Democracy Part IX: Participation and Ethnic Rifts in Kenya

It is always amusing to be reminded of race hierarchies--especially when presented by an institution self consciously dedicated to a never ending proof that it is beyond such the internalization of such racialized systems of dominance and subordination, civilization and barbarity. And so it is with the BBC and its reporting on the violent turn in the democratic discourse in Kenya. Gangs on Rampage in Kenyan Towns, BBC News Online, Jan. 28, 2008. The thing that first strikes is the title, or rather the judgment in that title. So, it is gangs now, lawless bandits, that are at the forefront of the complex political, social and ethnic battles in Kenya today. But reading on, one is reminded that these gangs are parts of the military arms of a number of ethnic groups which have been battling for control of territory and for the protection of their own culture and space in the face of sharp threats from neighbors. "Members of President Mwai Kibaki's Kikuyu tribe have been fighting with Luos and Kalenjins who backed his rival Raila Odinga in the election a month ago." Id.

The last time we heard of such events, in Kosovo, the gang members became hardly warriors of European Islam seeking freedom from the evil and despotic Christian Orthodox Serbians, from whom only independence , or something close to it, was the only solution. But in Kenya we speak only of Africans. And so we devolve from the language of political expression to that of petty criminality. Thus, Adam Mynott writes, Adam Mynott, Inter-Ethnic Scores Settled in Nakuru, BBC News Online, Jan. 26, 2008. "Old inter-ethnic scores, some going back generations are being settled. Many relate to disputes over land which different communities claim was stolen from them." Id. This is likely true, and true all over Africa.

Yet the tensions themselves merely serve as another reminder that the tensions created by imperialist map drawing in Eastern Europe, the Middle East and Africa in the late 19th and early 20th century, continue to cause tremendous problems--problems that cannot be paper overed by "democracy." Amalgamating peoples unrelated to each other and letting them know that they might vote together, and in so voting construct a demos, seems ludicrous, except to those with the power to make it so--and those who now profit from the increasingly empty exercise. Americans have begun to learn in Iraq that democracy is not a magic drug that can addle the brains of peoples with no love for each other into a band of brotherhood strong enough to forge a nation. Even in the United States, such a bond was cemented over the course of a war of conquest in which tens of thousands died and from which it took a century to recover. Kenya, like Yugoslavia--and Iraq-- was thrown together by a bunch of politicians seeking advantage. They were given to elites who sought to profit from the conglomerations. In Africa, we are still only at the end of the euphemistically recalled time of the "Big Men" of Africa.

In fake states, only the power and wealth provided by control of the state apparatus remains as a central reason for keeping these ersatz political units together. Those elites have been able to use a discourse of post colonialist anti imperialism and cultural protection, as well as post colonial race guilt to make the issue of the great imperialist exercise in map drawing off the table. And that is a shame. But we live in an age when it is more convenient to manage violence than to revisit their root causes. It is an age where the gesture of democracy is offered as a means of avoiding confronting the issue of demos. Thus, the BBC, like many western presses, can content itself by reporting (and the Western world can be comforted in its core illusions) of failures of democracy that can be corrected by "discussion" and management of differences among a unified people, if only those crazy bandit people can be brought to justice for their "crimes." When the old Soviet Union used to engage in these sorts of rhetorical flourishes the West would laugh at the cynical exercise. It seems we in the West have become their master now. And the true nations of Africa continue to languish, smothered under the European created system of politically expedient (and wealth creating for those in power) amalgamations that pass for states.

And thus to law. In this state of affairs, from Europe through Asia and to Latin America as well, the legitimacy of rule of law states hangs on an illusion. Its basis in popular sovereignty is in tension with the realities of the divisions of popular will within each state. The law of ethnic majorities--as has been increasingly apparent in places like Mugabe's Zimbabwe--retain the appearance of law but act as anything but. o management is joined the will to vest formalism, and the gesture of law, for its substance in Africa. There will be little progress and much management in Africa's future. But then this may well be the era of gesture in the rule of law.

Such a gesture, of course, refocuses interest on a federalism for the 21st century--one based on devolution of power based on ethnic, cultural, religious, or other significant communal differences as a way to paper over foundational differences among communities and as a consequence present something that looks like a demos to the rest fo the world. Ethnic federalism vaults form over substance. It suggests that any number of different groups can come together to form a nation state as long as they do not have to come together for that purpose in fact. This was the idea behind proposals for an Iraqi federation. And is now the last best hope for keeping the cobbled together states of Africa from coming apart. In Kenya's case this would require

a new constitution for Kenya that will guarantee non-Kikuyu citizens an equitable slice of the pie. This will require some form of federalism -- perhaps the devolution of power to 13 regions, which would replace the eight provinces currently controlled by the president's office through the provincial administration. Kenya's minority ethnic groups have called for federalism, or majimbo, for nearly fifty years. Long resisted by Kikuyu leaders, it is an idea whose time has come. It is also an idea that was tacitly endorsed by U.S. Assistant Secretary of State for Africa Jendayi Frazier, who called on January 7 for measures of devolution to achieve a long-term solution. Joel D. Barkan, Kenya's Great Rift, Foreign Affairs, Jan. 9, 2008

I am all for gesture. As Barkan suggests, the only way to deal with difference is to acknowledge its reality--effectively eliminating political cohesion within the state--while presenting a sort of unified front to the outside world. That solution did, in part, work for India. It works a bit less well in fact in Nigeria. But, whatever its effect, it is important to remember the reality behind the veil.

Cuba and Brazil, Part I: Castro Lectures Lula da Silva

The relationship between Cuba and Brazil has always been close. The two nations do not share a language, but in many ways are more culturally compatible than they are with other states in Latin America. Brazil has become, in many ways, the engine of Latin America. But like Germany within the European Union, it has tended to use its power and size gingerly. But it has sought to use its muscle nonetheless. The current President of Brazil, Luiz Inácio Lula da Silva, a man with a significant leftist past, has sought to serve as a bridge between left and right in Latin America. The initial assessment of Lula in 2002 I think still captures the core of his Presidency:

During the election campaign Lula repeatedly promised to change the country’s economic model, usually thought of in Brazil ashaving been something called the “Washington Consensus.” Popular opinion often focuses on the specifically neoliberal bits of the Washington Consensus (a term I coined 13years ago), such as capital-account convertibility and the minimal state that accepts no responsibility for income distribution, and these elements have indeed been problematic. But the basic notions that were embodied in the original concept of the Washington Consensus—macroeconomic discipline, the market economy, and opening up the economy to foreign trade—were precisely the things that Lula embraced in the course of moving to the center of the political spectrum to make himself electable. John Williamson, Lula’s Brazil, Foreign Affairs 81(6), 105, 110 (2002)

Lula means to be everyone’s friend—from George Bush (see Remarks by President Bush and President Lula of Brazil, Konstantinovsky Palace Complex Strelna, Russia, July 17, 2006, available http://www.whitehouse.gov/news/releases/2006/07/20060717.html) to Hugo Chavez (Brazil’s Lula Defends Chavez as Referendum Nears, Insurreción, Nov. 25, 2007, available http://www.insurreccion.org/brazils_lula_defends_chavez_as_referendum_nears). But the friendship with Cuba remains something special for Brazil, and instructive for the rest of the world. It is thus m ore than of passing interest when one of the principals in the Brazil-Cuba relationship has something to say. And whatever may be said would tend to merit careful analysis by Americans looking on.

It is with this in mind that one reads the recent posting by Fidel Castro, Fidel Castro Ruz, Reflexiones del Comandante en Jefe, Lula (Primera Parte), Jan. 22, 2008, available at http://www.cuba.cu/gobierno/discursos/2008/esp/f220108e.html (available in Spanish, French, Portuguese, Italian, German, Russian, Arabic and in English). I propose a close reading of the text to see where it leads us.

The “Refection” starts curiously, with a rebuke of sorts: “De forma espontánea decidió visitar Cuba por segunda vez como Presidente de Brasil, aunque mi salud no le garantizara un encuentro conmigo. Antes, como él mismo dijo, visitaba la Isla casi todos los años.” (Spontaneously, [Lula] decided to visit Cuba for a second time since he became President of Brazil, though the state of my health did not guarantee him a meeting with me. Before, as he has said, he would visit the Island almost every year.”).

This odd set of circumstances—an unplanned visit in the usually well controlled agenda of the Cuban state and especially of its Commander in Chief, must be read as irony, and rebuke, rather than as a suggestion of neighborly surprise. The sting become evident as the narrative continues. Castro uses the memory of the change in the current circumstances of their relationship—apparently much changed since Lula ascended to the Presidency of Brazil, as an opening to an elaboration of the rebuke, now clearly ideological in character. Castro devotes the next several paragraphs to a recollection of the first encounter with Lula. This was an encounter under very different circumstances. The setting was Nicaragua, on the first anniversary of the Sandinista Revolution.

The guests were well-credentialed representatives of what in the United States might be called the “hard left.” The meeting took place in the house of Sergio Ramírez, then the Nicaraguan Vice President (whose work of fiction (Divine Punishment) Castro relates, had him fooled because it so nicely captured the legal complexities of colonial Latin America. (“Lo conocí en ocasión del primer aniversario de la Revolución Sandinista en la casa de Sergio Ramírez, entonces vicepresidente del país. Digo de paso que este último de cierta forma me engañó. Cuando leí su libro Castigo Divino --excelente narración--, llegué a creer que era un caso real ocurrido en Nicaragua, con todos los enredos legales que son habituales en las antiguas colonias españolas; él mismo me contó un día que era ficción pura.” Id.).

Among the other guests were a couple of leaders of the then powerful Catholic Liberation Theology Movement. One was Brother Betto, the Brazilian Franciscan liberation theologian, with a long and intimate connection to Cuba and its revolution (see Frei Betto, Open Letter From Frei Betto to Che Guevara on the 30th Anniversary of his Death, July 9, 1997, available http://www.worldproutassembly.org/archives/2006/07/nicaragua_open.html). Indeed, Castro collaborated with Frei Betto on a 314 page book (representing about 23 hours of transcripts) about religion, Fidel And Religion Castro Talks on Revolution and Religion With Frei Betto (The Cuban Center for Translation and Interpretation, trans., Harvey Cox, Introduction, New York: Simon & Schuster, which was discussed in a New York Times article in early 2008. See Alan Riding, God and Man in Latin America, New York Times, June 28, 1987, Sunday, Late City Final Edition. And indeed, Castro’s first meeting with Lula and Frei Betto had been reported earlier, from Frei Betto’s perspective, in a 2006 article published in the Cuban Communist Party organ, Granma, Frei Betto, Encuentros con Fidel, available http://www.granma.cubaweb.cu/secciones/siempre_con_fidel/art-055.html.

The other guest was Father Ernesto Cardenal, a child of upper class parents who became another powerful voice of Liberation Theology within the Sandinista regime with which he later broke. He has since retired to his writings and last visited Cuba in 2003 for an authors convocation in honor of his literary work. See Ernesto Cardenal Hompage, available http://www.ernestocardenal.org/. (“También me encontré allí con Frei Betto, hoy crítico aunque no enemigo de Lula, y con el Padre Ernesto Cardenal, militante sandinista de izquierda y actual adversario de Daniel. Los dos escritores procedían de la Teología de la Liberación, una corriente progresista en la que siempre vimos un gran paso hacia la unidad de los revolucionarios y los pobres, más allá de su filosofía y sus creencias, ajustada a las condiciones concretas de lucha en América Latina y el Caribe.” Fidel Castro Ruz, Reflexiones del Comandante en Jefe, Lula (Primera Parte)).

Castro stops here long enough to emphasize a contrast between the religious and ideological purity of Cardenal, from others, initially of a more revolutionary bent, who wound up betraying the leftist cause for the emoluments offered by the enemies of the Revolution. “Confieso, sin embargo, que veía en el Padre Ernesto Cardenal, a diferencia de otros en la dirección de Nicaragua, una estampa del sacrificio y las privaciones cual monje medieval. Era un verdadero prototipo de pureza. Dejo a un lado otros que, menos consecuentes, alguna vez fueron revolucionarios, incluso militantes de extrema izquierda en Centroamérica y otras áreas, que después se pasaron con armas y bagajes, por ansias de bienestar y dinero, a las filas del imperio.” Fidel Castro Ruz, Reflexiones del Comandante en Jefe, Lula (Primera Parte). (“I confess, in any case, that I saw in Father Cardinal, unlike others leaders of Nicaragua, a stamp of the sacrifice and the deprivations of the medieval monk. It was a true prototype of purity. I leave to side other that, of less consequence, who were once revolutionaries, even militants of the extreme left in Central America and other places, that later passed with their arms and baggage, on account of anxieties over their well-being and money, to the ranks of the empire.”)

Having set the stage—the surprise visit of Lula, the changes in the relationship between the Lula once more comfortable with real revolutionaries and the current President of Brazil, and the oblique references to the way in which revolutionaries had betrayed the cause for money and security, he turns makes the implicit explicit: Lula is both put in his place within the Marxist pantheon of class types—impure but salvigable. And in this categorization, Castro finds an opportunity to lecture and teach his Brazilian counterpart on the necessary determinism inevitable in Latin America through the experiences of Cuba. “¿Qué tiene que ver lo relatado con Lula? Mucho. Nunca fue un extremista de izquierda, ni ascendió a la condición de revolucionario a partir de posiciones filosóficas, sino de las de un obrero de origen muy humilde y fe cristiana, que trabajó duramente creando plusvalía para otros. En los obreros vio Carlos Marx a los sepultureros del sistema capitalista,” Id. (“What does this have to do with Lula? Much. He was never an extreme leftist, nor did he ascend to the condition of the revolutionary starting from philosophical positions, but rather from the condition of a worker of very humble origins and Christian faith, who worked hard to create goodwill for others. In such workers Karl Marx saw the gravediggers of the capitalist system.”):

And then the lecture. This is standard ground for Castro, especially in his writings of the last decade or so. These include the essential validity of Marxist determinism; the application of those principles to a changing world order; the resulting threat to humanity; the change in the focus of capitalist domination from one based simply on money wealth to one based on control of technology, knowledge and the global means of production. He ends this recital with a call to action: “Hoy, que la humanidad sufre todavía esas realidades en virtud de la propia dialéctica de los acontecimientos, debemos hacer frente a esos peligros.” Id. (“Today, that humanity still suffers these realities by virtue of the very dialectics of these events, we should confront these dangers ”).

From macro to micro perspectives, Castro then contextualizes these basic Marxist notions in the experiences of Cuba, which I leave for the reader to work through. From this socio-historical set of musings, Castro focuses, somewhat slyly on the point he will be making—unity in the face of a common overarching enemy, even among those who though no longer tied to the left, are part of that Marxist cluster of capitalist gravediggers. And foremost among these gravediggers, of course, would be Lula himself.

“Para mí, unidad significa compartir el combate, los riesgos, los sacrificios, los objetivos, ideas, conceptos y estrategias, a los que se llega mediante debates y análisis. Unidad significa la lucha común contra anexionistas, vendepatrias y corruptos que no tienen nada que ver con un militante revolucionario. A esa unidad en torno a la idea de la independencia y contra el imperio que avanzaba sobre los pueblos de América, es a la que me referí siempre.” Id. (“for me, unity signifies the sharing of the battle, risks, sacrifices, objectives, ideas and strategies, that one attains in the course of debate and analysis. Unity signifies the common struggle against annexationists, traitors and the corrupt none of whom have anything to do with the militant revolutionary. That unity around the idea of independence and against the empire that advanced against the people of Latin America, is the one to which I have always referred.”).

There follows a long reverie on the rise of nationalism in Cuba, its ties to Marxist Leninist thought, its solidarity to Stalinism, and the parallels in the death struggles of the Soviet Union (with Germany) and Cuba (with the U.S). This is also a standard recitation of ideas long expressed by Castro. The parallelisms have been a favorite literary trope in Castro’s writings and he deploys them here again to affirm his Stalinism (a side swipe to his brother Raul and his Sinification of the Cuban economy), and the devolution of the Stalinist mantle (and Stalinist historical struggle) from the Soviet Union and Stalin to Castro and Cuba.

And this reverie eventually brings us back to Lula. He recalls having observed Lula’s red tie and asked him if it had been a gift from Hugo Chavez—sly plays on the link between the tie and symbolic communism hanging around the neck of the Brazilian president. This play is reinforced by the reported reply, that Lula intened to send Chvez some shirts because the collars of his shirts were too stiff. (“Observo un momento la corbata roja de Lula y le pregunto: ¿esa te la regaló Chávez? Se sonríe y responde: Ahora le voy a enviar algunas camisas, ya que él se queja de que el cuello de las suyas está muy duro, y se las voy a buscar en Bahía para regalárselas.”).

The essay ends with a reminder of the improving health of the Commander in Chief, and more importantly, the status of Castro increasingly as the elder statesman of Cuban revolutionary thought. In response to Lula’s comments about the state of Castro’s health, Castro replies that he has now dedicated himself to thinking and writing; never in his life had he thought so much (“Cuando comentó que estaba muy impresionado por mi salud, le respondí que me dedicaba a pensar y a escribir. Nunca en mi vida había pensado tanto.”).

Thus ends the first part of the lecture to (or for) Lula. Castro reminds Lula of his ideological and class origins, chides him for straying, but needs him enough to use him (and the ties to his past) to seek his support against the forces of the Americans with whom Lula is now in fairly tightly. Castro reminds Lula that he is no intellectual, but is inexorably tied by his class origins, and his faith, to the project of the destruction of capitalism in its current phase of market based economic globalization. Castro is ready to serve as his teacher. He calls Lula home. Lula is both an object and a platform for a summing up and a drawing home.

But why the interet? The answer might be found tucked in an early discussion ostensibly focused on the American President's visit ot the Middle East and the musings of a Yale professor that has impressed Castro.

Brazil, which is now self-reliant in fuel and has abundant reserves, will doubtlessly escape this dilemma. Stretching on a plateau at 300 to 900 meters altitude, it is 77 times bigger than Cuba. This sister republic enjoys 3 different climates. Almost every food can be grown there. It is no hit by tropical hurricanes. Together with Argentina, they could save the peoples of Latin America and the Caribbean, including Mexico, although they could never guarantee security for them because they are at the mercy of an empire which will not allow that union.

Fidel Castro Ruz, Reflections of the Commander in Chief, An Epiphany Gift, Jan. 14, 2008. (in the original-- Regalo de Reyes).Castro looks to Brazil as a counter to both the old empire--the United States--and the new empire, China, with which Raul Castro has increasingly tied the fortunes of the nation. Castro has sought over a lifetime to institutionalize an alliance of poorer states to act as a counterweight to empire. The latest version, the Alternativa Bolivariana para los Pueblos de Nuestra América (ALBA), focuses on both Latin American aspirations for independence and a socialist inspired economic union. Indeed, the entire set of lectures for Lula appear on ALBA's website. For this purpose Brazil is the key. And Lula may be the willing instrument.
Stay tuned.

Symposium Introduction: Reifying Law--Rule of Law, Government, the State and Transnational Governance

What follows is an introduction to a Symposium to be published by the Penn State International Law Review (Vol. 25). The contributions to the symposium include the following papers:

Larry Catá Backer, Reifying Law: Understanding Law Beyond the State, 25 PENN STATE INTERNATIONAL LAW REVIEW – (forthcoming 2007).

Gunnar Beck, Legimation Crisis, Reifying Human Rights and the Norm-Creating Power of the Factual, 25 PENN STATE INTERNATIONAL LAW REVIEW – (forthcoming 2007).

Mark Modak-Truron, A Process Theory of Natural Law and the Rule of Law in China, 25 PENN. STATE INTERNATIONAL L. REV. – (forthcoming 2007).

José Gabilondo, Monetizing Diaspora: Liquid Sovereigns, Fertile Workers, and the Interest-Convergence Around Remittance Flows, 25 PENN STAT INTERNATIONAL LAW REVIEW – (forthcoming 2007)

Mae Kuykendall, The Ship of State and the Abandoned Yacht, 25 PENN STATE INTERNATIONAL LAW REVIEW – (forthcoming 2007)

Carolina Pancotto Bohrer Munhoz, Corruption In The Eyes Of The World Bank: Implications For The Institution’s Policies And Developing Countries, 25 PENN STATE INTERNATIONAL LAW REVIEW – (forthcoming 2007)

SYMPOSIUM INTRODUCTION:

The idea for this symposium grew out of a problem that has grown more acute in the discourse of contemporary globalization: what are the basic assumptions from which regulatory systems are elaborated? Globalization may be shaking the foundations of contemporary systems, centered on a hierarchy of power in which the political community, organized as states, stood at the top. Government may both have a monopoly on formal lawmaking, yet official lawmaking may no longer describe the extent of formal governance in a world in which states no longer necessarily sit at the top of the pyramid of recognized power relationships and contract may serve as law in a new form. (Shaney 2005) Law, government, the state, the community of states, and the individual (natural and juridical) serve as the basic building blocks of contemporary communal orders. Each is a set of animating ideas that used to be confined to notions of constitutionalism once confined to the territory of states (Dicey 1982), and now important beyond the state (Carothers 1998). But each is also a set of methodologies through which that idea becomes manifested in communities of individuals. (Koh 2006) Yet the meaning of these terms has proven elusive, either as ideas or as manifestations of ideas. Equally elusive is the way each of those building blocks of communal order interacts with each other in a world of people and not of ideas, though a world in which ideas can be felt as fatally as concrete falling from a scaffold. Most elusive, perhaps, is the way in which law (understood broadly) is judged good (legitimate, authoritative, civilized, and the like) or bad (illegitimate, arbitrary, savage, and the like). (Willoughby 1924, 29-31, 35-39, 312-315; Timburg 1947; Buergenthal 2006).

Within this complex of concepts and manifestations, law appears always to have a primary place. Despite this conceptual dynamism, the last century has been consistent in its desire to be “ruled” by law as the basic parameter of the construction of systems of government, states, communities of states and individuals. “Rule of law,” both as a set of normative principles and as methods of governance, has assumed important institutional global dimensions since the establishment of the contemporary world order after 1945. (Zifac 2005) As a set of normative principles, “rule of law” has exploded from an understanding of the relationship of law, government, and the individuals who act in the name of either within political states to a search for a universal set of principles that govern the constitution of states. (Backer 2007a; Murphy 1993, 3-25) “Rule of law” is now said to serve an ideology of constitutionalism. (Henkin 1994; Schwartz 2004; but see McWhinney 1981) But it is also central to the methodologies of the construction of “legitimate” government—that is of government with respect to which there is no just reason against which to rebel. (Rawls 2001; Rosenfeld 2001) These legitimacy principles can be reduced to methods of constructing a legal state: “[1] the predominance of regular law so that the government has no arbitrary authority over the citizen. . . [2] all citizens are equally subject to the ordinary law administered by the ordinary courts. . [3] the citizen’s personal freedoms are formulated and protected by the ordinary law. . . . ” (Ibtahim 1996; see also Peeremboom 2004) The focus is on the translation of principle to lived reality among the people most directly affected. Rule of law, as concept and method, has become a concern of states whatever their foundational ideology (Backer 2006), and has become part of the discourse of the behavior of non-governmental entities, especially multinational corporations. (Backer 2006a) And its principles have begun to seep into the construction of hard and soft systems of international law, governance and behavior. (Franck 1997) Contract regimes overseen by supra-national entities may engage the same rule of law issues, as founding or legitimating ideologies, as traditional nation states. (Chanda 2004)

Still, for all the agreement about the rule of law, the essential ideas and constructions remain highly contested. Law is either something inherent in communities of people or can spring only from an assertion of their will. That assertion of will might be manifested by societal action or only through the apparatus of government. That government might represent the entire sovereign capacity of the people or merely serve as a fiduciary of that power. The sovereign capacity of a people might be unlimited or it might be exercised only within the constraints of rules to which all peoples are subject. All peoples may be subject to global and thus universal constraints, or to the universal constraints of a divinely ordained system. Law, may, indeed, be limited to rules applicable to the establishment of political communities, or systems of such communities, but not of non-political systems. Or law may be understood as an expression by any group through action or conscious design. Depending on the basic assumptions embraced (about how law “works”), the resulting ideas, jurisprudence and conceptual limits of discourse about law, communities, government, and individuals, follow. But what follows is neither inevitable nor indisputable from out of reason; rather than from a faith in the “truth” of the core assumptions embraced.

Understood in its contemporary form as a debate about “rule of law,” the roots of this debate about the meaning and practice of law, government, state, government are ancient. Its political, social and religious expressions are bound up in Bracton’s notions of gubernaculum (government) and jurisdictio (jurisdiction) (McIlwain 1947), which together define the character, scope and authority of coercive systems of governance, both public and private. And Bracton is a useful beginning for a consideration of the problem. He stands at the beginning of the transformation of medieval conceptions of both to the very different conceptual understandings of law and the state. Those debates remain current, but under a constantly changing contextual landscape. Since the sixteenth century, debates about the meaning of both have gone hand in hand with the almost simultaneous construction of both the most advanced democratic constitutional states and the most authoritarian states of the twentieth century. Contemporaneously, they serve as the building bocks of both political and economic regulatory networks at the supra-national level.

Those debates have taken on greater meaning with the advent of globalization and the elaboration of transnational systems of governance. Gubernaculum and jurisdictio serve as the basis for both making an object of law distinct from its origins and for understanding the parameters of its “rule.” Law as an object can be transported, adopted, moved, and negotiated detached from any particular government or individual can serve as a powerful transnational force and also a limit on the power of individuals or institutions to subvert it. As evidence of governmental will, however, it may be far more parochial. These differences become critical as the world moves toward systems of coercive global law, understood either as common law binding on states, as the precursor to global governance institutions like the International Criminal Court (1998/99), or global private law systems based on contracts with public law characteristics. (Meidinger) But, its jurisprudential expression, especially since the mania for positivism in the construction of political ‘constitutional’ societies took hold in the 19th century (Alcott 2002; LaPiana 1986), produced a certain amnesia of sorts of the ancient, and often violent, contests over the nature of law and the relationship of law to government. (Grossi 2004)

This symposium explores these dynamic aspects of the relationship of law, state, government in a national, international comparative and transnational context. Contributors examine the issues form a variety of perspectives. These perspectives range from theoretical to applied frameworks—that is from a set of concepts to methods of implementation. Law and governance now appear in new forms, and old forms take on new meanings within theory and as applied. The goal is to develop a more complex and realistic structure for understanding law and regulation in a globalized environment in which the traditional nation-state no longer can claim a monopoly of formal or informal power to create or enforce norms. The “idea” of law acquires distinct meanings in a global system in which multiple sources of law—states, corporations, religious institutions, and other non-governmental communities—compete for authority and in which neither the state, nor its government can always command a privileged position.

The contributors have chosen to explore these complex interactions from the perspectives of both theory and practice. They have approached the issues from the national as well as the international plane. Together, they provide a glimpse of the complexities of modern jurisprudence in its transnational context. My contribution to this symposium (Backer 2007b) seeks to confront the issue of the character of law and its ramifications for the power of the state. The paper interrogates that discourse in modern terms. Using the gubernaculum and jurisdictio distinction in Bracton, the paper focuses on Francis Bacon’s defense of James I/VI’s instrumentalist view of law and Edward Coke’s organic view of law as the embodiment of the normative values of the political community that serves to bind and limit its government. These opposing visions of law are then explored in the context of the jurisprudential oppositions of 19th and 20th century political theory. Then, more broadly, the paper examines the Bacon-Coke opposition in post-modern and global terms. The essay suggests the way in which the constitutional deadlock of seventeenth century England, now broadened and freed of the artificial boundaries between public and private law, reproduces itself on a global level in the 21st century. To that end the paper explores the way in which the contested understanding of law as object or subject becomes a critical element in the management of networks of power at the international global level and in the reconstitution of legal reification in global common law and private transnational legal systems. The analysis ends with an exploration of the implications of these theories in the construction of modern transnational constitutionalism, both secular and theocratic.

Gunnar Beck (2007), examines another aspect of law and its relationship to government. He argues that customary common law, or ethically or religiously grounded models of the individual, ultimately provide a more convincing framework for restraining gubernaculum. In the absence of such a firm ethical or religious foundation, judicial law-making lacks foundational solidity. For Beck, it is unclear whether such a foundation can still be provided in the absence of a unifying normative or social framework or whether, ultimately, in modern times the only credible reason for dividing law-making authority between different agencies is merely functional. But a privileging of separation and diffusion of power principles in the absence of a consensus based understanding of organizational first principles—and first principles expressing communal values—also poses a legitimation problem, quite apart from the concentration of power in private hands which is not subject to institutional checks and balances. Beck also interrogates the way in which law is redefining itself in the post-national context. What is clear is that in this international system explanatory devices such as the rule of recognition no longer provide adequate means for analyzing the sources of the specific form of authority of legitimacy law lends to politics, nor for understanding the scope, source and limits of legal power. But here one meets a problem of source. Law tied to the apparatus of state,m for all its defects, has the benefit of clearly defining lines of authority. In a world of diffuse and private lawmaking, the problem of legitimacy and authority becomes the central issue for law. Consequentially, it becomes difficult to define the manner in which private gubernaculum is or can still be restrained through jurisdictio. Perhaps, Beck suggests, there are no answers except that the term Business Law will acquire a new and all-embracing importance.

Mark Modak-Truron’s contribution (Modak-Truron 2007) begins bridging theory and implementation. His context is the relationship of state and law in China. Modak-Truron asks:

“Is it meaningful to continue talking about the rule of law? Does legal indeterminacy and the ontological gap mean that law is primarily guided by local social norms and customs rather than universal rules and principles? Do different cultural circumstances in the West and the East warrant different conceptions of the rule of law? If so, can a normative theory of law legitimate these culturally sensitive conceptions without devolving into cultural relativism?”

He applies the post-modern normative theory of law based on the Process Philosophy of Alfred North Whitehead and the Radical Empiricism of William James to address these issues. The result is a “process theory of natural law” that he argues provides a novel theory of natural law that eliminates the perceived illegitimacy arising from legal indeterminacy, and closes the ontological gap between legal theory and practice. He also argues that a process theory of natural law mediates many of the cultural differences between the East and the West through the telos of beauty (unity-in-diversity), which entails maximizing both an Eastern aesthetic sense of order (emergent harmony or spontaneous order) and a Western rational sense of order (complexity arising from diverse individual orderings). This conception of the rule of law allows for important cultural differences to be reflected in the interpretation of democracy and formal legality and in the instantiation of individual rights in the law. From this he concludes that the ideal rule of law may look different in the U.S. and China, and may continue to evolve in our constantly changing, pluralistic, and multicultural world.

Jose Gabilondo (2007) directly confronts the implementation issues raised in Backer and Beck’s contributions. He examines a legal and policy discourse about the need to reduce the transaction costs of worker remittances. The issue has become more important as labor migration has led to surges of remittance flows, which have become a source of hard currency foreign financing to developing countries on par with official aid and foreign direct investment. He argues that the current discourse on the question reflects a convergence of economic interests of three constituencies: labor-exporting countries, labor-importing countries, and international financial organizations, like the World Bank and the Inter-American Development Bank. The conflict between these constituencies and the interests of diaspora workers themselves illustrates one of the governance dilemmas about conflict and renegotiation of the relationship between ethnos, law, and the state raised by Backer and Beck.

Mae Kuykendall (2007) approaches the issue from the opposite end of the analytic spectrum. She focuses on the corporation as a site of regulation. The corporation is a fluid entity dominated by the logic of investment, a logic disjoined from the human stories that exist within corporations and which are rendered irrelevant to the subject of corporate law by the dominant persona of the corporate entity. It is not clear that this feature of the corporation, which naturally arises from the logic of financial markets, displaces law so much as, with growth of global capital, it makes less accessible to political understanding more sectors of human experience in which law might seek a role. The corporation is a site, not of jurisdictio or gubernaculum, but of fleeting interconnections based on exchange, all embedded in a whirlwind of words, and defying reification. Hence, it may be possible to suggest that law itself may not be contained. And no community of actors seeking to assert regulatory authority, can assert a monopoly of power. The contemporary world in general, and globalization in particular, may best be characterized by a diffusion of power, and thus of law. For regulatory institutions—like states and corporations—this suggests a limit to the resort to law to effect change, or control.

Carolina Pancotto Bohrer Munhoz (2007) ends the dialogue with an examination of law detached from its moorings in the state and its governance apparatus. She interrogates the complexity of corruption and the search for definition and methodological consensus at the transnational level. The specific objective is to identify the notion of corruption adopted by the World Bank in an attempt to demonstrate in what way this notion affects the actions of the institution in its fight against corruption and in the promotion of its primary objectives. In order to reach this objective, the adopted concept of corruption is analyzed in different contexts, both national and international. The article discusses the concept of corruption adopted by the World Bank, and the implication of this for the actions of the institution. The article analyzes the relationship that the preponderant role of the fight against corruption as an instrument of promoting development has with the paradigm of development adopted by the World Bank today, known as the Comprehensive Development Framework. However, this interest does not translate into a consensus on a single definition of corruption, or about the phenomena that it entails. In fact, there is no universally accepted concept of corruption. Because of this, practices understood or interpreted as being corrupt in one jurisdiction might not be judged corrupt in another.

Taken together, these essays suggest the realities of a world political, economic and social order in which the only stable element is the use of the same set of words to hide a multitude of ideas, desires, normative and institutional frameworks. Yet they also suggest a fairly narrow range within which the great debates over communal orderings are taking place. They further suggest that those debates are no longer the sole province of states, or even of political entities, but have become the common thread in the rush to institutionalize governance at the level of the firm, the political party, the state and the community of states. Law is a protean concept: it is at its most useful when it can serve as the object of desire of those who wish to use it. It has served totalitarian states as well as multinational corporations. It has been as much the creature of customary law in England as it has been instrumental in the ordering of systems of customary law at the international level. Law is both synonymous with the state, and the only means by which the state can be contained. It is a tool of political governance and the framework through which the state can be overcome. The “rule” of law is thus reduced to a highly technical meaning—the means through which arbitrary governance is contained—or it can be understood in a broader sense to encompass the institutionalization of governance at any level of autonomous, self contained governance systems. (Teubner 2004) Yet the result is not that the term “rule of law” loses all meaning, but that it serves as the vessel through which the commonalities of governance systems can be understood, compared, and tested for their authority and legitimacy in the context of their creation and operation. As international public and private law systems are broadened and deepened in this century, an understanding of the meaning and application of law in these senses will serve as a foundation of analysis and judgment of the value of the resulting systems of law.

References:

PHILIP ALCOTT, THE HEALTH OF NATIONS: SOCIETY AND LAW BEYOND THE STATE 47 (Cambridge: Cambridge University Press, 2002)

Larry Catá Backer, Larry Catá Backer, Reifying Law: Understanding Law Beyond the State, 25 PENN STATE INTERNATIONAL LAW REVIEW – (forthcoming 2007b).

----------, God(s) Over Constitutions: International and Religious Transnational Constitutionalism in the 21st Century, 26 MISSISSIPPI COLLEGE LAW REVIEW – (forthcoming 2007a)

----------, The Rule of Law, The Chinese Communist Party, and Ideological Campaigns: Sange Daibiao (the “Three Represents”), Socialist Rule of Law, and Modern Chinese Constitutionalism, 16(1) JOURNAL OF TRANSNATIONAL LAW & CONTEMPORARY PROBLEMS 29 (2006)

----------, Multinational Corporations, Transnational Law: The United Nation’s Norms on the Responsibilities of Transnational Corporations as a Harbinger of Corporate Social Responsibility as International Law, 37 COLUMBIA HUMAN RIGHTS LAW REVIEW 287 (2006a)

Gunnar Beck, Legimation Crisis, Reifying Human Rights and the Norm-Creating Power of the Factual, 25 PENN STATE INTERNATIONAL LAW REVIEW – (forthcoming 2007).

Thomas Buergenthal, The Evolving International Human Rights System, 100 AM. J. INT'L L. 783 (2006)

Thomas Carothers, The Rule of Law Revival, FOREIGN AFF., Mar.-Apr. 1998, at 95-96.

Parthapratim Chanda, The Effectiveness Of The World Bank's Anti-Corruption Efforts: Current Legal And Structural Obstacles And Uncertainties, 32 DENV. J. INT'L L. & POL'Y 315 (2004)

A.V. DICEY, INTRODUCTION TO THE STUDY OF LAW OF THE CONSTITUTION 107-23 (Liberty Classics 1982) (1885).

THOMAS M. FRANCK, FAIRNESS IN INTERNATIONAL LAW AND INSTITUTIONS (1997)

José Gabilondo, Monetizing Diaspora: Liquid Sovereigns, Fertile Workers, and the Interest-Convergence Around Remittance Flows, 25 PENN STAT INTERNATIONAL LAW REVIEW – (forthcoming 2007)

PAOLO GROSSI, MITOLOGÍAS JURÍDICAS DA MODERNIDADE (Florianópolis, Brasil: Fundação Boiteux, 2004)

Louis Henkin, A New Birth Of Constitutionalism: Genetic Influences And Genetic Defects, in CONSTITUTIONALISM, IDENTITY, DIFFERENCE, AND LEGITIMACY THEORETICAL PERSPECTIVES (Michel Rosenfeld, ed., Duke University Press Durham and London 1994)

ANWAR IBRAHIM, THE ASIAN RENAISSANCE 63 (1996)

International Criminal Court, Rome Statute of the International Criminal Court: Overview (1998/99), available at http://www.un.org/law/icc/general/overview.htm

Harold Hongju Koh, Luncheon Address (May 17, 2006), in American Law Institute Remarks and Addresses 83rd Annual Meeting, Washington, D.C. pp. 65-89.

Mae Kuykendall, The Ship of State and the Abandoned Yacht, 25 PENN STATE INTERNATIONAL LAW REVIEW – (forthcoming 2007)

William P. LaPiana, Swift v. Tyson and the Brooding Omnipresence in the Sky: An Investigation of the Idea of Law in Antebellum America, 20 SUFFOLK UNIVERSITY LAW REVIEW 775-776 (1986)

CHARES MCILWAIN, CONSTITUTIONALISM, ANCIENT AND MODERN, Ithaca, N.Y., Cornell Univ. Press, rev. ed. 1947

EDWARD MCWHINNEY, CONSTITUTION-MAKING: PRINCIPLES, PROCESS, PRACTICE (1981)

Errol Meidinger, Multi-Interest Self Governance Through Global Product Certification Programs. Legal Studies Research Paper Series, Paper No. 2006-016, University of Buffalo Law School Baldy Center for Law and Social Policy. Http://ssrn.com/abstract=917956 (accessed Jan. 16, 2008)

Mark Modak-Truron, A Process Theory of Natural Law and the Rule of Law in China, 25 PENN. STATE INTERNATIONAL L. REV. – (forthcoming 2007)

Walter F. Murphy, Constitutions, Constitutionalism, and Democracy, in CONSTITUTIONALISM AND DEMOCRACY: TRANSITIONS IN THE CONTEMPORARY WORLD 3-25 (Douglas Greenberg et al. eds., 1993)

Carolina Pancotto Bohrer Munhoz, Corruption In The Eyes Of The World Bank: Implications For The Institution’s Policies And Developing Countries, 25 PENN STATE INTERNATIONAL LAW REVIEW – (forthcoming 2007)

Randall Peeremboom, Varieties Of Rule Of Law: An Introduction And Provisional Conclusion, in THEORIES AND IMPLEMENTATION OF RULE OF LAW IN TWELVE ASIAN COUNTRIES, FRANCE AND THE U.S. 1, 4 (Randall Peerenboom, ed., 2004)

JOHN RAWLS, JUSTICE AS FAIRNESS: A RESTATEMENT 41 (2001)

Michel Rosenfeld, The Rule of Law and the Legitimacy of Constitutional Democracy, 74 S. CAL. L. REV. 1307 (2001)

Herman Schwartz, Building Blocks for a Constitution, 9(1) ISSUES OF DEMOCRACY: CONSTITUTIONALISM AND EMERGING DEMOCRACIES (Mar. 2004), http://usinfo.state.gov/journals/ itdhr/0304/ijde/schwartz.htm

Yuval Shany, Notes and Comments: Contract Claims Versus Treaty Claims: Mapping Conflicts Between ICSID Decisions on Multisourced Investment Claims, 99 AMERICAN JOURNAL OF INTERNATIONAL LAW 835 (2005).

Sigmund Timburg, International Combines and National Sovereigns, 95 UNIVERSITY OF PENNSYLVANIA LAW REVIEW575, 577 ( 1947)

Gunther Teubner, Societal Constitutionalism: Alternatives to State-Centered Constitutional Theory, in TRANSNATIONAL GOVERNANCE AND CONSTITUTIONALISM (Christian Joerges, Inger-Johane Sand and Gunther Teubner, eds.) 3-28 (Oxford & Portland Oregon: Hart Publishing, 2004)

WESTEL W. WILLOUGHBY, THE FUNDAMENTAL CONCEPTS OF PUBLIC LAW 29-31; 35-39; 312-315 (New York: Macmillan, 1924)

Spencer Zifac, Globalizing the Rule of Law: Rethinking Values and Reforming Institutions, in GLOBALISATION AND THE RULE OF LAW 32-65 (Spencer Zifcak ed., 2005)

Values Morality and the Regulation of Transnational Economic Activity

The ethicist Randy Cohen, whose column appears weekly in the New York Times Magazine, recently wrote on the ethics of transborder economic transactions. Both the problem and the advice suggest the radical changes that have been occurring below the level of formal regulation in the development of “community standards” for expected behavior amongst business enterprises. (Cohen 2008).

The problem posed was simple:

To afford to start a new business, I must use low cost foreign manufacturers, some of whom likely maintain unsafe working conditions. It is difficult to be certain from here. In the relevant country, many workers doing the tasks I’ll require receive low wages and face serious health problems including chronic colds, fever, stomach disorders, chest pains, and tuberculosis. Is it wrong to start my business sin this way? (Name withheld New York). Id.

This was a problem that would not have existed even twenty years ago. Certainly, from a legal perspective, there would be no problem at all. Consider the nature of the transactions: one enterprise is seeking to buy a product from another enterprise. From the perspective of law, the focus is on the commodity and the legal documents memorializing the agreement between the parties would reflect that focus. The principal terms of a complete agreement between the parties would center on (1) the amount of product ordered, (2) the price of the good, (3) delivery terms, (4) payment terms, (5) representations and guarantees about the suitability of the product, and (6) remedies for breach. As autonomous entities responsible to their principal stakeholders (investors) and competing for larger and more profitable shares of the markets they served (firm consumers), neither would have invested much time or thought to the methods, objects or conditions through which either met their respective obligations under the contract.

Profit maximization in this narrow sense, not values, was understood as driving economic relations. And that understanding drove the law of economic relations. To the extent values mattered, they did so only at the margins. Businesses were entitled to presume that their counterparts also acted within some sort of acceptable moral parameters (at least acceptable within the society and culture in which they operated). Only when it was apparent that this was not the case—when a business knew that a potential relationship involved entanglement with a company known to have a bad reputation, would the contracting party be bound to think through the effects of entering into a relationship with that badly reputed firm. These notions were tightly bound up with the law of fiduciary duty in the United States and served as a foundation for appropriate behavior among business enterprise managers. Graham v. Allis-Chalmers Mfg. Co., 188 A.2d 125 (Del.1963) (“absent cause for suspicion there is no duty upon the directors to install and operate a corporate system of espionage to ferret out wrongdoing which they have no reason to suspect exists.” (Id., at 130).

And so, a quarter century or so ago, the ethical answer might have been simple: there is no positive moral obligation to ensure that the parties with which one enters into contractual relations treat their own workers decently. Indeed there is a moral obligation, grounded in respect for the autonomy of individuals and the entities they create, to avoid interfering with the affairs of people to entities with which one has only a limited and specific relation—in this case to purchase goods. The limits of their economic relations define and limit the extent of their moral obligations. However, were the contracting parties to become aware of conditions that violated standards of conduct that were meaningful to that party—for example, were the person seeking to manufacture good through another entity to know that a particular entity treated their workers so badly that the workers sickened—then, acting on that knowledge, action might be required. But there was no positive obligation to find out, nor an obligation to broaden the scope of contractual relations in contracts for goods to include this social component.

But today, the answer is different—both as a matter of values, and increasingly, as a matter of law. Mr. Cohen suggests that change, and also its limitations, in his response.

It is your moral obligation to see that those who work for you even indirectly—those from whose labor you profit, receive decent treatment. While wages and working conditions vary internationally, nobody’s idea of “decent” encompasses “chronic colds, fever, stomach disorders, chest pains and tuberculosis,” even in developing nations even where people badly need jobs. . . . (Id.).

Mr. Cohen then suggests that at a minimum, proceeding with this sort of business relationship would require monitoring—implementing the purchaser’s duty to participate in the development of the legal and economic relationships between the product supplier and the purchaser. For this purpose, monitoring might be done directly, or as Mr. Cohen suggests through certain middlemen—government or elements of civil society—to ensure fairness in hiring and working conditions. If that is not viable, it might make most sense to avoid foreign entanglements and hire labor domestically. Mr. Cohen summarizes the consequences of this approach to the problem: “What you may not do is simply throw up your hands at working conditions overseas or fob off this duty on those with whom you contract. You must strive to learn whose sweat provides your equity and how it is extracted.” Id.

But why is it immoral? Mr. Cohen does not suggest an answer. It seems self-evident to him that there is no other way of understanding the moral or ethical issue. There are some bases for supporting Mr. Cohen’s premise.

Jews and Catholics, for example, might suggest faith grounded reasons. For Jews it might be based on moral ramifications of Godliness elaborated in Leviticus, Numbers and Deuteronomy and implemented through the Talmud. Catholics might understand this obligation through a different elaboration of Godliness, grounded in the meaning of the Incarnation, Passion and Resurrection. (Backer 2008 and sources cited therein). Both might extract from faith in a particular vision of God and God’s relationship with humanity a set of precepts and conduct norms inherent in people seeking a closer relation to God—love of neighbor as the grundnorm of a values maximizing social and economic order. (Id.). Under these regimes, it is almost self evident that there is a “moral obligation to see that those who work for you even indirectly” (Cohen, supra) are treated morally. And, indeed, Catholic social thought has suggested that economic entities have a moral obligation to indirect employees. (Backer 2008, supra).

Yet, one does not need the comfort of faith to arrive at a similar conclusion. The last half of the 20th century has seen the rise of values based economics. Socio-economics, and particularly so-called binary economics, would infuse economic analysis with social justice values. (Backer 2008, supra). From either it might be possible to derive the idea that an economics that privileges objects (in the form of wealth or production or consumption) privileges things over people. That distorts both the understanding and measurement of welfare maximization. To correct that distortion, the focus of analysis must either focus on people rather then the objects of their consumption or must at least privilege labor and capital equally. In either case, economic relationships that take no account of the conditions of labor used to produce objects (or render services) would not be welfare maximizing in the sense in which such terms ought to be understood, and thus would be inefficient.

Law has taken a few short steps to privilege—or at least acknowledge—this position shift. Corporate social responsibility has exploded as a regulatory issue in the 20th century. Starting as an issue of the extent of the charitable obligations of economic entities—effectively an issue tied to the extent to which juridical entities might be able to act like natural persons—corporate social responsibility now serves as a proxy for a dynamic set of norms governing the way in which economic entities may engage in economic transactions. (Backer 2006). That transformation has paralleled the debates within economics over its own scope and character. Just as values economics has shifted the basis for understanding the nature and measurement of economic value for welfare maximization purposes, so has corporate theory begun to suggest an alternative to the traditional view that economic entities are inward looking institutions with obligations running only to its shareholders. Corporate social responsibility suggests a theory of enterprise operation grounded in the treatment of economic entities as institutional individuals with obligations to all other individuals with which it engages in transactions or interactions. Enterprise liability, piercing the corporate veil theories, extended jurisdictional theories, and extended notions of fiduciary duty are all tentative legal steps in the direction of extended obligation. But these are tentative steps indeed. (Id.).

And so, the ethical answer to the question is different in 2008. Economic relationships may now be judged by a different standard. This standard rejects the primacy of the object and a narrow understanding of scope of economic relations even at the level of discrete transactions (for example, transactions for the purchase of goods in return for payment). Instead, it suggests a model that looks at the effects of economic transactions in the context of all of the factors of the production of objects (labor and capital) and measures efficiency and wealth production from the perspective of individual stakeholders. Under this framework, the business of actors may not be disregarded by outsourcing any aspect of production.

But the connection between moral and legal accountability is never entirely consistent. And moral obligation not backed by consequences tends to be easier to evade—or postpone. Thus, the person who sought Cohen’s advice “hired an outfit in Uttar Pradesh [India] whose labor conditions are unknown to him. If the project advances he vows to travel to India to inspect the manufacturing facilities.” (Cohen 2008). This is an interesting result. On the one hand, the purchaser chose to adhere to the traditional model—he hired a supplier whose labor practices are unknown to him. Because the practices are unknown the purchaser can, under traditional models, assume the best until he knows otherwise. On the other hand, the purchaser appears (by implication) to have avoided hiring any outfit that might have been known to him to have labor policies that resulted in physical injury to the supplier’s workers. That advances the broadly understood social responsibility project, but within the traditional framework of economic relationships. Yet the most important aspect of the purchaser’s conduct was the last—that the purchaser intended to go to India at some point and inspect the operations of the supplier for himself. This represents a deviation from the traditional model. It is more than an acknowledgement of moral obligation—it is a suggestion that moral obligation will be imposed as a basis for arranging the relationships between supplier and purchaser.

There are certain implications from this conclusion that are worth drawing out.

First, the contemporary issue, then, is not whether an entity has an obligation, moral and legal, to monitor; the question is, what is the scope and nature of that monitoring obligation. If under the traditional standards, all entities were to mind their own business, under the new regime all people serve appear to serve as each other’s keepers. That new basis of relationship suggests that personal autonomy is less important as a value governing social and economic relationships. An implication of that change in the value of personal autonomy in social ordering may be that moral obligations are communal and not individual. The more important implication, however, is that moral obligations, as communal obligations that may trump individual desire, impose an obligation on individuals to monitor compliance with those communal obligations. (Backer 2003).

The Delaware courts have suggested that the extent of the legal obligation is inward looking—economic entities have an obligation to monitor the conduct of their own agents. Thus, for example, the law of fiduciaries has moved from a basis in presumptions of goodness and moral conduct to its opposite. As a consequence, the corporate law, at least, has begun to construct a series of positive obligations on economic entities in connection with certain conduct. The touchstone of this set of positive obligations is surveillance. The Delaware Supreme Court has most recently articulated the standard as follows:

We hold that Caremark articulates the necessary conditions predicate for director oversight liability: (a) the directors utterly failed to implement any reporting or information system or controls; or (b) having implemented such a system or controls, consciously failed to monitor or oversee its operations thus disabling themselves from being informed of risks or problems requiring their attention. In either case, imposition of liability requires a showing that the directors knew that they were not discharging their fiduciary obligations. Where directors fail to act in the face of a known duty to act, thereby demonstrating a conscious disregard for their responsibilities, they breach their duty of loyalty by failing to discharge that fiduciary obligation in good faith. Stone v. Ritter, 2006 WL 3169168, Supreme Court of Delaware (Nov. 6, 2006) (discussing In re Caremark Int’l Inc. Derivative Litig., 698 A.2d 959, 969 (Del. Ch. 1996)).

And indeed, the obligations to monitor for bad conduct are being extended to the agents of economic enterprises. (Backer 2003). Simultaneously, law is beginning to impose monitoring, reporting and disclosure requirements more generally. (Backer 2007).

Mr. Cohen suggests that the extent of the moral obligation to monitor is broader—extending to at least some entities with which an actor engages. Mr. Cohen, though, rightly understands that, for the moment at least, the moral obligation he identifies is effectuated only through extra legal means. Cohen identifies the growing and increasingly powerful networks of social actors who monitor economic activity. These entities can share the fruits of their monitoring to economic enterprises to help them meet their ethical obligations. That was the point of Mr. Cohen’s advice. At the same time they can be used against economic enterprises that fail to meet their moral obligations. That is a point I have made elsewhere with respect to both the suppliers of Gap, Inc. (Backer Oct. 29, 2007), Apple, Inc. (Backer June 16, 2006), and Walmart (Backer 2007a).

Second, it is likely that Mr. Cohen’s moral perspective is most likely to successfully find some expression in law through the construction of legally enforceable monitoring systems rather than through direct regulation of ethical obligations. (Backer 2007). American lawmakers understood this implicitly in the construction of the federal securities laws in the 1930s. The great idea under-girding those statutory systems was surveillance—systems of mandatory disclosure to both the state and to principal stakeholder communities (in the case of the federal securities law the investor community). Indeed, that system has become extremely useful in molding behavior beyond the original scope of those statutes. It has become a means through which disclosure is used to indirectly legislate behavior. (Backer Dec. 21, 2007) For example, under the Sarbanes Oxley Act (2002), publicly held companies were not obligated to adopt an ethics code for senior financial officers, but rather were required to disclose whether or not they had adopted such a code (Sarbanes Oxley Act of 2002, § 406). The object was not to impose ethics codes but to create a legal framework within which stakeholders could negotiate the extent and terms of such codes. (Backer 2002). The state chose the objective—ethics codes—but private actors were free to use the information as they liked in arranging their relationships. In a sense, then, monitoring regimes can serve as a framework for incorporating moral obligations within a legal structure of relationships between economic actors, without hardwiring any particular set of ethical standards in law. For those in search of avenues for the implementation of corporate social responsibility at a transnational level, international agreements for transparency, disclosure and information dissemination might be more effective as a means of hardwiring ethical obligations in the relationships between economic enterprises, than commanding obedience to any set of such obligations.

References:

Graham v. Allis-Chalmers Mfg. Co., 188 A.2d 125 (Del.1963)

Larry Catá Backer, Values Economics and Theology: The Contribution of Catholic Social Thought and its Implications for Legal Regulatory Systems, Law at the End of the Day, Jan. 12, 2008.

----------, The Duty to Monitor: Emerging Obligations of Outside Lawyers and Auditors to Detect and Report Corporate Wrongdoing Beyond the Federal Securities Laws, 77 ST. JOHN’S LAW REVIEW 919 (2003), reprinted 53(4) DEFENSE L.J. 671 (2004). Abstract.

----------, The Sarbanes-Oxley Act: Federalizing Norms for Officers, Lawyer and Accountant Behavior, 76 ST. JOHN’S LAW REVIEW 897 (2002). Abstract.

----------, Global Panopticism: Surveillance Lawmaking by Corporations, States, and Other Entities, 13 INDIANA JOURNAL OF GLOBAL LEGAL STUDIES – (forthcoming 2007). Abstract.

----------, The Surveillance State: Monitoring as Regulation, Information as Power, Law at the End of the Day (Dec. 21, 2007).

----------, Economic Globalization and the Rise of Efficient Systems of Global Private Law Making: Wal-Mart as Global Legislator, 39(4) UNIVERSITY OF CONNECTICUT LAW REVIEW 1739 (2007a). Abstract.

-----------, Multinational Corporations as Objects and Sources of Transnational Regulation, LAW AT THE END OF THE DAY (Oct. 29, 2007).

----------, Multinational Corporations, Transnational Law: The United Nation’s Norms on the Responsibilities of Transnational Corporations as a Harbinger of Corporate Social Responsibility as International Law, 37 COLUMBIA HUMAN RIGHTS LAW REVIEW 287 (2006). Abstract.

----------, Corporate Social Responsibility and Voluntary Codes: Apple, its Stakeholders, and its Chinese Laborers, LAW AT THE END OF THE DAY, June 16, 2006.

In re Caremark Int’l Inc. Derivative Litig., 698 A.2d 959, 969 (Del. Ch. 1996).

Randy Cohen, The Right Hires, The New York Times Magazine, Jan. 13, 2008, at 18.

Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745, codified at various places in 15 U.S.C.

Stone v. Ritter, 2006 WL 3169168, Supreme Court of Delaware (Nov. 6, 2006).

Cheryl L. Wade, Racial Discrimination and the Relationship Between the Directorial Duty of Care and Corporate Disclosure, 63 U. PITT. L. REV. 389, 403–20 (2002).

On the Dynamism of American Political Culture

Politics in 19th century America can be divided into two great epochs, separated by that great Second American Revolution, the American Civil War. The period ending with the Civil War began after the First American Revolution and the adoption of the federal Constitution in 1789. During this period, the Union was absorbed by the question of its own identity at a time when immigration of non-Protestants, the expansion of the slave population, and an accelerating westward expansion began to change the locus of political power within the states and the Union itself. The epoch of American national political consolidation that followed concluded only with the end of the "Progressive" era and the election of Woodrow Wilson in 1912. Renewed immigration on an unprecedented scale, industrialization, the creation of national markets and westward expansion contributed to a substantial change in the character of a union now striving to become a nation.

Much like many theories of the origins of the universe, American political culture began as a diffused and fluid set of political factions among a small elite, the members of which considered themselves the guardians of the true meaning of the instruments creating the federal union. By century’s end, these diffused and fluid factions had slowly, painfully and sometimes violently stewed, simmered and coalesced into two large national political parties, Democratic and Republican. These two parties, along with any number of smaller and shorter lived factions, became the preeminent vehicles for the effective expression of political ideas in the United States. American political culture, and political parties as the expression of that culture in government, arose in large part from out of the major political event of the century -- the conflict over the essence of the Republic, its resolution by the conquest of the Confederate States of America, and the construction of a new nation in the aftermath of the war. This event occupied much of the century, providing the background against which most of the political struggles of the day were fought, from war with Britain in the early part of the century, to slavery, tariff policy, expansion westward, industrialization, imperialism, and infrastructure.

The major political parties that arose before the Civil War all constituted coalitions eager to impose their vision of the nature of union, and in the implementation of this vision, to further their particular political agendas. Among the most important of these parties were the Federalist Party of Hamilton, Adams and the mercantile elite of the Northeast, operating from the 1790s through the 1820s; the Democratic-Republican Party (eventually the modern Democratic Party) of Jefferson, Madison, Jackson, John C. Calhoun and the farmers and planters in the West and South, which began as a center of opposition to the more strongly centralist agenda of the Federalists; the short-lived Whig Party of Daniel Webster, Henry Clay and traditionalist merchant, planter and industrial elites; and the Republican Party of Lincoln and its abolitionist, nativist, interventionist, elitist, and nationalist allies which became the heir not only of the anti-slavery elements of society, but also of the merchant, industrialist and planter classes formerly sympathetic to the Whig Party.

Yet other events also played a large role in forming the character of American political culture in the 19th century. Successive waves of immigration substantially disrupted and fractured politics in the nation and within virtually every state. Immigration created the opportunity for immigrant elites to arise and use the instrumentalities of government for their own and their communities' benefit. Corruption and localism became important markers for political culture especially after 1865, as large urban political machines began to affect the business of the political parties. The Tammany Society of New York was a prominent example. Although the campaign to create a merit-based civil service reflected a reaction against the corruption of the machine system, it was also perfumed with the aroma of nativism -- the idea that foreigners were introducing "anti-democratic" mores to the places they controlled. Immigration sharpened divisions based on religion and race. For the substantially Northern European and Protestant majority population of the first part of the 19th century, politics was molded by a healthy dose of the art of containing or assimilating the increasingly Catholic, and later Jewish, Southern and Eastern European immigrants who began to vie for control of the political machinery and culture first at the state and then at the national level. For Whigs, and then Republicans, for example, who feared the radical effects of suffrage extended to the growing numbers of immigrants, immigrants were people in need of training and containment. Indeed, during the 1850s the fairly radical and strongly anti-Catholic and nativist No-Nothing or American Party captured the governorships of Massachusetts and Delaware before splitting on the slavery question and losing ground to the Republican Party in the early 1860s.

For all European groups, first arrivals or latecomers, the "color line" was also a considerable part of the mash of political culture. Indians were to be pushed out into small areas of settlement, or to be made to disappear either by assimilation or physical destruction. But even successful assimilation did not result in Indians= social or political parity with even the lowest orders of white society. Slavery became a key political issue between the time of the Missouri Compromise of 1820 and the Civil War. While the major parties included elements on both sides of the issue, splinter factions arose from time to time. Among the most important was the Free-Soil Party, which emerged in 1848 for the purpose of keeping slavery out of the new territories. While abolitionism played a part in the formation of these parties, the availability of land for white men, free of the debilitating competition from farmers using slave labor, also played a role. After the Civil War, neither great party was the friend of the African-American. The newly freed descendants of Africans were either used as inferior allies or disenfranchised and pushed into their own "reservations" to avoid mixing with the rest of the population. The former slaves looked to the Republicans for help. The Republicans, with a voter base in the relatively African-American free North, were willing to use African-Americans as their instrument for containment of the Democratic party in the newly conquered South until the re-establishment of the Southern elites, when African-Americans were abandoned.

Immigration also provided fuel for the policing of morality in local, and then national politics. Prohibition was meant partially to help save and control the waves of potentially unruly immigrants, Indians and African descendants. Prohibitionists, like abolitionists before them, played an increasingly important part in party politics, especially within the Republican Party. The loose morals of immigrants, especially of people from supposedly inferior racial, ethnic or religious stock, also produced popular agitation (in part for the protection of the members of the superior racial/ethnic stock) for state removal of children from nonconforming environments, and protection against "white slavery."

Equally important were the effects of industrialization on political culture. The growth of national networks of business enterprises contributed to a political culture sensitive to issues of social stratification, urbanization, and class struggle. Industrialization produced elites capable of molding political parties for the protection of their interests. As heirs to the Whigs, the post Civil War Republican Party became strongly attached to the interests of the merchant, industrialist and wealthy agricultural landlord classes. But, as the 19th century closed, the growing power of business became linked with political corruption requiring reform. Stratification and the class struggle gave birth to radical workers parties in northern cities before the Civil war, for example the Locofocos. The short lived anti-Jacksonian National Republican Party, an 1830s offshoot of the Democratic Party, and the Whig Party in the 1830s through 1850s, became a magnet for the wealthy of both North and South who were willing to compromise their sectional differences in defense of their collective wealth and position in society. Later in the century, the class divisions in the cities gave rise to other groups with ties to European class radicalism, most notably the Socialist Labor Party founded in 1877, and the Social Democratic Party founded by Eugene Debs in 1898 which in 1901 joined with Christian Socialists to form the Socialist Party. The less radical elements of these movements found a home in the Democratic Party machines of northern cities.

Before the Civil War, urbanization and concentrations of wealth in the industrial sector in the Northern states led to a strong culture favoring tariffs in the North as well as Southern planter sectionalism (and thus helped fuel the controversy over the power of the general government). After the Civil War, those forces gave rise to numerous factions of farmers rising against a monetary policy favoring industry, and eventually to populism and a racist and anti-immigrant tinged anti-urbanism as well. Among these were the Granger Movement, the Farmers Alliances of the 1870s, and the Greenback Party and Greenback Labor Parties of the 1870s and 1880s. These farm-rural movements joined with the Knights of Labor to create the People=s Party or Populist Party, active from the 1890s through the early 1900s. The Populists favored inflationary fiscal policies, nationalization of the railroads, direct election of Senators and an eight-hour work day. Some of the social programs advocated by the Populists were later taken up by progressive Republicans, including the insurgent Bull Moose Party, and later by the Democratic Party.

The history of 19th century American political culture can be usefully summarized through the histories of the political factions and parties which gave that culture tangible expression and which rose and, to some extent, disappeared during the century. The two great parties of the 19th century represented opposite poles in the popular conception of the union. Democrats were generally wary of federal power, and tended to include many factions co-existing in uneasy alliance. State’s rights and localism served to provide outlets for the many potentially antagonistic allies within the party. Republicans were a more single vision political unit. They tended to be ardent nationalists, heirs to the ideas of Hamilton and the Federalists. Republicans meant to use the power of the federal government to mold a nation and preserve the power of the traditional elites.

Ironically, on the eve of the twentieth century, these two great parties each stood poised to completely reverse their respective political philosophies, at least with respect to federal power. The Democratic party, for almost a century the stalwart supporter of states rights and a more "unionist" approach to federalism would become, within a generation of century’s end, the great party of national intervention and shrinking state authority, retaining only a minority faction of traditional democrats based mostly in the states of the former Confederate Republic. The Republican party, within that same generation, would transform itself as well from the great radical "nationalist party" of its first generation to a more "unionist" party advancing the power first of "business" and then "markets" over that of national and even state authority. Yet the Republican Party would still retain its moral-cultural elitist, essentially Whiggish, tendencies, reserving federal power for the protection and management of the good morals and culture of a hodgepodge of immigrant peoples badly in need of assimilation for the preservation of business, prosperity and good conduct.

BIBLIOGRAPHY


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Summers, Mark W. Railroads, Reconstruction, and the Gospel of Prosperity Aid Under the Radical Republicans, 1865-1877. Princeton, N.J.: Princeton University Press 1984.

Values Economics and Theology: The Contribution of Catholic Social Thought and its Implications for Legal Regulatory Systems

At the Association of American Law Schools 2008 Annual Meeting, held this year in New York City, the Section on Socio-Economics presented its annual meeting program on Thursday, January 3, 2008 , co-Sponsored by the Sections on Jurisprudence, Minority Groups, Poverty Law, and Women in Legal Education. That program was entitled “Positive and Normative Dimensions of Socio-Economics.” I was fortunate enough to have been invited to participate in one of the panels—Theology and Socio-Economics, with Susan Stabile, formerly of St. Johns Law School and now a member of the faculty of St. Thomas University Law School in Minneapolis. The panel description suggested the parameters of our general discussion:

Socio-economists recognize (1) that faith in a higher power affects economic behavior and (2) an understanding of how faith affects economic behavior will enhance one’s ability to address law-related economic issues. This session continues an inquiry began at last year’ s annual meeting to explore the connection between theology and Socio-economics.

For that panel I presented a paper entitled: Values Economics and Theology: The Contribution of Catholic Social Thought and its Implications for Legal Regulatory Systems. What follows is an extended version of the remarked delivered at that panel. I am grateful to Robert Ashford (Syracuse University Law School) for putting the program together, and to Susan and the participants at the panel for their questions and comments.

Values Economics and Theology: The Contribution of Catholic Social Thought and its Implications for Legal Regulatory Systems.

At its core, classical economics, whether in its free market or Marxist forms, focuses on issues of scarcity and ownership. Wealth maximization is the foundation around which most systems of economics are built. Each posits economic actors who act rationally to maximize wealth, and tends to ignore the possibility of foundationally different characteristics of people as holders of capital or people as contributors of labor. The systems built on this grounding in the material (that is in materialist systems) are concerned with the attainment of the foundational object, and are indifferent to the means to those ends, except to the extent that the means are more or less efficient in the attainment of that objective. Like the great 19th century systems of constitutional law, these systems privilege process and not the normative values that underlie them. They look to Rechtsstaat and not Sozialstaat constructions of value, efficiency, and the right.

But the great global wars of the 20th century changed thinking among elites in the ways in thinking about the character of legitimate approaches to system building and the character of the elements that went into those efforts. Among the most significant change was a movement from a privileging of process and process issues, to a focus on values. Just as in constitutional law value systems provide the critical element in constructing legal systems (Backer 2007), so in the law of economics, normative systems are vital for the construction of those values that necessarily infuse rationality. Economics itself, in the West, has sought to engage in these notions.

Consequently, by the middle of the 20th century, the values lacunae in economics suggested to some at least that, like legal systems, economic systems grounded solely on rational activity without a grounding in normative systems of values, are either incomplete or subject to perversion. Among the more vibrant of the responses, at least within the contemporary legal academic community, are notions of socio-economics, and particularly the binary economics of Louis Kelso. (Kelso and Adler 1958). These seek to find a values hierarchy within economics, in general, and in particular to re-examine the place of labor within the labor capital matrix, in particular.

But the search for a normative structure within which to frame economics has not been limited to those who carefully guard the field boundaries of that social science within the academy. Theology, too, has much to contribute in those areas of economics left open by economic theory. This paper focuses on the values of substantive economics developed recently through application of Catholic theology. It focuses on the Catholic critique of consumerism, its understanding of a necessary labor policy and its sense of a just global economics. It will suggest a number of places where socio-economics and theology share common ground, and even something of a common framework of analysis. That, I will further suggest, adds weight to the notion that some values may be trans-religious, as well as trans-cultural. I will start with a short consideration of the approach of economics in its modern globalized context, and the contribution of socio-economics to that approach. I will then briefly suggest the contours of an economic critique of that modern approach—focusing on the attacks on globalization by Fidel Castro in the name of an alternative global economic model—substantially Marxist in character. I will then turn to the development of Catholic social thought as it touches on the issues raised by global economic activity in three respects: materialism, labor rights and globalization. For that purpose I will look carefully at two encyclicals separated by almost 15 years. The first is Benedict XVI’s encyclical, Deus Caritas Est given December 25, 2005. And the second is John Paul II’s encyclical, Laborem exercens, given September 14, 1981. Both provide a basis for a values based economics, and both suggest a regulatory context significantly different from both classical economic and Marxist models. Socio-economics has taught that values matter, even in economics. Religion reminds us that values and economics also matter in religion. All share in the search for values, and the application of those value systems to the relationship between people, things, the production and distribution of wealth.

Classical economics focuses on the maximization of wealth. Wealth maximization must occur both at the level of the individual (and the firm), and in the aggregate, at the level of the community (and ultimately the globe). Like any system focused on production, its students tend to privilege efficiency as the value par excellence of any system of wealth maximization at both individual and aggregate level. But privileging efficiency suggests less concern with the means instituted to attain wealth maximization. Despite this indifference, there is a sense that systems of open, transparent and flexible markets, where the aggregate actions of individuals and organizations, all equally situated, together tend to produce the greatest production of wealth for the greatest number of people for the longest period of time. This idea is based on the great postulates of the system: that people act rationally in a world of perfect information, that income distribution will reflect marginal productivity under conditions of perfect competition, and that personal preference is exogenous to the appropriate functioning of a system focused on the production of wealth (that is, to each her own). Economics, thus, is a function of objects and process. In the long run all individual profit, but that profit (material things) rather than the human being, serve as the center of system focus. These ideas have significant regulatory consequences. They suggest that governments seeking the greatest wealth for the greatest number of its inhabitants should regulate only in a manner that facilitates the efficiency required for long-term wealth production of the greatest sort. Disclosure, maintaining the integrity of markets, facilitating economic transactions across borders, reducing the transaction costs of economic activity would suggest themselves as the highest forms of state political regulatory activity. The care and augmentation of capital becomes the greatest good of state policy. Success can be measured in the ability of the state to reduce allocation of resources to ameliorate the effects of short-term market dislocations or failures at the personal or institutional level. In a perfect world everyone would have more than enough to meet their needs.

Socio-economics seeks to privilege the human element. Along with classical economics, it accepts materialism as the founding principle of human activity. But it rejects the possibility of attainable conditions of perfect competition, perfect markets and rational behavior. As such, the system of economics must, of necessity, have built into it the unfairness of structurally permanent market failures and faulty income distribution. As a consequence, there can be no hope of optimally allocating resources or maintaining perfectly functioning markets. These failures, a product of human imperfection, are borne, of necessity, by people, and might be augmented by a stubborn insistence on privileging capital over labor. In this imperfect system, human preferences are endogenous, and the state is necessary to provide a necessary correction or at least amelioration to the failures that are an inevitable part of any human based system of interaction. For an economics that privileges individuals, values must matter. But, like classical economics, it is substantially indifferent among value systems. It recognizes the importance of values in charting (ir)rational behavior but refrains from imposing its own set as an aspirational basis for human behavior.

“However, socio-economics does more than suspend these assumptions [of classical economic theory]. Rather, based on principles of natural and moral philosophy relied on by Adam Smith, and drawing upon all relevant disciplines, socio-economics is a positive and normative approach that aspires to present a factually rigorous, holistic understanding of economic behavior that is both paradigm-conscious and value-conscious, yet at the same time, largely, though not entirely, paradigm- and value- neutral.” Robert Ashford, Socio-Economics—An Overview, electronic version available at http://www.ssrn.com/abstract-882751.

These ideas, too, have significant regulatory consequences. They suggest that governments seeking an appropriate role in the amelioration of the dysfunction of economic wealth maximization and allocation systems must regulate in a way that levels the privilege of capital and labor in ways that are consistent with aggregate value systems of the people for whose benefit regulation is maintained.

One famous elaboration of these ideas can be found in Louis Kelso’s binary economics. (Kelso and Adler 1958; Kelso and Adler 2000). The binary in Kelso’s theory referred to the human and non-human elements into which all factors of production can be grouped. “The central tenet of binary economics is that, through the property (or ownership) principle, these two ‘independent variables’ can link marketable outputs from the labor-capital mix directly to incomes distributed according to market quantified values of all ‘labor’ and all capital’ inputs.” (Kurland 2005, 1). Under principles of binary economics, economic justice is privileged as a form in which wealth optimization must occur (that is one in which human values are endogenous) and regulation along lines meant to achieve such economic justice (as wealth maximization) must be based on a more aggressive and pointed system of positive political regulation. According to some, that regulation must be based on four key principles: (1) the democratization of capital and universal access to capital, (2) universal access to and protection of rights to property for exploitation and wealth production, (3) positive regulation to achieve the aims of individual and institutional social justice based wealth maximization, and (4) the promotion of the free and open markets which serve as the start (but are actually the goal) of classical economic theory. (Ashford and Shakespeare). Lastly, economic justice is conceived as participatory, distributive, and harmony inducing. Id.).

Marxism’s dialectical materialism also speaks to social justice and also focuses on the individual—that is the labor component of the production of wealth. But Marxist theory relies on collectivization rather than a regulatory environment for the perfection of individual activity, to achieve its vision of a social justice based system of optimal wealth maximization and allocation. For Marxist economics, individual perfectibility is rejected in favor of the perfectibility of the collective, to which the individual must defer, and to the values of which the individual must assimilate. But like classical economics, Marxist economics also focuses on wealth maximization and the optimal allocation of resources. Capital retains its privileged position within theory. But the individual, and individual power to direct capital, is substantially curtailed in favor of the collective. Marxism is values based to some extent. Collective values are endogenous. Economic justice is a critical component of Marxist economics. And in its post-Soviet phases, this includes anti subordination and pluralist value notions.

But values do not include substantive notions of individual rights. These rights, like the power to direct, are bound up in the collective and its more perfect wisdom. Marxists have theorized this notion in the political as well as the economic sphere as democratic centralism at least since its origins in the construction of Leninist party organization (Lenin 1902, 347-530). And of course, democratic centralism, and the privileging of the collective in its relationship with capital has had significant regulatory effects. Socialism, totalitarianism, and other forms of collective ownership by the instrumentalities (the apparatus) of state organization, under the guidance of the Communist Party (or its equivalent), of the means of production (capital) merges the economic with the political. And all of this is the service of wealth maximization and optimal resource allocation for the benefit of the collective.

But the Church’s approach, based on an application of a now almost century old development of Catholic theology and expressed through an increasingly sophisticated system of Catholic social thought, is grounded on a very different basis than Marxist systems, or the free market systems Marxists criticize. Indeed, the Catholic Church has engaged deeply, on a theoretical basis, not only the basis of Marxist theory but that of free market globalization as well. The foundational difference can be seen in the differences between these systems in their understanding and privileging of capital and labor, and in their understanding of the nature of labor and its social place within legal orders.

The grounding of Catholic social thought, and its relationship to economic theory, can be found in the encyclical, Deus Caritas Est. (2005). That grounding is complex, sophisticated and subtle and requires a bit of exposition. The basic premise is the centrality of love, the core of traditional Jewish faith. “In acknowledging the centrality of love, Christian faith has retained the core of Israel's faith, while at the same time giving it new depth and breadth.” (Deus Caritas Est at ¶ 1).

The commandment of love, in essence a dual whole made up of love for God and for one’s neighbor) is now also a response to the gift of love through the incarnation of the divine. “Jesus united into a single precept this commandment of love for God and the commandment of love for neighbour found in the Book of Leviticus: “You shall love your neighbour as yourself” (19:18; cf. Mk 12:29-31). Since God has first loved us (cf. 1 Jn 4:10), love is now no longer a mere “command”; it is the response to the gift of love with which God draws near to us.” (Deus Caritas Est at ¶ 1). It is in the interplay of a series of dualisms that one can construct a theology of both charity and economic substantive norms. These dualisms have as their core the love of God for humanity, and the love of individuals for their neighbors. From the love of God for humanity will be derived “the ecclesial exercise of the commandment of love of neighbour.” (Deus Caritas Est at ¶ 1).

Benedict starts with a long and complex development of the speculative duality of love. That development first sketches the distinctiveness of divine love in both God and humanity (agape) and an appropriate physical love (eros). (Deus Caritas Est at ¶ 2-7). (Deus Caritas Est at ¶ 1). “This is due first and foremost to the fact that man is a being made up of body and soul. Man is truly himself when his body and soul are intimately united; the challenge of eros can be said to be truly overcome when this unification is achieved.” (Id., at ¶ 5). Both eros and agape, together, are constructed as necessary connecting the physical with the spiritual and humanity with God. “Yet eros and agape—ascending love and descending love—can never be completely separated. The more the two, in their different aspects, find a proper unity in the one reality of love, the more the true nature of love in general is realized.” (Id., at ¶ 7).

At this point comes to “an initial, albeit still somewhat generic response to the two questions raised earlier. Fundamentally, “love” is a single reality, but with different dimensions; at different times, one or other dimension may emerge more clearly. Yet when the two dimensions are totally cut off from one another, the result is a caricature or at least an impoverished form of love.” (Id., at ¶ 8). That, Benedict suggest, is the great Biblical innovation that distinguishes it from its predecessor systems of understanding and faith, built on the unity of the dual systems of human and divine. “This newness of biblical faith is shown chiefly in two elements which deserve to be highlighted: the image of God and the image of man.” (Id., at ¶ 8). This harmonization of the duality of love can be seen in the nature of the love of God for man. “We have seen that God's eros for man is also totally agape. This is not only because it is bestowed in a completely gratuitous manner, without any previous merit, but also because it is love which forgives.” (Id., at ¶ 10). And it can also be seen as a part of the nature of the physical love of humanity through marriage.

“First, eros is somehow rooted in man's very nature; Adam is a seeker, who “abandons his mother and father” in order to find woman; only together do the two represent complete humanity and become “one flesh”. The second aspect is equally important. From the standpoint of creation, eros directs man towards marriage, to a bond which is unique and definitive; thus, and only thus, does it fulfil its deepest purpose. Corresponding to the image of a monotheistic God is monogamous marriage.” (Id., at ¶11).

It is, for Benedict, bound up in the incarnation of God, giving physical reality to the combination of divine and human love—love for God and for one’s neighbor—through the physical presence of God on earth. “The real novelty of the New Testament lies not so much in new ideas as in the figure of Christ himself, who gives flesh and blood to those concepts—an unprecedented realism.” (Id., at ¶ 12).

The stage is now set for the connection between this more or less esoteric discussion of love and its theology and charity. Benedict starts by drawing a parallel between love of God for humanity and the love between individuals through the symbolism of Communion. “Communion draws me out of myself towards him, and thus also towards unity with all Christians. We become “one body”, completely joined in a single existence. Love of God and love of neighbour are now truly united: God incarnate draws us all to himself.” (Id., at ¶ 14). But Communion is not limited to a love of fellow Christians. “The concept of ‘neighbor’ is now universalized, yet it remains concrete. Despite being extended to all mankind, it is not reduced to a generic, abstract and undemanding expression of love, but calls for its own practical commitment here and now.” (Id., at ¶ 5). Love of neighbor, as a physical manifestation of the love of God, and a necessary part of the whole, can be manifested as charity—the practice of love. “As a community, the Church must practise love. Love thus needs to be organized if it is to be an ordered service to the community.” (Id., at ¶ 20).

“Love of neighbour, grounded in the love of God, is first and foremost a responsibility for each individual member of the faithful, but it is also a responsibility for the entire ecclesial community at every level: from the local community to the particular Church and to the Church universal in its entirety.” (Id., at ¶ 20). The individual and institutional nature of charity (as love of neighbor) adds another aspect to the layers of duality which serves as the foundation of Catholic theology as a sort of values economics. That institutionalization has significant regulatory aspect—evidenced by legal regulation of Church charity from the 4th century, with a focus on the example of Egyptian regulation. (Id., at ¶ 23). Benedict at last draws what he calls two essential facts from the discussion, critical to the development of a theological set of values economics. The first that charity is “not a kind of welfare activity which could equally well be left to others, but is a part of her nature, an indispensable expression of her very being.” (Id., at ¶ 25). The second is that within the family of God on earth caritas agape extends beyond the frontiers of the Church, within which “no one ought to go without the necessities of life.” (Id., at ¶ 25).

This charity has a strong social justice dimension. Responding to a Marxist critique of the Church’s charitable activities, Benedict asserts that caritas, as developed since the 19th century has a strong social justice component. “Historically, the issue of the just ordering of the collectivity had taken a new dimension with the industrialization of society in the nineteenth century. The rise of modern industry caused the old social structures to collapse, while the growth of a class of salaried workers provoked radical changes in the fabric of society.” (Id., at ¶ 26). Since the maturity of the Industrial Revolution, the social justice component of Catholic social thought has been bound up with the relationship between capital and labor. “The relationship between capital and labour now became the decisive issue—an issue which in that form was previously unknown. Capital and the means of production were now the new source of power which, concentrated in the hands of a few, led to the suppression of the rights of the working classes, against which they had to rebel.” (Id., at ¶ 26). The Church’s response, Benedict relates, was slow at first, and then decisive. (Id., at ¶ 27). “Faced with new situations and issues, Catholic social teaching thus gradually developed, and has now found a comprehensive presentation in the Compendium of the Social Doctrine of the Church published in 2004 by the Pontifical Council Iustitia et Pax.” (Id.).

The social justice values derived from the Church’s notions of love of neighbor and its obligation to charity, Benedict offers, can serve as the foundation of a universal set of values for constructing a just society. “In today's complex situation, not least because of the growth of a globalized economy, the Church's social doctrine has become a set of fundamental guidelines offering approaches that are valid even beyond the confines of the Church: in the face of ongoing development these guidelines need to be addressed in the context of dialogue with all those seriously concerned for humanity and for the world in which we live.” (Id., at ¶ 27). That foundation, like the development of a theology of social values in economic theory, arises from the unity of a set of dualities. Benedict posits that the basis of Church notions of social justice as universal arises from an understanding that the just ordering of society is primarily the responsibility of politics. “The just ordering of society and the State is a central responsibility of politics. As Augustine once said, a State which is not governed according to justice would be just a bunch of thieves: “Remota itaque iustitia quid sunt regna nisi magna latrocinia?”.[18] Fundamental to Christianity is the distinction between what belongs to Caesar and what belongs to God (cf. Mt 22:21), in other words, the distinction between Church and State, or, as the Second Vatican Council puts it, the autonomy of the temporal sphere.” (Id., at ¶ 28(a)).

But politics must have as its objective the achievement of justice, that is through the implementation of a social ordering based on ethics. “Justice is both the aim and the intrinsic criterion of all politics. Politics is more than a mere mechanism for defining the rules of public life: its origin and its goal are found in justice, which by its very nature has to do with ethics.” (Id., at ¶ 28(a)). The connection comes in the form of faith—for faith, for Benedict, is the key to justice. “Here politics and faith meet. Faith by its specific nature is an encounter with the living God—an encounter opening up new horizons extending beyond the sphere of reason. But it is also a purifying force for reason itself.” (Id.). Faith acts as the agape to politics’ Eros

The ethics inherent in faith leads to the possibility of universalizing values beyond a particular faith system.

“Faith enables reason to do its work more effectively and to see its proper object more clearly. This is where Catholic social doctrine has its place: it has no intention of giving the Church power over the State. Even less is it an attempt to impose on those who do not share the faith ways of thinking and modes of conduct proper to faith. Its aim is simply to help purify reason and to contribute, here and now, to the acknowledgment and attainment of what is just.” (Id., at ¶ 28(a)).

Faith can thus serve as a proper basis for constructing a just social order among many faiths. “It recognizes that it is not the Church's responsibility to make this teaching prevail in political life. Rather, the Church wishes to help form consciences in political life and to stimulate greater insight into the authentic requirements of justice as well as greater readiness to act accordingly, even when this might involve conflict with situations of personal interest.” (Id.). This is a journey from faith to universal morals and ethics. “As a political task, this cannot be the Church's immediate responsibility. Yet, since it is also a most important human responsibility, the Church is duty-bound to offer, through the purification of reason and through ethical formation, her own specific contribution towards understanding the requirements of justice and achieving them politically.” (Id.). And that ethics is based on the notions of love and the charity (now social justice) obligations that flow from that love.

Thus Benedict has built up a theology of social justice values on a foundation of resolved binaries: Religion-politics, love of God-love of humanity, faith-reason, spiritual-concrete, theology-economic values. And it also suggests an important caveat that separates Church theology from classical or Marxist economic values theory—the Church does not posit the possibility of constructing systems that produce (eventually) a perfection that makes values regulation irrelevant. Instead, Benedict posits that the striving for a just society on the basis of Church values will not lead to human social perfection. (Id., at ¶ 28(b)). Instead, the obligation to charity—now social justice—reflects an eternal obligation to express the love of God for humanity, and of individuals for their neighbors. “In the end, the claim that just social structures would make works of charity superfluous masks a materialist conception of man: the mistaken notion that man can live “by bread alone” (Mt 4:4; cf. Dt 8:3)—a conviction that demeans man and ultimately disregards all that is specifically human.” (Id.).

Deus Caritas Est suggests a fully developed and sophisticated system of valuation for economic analysis. Economic values are essentially grounded in love, rather than in personal or aggregate wealth maximization. But love here is understood as the expression of a complex series of parallelisms. These start with the relationship between God and humanity—as expressed from the Old Testament to the meaning of the Incarnation (agape). That love find expression in the love between man and woman, and then generalized as the love among individuals—both physical (and thus grounded in physical relationships) and perfectible (grounded in the need to mimic the love from God in the love of neighbor). From these foundations—divine love expressed in physical terms in the love among individuals within families and in communities, and among communities, is what is meant to serve as the maximizing value of economic analysis—not goods but the love value generated by interactions. Aggregate maximization of value, then, is not necessarily measured by wealth maximization in the form of the accumulation of lots of objects with a high market value (the conventional sense of classical economics and Marxist theory), but is measured in the production of good measured in terms of charity, and, in its modern understanding—social justice. Economics, then, is grounded in the study of systems for the maximization of social justice among individuals which itself is to be understood as an application of divine love in human relations.

The resonance with the values laden focus of socio-economics in particular, and Kelso’s binary economics, is obvious. Though the two sets of systems are based on different notions of the source of value, both suggest values exogenous to the production of objects themselves as a basis for maximization analysis in economic terms. The regulatory consequences are apparent as well—at least at a macro level—markets in things are not a central focus of a Catholic values economics. Neither hostile nor solicitous of markets—or of centralization in planning (either by public or private forces)—the thrust of Deus Caritas Est looks to the use of things for the betterment of the individual, and the aggregate of individuals in the family, communities and political and social organizations. Income transfer, social benefits, the requisites of human diognity become the focus of an efficient economic system. But it is by no means one in which the individual is passive. Love, in the sense of Deus Caritas Est is an active not a passive thing. Looking to the incarnation itself as an active principle of involvement, Benedict suggests the role of individuals as instruments of love in the sense of charity and social justice.

For all that, the social justice concerns that form an integral part of the social project of the Church, and a necessary project mandated by Church theology, still remains somewhat esoteric. But the Church has been able to translate this theology of social justice into more concrete terms in three specific areas of economic regulation: consumerism (materialism), labor rights, and globalization. It is to each of these that this essay turns to next.

Consumerism: The phenomenon of consumerism is characterized as the expression of a godless materialism that demeans humanity and leads it away from an ethical life. John Paul II fleshed these values out in his encyclical Centesimus annus (1991):

A given culture reveals its overall understanding of life through the choices it makes in production and consumption. It is here that the phenomenon of consumerism arises. In singling out new needs and new means to meet them, one must be guided by a comprehensive picture of man which respects all the dimensions of his being and which subordinates his material and instinctive dimensions to his interior and spiritual ones. If, on the contrary, a direct appeal is made to his instincts — while ignoring in various ways the reality of the person as intelligent and free — then consumer attitudes and life-styles can be created which are objectively improper and often damaging to his physical and spiritual health. Of itself, an economic system does not possess criteria for correctly distinguishing new and higher forms of satisfying human needs from artificial new needs which hinder the formation of a mature personality. Thus a great deal of educational and cultural work is urgently needed, including the education of consumers in the responsible use of their power of choice, the formation of a strong sense of responsibility among producers and among people in the mass media in particular, as well as the necessary intervention by public authorities. (Centesimus annus at ¶ 36).

Among the consumption patterns that are permitted through the materialism of a consumer culture are cultures of drug use. (Id.). “It is not wrong to want to live better; what is wrong is a style of life which is presumed to be better when it is directed towards "having" rather than "being", and which wants to have more, not in order to be more but in order to spend life in enjoyment as an end in itself.” (Id.). The sense is that the promotion of consumption for consumption’s sake bespeaks a hedonism that privileges the physical over the spiritual, and thus reduces the wealth maximization—and value—of production, for the individuals. This is evidenced by a sense of alienation. “This happens in consumerism, when people are ensnared in a web of false and superficial gratifications rather than being helped to experience their personhood in an authentic and concrete way.” (Id., at ¶ 41).

Labor: The development of the Church’s labor values is perhaps its most specific elaboration of its understanding of social justice as a component of its mission to caritas, the lynchpin of which is the relationship between labor and capital. (Deus Caritas Est, supra at ¶ 26). The great elaboration of these policies within the context of Church social justice norms was in John Paul II’s encyclical, Laborem exercens (1981). The basis of a theology of labor, like that of the function of economic activity, was based on the relationship between God and humanity. The encyclical explains that “man "is the primary and fundamental way for the Church"4,precisely because of the inscrutable mystery of Redemption in Christ; and so it is necessary to return constantly to this way and to follow it ever anew in the various aspects in which it shows us all the wealth and at the same time all the toil of human existence on earth.” (Laborem exercens, at ¶ 1).

John Paul II starts by situating work in the context of faith and reason. First, there is an acknowledgement of the utility of reason for reasoning through the values issue for labor policy. “She is confirmed in this conviction by considering the whole heritage of the many sciences devoted to man: anthropology, palaeontology, history, sociology, psychology and so on; they all seem to bear witness to this reality in an irrefutable way. But the source of the Church's conviction is above all the revealed word of God, and therefore what is a conviction of the intellect is also a conviction of faith.” Id., at ¶ 4.

From this John Paul draws an important conclusion. “The Church is convinced that work is a fundamental dimension of man's existence on earth.” (Id., at ¶ 4). Humanity is the subject of work both because of the Biblical commandment to assert dominion over the earth and because persons were created in the image of God, an image incarnated in the form of the divine presence on earth for a short time. “Man has to subdue the earth and dominate it, because as the "image of God" he is a person, that is to say, a subjective being capable of acting in a planned and rational way, capable of deciding about himself, and with a tendency to self-realization. As a person, man is therefore the subject of work.” (Id., ¶ 6). Dominion conditions the nature of work, and gives rise to its ethical dimension. “This dominion, in a certain sense, refers to the subjective dimension even more than to the objective one: this dimension conditions the very ethical nature of work. In fact there is no doubt that human work has an ethical value of its own, which clearly and directly remain linked to the fact that the one who carries it out is a person, a conscious and free subject, that is to say a subject that decides about himself.” (Id., at ¶ 6). Thus, fundamental to the relationship between humanity and work is the relationship between humanity and God, that is for God’s work for humanity on Earth.

If the work of humanity must reflect the work of God, then the dualistist parallelism that marked the ethics of charity and social justice in Deus Caritas est is also at the foundation of the ethics of work in Laborem Excercens. That ethics is grounded in the attainment of human dignity through work. “Work is a good thing for man-a good thing for his humanity-because through work man not only transforms nature, adapting it to his own needs, but he also achieves fulfillment as a human being and indeed, in a sense, becomes "more a human being".” (Id., at ¶ 9). The ethics is also tied to basic human social and politica organization—the family and the state. Work must be the basis for the strengthening of the family and the nation. “Work constitutes a foundation for the formation of family life, which is a natural right and something that man is called to. These two spheres of values-one linked to work and the other consequent on the family nature of human life-must be properly united and must properly permeate each other.” (Id., at 10). Those relationship are made explicit in Laborem exercens: “In fact, the family is simultaneously a community made possible by work and the first school of work, within the home, for every person.” (Id.).

The centrality of the human in the context of work is decisive for the elaboration of an ethics of work in the context of the conflict between labor and capital. (Laborem exercens, at ¶¶11-15). It is in this sphere that the Church took some pains to suggest both the similarities of its applied theology to modern notions of classical and Marxist economics and, more importantly, the differences between the three approaches to understanding the foundations of economic analysis (and thus the foundations for political regulation). The conflict between labor and capital had it modern origins, for the Church, in the shift from self employment to employment of one person by another, which without an ethical dimension, gives rise to exploitation and the lose of human dignity. “The conflict originated in the fact that the workers put their powers at the disposal of the entrepreneurs, and these, following the principle of maximum profit, tried to establish the lowest possible wages for the work done by the employees. In addition there were other elements of exploitation, connected with the lack of safety at work and of safeguards regarding the health and living conditions of the workers and their families.” (Id., at ¶ 11).

Thus, the critical issue is not the nature of work, but the nature and purpose of ownership. Applying its theology of work, Laborem exercens derives a principal of the priority of labor over capital (Id., at ¶ 12), elaborates a connection between labor and capital on the basis of this principal of labor priority (Id., at ¶ 12), suggests a critique of both classical and Marxist economics (Id., at ¶ 13), and provides an ethical grounding for the use and exploitation of property (capital) in the context of the primacy of work. (Id., at ¶ 14). From this ethics of labor, Laborem exercens develops a systems of workers rights situated within the context of human rights and grounded in notions of human dignity (Id., at ¶ 16), and the obligations of employers and the state ((Id., at ¶ 17). In addition, Laborem exercens elaborates from its first principles a right to work and subsistence (elaborated more completely in Deus Caritas Est). (Id., at ¶ 18). “The obligation to provide unemployment benefits, that is to say, the duty to make suitable grants indispensable for the subsistence of unemployed workers and their families, is a duty springing from the fundamental principle of the moral order in this sphere, namely the principle of the common use of goods or, to put it in another and still simpler way, the right to life and subsistence.” (Id.). Additionally elaborated is an ethics of just wages. (Id., at ¶ 19). “The key problem of social ethics in this case is that of just remuneration for work done.. . . . Hence, in every case, a just wage is the concrete means of verifying the justice of the whole socioeconomic system and, in any case, of checking that it is functioning justly. It is not the only means of checking, but it is a particularly important one and, in a sense, the key means.” (Id.). The rights of women in the workplace are also a product of this elaboration of an ethics of economic values. (Id., at ¶ 19). “The true advancement of women requires that labour should be structured in such a way that women do not have to pay for their advancement by abandoning what is specific to them and at the expense of the family, in which women as mothers have an irreplaceable role.” (Id.). Also flowing from the primacy of labour in an ethics based economics of values is a right to unionization. (Id., at ¶ 20). “They are indeed a mouthpiece for the struggle for social justice, for the just rights of working people in accordance with their individual professions. However, this struggle should be seen as a normal endeavour "for" the just good: in the present case, for the good which corresponds to the needs and merits of working people associated by profession; but it is not a struggle "against" others.” (Id.). But unionization is valued only when appropriately asserted. (Id.). For similar reasons the importance of agricultural work and work by the disabled is confirmed. (Id., at ¶ 21-22). Lastly, and importantly, Catholic values labor economics also elaborates a basis for the ethical regulation of global labor migration. (Id., at ¶ 23). “The most important thing is that the person working away from his native land, whether as a permanent emigrant or as a seasonal worker, should not be placed at a disadvantage in comparison with the other workers in that society in the matter of working rights. Emigration in search of work must in no way become an opportunity for financial or social exploitation. As regards the work relationship, the same criteria should be applied to immigrant workers as to all other workers in the society concerned.” (Id.).

The principle of the priority of labor inverts the classical relationship between labor and capital. This is derived from the theology of human dominion over the Earth. Things are taken over “by making them his workbench. He takes them over through work and for work.” (Id., at ¶ 12). Capital, in effect, in “every phase of the development of his work man comes up against the leading role of the gift made by "nature", that is to say, in the final analysis, by the Creator. At the beginning of man's work is the mystery of creation.” (Id.). As a consequence, capital is something gifted to persons by God for their use, and must necessarily be treated as an instrument of work rather than as its object. “Obviously, it remains clear that every human being sharing in the production process, even if he or she is only doing the kind of work for which no special training or qualifications are required, is the real efficient subject in this production process, while the whole collection of instruments, no matter how perfect they may be in themselves, are only a mere instrument subordinate to human labour.” (Id., at ¶ 12). “All that we can say of everything in the production process which constitutes a whole collection of "things", the instruments, the capital, is that it conditions man's work; we cannot assert that it constitutes as it were an impersonal "subject" putting man and man's work into a position of dependence.” (Id., at ¶ 13).

More importantly it suggests two things. First, labor priority suggests that the character of property ownership is ethically charged and values laden. “From the beginning there is also linked with work the question of ownership, for the only means that man has for causing the resources hidden in nature to serve himself and others is his work. And to be able through his work to make these resources bear fruit, man takes over ownership of small parts of the various riches of nature: those beneath the ground, those in the sea, on land, or in space. He takes all these things over by making them his workbench. He takes them over through work and for work.” (Id., at ¶ 12).

And second, the relationship between labor and capital is not one of conflict but of hierarchy. (Id., at ¶¶ 12-13). Christian morals and ethics posits that property ownership is morally charged. As a gift from God, its possession is not absolute and unlimited. Instead, there are a number of ethical parameters limiting the rights of private exploitation of property. “Christian tradition has never upheld this right as absolute and untouchable. On the contrary, it has always understood this right within the broader context of the right common to all to use the goods of the whole of creation: the right to private property is subordinated to the right to common use, to the fact that goods are meant for everyone.” (Id., at ¶ 14). These obligations are not solved by changing the owner of the property (collective rather than private ownership), but are inherent in the nature of ownership itself. (Id.). Ownership ethics “diverges radically from the programme of collectivism as proclaimed by Marxism and put into pratice in various countries in the decades following the time of Leo XIII's Encyclical. At the same time it differs from the programme of capitalism practised by liberalism and by the political systems inspired by it.” (Id.). Essentially, the ethics of ownership suggests that every worker ought to feel herself a part owner of the gift of property made by God to all of his human creatures.

“We can speak of socializing only when the subject character of society is ensured, that is to say, when on the basis of his work each person is fully entitled to consider himself a part-owner of the great workbench at which he is working with every one else. A way towards that goal could be found by associating labour with the ownership of capital, as far as possible, and by producing a wide range of intermediate bodies with economic, social and cultural purposes; they would be bodies enjoying real autonomy with regard to the public powers, pursuing their specific aims in honest collaboration with each other and in subordination to the demands of the common good, and they would be living communities both in form and in substance, in the sense that the members of each body would be looked upon and treated as persons and encouraged to take an active part in the life of the body.” (Id., at ¶ 14).

Thus, the problem of ownership is not the right to own or exploit but the nature or character of that ownership.

From this, Laborem exercens derives a critique of classical and Marxist economics. That critique suggested that the tendency of both systems to posit an irreconcilable antimony between labor and capital inverted the relationship between labor and capital and leads inevitably to amoral systems of economic regulation in which human dignity and economic justice might not be attained. The focus of the critique is that both classical and Marxist economics wrongly focus on the means of production—the possibilities of the production of material wealth—and ignore the ends of production—the human being and her material and spiritual fulfillment. The error “originated in the whole of the economic and social practice of that time, the time of the birth and rapid development of industrialization, in which what was mainly seen was the possibility of vastly increasing material wealth, means, while the end, that is to say, man, who should be served by the means, was ignored. It was this practical error that struck a blow first and foremost against human labour, against the working man, and caused the ethically just social reaction already spoken of above.” (Id., at ¶ 13).

In the absence of appropriate values, economics leads to perversion of sorts by elevating the thing over the person. And that elevation of the material over the personal provides the core of the Catholic critique of a non-values based economics. Classical economic theory is critiqued for its materialism—its frenetic search for more and greater things as the beginning and end of “the good.” In this context, the human is reduced to a subordinate position and spiritual well being is marginalized. Human dignity is threatened.

“This fundamental error of thought can and must be called an error of materialism, in that economism directly or indirectly includes a conviction of the primacy and superiority of the material, and directly or indirectly places the spiritual and the personal (man's activity, moral values and such matters) in a position of subordination to material reality. This is still not theoretical materialism in the full sense of the term, but it is certainly practical materialism, a materialism judged capable of satisfying man's needs, not so much on the grounds of premises derived from materialist theory, as on the grounds of a particular way of evaluating things, and so on the grounds of a certain hierarchy of goods based on the greater immediate attractiveness of what is material.” (Id., at ¶ 13).

That dehamization is expressed in its notions of property ownership. (Id., at ¶ 14). The right to personal exploitation without ethical limit serves to invert the social order, putting things over people in an unacceptable way, ethically speaking.

“From this point of view the position of "rigid" capitalism continues to remain unacceptable, namely the position that defends the exclusive right to private ownership of the means of production as an untouchable "dogma" of economic life. The principle of respect for work demands that this right should undergo a constructive revision, both in theory and in practice. If it is true that capital, as the whole of the means of production, is at the same time the product of the work of generations, it is equally true that capital is being unceasingly created through the work done with the help of all these means of production, and these means can be seen as a great workbench at which the present generation of workers is working day after day. Obviously we are dealing here with different kinds of work, not only so-called manual labour but also the many forms of intellectual work, including white-collar work and management.” (Id., at ¶ 14).

Dialectical materialism, though more sympathetic form an ethical perspective, also fails to avoid the materialist trap. “In dialectical materialism too man is not first and foremost the subject of work and the efficient cause of the production process, but continues to be understood and treated, in dependence on what is material, as a kind of "resultant" of the economic or production relations prevailing at a given period.” (Id., at ¶ 13). And in the case of Marxist economics there is a further trap—the ease with which the collective spirit can suppress individual human dignity. The bureaucratic centralism of collective organization in the absence of ethical limitations, serves merely as an efficient vehicle for the dehumanization of the social order.

“While we accept that for certain well founded reasons exceptions can be made to the principle of private ownership-in our own time we even see that the system of "socialized ownership" has been introduced-nevertheless the personalist argument still holds good both on the level of principles and on the practical level. If it is to be rational and fruitful, any socialization of the means of production must take this argument into consideration. Every effort must be made to ensure that in this kind of system also the human person can preserve his awareness of working "for himself". If this is not done, incalculable damage is inevitably done throughout the economic process, not only economic damage but first and foremost damage to man.” (Id., at ¶ 15).

Collective ownership, then, like unlimited personal ownership, dehumanizes.

“For it must be noted that merely taking these means of production (capital) out of the hands of their private owners is not enough to ensure their satisfactory socialization. They cease to be the property of a certain social group, namely the private owners, and become the property of organized society, coming under the administration and direct control of another group of people, namely those who, though not owning them, from the fact of exercising power in society manage them on the level of the whole national or the local economy.” (Id., at ¶ 14).

Stripping the individual of the right to own and exploit the means of production puts people in a position of denying others the gift of resources that God freely gave all people and thus reduces their individual dignity.

Globalization and Development: The Church’s moral economic stance has been most visible recently in its interactions with globalization and global finance. It is in the Church’s confrontation with globalization in its current economic forms that values based understanding of consumerism (as the valueless pursuit of things) and labor policy (as the error of placing capital over labor) is most fully developed. In that development, especially with respect to objectives, there is a similarity between Catholic social thought and traditional Marxist frameworks. But the sources of each are quite distinct and the methods used to get to the objectives distinctly different.

A great contemporary voice of traditionalist Marxist approaches to globalized economic activity is Fidel Castro. Castro effectively makes the case that loans profiting the lender but not the borrower (in a public-debt context) must by nature constitute a class of debt that is odious, as that notion is classically understood. (Backer 2007a). Four principal characteristics of this systemic hypercycle produce an unavoidable need for developing states to borrow, and their perpetual inability to repay those loans outlined by Castro was described in earlier studies. (Backer 2006). Labor specialization, overproduction, capital migration, and consumerism produce a global system that compels poor states to borrow for the benefit of developed states. (Id.). “Overproduction misallocates resources for the benefit of consumers in the wealthiest states by depressing the price of these goods, making them more affordable in the developed world but beyond the reach of people elsewhere. Free movement of capital makes it harder for developing states to tax consumption or income of the entities producing goods for the global market. Consumerism as an ideology keeps the wheels of overproduction going and fuels a constant if false aspirational hope among those in developing states.” (Castro 1999).

“States, without wealth to tax and with critical needs to meet, must borrow. Developing states borrow directly, in the debt markets, and indirectly, through the IMF, from developing states.” (Id.). The modern system of private orderings, of global capital in the service of undefined global markets, it is argued, serves to benefit creditor states to the ruin of borrower states. (Id.). “In effect, developing states acquire as a debt obligation a portion of the wealth that represents the required subsidy of global production at the heart of the neo-liberal system. Thus the spiral deepens.” (Id.). In this way, the system of sovereign lending manages to reinforce the old international-law system that sought to legitimize colonialism and the unequal treatment of states without invoking the old imperialist norm system directly. Fidel Castro nicely distilled this insight in the 1980s: “we have analyzed all of the variations suggested to resolve the problem of state debt . . . the result of all of these analyses is that sovereign debt, like an enormous and monstrous cancer, . . . tends to reproduce itself and grow without limit.” (Castro 1987). Unable to tax sufficiently to repay prior loans, “States must borrow additional sums of money to pay the portion of prior loans which are unpaid while meeting continuing need, or sell their wealth (in the form of natural resources or other wealth) in an effort to pay their loans.” (Backer 2006).

Castro’s vision finds an equally important echo in the Catholic social thought of the late 20th century. It has also been elaborated in the writings of American academics who have embraced this perspective. (Quigley 2004). Since its rejection of so-called liberation theology in the 1980s (Ratzinger 1986), Catholic social thought has stressed many of the objectives identified by Castro, and has criticized aspects of market based globalization, and the resulting system of unsustainable state debt, attacked by Castro. At the same time it embraced the form of the critique, the Roman Catholic Church has been careful to reject what it calls the secularism inherent in any form of Marxist-Leninist program of opposition to market globalization. (Ratzinger 1986). The Roman Catholic Church has thus developed, under the leadership of John Paul II, an extensive catalogue of criticism of the modern global market system that stressed development and charity, within a Catholic context, that paralleled Castro’s opposition to neo-liberal globalization, within a Marxist-Leninist context. (described in Deus Caritas Est). Both understand sovereign debt as a piece of the larger problem of the nature of the organization, and the character of the normative structure, of the emerging global governance system.

But the foundations of those objectives are quite different. John Paul II suggested that “Christians will have to raise their voice on behalf of all the poor of the world, proposing the Jubilee as an appropriate time to give thought, among other things, to reducing substantially, if not canceling outright, the international debt which seriously threatens the future of many nations.” (Ecclesia in America). He explains “[o]nce more I express the hope, . . . that . . . “through study and dialogue with representatives of the First World and with the leaders of the World Bank and the International Monetary Fund, will seek ways of resolving the problem of the foreign debt and produce guidelines that would prevent similar situations from recurring on the occasion of future loans”. (218)” (Id.).

John Paul II, like Castro, suggests a “critical analysis of the world economic order, in its positive and negative aspects, so as to correct the present order, and that they would propose a system and mechanisms capable of ensuring an integral and concerted development of individuals and peoples.” (Id.). Like Castro, John Paul II would have sought a recasting of the current global economic system away from markets and toward development and ‘social justice.’ He writes: “The cry of millions upon millions of poor and marginalized people in our Latin American and Caribbean societies due to this unjust economic system with its "face of suffering" (S.D. 179), must be heard by the Church in the Americas, and must be cased with evangelical courage, and a desire to promote, for everyone’s benefit, this "new international socio-economic order" based on solidarity and justice.” (Synodus Episcoporum 1997).
These views are echoed by American prelates as well.

“Another reason we care is that the most vulnerable people in society were not responsible for contracting the debt, yet they pay the price for it. Some countries used borrowed funds to finance their militaries or projects benefiting the elites rather than for projects that would have benefited the poor. Poor people suffer the most by the diversion of scarce resources to debt repayments from human development.” (United States Bishops 2000).

Like Castro, John Paul II was no friend of the consumerism that formed an integral part of the global economic system contributing, in some measure, to the need to borrow by states least able to afford the debt.

“In the entire American continent, there are indications of the difference mentioned by Pope John Paul II in his Encyclical Letter Redemptoris missio: "the North has constructed (a development model) which is now spreading to the South, where a sense of religion as well as human values are in danger of being overwhelmed by a wave of consumerism." Various answers point to the urgent need to find a solution to the problem of the foreign debt in the context of the celebration of the Great Jubilee of the Year 2000, as proposed by the Holy Father in his Apostolic Letter Tertio millenio adveniente.” (Synod of Bishops 1997).

In Laborem exercens, John Paul II suggested that globalization provided a venue for the indirect exploitation of labor through the elaboration of a transnational classical or Marxist (collective) system of economic exploitation of the individual through the exploitation of capital. He starts by reaffirming the central role of the state. “The concept of indirect employer is applicable to every society, and in the first place to the State. For it is the State that must conduct a just labour policy.” (Laborem exercens, ¶ 17). But the state, John Paul II reminds, does not have a monopoly of power within the community of states. “However, it is common knowledge that in the present system of economic relations in the world there are numerous links between individual States, links that find expression, for instance, in the import and export process, that is to say, in the mutual exchange of economic goods, whether raw materials, semimanufactured goods, or finished industrial products.” (Id.). That has consequences in an interlinked world. “These links also create mutual dependence, and as a result it would be difficult to speak, in the case of any State, even the economically most powerful, of complete self-sufficiency or autarky.” (Laborem exercens, supra at ¶ 17).

The attainment of the worker's rights cannot however be doomed to be merely a result of economic systems which on a larger or smaller scale are guided chiefly by the criterion of maximum profit. On the contrary, it is respect for the objective rights of the worker-every kind of worker: manual or intellectual, industrial or agricultural, etc.-that must constitute the adequate and fundamental criterion for shaping the whole economy, both on the level of the individual society and State and within the whole of the world economic policy and of the systems of international relationships that derive from it. (Id.).

But The Catholic Church views the adoption of this vision as an aspect of conversion to Christian, that is, Catholic, universalism. Thus, the issue of sovereign debt has been conceived as forming a part of a total conversion.

Certain economic systems and policies exist which control the commercial market and affect the financial matter of loans and interests, generating in some cases an enormous debt for nations and impeding the development of peoples. There are also certain types of economic aid dependent on the ideologies of small political groups, various people in power and nations which are not always governed by the criteria of equity and solidarity, but rather by selfish interests. Such conditions call for conversion, especially as they relate to the economic inequality between the northern and southern areas of the continent. The situation calls out to faith and to conscience--both human and Christian--for a response. (Synod of Bishops 1996).

And so, like Castro, within his system, the Roman Catholic Church must continue to witness it faith in it economic and social justice manifestations. “In the next two years, we plan to do a lot of work on the debt issue. We will continue to press the World Bank, IMF, and US government for more substantial relief for the countries that qualify under the new initiative. We will work with CRS' partners in Africa and Latin America who want to do their own work on debt. We will also support more exchanges of bishops and clergy from countries that are deeply indebted.” (United States Bishops 2000).

Like Castro, elements of the Catholic hierarchy have suggested a greater lender responsibility for sovereign debt, especially to less developed states in which the ruling institutions might not be totally free of corruption or entirely legitimate. Thus for example, the Pontifical Council for Justice and Peace Trade, Development and the Fight Against Poverty suggested that:

Among the causes which have helped to create massive external debt are not only high interest rates, caused by speculative financial policies, but also the irresponsibility of people in government who, in incurring debt, have given too little thought to the real possibility of repaying it. This has been aggravated by the fact that huge sums obtained through international loans sometimes go to enrich individuals instead of being used to pay for the changes needed for the country's development. At the same time, it would be unjust to impose the burden resulting from these irresponsible decisions upon those who did not make them. (Martin 1999).

And the Catholic Church has indicated a willingness to embrace a form of Castro’s subsidy argument about neo liberal global trade and its effects on developing states as borrowers. (Id.). Thus, for example, it has suggested that “the international trade system today frequently discriminates against the products of the young industries of the developing countries and discourages the producers of raw materials." (Sollicitudo rei socialis 1987 , ¶ 43). Further, “The trends in primary commodity trade, access to world markets and diversification of production have a decisive impact on developing countries, affecting the balance of payments, foreign debt, domestic budget and the success of savings and investment policies.” (Id.). At a speech given during the Pontifical Council for Justice and Peace, with the support of the Adenauer Foundation, organized a seminar, in Rome on June 9 and 10, which gathered the leaders of international financial institutions (World Bank, International Monetary Fund, Inter-American Bank for Development), the presidency of the Latin American Bishops' Conference and representatives of the US and German Bishops' Conferences, a senior Roman Catholic Church official stated, for example, that “Another reason we care is that the most vulnerable people in society were not responsible for contracting the debt, yet they pay the price for it. Some countries used borrowed funds to finance their militaries or projects benefiting the elites rather than for projects that would have benefited the poor. Poor people suffer the most by the diversion of scarce resources to debt repayments from human development.” (Etchegaray 2000).

At the same time, the Catholic hierarchy has been very careful to curb political expression of its moral stances. The Catholic Church firmly restrained the ‘liberation theology” popular with Latin American religious during the 1970s and 1980s. (Gutierrez 1973). The current Pontiff, Benedict XVI, as Cardinal Ratzinger, was crucial in that effort. He made a distinction between Marxist elements of liberation theology – which he considered an error within the traditions of the Roman Catholic faith, though an alluring one. (Ratzinger 1984).

In trying to arrive at an overall evaluation it must be said that, if one accepts the fundamental assumptions which underlie liberation theology, it cannot be denied that the whole edifice has an almost irresistible logic. By adopting the position of biblical criticism and of a hermeneutics that grows through experience, on the one hand, and of the marxist analysis of history, on the other, liberation theologians have succeeded in creating a total picture of the Christian reality, and this total view seems to respond fully both to the claims of science and to the moral challenges of our time, urging people to make Christianity an instrument of concrete world transformation; it seems to have united Christianity, in this way, with all the "progressive forces" of our era. (Id.).

Instead, the focus ought to turn from political action and the marshalling of the material, to the traditional, and doctrinally appropriate concern for the poor. (Lynch 1994). Professor Lynch notes “Opponents of liberation theology have incorporated their struggle against this particular philosophy into a more general attack on secularism, societal disunity and a culture confined to addressing economic conflict. The approach has been quite successful.” (Id.).

Again, the regulatory consequences can be significant. A Catholic values based economics would tend to reject the free market globalization that is dominant today. The basis is consistent with its views on consumerism and labor policy. Modern globalization is built on a hierarchy of false values—things over people and the value of aggregations of things over the use of those things for the fulfillment of the divine command to love (God and neighbor). As a result, developed states might be deemed t have obligations ot aid the development of their less well developed neighbors, and all states have an obligation to provide for their people. The position is not in direct opposition to free markets, or even a socialist based transnational trade system. Rather it measures those systems using a different values yardstick. It is not the amount of accumulation, but the way in which those accumulations are used that matter under those systems of values. And economic analysis must serve those values to be legitimate.

Conclusion:

John Paul II perhaps described the theological intervention in economics best when he noted:

The Church's social doctrine is not a "third way" between liberal capitalism and Marxist collectivism, nor even a possible alternative to other solutions less radically opposed to one another: rather, it constitutes a category of its own. Nor is it an ideology, but rather the accurate formulation of the results of a careful reflection on the complex realities of human existence, in society and in the international order, in the light of faith and of the Church's tradition. Its main aim is to interpret these realities, determining their conformity with or divergence from the lines of the Gospel teaching on man and his vocation, a vocation which is at once earthly and transcendent; its aim is thus to guide Christian behavior. It therefore belongs to the field, not of ideology, but of theology and particularly of moral theology.

(Sollicitudo rei socialis 1987 ¶ 41). The Curch has developed a values bases systemn for grounding economics//and most importantly social and political policy arising from the application of economic theory, now properly understood. To a great extent, this development is central to the theology of the Church itself and its mission to spread the word. "In these new forms, it is often possible to establish a fruitful link between evangelization and works of charity. " (Deus Caritas Est ¶ 30(b)). The centrality of charity to Catholic theology was a central element of Deus Caritas Est. But at the same time, the values have also been conceived as transcending any one theology. Since the Church speaks of the union of faith with reason, it is possible to constitute the application of reason (in the form of the vaue system of economics) as reason universal. This is critical to the possibility of applying Catholic social theory beyond the confines of the Catholic community--that is, to produce an ethics of economics that is above a parochial religion. Thus, Benedict suggests that "since we all have the same fundamental motivation and look towards the same goal: a true humanism, which acknowledges that man is made in the image of God and wants to help him to live in a way consonant with that dignity. " (Deus Caritas Est ¶ 30(b); Sollicitudo rei socialis 1987 ¶ 32). In these forms, Catholic values economics can participate in secular policy and legal discourse on economics and its regulatory implications, without lessening its breadth as "mere" religion.

In the end, all of these systems seek the good. All of them are based, in large measure on faith. But the faith of each of these systems—those premises from which the vast and complex structures of each of these rational systems of knowledge and order are constructed, are vastly different. Yet all share the same foundational understanding that the rational can only be perfected as a function of something else—of something outside of the systems that are created on their basis. It is from that faith, from those premises, that all else—from law to economics, to culture, to the structure of human organization, arises and is supported. The contest for the soul of a community, then, as the pontiffs so rightly suggest, strike at the core of the ordering of human organization for the coming century. Which faith will triumph, of course, is another matter. Still, whichever triumphs, all assert a substantial effect on both policy and the law that results from application of that policy. Acceptance of one or another basis of economic “truth” is essential for the legitimacy of government action, and for elaborating the basis on which political as well as economic judgments can be made and leaders held accountable. Accountability here is not limited to political actors—but extends as well to economic actors who themselves must be accountable to their own stakeholders. Theology and socio-economics, thus, both have become significant actors in law and politics.

References:

Robert Ashford, Socio-Economics—An Overview, electronic version available at http://www.ssrn.com/abstract-882751.

Robert Ashford and Rodney Shakespeare, Binary Economics: The New Paradigm.

Larry Catá Backer, God(s) Over Constitutions: International and Religious Transnational Constitutionalism in the 21st Century, 26 MISSISSIPPI COLLEGE LAW REVIEW – (forthcoming 2007).

----------. Odious Debt Wears Two Faces: Systemic Illegitimacy, Problems and Opportunities in Traditional Odious Debt Conceptions in Globalized Economic Regimes, 70 DUKE JOURNAL OF LAW & CONTEMPORARY PROBLEMS –(forthcoming 2007a).

----------. Ideologies of Globalization and Sovereign Debt: Cuba and the IMF, 24 PENN STATE INTERNATIONAL LAW REVIEW 497 (2006).

Benedict XVI, Deus Caritas Est 2005,

Fidel Castro Ruz, Commander in Chief, First Secretary of the Central Committee of the Cuban Communist Party, President of the Council of State and Ministers, Discourse Delivered at the Eighth Summit Conference of Non-Aligned States (Sept. 2, 1986), http://www.cuba.cu/gobierno/discursos/1986/esp/f020986e (last visited Sept. 9, 2007) (author’s translation).

John Paul II, Sollicitudo rei socialis 1987,

---------- Centesimus annis 1991.

---------- Laborem exercens 1981,.

---------- Ecclesia In America, (Apostolic Exhortation: To the Bishops, Deacons, and Priests)(available at http://www.vatican.va/index.htm).

Cardinal Etchegaray, Speech: Pontifical Council for Justice and Peace, (June 9-10 2000)(Speech available at http://www.vatican.va/phome_en.htm).

GUSTAVO GUTIERREZ, A THEOLOGY OF LIBERATION (1973).

Louis O. Kelso and Mortimer J. Adler, The Capitalist Manifesto (New York: Random House, 1958).

----------, The New Capitalists: A Proposal to Free Economic Growth from the Slavery of Savings (San Francisco: The Kelso Institute, 2000).

Norman G. Kurland, Binary Economics in a Nutshell (2005) available at http://www.cej.org/binaryeconomics/be-inanutshell.html.

V.I. Lenin, What is to be Done (1902) in Lenin Collected Works, Foreign Languages Publishing House, 1961, Moscow, Volume 5, pages 347-530. available at http://marxists.org/archive/lenin/works/1901/witbd/index.htm.

Edward A. Lynch, The Retreat of Liberation Theology, HOMILETIC & PASTORAL REVIEW 12-21 (Feb. 1994) available at http://www.catholicculture.org/docs/doc_view.cfm?recnum=643.

Bishop Diarmud Martin, Pontifical Council for Justice and Peace Trade, Development and the Fight against Poverty, Report (18 November 1999)(available at http://www.vatican.va/phome_en.htm ).

William P. Quigley, Prison Work, Wages, and Catholic Social Thought: Justice Demands Decent Work for Decent Wages, Even for Prisoners, 44 SANTA CLARA L. REV. 1159, 1174 (2004).

Joseph Cardinal Ratzinger, Sacred Congregation for the Doctrine of the Faith. Instruction on Christian Freedom and Liberation (1986).

---------- Liberation Theology, Preliminary Notes, (1984) available at http://www.christendom-awake.org/pages/ratzinger/liberationtheol.htm (reproduced from THE RATZINGER REPORT — an interview with Cardinal Ratzinger and Vittorio Messori (Ignatius Press 1984)).

Synod of Bishops, Special Assembly for America, Instrumentum Laboris, Encounter With the Living Jesus Christ: The Way to Conversion, Communion and Solidarity in America (1997) available at http://www.vatican.va/roman_curia/synod/documents/rc_synod_doc_01091997_usa-instrlabor_en.html.

---------- Special Assembly for America, Encounter With the Living Jesus Christ: The Way to Conversion, Community and Solidarity in America: Lineamenta, 1996, available at http://www.vatican.va/roman_curia/synod/documents/rc_synod_doc_01081996_usa-lineam_en.html at ¶ 25.

Synodus Episcoporum Bulletin Of The Commission For Information Of The Special Assembly For America Of The Synod Of Bishops 16 November-12 December 1997.

United States Bishops, Jubilee, That’s Why We Care About International Debt, (June 2000) (available at http://www.vatican.va/phome_en.htm).