Showing posts with label corporate capitalism. Show all posts
Showing posts with label corporate capitalism. Show all posts

Monday, May 28, 2018

Extrapolating from the Arab Spring to Corporate Social Responsibility

Richard Branson, founder of Virgin Atlantic and a myriad of other companies, sees a natural extension or follow-through from the pro-democracy protests in the Middle East and North Africa to more corporate social responsibility. As much as I would like to think that the twenty-first century proffers a new world, I think we have to acknowledge the weight of the political, economic and social strictures that we have uncritically inherited.



Monday, March 12, 2018

A Critique of Corporate Political Risk Analysis and U.S. Foreign Policy: The Case of Libya

Even though people the world over instinctively recoiled as reports came in of Gadhafi's violent retaliation against Libyan protests on February 21, 2011, the official reaction from the US Government was muted at best. The refusal to act on an intuitive response to immediately remove the Libyan dictator's ability to wantonly kill people resisting his right to rule may have come from concerns that the mounting tumult of a change of government in a major oil-producing region of North Africa could cause even just a disruption in the supply of crude. Indeed, even the mere possibility was prompting a spike in the price of oil (and gas)--what one might call a risk premium. Even the prospect of an ensuing nasty electoral backlash from consumers having to face a possible increase in their largely non-discretionary gas expense was not lost on their elected representative in chief at the White House. 
Even five days later, after some serious press on the rising price of gasoline hitting American consumers, the most the president would do is proffer a verbal "demand" from afar that Gadhafi leave Libya.  "When a leader's only means of staying in power is to use mass violence against his own people, he has lost the legitimacy to rule and needs to do what is right for his country by leaving now," the White House said in a statement. The dictator must have been shaking in his boots.  In actuality, Gadhafi had lost his legitmacy to rule five days earlier, and by the day of the statement the American administration could have been actively involved with willing EU states in stopping him inside Libya. Given the progress of the protesters-turned rebels and the behavior of Brent crude that week, the interests of the American consumer (and Western oil companies, as well as the business sector over all) were by then firmly in line with an enforced regime change in Libya.  Oddly, the old dogma of an absolute governmental sovereignty was colluding with an inherently excessive risk-averse corporate political risk methodology to hold America back from acting as midwife to a new political awareness breaking out in the Middle East.
On the day of Gadhafi's self-vaunted shooting spree, Brent crude benchmark vaulted past $108 a barrel (settling at $105.74, a two-year high).  On the following day, it rose to $111.25. On the first day of March, the Dow Jones Industrial Average dropped 168.32 points, or 1.38%, to finish at 12058.02, its third triple-digit decline in the past week. Oil futures on the New York Mercantile Exchange, already up 6% this year, jumped 2.7% to settle at $99.63 a barrel.  Brent Crude in London hit $115.42 a barrel, the highest settlement since Aug. 27, 2008.The graph below shows the change in oil, though the change looks astounding in part simply because the graph only goes to 15%; were it to go to 100 percent, the picture might seem less dramatic.
The Wall Street Journal had reported already on February 21st that the rise was "driven by increasing unrest in the Middle East." Specifically, worries that the turmoil in Libya was curtailing output of that country's oil were said to be driving the price climb. However, USA Today cites Darin Newsome, an energy analyst at DTN, as pointing to the role of speculators around the world as propelling the price of oil. "The flow of money plays an enormous role in the direction, speed and volatility of these markets." In fact, the market mechanism itself may be flawed because speculators could push commodity prices out of sync with the underlying supply of the respective commodities. Turmoil in Libya cannot be blamed for the ensuing “creation” of artificial value (such an increase, by the way, had fueled the housing bubble in the US that came in for a hard landing in 2008). In fact, the rise in world oil prices began before the final third of 2010—before the prospect of widespread popular protest in the Middle East was realized. Indeed, the climb during the last third of 2010 looks a lot like that which took place in the first third of 2009 (during a recession). It was not until well into February, 2011, that the turmoil in the Middle East appeared, according to MSNBC, “to pose limited risk to global oil supplies. Neither Tunisia nor Egypt produce oil or gas.” Such “limited risk,” besides being mitigated, cannot very well be projected back well into 2010 to explain the rise in the price of gas.
Incidentally, another interesting feature of this graph is the sustained drop in 2008, before the financial crisis in September (and the U.S. Presidential election in November!).  The “V” pattern at the end of 2008 is classic “electoral.” It suggests that the price of gas may be very attuned to the electoral interests of those in power, and therefore to government policy. My contention in this essay is that this dynamic was alive and well in Washington when Gadhafi was turning on his own people.




Sources:

Jerry DiColo and Brian Baskin, "A Stealth Comeback for $100 Crude Oil," The Wall Street Journal, February 22, 2011, pp. C1, C3.

http://online.wsj.com/article/SB10001424052748704506004576173961240139414.html?mod=ITP_moneyandinvesting_0

Gary Strauss, "If Unrest Spreads, Gas May hit $5", USA Today, February 22, 2011, p. AI.

http://www.msnbc.msn.com/id/41739499/ns/business-personal_finance/

http://www.nytimes.com/2011/02/24/business/energy-environment/24oil.html?_r=1&hp

http://www.nytimes.com/2011/02/23/business/global/23oil.html?ref=todayspaper

http://www.msnbc.msn.com/id/41785849/ns/world_news-mideastn_africa/

http://www.nytimes.com/2011/03/18/world/africa/18nations.html?hp

Tuesday, August 8, 2017

Democratic Protests in the Middle East: A Conflagration of Historic Proportions amid a Constancy in Human Nature?

Perhaps by looking back on one's own time as though it were already historical, it is possible to assess whether what one is witnessing on the global stage is truly significant from the standpoint of human history or merely of that which history is replete. In the context of the popular protests in the Middle East in early 2011, the question is perhaps whether the world was witnessing a Hegelian burst of freedom or merely more of the same in terms of political revolutions. According to The New York Times, popular movements were "transforming the political landscape of the Middle East" in the wake of the protests in Tunesia and Egypt.  For example, in Bahrain, "as in Tunisia and Egypt, modest concessions from the government [were] only raising expectations among the protesters, who by day’s end [on February 15, 2011] were talking about tearing the whole system down, monarchy and all."  The prime minister, Khalifa bin Salman al-Khalifa, the king’s uncle, had been in office for 40 years. Accordingly, the protesters were asking not only for the release of political prisoners, but also "the creation of a more representative and empowered Parliament, the establishment of a constitution written by the people and the formation of a new, more representative cabinet."


The New York Times placed the protests in Bahrain in the wider context of the protests that had recently occurred in Tunesia and Egypt. The Bahrain protests, "inspired by the uprisings in Tunisia and Egypt, have altered the dynamics in a nation where political expression has long been tamed by harsh police tactics and prison terms." (italics added)  However, it was not clear at the time of the protests whether the thread of inspiration was determinative to such an extent that the landscape of the Middle East itself would be transformed as a result. In allowing the protests, the king of Bahrain may have assumed that he could stay in control and thereby reduce the strength of the "inspiration" by giving the protesters some space to do their thing and presumably get it out of their system. However, Ibrahim Matar, an opposition member of Parliament who joined the crowd of protesters, said, “Now the people are the real players, not the government, not the opposition.” It is interesting that he dismissed his own movement (i.e., the opposition) rather than trying to take credit for the uprising.  If Matar was correct, the spread of protests throughout the Middle East had the wherewithal to fundamentally change the means by which people would be governed in the region. That is, the protests could have been a transformative wave wherein people finally had within their sight the possibility that government could be of and by the people. The revolutions in Tunesia and Egypt would not have been isolated incidents in a long world history of sporatic revolutions without autocratic government itself being expunged from the tired face of the earth. The question that captivated the world watching the Egyptians protest was whether something different might have been going on. 

Whereas the twentieth century had hosted technological change on many fronts, political development was not among the areas of progress. When the twenty-first century had gained enough of its own years to claim its own time, the question may have become whether the human race was  ripe then for a leap in political development. If so, the trigger would not be in the democratic nations that preach representative democracy; rather, it would be in the people themselves who had lived under autocratic rule. It is as though there were a spreading suddent awareness that they didn't have to take the abuse anymore; they could simply say no--though "simply" is the wrong word here as saying no in a state such as Iran, for example, was at the time still prompting a barrage of bullets from government soldiers. It was clear that the autocratic governments had different strategies with respect to the protests.  The question was perhaps whether the thrust of the wave had rendered the choice of strategy nugatory. In other words, was the world witnessing the beginning of the end for autocracy or dictatorship as a means of governing human beings, or merely the latest round in a series of revolutions that have been an intractable part of human history?  Did Tunesia unleash a burst of freedom that can be placed in a Hegelian progression of human history wherein human spirit comes to realize itself in greater freedom, as per its nature? That is to say, were we witnessing a Hegelian moment? Can the protests in the Middle East in 2011 be interpreted as marking a fundamental political change or even a new awareness in humanity?  I suppose the answer would depend on whether the protests spread like a forest fire across highways and byways such that no dictator would remain standing not only in the Middle East, but, moreover, in the entire world as well.

Lest we get too carried away in celebrating the salubrious evisceration of autocratic government, we should not forget that representative democracy is far from perfect. Left without any viable competitors, this system of government could be more subject to abuses from within. If representative democracy is the beneficiary of the extinction of autocracy, might democracy as an ideal be like capitalism in the wake of the demise of the USSR (and communism in China)?  In other words, might the hegemony of representative democracy ironically make it more likely that the drawbacks of such democracy gain in force, or at least become more transparent?  Just as the financial crisis of 2008 rather than the USSR demonstrated that the market mechanism itself is flawed in how it accommodates increased volatility (by freezing up rather than accommodating it), perhaps once the world is populated by republics we might come to see the internal flaws in what the U.S. Founders called "excess democracy."

The protests in the Middle East reminded the world that history is not very predictable. Similarly, history can be quite ironic, given the fixity inherent in human expectations. As we the West welcome our brothers and sisters in the Middle East into the family of free nations, let us not get too self-congratulatory, for our institutions are far from perfect.  We are all human, all too human. Yet in spite of human nature as its constant, human history may contain a progression wherein humanity the world over comes to realizations that insist upon or inevitably lead to greater self-realization. Humanity's realization in the early twenty-first century may involve political development. I suspect that the next turn will concern religion. After that turn, the world will be quite different than for those who lived before even the technological revolution in the twentieth century.  In other words, modernity may well be characterized in terms of succeeding intervals of technological, political and religious transformation--altogether evincing a huge amount of change even as human nature remains constant.  The question might be how much change is possible given the constancy of our nature, or do some change elements change human nature? In the context of the protests in the Middle East, human nature looks pretty much the same as it has been for eons.  Yet the future change may shift the basis-point in human biology and psychology such that even more change becomes possible.

Source:

Michael Slackman, "Bahrain Takes the Stage With a Raucous Protest," The New York Times, February 15, 2011.

Wednesday, February 29, 2012

Corporate Legal Personhood in the Kiobel Case

In Kiobel v. Royal Dutch Petroleum, the U.S. Supreme Court waded into the murky waters of corporate legal personhood, at least potentially, in hearing oral arguments in late February 2012. The issue in the case is whether corporations can be held liable to the extent that they are complicit in a foreign government’s human rights abuses. Legal personhood would say that they could be. This would represent an obligation that goes with legal personhood. The question is whether the justices who conferred in the Citizens United decision the right of corporations, based on their legal personhood, to make unlimited political donations would also be willing to view obligations as “part and parcel” with such personhood. If not, then legal persons, unlike human persons, would have the benefits of personhood without any of the obligations—an oxymoron to corporations to be sure. In other words, such an asymmetry would render the legal personhood doctrine itself as akin to a one-sided coin—which cannot exist, let alone stand.

The full essay is at "Corporate Legal Personhood."