If I were Greek, would I be happy to have my country rescued at the cost of a significant curtailment of its decision-making power in terms of economic and social policy, which will be dictated by my new “rescuers”?

For one, the Greek government will be required to swallow rampant privatisations and public service cuts as a way to bring its balance sheet back in check, exactly the type of things that – in my opinion – can send a country down the drain, in terms of social cohesion.

Public services in particular, such as healthcare and education, are essential to the full development of a country’s citizens. When public services withdraw, the odds are that social mobility will also falter, and the gap between rich and poor widen. I can’t help but giggle to those (like Maggie, here) that say that our brand of capitalism has made the poor wealthier in absolute terms. To me, a person without a decent education and healthcare has no reason to be happier if she can afford a plasma TV: she will just be more distracted from her real problems.

Will a non-defaulting Greece be able to still provide these essential services in a manner that makes its people’s best interest? Or will it turn to just another victim of neoliberal imperialism?

If a default may help put the future of Greece back into the hands of Greeks, I think that should be the way to go.

Link

This was perhaps the most striking question raised by Ugo Mattei in the talk “When the Rule of Law is Illegal”, delivered on January 28, 2010 at the Centre for Transnational Legal Studies in London.

After a brief introduction, in which Mattei presented the main ideas contained in his book – co-authored with Laura Nader – Plunder: When the Rule of Law is Illegal (which I reviewed here), he went on to illustrate his current research, which builds on the radical critique performed in Plunder of the concept of rule of law, as it has played itself out in history.

His new project, for which he has joined forces with best-seller author and ecologist Fritjof Capra, is a positive effort to emerge from the discomfort and the desolation of the bleak scenario painted in Plunder, in order to build a new brand of legal studies, which he himself described as “law & ecology”.

Mattei’s current project deals with the duality between the laws of science and the laws of nature. On the one hand – he observed – lawyers turn to science for certainty, as is clear from the “battle of consultants” that is often engaged in courtrooms around the world to reconstruct some kind of causality between set events (e.g. could the leak from nuclear plant X be responsible for increased death rates in the surrounding area?). On the other hand, however, scientists (who have, in the contemporary world, been confronted with uncertainty in the process of scientific discovery, as exemplified, for instance, by Heisenberg’s indeterminacy principle) seem to do the same with law, i.e. they look at it as something which is immutable and strict, and strive to uncover laws of nature that are as general and certain as those which they believe humans have given themselves.

Building upon this duality, Mattei goes on to ask when exactly did it happen that the laws of humans and those of science became two separate bodies, with such ill-informed opinions of one another. At what point have humans put themselves outside of the laws of nature, and begun looking at the Earth as an object of property, subject to human power, thereby losing their sense of belonging to the rest of nature?  This point Mattei identifies in the transition from Spanish naturalist legal thought, as shaped by the school of Salamanca, and firmly anchored in distributive justice, to the notion of commutative justice championed by Northern European conceptions of the law, and particularly by Dutch jurist Grotius.

At that point – he argued – the belief became ingrained in men’s minds that we are better than nature in drafting our laws. Fast forwarding to the present day, the results of this way of thinking have brought about things such as colonialism (where occupation of new territories was justified by the principle of empty land, although that “empty land” was in fact inhabited by people, who were swiftly dismissed as savages and lesser beings), unfair extraction of resources (see the critique of international economic institutions in Plunder) and climate change through uncontrolled exploitation of the Earth’s resources.

The speech closed with the auspice for the adoption of a new conception of the law, more in syntony with the natural world, as opposed to perseverance in the building of a separated, awkward and self-referential legal infrastructure. In this, he hopes for the inclusion of ecology among the criteria for validation of the law, through a breakthrough in legal thought comparable to that brought about by the “law & economics” movement.

Of course, the brevity of this account cannot do justice to the complexiy of this scholar’s thought and research project. I wish, however, to make a few observations which were sparked in my mind by the words of Ugo Mattei.

In particular, what should “law & ecology” mean? The way I see it, Mattei calls for the internalisation – on the part of the law – of those patterns of interaction that make the environment such a robust, adaptive system. In this sense, I believe that the idea of responsiveness to feedback ought to be at the heart of a “law & ecology” movement. Mattei himself repeatedly referred to the Earth as Gaia, likely referring to the Gaia hypothesis, whereby the Earth can be seen as one massive organism that self-regulates itself in order to adjust to turbulence and to preserve itself over time. Ecosystems adapt to stimuli. So should the law (supporting this, I recall Mattei explicitly drawing a parallel between social systems and ecosystems).

In the case of the law, in particular, adaptation to stimuli could mean greater responsiveness to cross-fertilisation from other academic disciplines, as well as from other cultural and legal backgrounds. More generally, it would mean greater attention to all interests touched by legal rules and procedures (not just those that manage to get their voices heard by means of lobbying or lengthy lawyer payrolls), which include those of non-Western populations, as well as the environment.

Once we put it this way, it becomes possible to contextualise Mattei’s critique of the rule of law, so as to carve out some useful guiding principles that can inspire practical change. In fact, I doubt Mattei would go at such distance as to theorise a complete demise of social and legal systems that arguably form the core of Western “culture”. Yet, I believe that starting from the status quo, Mattei’s idea could be implemented to correct existing shortcomings and improve the way things work.

For instance, we always think that Western-style democracies are the best means to govern a society. This conviction, however, may make us deaf to the stimuli for improvement that could be drawn from systems thinking and ecology. In this perspective, in fact, asking how “democratic” democratic societies really are would take on a new, more precise, meaning in terms of how “adaptive” Western democracies really are. How are they able to respond to the feedback available from their citizens? Also, how responsive are democratic states to the needs of their non-voting stakeholders, such as their business partners, their former colonies, the developing world, the environment?

The search for an answer (as well as for an improvement of the shortcomings that would be brought to the fore by it) could – I believe – be a thrilling starting point for a “law & ecology” (or ecologic law?) movement.

Let’s clarify some of the key terms first. In the Introduction, the authors observe how “rule of law” possesses two basic meanings. On the one hand, it refers to the substantive content of a legal system that protects property rights and guarantees contractual obligations. “Rule of law”, however, equally refers to the specific formal features of a legal system which is “impersonal, abstract, and fair, because it is applied blindly to anyone in society” (Mattei and Nader: p 14).

These two meanings which make up the “rule of law ideology” are said to serve an illegal purpose whenever (1) they are used as cover-up rhetoric for the appropriation of resources; (2) they lend themselves to selective application, for the purpose of enforcing “double standards” in the imposition of restraints upon only some international or social constituencies; (3) they prevail over the value of peoples’ self-determination. Of course, this is just an approximate classification, which the authors advance in the Introduction, but which they do not recall later on in the book, as, at their core, all “illegal” uses of the rule of law share a common feature: that of favoring an unjust distribution of resources. This is, ultimately, what Mattei and Nader use as the benchmark for discerning what’s legal from what isn’t, as they deem this distinction to have blurred “in a world in which the rule of law is reduced to a dull rhetoric or to Orwellian double-speak” (Mattei and Nader: p 8)

Central to the understanding of the current uses of the “rule of law” ideology is the notion of “hegemony”, i.e. power imposed by a mixture of force and consent. In colonial times, vesting foreign domination in formal legal structure was necessary in order to lower local resistance and facilitate the extraction of resources needed to facilitate the economic development of colonial powers. Nowadays, hegemony still proceeds through the imposition of law which, however, only rarely occurs by force. More often, reforms needed to support the neo-colonial project are enacted in non-Western countries either through bargaining or through prestige.

In the former case, international institutions such as the IMF and the World Bank implement seemingly “universal” development recipes by requiring the enactment of particular legislation as a condition to issue their loans. In the latter case, instead, intellectual groups provide a coat of “scientific superiority” to Western “rule of law ideology”, thereby favoring its reception on a worldwide scale.

Mattei and Nader, however, find a fundamental flaw in both strategies. In fact, both tend to present particular reforms, involving extensive privatization and the opening up of national markets to international competition, as “technical matters”, divorcing law from the political soul which is needed to make it the actual embodiment of the will of those that are subject to it. As a consequence, Mattei and Nader argue, choices with an inherent neo-liberal political flavor end up being presented as a necessary path to growth and development, without regard to local social complexities that may justify alternative solutions. At their root, these seemingly a-distributive, a-political reforms ultimately affect the distribution of resources, by favoring their allocation to those that are more willing to pay for them:

the ‘willingness to pay’ for a given resource, the yardstick that economists use in order to see whether such a resource is actually in the hands of whoever values it most, is a function of the ‘capacity to pay’ which in turn depends on the amount of resources already available to each of the actors of the transaction. Consequently, the rich are systematically favored when policy is evaluated in terms of efficiency, which explains the enormous increase in the gap between the rich and the poor under neo-liberal globalization
Mattei and Nader: p 49

These strategies, that inevitably end up benefitting multinational corporate actors – those which have been called elsewhere “ipermercatores” – ultimately warrant the following observation:

The rule of law should lose appeal as much from being controlled by political power as by business interests. Nevertheless, only the first distortion, blamed on socialist legality and on other non-Western conceptions, is constructed as lack of the rule of law. The second distortion gets constructed by strong corporate actors as the way things should be, in the name of economic efficiency and market expansion and development.
Mattei and Nader: p. 98

In light of this, the question that Mattei and Nader seek to answer, by discussing a wealth of examples taken from colonial as well as more recent history, is whether it is possible to curb the opportunism inherent in the rule of law ideology “from within”, ie by severing only its “illegal” uses, or whether a more radical re-thinking of legality is needed.

An anatomy of plunder frames a way to understand whether plunder can be cured by the rule of law. Can the path of development be changed by political practices compatible with legality, or can change happen only outside of the current legal order, by means of revolutionary transformations in the political space?
Mattei and Nader: p 24

Eventually, Mattei and Nader seem to lean towards the latter option, after criticizing, through the presentation of a wealth of actual cases both at the international and the US level, the current ideal of the “rule of law” as supporting a pattern of reactive institutions ill-suited to reverse the existing distribution of resources, which is too heavily skewed in favor of corporations and wealthy individuals. This kind of framework, they conclude, “does not compel powerful market actors to internalize their costs” (Mattei and Nader: p 212).

Instead, the authors favor a new paradigm of the rule of law, which they call the “people’s rule of law”. One that keeps into account the position of those at the other end of environmental or social externalities and who, ultimately, pay the price of one-directional corporate expansion. For this to be possible, Mattei and Nader seem to suggest a radical departure from the manner in which “rule of law” is presently translated into actual institutional arrangements (p 215).

When it comes to protecting private property and private initiative, they advocate greater sensibility towards social justice goals, ultimately justified by the observation that

in a world of scarce resources there is a limit to private accumulation to be respected, and the rich … cannot be rich beyond that limit without being responsible for the poor being poor. Trespassing over that substantive limit amounts to plunder, regardless of whether the rule of law, by protecting the bottom line and all externalized costs, enforces such disparities.
Mattei and Nader: p 216

In order to bring about a system where these alternative substantive priorities may find satisfactory implementation, Mattei and Nader seem to advocate a change in the dominant pattern of understanding legal institutions as “facilitators” of the market economy and efficiency, towards a more openly proactive attitude that may serve to confront externalities head-on.

A good starting point, they argue, can be found in those layers of the legal framework that have been spared by “imperial rule of law” ideology, ie “local laws”. By adhering more closely to what the people regard as notions of social justice, these often overlooked sets of rules serve to provide legal redress to needs that are currently overshadowed by “reactive” institutions typical of the imperial rule of law.

After all, it is only in this way, by offering a framework for balancing private and collective interests, that the “rule of law” may translate into a truly impartial and fair legal system, where “big interests and small interests are entitled to equal protection in the eyes of the law.” (Mattei and Nader: p 209).

The road to this visionary change, however, is not an easy one, and is recognized as having to overcome a whole range of discursive practices aimed at legitimizing the dominant conception of the “rule of law”:

If more widely recognized for what it is, plunder may become the target of public opinion and legal challenges. Lifting plunder from below the radar screen is a potential mobilizing force, although there is no guarantee without persistence, networking, imagination, and recognition of the difficulties inherent in deconstructing imperial rule of law, in some places still considered to be a social good.
Mattei and Nader: p 214

In this call for grassroots activism by Mattei and Nader, this book clearly represents an outstanding and successful attempt at unveiling many of the contradictions of the dominant conception of the “rule of law”, while advocating greater attention and respect for local institutional arrangements, rightfully seen as expressions of important ideas of social justice which should not be unquestioningly sacrificed on the altar of corporate efficiency.

I have just posted the first part of the movie, all the rest of the documentary is in Youtube. The documentary is in English, but it has Italian subtitles.

To give you an idea of how IMF and World Bank loans work, imagine that you need a loan. Imagine further that there is only one person that can give you this loan (because, say, you’re really desperate for money), and that that person requires a detailed breakdown of all your current expenses and subsequently asks you, as a condition to issue the loan, that your future expenses fit more closely with another breakdown proposed by the lender (which, say, involves much less spending on food, health or education). In exchange for the money, in other words, you lose the freedom to do with it whatever you thought was best for yourself , and become forced to use it for what the lender thinks (or says to think) is best for you.

The Muslim banking system is organized in a slightly different way. Muslim savers have two possibilities of investing their money: (i) safe saving accounts and (ii) profit-sharing bank accounts. In the latter one, clients can either gain or lose their savings in case of profit or loss of the bank. Moreover, all contracts are based on the project results. Meaning that investors can obtain a gain just in case the bank finances good investments. The risk for profit-sharing bank account is that clients do not have any control and authority on the bank’s investment. In case of loss of the bank, they lose all their savings.

Moreover, Muslim banks issue bond called Sukuk. Unlike our bonds, the gain of a sukuk is linked to the profit of a project. While, the bond gain depends on his future cash flow, the Sukuk ‘s holder has an ownership right of a product issued with the Sukuk. Thus, Sukuk’s issue is very similar to a securitization process. In fact, the bank or a financial institution creates a Special purpose vehicle, which is a legal entity (subsidiary company) that receives assets (money) and, as a consequence, it issues new Sukuk notes. All money collected finance bank’s projects. Hence, holders of the issued Sukuk become the pro rata owners of investments. So, western bonds and Sukuk do not show big differences, a part from the fact that the latter has a gain depending on the bank investment.

In conclusion, Muslim banks should not finance projects concerning the production of alcoholic beverage, swine breeding, illegal weapons trade, night club management and so on. Anyway, it is the Shari’a board of the bank that has to define which investment to finance. As a matter of fact, they should evaluate every business in order to take a right decision.

I would like to point out that the development of the Muslim finance, such as Sukuk, could become a good tool so as to finance public projects in other countries. For example, Italy could issue Sukuk in order to attract new investors in Muslim countries with great amount of savings and, as a consequence, acquire money for our public investments. Secondly, Muslim financial tools could help our companies to reinforce their partnership with Muslim businesses, increasing profits of both.

The same thought is outlined by Andrew Keen in his book “The cult of the amateur”.

The revolution of the Web 2.0 is killing our culture and destroying our economy.
Andrew Keen

We are the consumers of the mainstream culture. The larger use of the Web allows a democratization of the society. Keen points out that the revolution of the Web 2.0 has caused an impoverishment of culture and the unreliability of news. The person of the year 2006 for the Time was: YOU. In the digital era the amateur has the power of taking part in building Wikipedia, of saying his or her opinion on blogs and of giving reviews of books and comments of facts. It does not matter who is behind the PC, everyone with a Internet connection has such power.

Lemann of the New Yorker wrote that society creates the authority for the production and distribution of knowledge, news and ideas. Why do they do so? Because when an article is written by an author of the Economist or Financial Times, we are aware that such article has been subject to a proper research and  reviewed by a team of journalists. But, today we can read news, opinions on blogs, and web sites. Nobody is able to guarantee the reliability. In other words, the lack of filters creates an ocean of mud where false and improper news find their raison d’être. It is easy for misinformation and rumors to proliferate in cyberspace. For instance, Wikipedia attracts more users than the Encyclopedia Brittanica (which relies upon experts and scholars). For Keen, the web 2.0 distrusts the talent and proclaims the mediocrity.

Furthermore, Keen criticizes the print on demand and the vanity press such as Lulu, but at the same time he praises projects such as the Citizedium. Moreover, Keen explains that the free online press allowing to be updated and read articles is damaging the newspapers all over the world. This is why Rupert Murdoch has stated that the Sunday Times is going to be paid for its online content. It is still unclear whether the site will charge a fee for each article or a subscription system. However, what is clear is that the Sunday Times plan can be a solution for protecting the even weaker newspapers.

Workers face a dual threat from the global financial crisis. First, we are exposed to the immediate economic and social costs of the recession itself: lost jobs, lost incomes, lost homes, and in many cases lost lives. Second, and more permanently, this moment could actually lead to structural changes that further damage workers and their organizations. Far from conceding that there was anything wrong with the recipe they have forced down our throats, employers and pro-business governments will seize on the fear, confusion, and divisions caused by the crisis to push for still more market-oriented measures.

Indeed, the Canadian author and anti-globalization activist Naomi Klein explains in her latest book, The Shock Doctrine, that ruling elites regularly take advantage of moments of widespread fear and confusion, arising at moments of economic, social, or even natural disasters, to force painful changes that they were preparing for years – but that the masses of people would not tolerate under “normal” circumstances. The present global economic crisis will surely provide another test case for shock doctrine strategies. The best way to inoculate ourselves against shock doctrine is to push back with our own analysis: our own explanation of what happened, why it happened, what can be done to both insulate working and poor people from its effects, and how to prevent it from happening again.

In my view, economic literacy and political-economy training must be a core element of the organizing and movement-building efforts of trade unions and other progressive forces. We have to equip our supporters to identify the true culprits, resist false solutions, and fight confidently for better alternatives, and learning more about economics – from a worker’s perspective – is a crucial part of those preparations.

In short, the labor and left movements need their own “story line” about the economic crisis, its causes, and consequences. We need to prepare our members and supporters to reject claims that workers, unions, and public programs are somehow responsible for the meltdown of private finance. Of course, working and poor people are the victims of this crisis, not its cause, and tightening our belts will do nothing to solve it. That’s why it’s so important to explain exactly what did cause this crisis – the same factors that will cause the next one, too, if we don’t change the rules of the game. It wasn’t a random, negative event. It was the predictable, preventable outcome of running the world economy in a particular way, according to a particular set of rules. And unless and until the rules of the game are changed, we will continue to experience chaos like this every few years. (In fact, thanks to globalization and the lightning-quick technology of the financial sector, the crises are coming faster than ever – and deeper, too.)

Without understanding how this downturn emerged from features and forces that are “hard-wired” into the DNA of deregulated, financialized capitalism, people will be tempted to see the crisis as a “random,” negative event – an unfortunate but unavoidable challenge that everyone in society must help to overcome. At best, this leads to the conclusion that we just need to hunker down and wait out the crisis, hoping that the financial bubble eventually reinflates and things get better. At worst it underpins a willingness to accept the sacrifices and concessions that are being demanded by employers and governments – accepting the false logic that “we’re all in this together.”

In the coming tough years, therefore, the labor movement will naturally fight hard to protect workers against lay-offs, cutbacks, concessions, and the many other consequences of the recession. And all progressive forces will campaign in the political arena against regressive shifts in social and economic policies, and cutbacks in public programs, that we know will be imposed by deficit-laden governments. A crucial part of arming ourselves for those battles is ensuring that our members and supporters understand why this crisis occurred, and why it will happen again, unless we change the whole set of neoliberal economic and social policies we’ve been living under for the last three decades.

This recession was not a random event. It wasn’t inevitable. In fact, it was both predictable and preventable. It was produced by the mechanisms of private profit (especially as practiced in the financial, or “paper”, economy); irresponsible credit practices; and a profound failure of government regulation. Those same three key ingredients (greed, loose credit, and lack of oversight) will cause the next conflagration, if our only response to the collapse of this bubble is to sit back and hope that it re-inflates – as the screws are tightened on working people all the while. By building a stronger understanding of how capitalism actually works, through more extensive economic literacy and political-economy training initiatives in our own ranks, our movements can better resist the attacks that are coming, and be ready to fight for the fundamental change in direction that we all need.