed through the articulation of praxis oriented application of commonly embraced ideology that are substantially similar to those that support the legitimacy of state action, suggests the power of this form of governance organization, its strengths and weaknesses.  Like spiderweb, it is easy to pierce when considered from the perspective of the conventional organization of governance units.  But like spider web it can be quite strong when invoked for the limited and transitory objectives for which mobilization based action is organized. Though the current interactions between this aggregation and states over the Wikileaks disclosures will likely be managed away, the form of this framework for governance will not.

One of my students, Robert Marriott, has undertaken some research on Anonymous. He has agreed to share an essay reflecting his work, which is reproduced below. The essay follows:

The Problems and Perspectives of Anonymous as a criminal entity
Robert Marriott


Several hosting and payment company websites were recently attacked by the internet group Anonymous under the banner of “Operation Payback”, an attempt to show solidarity and lend support to Julian Assange and Wikileaks in light of Assange’s recent arrest and the substantial part of the media which has cast the site’s recent activities in a derogatory light. Each of these sites had responded to soft pressure and requests from US Government officials to stop supporting Wikileaks. Although the attacks did temporarily shut down some sites and brought about policy reversals in a couple of cases, they generally did not cause substantial damage, and did lead Assange to publicly distance himself from Anonymous and its tactics. Anonymous is now working to disseminate the diplomatic cables Wikileaks has released as widely across the web as possible, usually by legal if not entirely orthodox means. The capacity of Anonymous and similar organizations to commit legal acts of protest, and criminal acts poses novel and substantial challenges to effective governance on an international scale. This essay will focus upon the history and development of Anonymous as a decentralized group, the merits and demerits of arguments describing Project Payback as a valid of civil protest, and the effectiveness of different responses to Anonymous by government agents seeking to reduce their potential impact.

Anonymous originated among the users of an imageboard (a BBS that permits image posting) called 4chan. Individuals posting to 4chan are not identified unless they choose to give themselves a nickname- hence, “anonymous”. Even before the emergence of Anonymous as a broader entity, ideas and figures of speech from 4chan would frequently find their way into broader internet culture, and conversation on the board could, in a matter of minutes, use and discard a large number of topics in a complex interplay of a variety of memes and in-jokes. Among the sections of the website, the most infamous was /b/, the Random board. This section is almost completely unmoderated, and became known as a place where the most profane and uncensored sort of discussion could take place, involving depraved conversation topics and the use of graphic “shock” images to troll other users and attract attention to the original poster. To give an example, it was not until after several years of community infighting and external legal pressure that images of child pornography were universally banned from the site. This ban, and other internal disputes, would also lead to the creation of a large number of similar imageboards that catered to 4chan users who also had other interests, or simply to create a parallel community. Individuals who used any of these boards can be seen as the first members of Anonymous. This definition still holds: individuals who use the boards are Anonymous, despite no affiliation with cyberattacks or criminal activity. The fact that many Anonymous members do nothing illegal and are involved in no protest movements can make discussing the criminal acts of some members of Anonymous difficult; from this point forward the reader may assume that Anonymous refers only to those members of the group whom are either involved in some form of illegal activity as part of the group, or are members of one of its protest movements, or both.

The first raids by members of Anonymous were carried out against websites that were seen as wronging the 4chan community in some way, such as by stealing content generated by users, or against individuals whom posters on /b/ found offensive, such as an individuals who posted footage of cruelty to animals. A “raid” could employ any number of methods, including locating and publicizing a target’s personal contact information, reporting the target to the authorities for real or fabricated offenses, or cyberattacks that seek to disable the target’s activities online. Although these early raids were partially retributive in nature, another major motivation was “lulz”, a variation of LOL meant to indicate a sort of schadenfreude. A frequent justification for a raid or other attack came to be that it was done “for the lulz”, alongside any other moral gloss that the situation provided. At no time did these attacks represent any consistent moral or social system of norms by the community; rather, they were acts of opportunity by individuals who felt protected by their anonymity online, and empowered by the society they had found in their community. Targets were selected largely based upon popular consensus, which varied intensely; if Anonymous attacked a man in Nebraska for setting his cat on fire one week, the next they might ignore or take amusement in posted videos of similar animal torture from another source. For years, these attacks occurred with only sporadic media coverage. Generally, it appeared to be understood that publicity was counterproductive- when members of the media reported on Anonymous, it tended to attract new users to the board, and members of the group reveled in the mistakes members of the press made in describing the group. 

 

 "Hate"--An example of Anonymous recontextualizing early media coverage- "internet hate machine," a memetic name for the group, is a quote from a sensationalistic FOX report on an early attack.

 The first well-publicized raids by Anonymous, known as Project Chanology, consisted of a series of cyber-attacks and, eventually, real-life protests against the Church of Scientology. These attacks were noticed by other individuals and groups involved in protesting Scientologists, who contacted and attached themselves to the 4chan attackers. The publicity of the protests, and the misdeeds by Church of Scientology officials that prompted them, led to a massive influx of new members of Anonymous, many of whom had no knowledge of the amoral culture and inconsistent behaviors of the prior community. This growth in structure and purpose also brought with it new websites, designed to organize members of Anonymous to protests and raids, as well as to manage the publicity the group was beginning to gain. These websites were often completely different from the imageboards such as 4chan, including some that required registration and providing a username. The new structure for Project Chanology was not centrally organized, and frequently members would conflict on the proper course of action. Project Chanology sites and protests continue to occur, but the activities are now rarely covered by the media, and many members of Anonymous view the conflict with the Church of Scientology as an embarrassment that was co-opted entirely by individuals from outside the group. 

 

 

 "Chanology protest”- During the protests against Scientology, many Anonymous protesters wore Guy Fawkes masks, in response to a prior mem

The result of this blossoming infrastructure and massive influx of new, inexperienced members was in many respects, predictable. Opinion split among the members of the group about the nature and reasons for the Project Chanology raids, and different groups began to justify the involvement of Anonymous in public issues in different ways. Each of these groups has no stable or identifiable membership, and each of which still perceives the broader whole as Anonymous. I will here assign names to these different factions, with the understanding that membership in any one is not exclusive, and that these distinctions are being applied in part externally.

Some members of the /b/ board who predated the Scientology protests viewed the entire exercise as a means of trolling Scientology, or generally having a good old amoral time. Sometimes calling themselves Old Anonymous, these members find the moral claims and earnest statements by other Anonymous members ridiculous or impractical, and are less likely to participate in large-scale, political attacks like Project Payback. Old Anonymous generally would rather participate in pranks which make no claim to do public good, like Operation Lemonparty, which sought to direct unsuspecting members of the public to navigate to a website displaying a shock image, under the pretense that it was the site of a new, popular political party.

Moralists, or “Moralfags”, as they are called by some members of the Old Anonymous, participate in raids or protests because they are genuinely motivated by the cause at issue. Over time, and particularly in the context of Wikileaks, these protestors have come to count among their members fairly sophisticated hackers with old-school, antiauthoritarian beliefs, similar to the earlier Phreaking generation.

The Epic Fail Guys(EFG) are a strong example of the amorphous and sometimes creative nature of Anonymous as a whole. EFG members join protests such as Project Chanology, and claim similar beliefs to Moralist members of Anonymous, but are in truth doing it “for the lulz”; EFG members view picketing and other protests as useless, and rather seek to troll all sides of the issue by peppering their moral arguments with logical fallacies or by otherwise undercutting the legitimacy of the raid as a whole.

These are just some distinctions that can be made among the members of Anonymous as it exists today; this is just intended to illustrate one major controversy in the group. As Anonymous has splintered by motive, so too has its means. Although 4chan-style imageboards remain popular, coordination for raids tends to occur in more secure environments, such as IRC chatrooms and the freenet distributed data storage system. Other sites also serve as repositories for information and techniques for raiding, and frequently, other illegal activities. Such sites are not usually on any directory, and instead must be ferretted out by following links from one Anonymous internet location to another. Two sites located in preparation for this article will serve as examples:

There are several wikis set up to introduce new Anonymous members to raiding tactics and induct them into the supporters of particular raids. A page on one of these wikis contains instructions on how to use basic services like directory assistance and Facebook to find a target’s personal information, and then provides websites which can be used to sign the target up for services, or harass them by sending them free condoms and sexual lubricant, or to direct prostitutes or the police to the target’s residence without retribution. The same site also provides information on how to steal premium access to direct download websites and other rudimentary hacks. The site also provides a very skewed history of recent raids, with most pages updated in 2007. Because even one wiki site requires a large, independently motivated userbase to remain accurate, most Anonymous wikis are out of date and semifunctional at best.

A subdirectory on another fairly prominent, very recently created Anonymous site is simply titled “/Library/.” This file directory contains a large number of books in pdf and txt file formats, on a large variety of subjects- but primarily instructional manuals for various sorts of criminal activity, including hacking, bomb construction and drug fabrication. Putting aside the legality of pirating these documents, the hacking tools found on the site and similar analogues elsewhere are a mix of legally grey software ostensibly or legitimately designed for testing servers, and hacking tools written specifically for stronger criminal attacks.

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”Dangerous Kitten”- The “Dangerous Kitten" package of hacker and DDoS tools(including LOIC) has been used by many members of Anonymous since their early attacks. It gained this name because the package, a rar compressed file, was initially disguised as a jpeg image similar to the one above. 

Among the tools used to actually carry out Anonymous raids, the most popular is the Low Orbit Ion Cannon(LOIC). Named after a science fiction weapon, is a client tool which allows the user to “volunteer” their computer for a DDoS attack. Unlike normal DDoS attacks, which tend to use bot-infected computers to apply pressure to the target site, LOIC users have the chance to remove themselves from a given attack. Despite this, some member of the group must coordinate the attack and “pull the trigger”. For this reason, attacks such as Project Payback often have self-appointed high-tier Anonymous leaders, who work together as a community to prepare and communicate the plans for the strike. These leadership structures are temporary and vary in structure from raid to raid. One thing is almost always consistent, however- Anonymous leaders take substantial risks in coordinating any sort of activity, even legal protests. If the leader makes choices that are unpopular with the group, they risk becoming the target of especially strong retribution. Despite this risk, leaders can usually be found if there is demand for a given attack, simply because such leaders are often the same ones who make the attack possible

Therefore, although Anonymous may be amorphous as a rule, it will tend to organize itself into a similar hierarchical structure whenever part of the group mobilizes for a raid: several leaders, communicating privately to generate media to publicize and execute the attack, and the seething mass of Anonymous below to provide the necessary firepower for execution. Two years ago, I wrote an essay comparing Anonymous to the horde as described in Deleuze and Guattari’s anti-oedipus, as completely without form or consistent morality. While it is possible that this was true during the early stages of the group, this dependence on highly skilled technicians to coordinate attack has diminished this quality in the group- if anything its structure now more closely resembles a cell network, with a very rapid turnover among individual members.

Anonymous is, at a fundamental level, unlike other internet subcultures. Over the course of the past 10 years, I have observed a number of different group dynamics online, ranging from large fringe organizations such as the white nationalist movement at stormfront.org to small, inoffensive groups like the independent videogame modding enthusiasts at KZMOD.com. All of these other organizations, regardless of their often complicated and muddled social structures and histories, generally have a clear sense of self-identity. Although different justification for racialist or racist doctrines may exist at stormfront(when I was watching the site these disputes, over the religious or other origins of “whiteness”, dominated the forums), members know why they are there and can if necessary locate and learn about the past and present events in the history of the community. Anonymous lacks internal records and consistency- the closest thing they have to an internal record of events is “encyclopedia Dramatica”, a parody of Wikipedia that is completely indecipherable without the endurance to process an almost Lovecraftian level of obscuring language. This inconsistency is what allows Anonymous its amorality, and more importantly it also makes it attractive to new members- whether you want to have fun, meet new friends, fight the power, or find out how to grow weed in your basement, Anonymous has something for you. This quality also makes it easier for outsiders to ascribe their own beliefs or qualities to the group.

Anonymous activities are seen by some civil libertarians and others on the left as a sort of “Hacktivism”- a legitimate form of civil protest. The Operation Payback attacks have also attracted the support of some of the same community that supports Assange- technophiles who see Anonymous actions as a means of freeing information and ideas from government control. In this light, Anonymous acts as a democratizing force, speaking truth to a power which is seeking to control and govern what should or must be free. While some members of Anonymous have compared themselves to civil rights protestors or Democrats of the Athenian sort, the most knowledgeable and tech-savvy members of the press and academy, many of whom have actually spent time directly communicating with members of Anonymous as they plan their attacks, view the group as something completely new, emerging from the capabilities and opportunities that arise from the structure of the internet, as a new and insatiable threat to the enemies of Truth and nemeses of various sorts, the viewer’s political preferences depending.

I personally disagree with this perception, because I feel that the phenomenon that is Anonymous is not without some precedent in the real world, indeed in the United States. Anonymous, in terms of its actions, is a group of individuals whom, using various means to hide their identities, perform criminal and noncriminal disruptive and occasionally violent acts in the name of upholding values that they ascribe as being essential to the broader community. An increasing number of group members appear to hold strong, sometimes irrational antiauthoritarian beliefs, and view actions by the federal government as part of an impending plan to limit their freedom. Although the organization is different in composition, methodology and goals, it resembles in some respects organizations like the KKK, in that the anonymity of individual members allows them to claim greater purpose while shielding themselves from a society that would be hostile if it knew the full extent of their ideology and attacks. Although the cyberattacks on Mastercard and Paypal have had some degree of success in terms of raising public awareness of the soft pressure that some federal officials have applied to these companies, they are doomed to failure because they lack the elements of public sympathy and broad media support that have made protest movements successful in the past. In this sense, the anonymity of members of the group works to their disadvantage. Members of Anonymous who genuinely believe in the causes they protest and raid for are using the wrong means to achieve their goals- and in this case, they may very well have overreached themselves.

As this article was being written on New Year’s Eve, 2010, the FBI and European equivalent agencies have begun raiding ISP server hosts and seizing machines used to perform the Operation Payback attacks. Several of the websites that were used to gather information for this essay have gone offline in the past 24 hours. The ensuing investigation, and any subsequent arrests and trials, will have a major influence on the composition and affiliations of Anonymous in the future, and will likely alter the way the group is perceived and they way they conduct themselves.

The worst course of action for those attempting to manage the effects of Anonymous and similar groups would be to arrest individual Anonymous members who used LOIC to aid the DDoS attacks. Such prosecutions would be difficult to win, and easily spun by members of the Anonymous community, who are skilled at spreading false information about their exploits, even among themselves. Most importantly, the high level of publicity these trials would garner would also lead to an increase in the membership of Anonymous, as press coverage exposes a larger proportion of the public to Anonymous in a context that humanizes individual members and makes the actions of Anonymous more sympathetic. A more successful tactic, and probably the likely outcome, is that the government will only pursue the highest levels of the Anonymous hierarchy that were involved in these particular attacks. By doing this, the government may drastically reduce the organization’s short-term ability to plan and execute raids, or continue to disseminate some hacking tools. It may also reduce the group’s popularity among some antiauthoritarian quarters, although there are no guarantees of such. What is certain, however, is that any current criminal case will not stop Anonymous completely; members of the group have been expecting this sort of response for years, and several different individuals and groups have already appeared online to propose and begin partial migration of Anonymous assets and sites to far less traceable internet architectures, such as the Freenet system and similar analogues. Because there are a sizeable number of highly literate hackers in Anonymous, and because the group self-educates at an alarming rate, it is difficult to imagine a governance policy that could effectively bring Anonymous raids to a complete halt. In order to do this, changes would have to be made to the fundamental structure of the internet itself, rendering individual users much more visible and with incredibly tight control on access, all to prevent the security free-for-all and the anonymity in numbers that the internet currently provides. If this were ever to occur, it would be the ultimate irony; in protesting to increase freedom of information and reduce authoritarian controls on communication, Anonymous would bring about a state of affairs that would effectively annul the very elements of the internet that made it possible for them to exist in the first place.