What Role for Global Finance in a Course on International Trade Law?

David Singh Grewal –

Most years, I teach an introductory course on International Trade Law. And every year since I began I’ve included a session on the international financial architecture, on the view that this architecture is intimately bound up with the functioning of the trade regime.

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I begin the course predictably enough with a series of sessions on the history and political economy of international trade before we get into what I call the “guts of the GATT.” Here, we study the key articles of the General Agreement on Tariffs and Trade (GATT) and the main disputes that have arisen concerning their interpretation, both before and after the establishment of the World Trade Organization (WTO). Any course on international trade law would have to introduce core elements such as “most favored nation” status (Art. I), “national treatment” (Art. III), key exceptions (for example, as elaborated in Article XX), and the main “annex agreements” of the WTO (such as the TRIPS agreement, which Amy Kapczynski has discussed on this blog), as well as the various remedies and safeguards available to states facing disruptions from international trade. But toward the end of the course, I bring my friend and colleague, Robert Hockett, to discuss the international financial architecture underpinning economic globalization as a whole.

I suspect few international trade law courses address international finance as an integral part of an introduction to trade liberalization. Given the evolution of international economic law, this choice is probably unsurprising. Neither in the treaty text of the GATT (nor in the other “annex agreements” that make up the WTO) is financial architecture explicitly regulated. By contrast with international trade law, international financial law is elaborated through a different set of governing texts, institutions, and international monetary practices—prominently, the IMF Articles of Agreement, the IMF itself, and the practices that have developed among affiliated national central banks and finance ministries. Trade law scholars may be understandably wary of bringing such complex or seemingly extraneous considerations into a course that will already be full enough.

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The dark side of the ‘data-driven’

Frank Pasquale –

In her fascinating new book Automating Inequality, Virginia Eubanks recounts that the first “big data” set in the United States “was the Eugenics Records Office in Cold Spring Harbor. It was the public arm of the eugenics movement.” While the systematic collection of data has underpinned many important initiatives, it also has a dark side. Expect to see that dark side re-emerge with a vengeance in the next few years, as many American states intensify their surveillance of already disadvantaged groups.

Are there forms of knowledge that the state—or even university researchers—should not aspire to attain? Privacy law is meant to empower us with zones of thought and experience that no one can access without permission. Another branch of law, governing human subjects research, ensures that experimenters obtain consent before gathering data about individuals. As a member of the Council on Big Data, Ethics, and Society, I have thought and written about the types of data corporations and states should be able to gather about individuals, and the power relationships that data gathering entailed.benthams-panopticon-copy.jpg

Like disputes over free expression, the politics of data gathering for social science research is becoming a fraught area for progressives. For some, knowledge is an intrinsic good. Research of all stripes is a way of better understanding ourselves and our world. But there is another, more Foucauldian perspective: Where does the burden of scrutiny fall? What complicity does a social scientist have with the regime that provides data? The construction of what counts as “success” or “failure” in a given study is a highly political decision. A particular focus on some data or metrics comes at the cost of an exclusion or devaluation of others (akin to the “jurispathic” judgments Robert Cover recognized). All these questions will be critical as America’s laboratories (or meth labs) of democracy concoct innovative ways of denying health care to the poor, and ask social scientists to study “what works” in health policy.

Evaluating the Costs of Program Evaluation

The Trump Administration recently announced an intent to grant states permission to condition Medicaid benefits on work requirements (via Section 1115 of the Social Security Act). Former CMS Administrator Andy Slavitt immediately condemned the move. Activists were even more outraged. Journalists chronicled the many ways the work requirements were likely to worsen health outcomes, while burdening the vulnerable with paperwork and bureaucratic hurdles. New state “flexibility” will translate into cruel cutbacks for the disabled (who now may be denied transportation benefits).   Continue reading

Tax policy is human rights policy

Zak Manfredi – 

“[T]ax policy is…human rights policy.”

– Philip Alston, UN Special Rapporteur on Extreme Poverty and Human Rights

On the eve of December 1, 2017—as members of the United States Senate prepared for a late night of political contestation—Senator Bernie Sanders made the Republican tax bill a human rights issue. Senator Sanders drew attention to UN Special Rapporteur Philip Alston’s then-ongoing investigation into how “extreme poverty” implicates human rights in the United States. Alston later met with Senator Sanders, and, after concluding his visit, castigated the Republican tax legislation for its potential to exacerbate already historic levels of economic inequality and extreme poverty. In the wake of the finalization of the tax lawone of the greatest tax transfers of wealth to the rich in modern times—numerous activists also decried the human rights implications of radical economic disparities. Alston’s trip to the United States might nevertheless have seemed controversial to other observers precisely because it treated extreme economic inequality and poverty as human rights concerns. As a formal matter, the United States has never ratified the International Covenant on Economic, Social and Cultural Rights (ICESCR), and even its assent to the International Covenant on Civil and Political Rights (ICCPR) consisted of many formal reservations that render the treaty almost entirely non-justiciable in US courts. More generally, as Alston’s preliminary report noted, legal institutions in the US have been notoriously reluctant to apply the language of “rights” to address social and economic justice claims.

6720.jpgFor contemporary scholars and activists invested in challenging extreme inequality and concentrations of corporate power, however, human rights may prove controversial for a different reason: the long-shadow of the left critique of rights. Since at least Karl Marx’s critique of the French Declaration of the Rights of Man and Citizen, many left thinkers have been suspicious of the conceptual foundation and practical implications of human rights.  For Marx, the Rights of Man helped underwrite a regime of private property law that stifled “genuine human emancipation,” while simultaneously absolving the state from addressing social and economic domination in the sphere of “civil society.” On this account, just as the state recognizes the formal equality of all persons, it simultaneously abdicates responsibility for private forms of discrimination and social domination—rights to hold private property offer no comfort to those without means to acquire food, shelter, or housing. More generally, leftists have long observed that a narrow focus on formal equality obscures and ratifies substantive inequalities. Indeed, many subsequent critics—including notably early writings of the Critical Legal Studies Movement—contend that the promulgation of legal rights can exacerbate conditions of oppression. Contemporary scholars note how rights claims are invoked to prevent the redistributive taxation of privately held capital, to protect the rights of corporate entities to “speak” as in Citizen’s United, and to weaken the power of labor unions with “right to work” laws.

Today, thinkers have updated these critiques to consider how human rights law can function as a form of “neoliberal governance”—these critics stress that complying with human rights norms often requires states to make certain “reforms” that align with political and economic agendas that favor “free market” principles. As Naomi Klein observes, the neoliberal economic programs championed by Reagan and Thatcher spread across the globe during the 1970s and 80s at precisely the same time when international human rights NGOs also flourished. Jessica Whyte’s astute analysis argues that even the social and economic human rights frameworks of the twentieth century were designed to be “flexible” enough to allow for the implementation of new forms of neoliberal economic governance. While I cannot do full justice to these critiques in the space here, it is important to note that they ultimately rest on a set of concerns about the kind of normative vision of the “human” that human rights laws underwrite. Anthropologist Talal Asad, for one, suggested that “the historical convergence of human rights and neoliberalism may not be purely accidental,” since human rights notions of “self-ownership” and “self-preservation” align with neoliberal economics’ understanding of human beings as pieces of “human capital” always striving towards greater self-augmentation. Consider, for instance, whether a theory of human rights imagines human being as, in Marx’s critique, “egoistic individuals” preoccupied with holding and consuming private property, or in contemporary terms, as entrepreneurial creatures always seeking to maximize their individual capital and credit-worthiness; when such a theory of human rights is implemented in practice, critics worry that the legal protections it offers will focus primarily on creation of “free markets” and justify policies that intensify social and economic stratification. Perhaps more distressingly, left critics of human rights also worry that particular rights regimes encourage and produce different self-conception among rights holders—if a human right to private property or wealth accumulation is enshrined in law, it helps establish a framework for how people evaluate their own, and each others, life projects. Continue reading

The Law and Political Economy of the “Future of Work”

Brishen Rogers

How will new advanced information technologies impact work? This is a major focus of public debate right now, driven by widespread fears that automation will soon leave tens of millions unemployed. But debate so far has tended to neglect the relationship among technological innovation, political economy, and the law of work. This is a major omission, since the automation of particular tasks doesn’t just happen. Rather, it takes place under laws that are subject to democratic oversight and revision – and with different laws, we could encourage a radically different path of technological development, one in which workers have a real voice, and in which they share consistently in technology-driven productivity gains.

Take two upcoming transformations that we’re all familiar with: the automation of some kinds of driving and some kinds of fast-food work. Within a few years, truckers, delivery drivers, and taxi drivers may be able to use an autonomous mode consistently on highways. Later on, they may be able to do so on major suburban and rural streets. But given the wide variation in road quality, humans will likely need to pilot vehicles in residential areas and on city streets for some time to come. And given the wide variation in building structures that delivery robots would need to navigate, humans will almost certainly need to complete deliveries in many instances.

Similarly, in fast food, ordering kiosks are already displacing cashiers, but not in their entirety. Some customers are unable to use the kiosks, including the 70% of McDonalds customers who use the drive-through. Sometimes the kiosks will break down, and sometimes orders won’t be processed appropriately, and thus workers will need to step in. Food preparation may also be automated in part, but given the fine motor control and tacit knowledge required for cooking, it has proven resistant to full automation. Like the transformation in driving, then, this change will likely be gradual and iterative. Technology will augment human capabilities rather than replacing humans wholesale, and workers, companies, and consumers will need to adapt over time.

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Understanding the Political Economy of Academia Through the Tax Bills

Alyssa Battistoni

Paying for corporate tax cuts with revenue raised from grad students and universities sounds like a parody of a Republican tax bill. Unfortunately–like many seeming parodies these days–it was all too real. The tax bill that originally passed the House would have taxed both graduate student tuition waivers and university endowments above a certain level, measured per-student.

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The tax on tuition relief wasn’t in the version of the bill that passed the Senate, and has been dropped from the bill entirely in the reconciliation process—thanks largely to grad students and their unions, who led a wave of protests against the provision. The endowment tax, however, remains intact despite the best lobbying efforts of university administrators.

Understanding the various versions of the bill in relation to both grad students and endowments provides a valuable window into the political economy of contemporary academia. In particular, Congressional Republicans have unintentionally revealed the ways in which the labels of “school” and “student” are only partial descriptors of contemporary universities and the people who study at them.

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Why Civil Disobedience, and Why Now?

Amy Kapczynski – 

On December 5th, I joined hundreds of people from 32 states in Washington D.C to protest the Republican tax bill.  We packed the hallways outside of the offices of seven key members of Congress, and mic-checked one another so that people’s stories about the bill’s devastating consequences could be heard.   A group of us – around 130 in total – refused to leave when the Capitol police arrived, and were arrested.

It was in many ways not an unusual act – the next day, more than 200 people were arrested in D.C. demanding a Clean Dream Act.  I’m heading back to D.C. today for another protest, joining hundreds more in a last ditch effort to head off the tax bill.*

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Many people have thanked me for what I did two weeks ago.  Perhaps it’s because I’m a law professor.  Or perhaps it’s because so many of us are wondering what more we can – or must – do to save our democracy and bring about a more equal society.

Confrontational protest and civil disobedience are an indispensable part of the answer. Here are five thoughts on why I decided to participate in the protest, and what it means to me, and what I hope it might mean to some of you.   Continue reading

From Territorial to Functional Sovereignty: The Case of Amazon

Frank Pasquale

Economists tend to characterize the scope of regulation as a simple matter of expanding or contracting state power. But a political economy perspective emphasizes that social relations abhor a power vacuum. When state authority contracts, private parties fill the gap. That power can feel just as oppressive, and have effects just as pervasive, as garden variety administrative agency enforcement of civil law. As Robert Lee Hale stated, “There is government whenever one person or group can tell others what they must do and when those others have to obey or suffer a penalty.”

We are familiar with that power in employer-employee relationships, or when a massive firm extracts concessions from suppliers. But what about when a firm presumes to exercise juridical power, not as a party to a conflict, but the authority deciding it? I worry that such scenarios will become all the more common as massive digital platforms exercise more power over our commercial lives.

A few weeks ago, the Friedrich Ebert Stiftung (a think tank affiliated with the Social Democratic Party in Germany) invited me to speak at their Conference on Digital Capitalism. As European authorities develop long-term plans to address the rise of powerful platforms, they want to know: What is new, or particularly challenging, in digital capitalism?

My answer focused on the identity and aspirations of major digital firms. They are no longer market participants. Rather, in their fields, they are market makers, able to exert regulatory control over the terms on which others can sell goods and services. Moreover, they aspire to displace more government roles over time, replacing the logic of territorial sovereignty with functional sovereignty. In functional arenas from room-letting to transportation to commerce, persons will be increasingly subject to corporate, rather than democratic, control. Continue reading

The Epicycles of Health Care Market Design: Time for a Paradigm Shift in Health Policy

Frank Pasquale – 

Back in June, I attended the annual conference of health law professors held by the ASLME. This conference is a real intellectual feast for anyone interested in political economy. National experts describe the latest developments in the Affordable Care Act’s exchange marketplaces. Antitrust scholars consider the proper balance between delivery system integration and competition in accountable care organizations. The role of the state in structuring economic activity is critical to nearly every panel on insurance markets, licensure, and access to care.

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But there was very little buzz about what has become one of the hottest topics in progressive health policy in 2017: state efforts to develop single-payer health care systems or public options (like a Medicaid buy-in). Politicians and activists appear to be leading this charge, pushing proposals in California, Nevada, and New York. They have generated a lot of enthusiasm, and they will get more attention if the GOP manages to repeal the individual mandate and further damage insurance markets. Even self-described neoliberal Matt Yglesias has called on experts to further develop ideas here. And yet the academy seems slow off the mark. What explains this tardiness?

I think part of the problem is the sheer complexity—and thus intellectual challenge—of market design in a neoliberal era. Sarah Kliff recently eulogized the great health care economist Uwe Reinhardt by memorializing the “joy he always took in trying to understand the maddening, baffling inner-workings of the American health care system.” “Joy” seems like an odd emotion to express, upon encountering the complexities of ERISA, MedPAC, MACRA, MIPS, and the rest of the health care finance alphabet soup. But once you teach in these areas, the incrementalism of the well-informed is hard to shake. Continue reading

Your Money or Your Life?

Amy Kapczynski – 

High drug prices are a major problem in the United States. In the Washington Post today, Aaron Kesselheim and I have an op-ed about what President Trump could do – immediately – to lower drug prices, if he had any intention of following through on all of those campaign promises and tweets. 649816939_1280x720(We also explain why his nomination of Alex Azar to head HHS is a clear sign that he will do none of this.)

Here I wanted to say more about the stakes of the drug pricing problem, and about one option we describe – a little known patent “eminent domain” power that could be a powerful tool to lower drug prices.

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How the Tax Bills Target Good Government, Workers, and Young People

Anne Alstott –

If the details of the House and Senate tax bills under consideration in Washington make your eyes glaze over, it’s because they’re supposed to.  The tax-writers, as they often do, are using the technicalities of the tax law to mask major changes in national economic policy.  It’s fairly well-known that both bills are stacked in favor of the wealthy.  But the details of the tax bills (please don’t call them “tax reform”) contain a neoliberal agenda that, if enacted, will punish good governance, reward capital over labor, and favor the old over the young.

The United States, perhaps more than any other developed country, shapes its economy via the tax law.  Neoliberals often say that the United States – unlike socialist Europe – has no government-sponsored industrial policy. And it is true that (for the most part) we don’t have big spending programs that subsidize business or  have big bureaucracies that manage the economy. Instead, our politicians hide economic and social policy in the tax code and leave administration to the IRS. In 2015, for instance, the United States devoted $1.2 trillion to tax-based subsidies – an amount that exceeded federal discretionary spending in that year.

Paul Ryan

So, even as politicians rail publicly against tax loopholes, both parties use the tax code to reward favored industries and citizens. The current tax code, for instance, favors owners of capital, wealthy dynasties, highly-paid workers, and industries including tech and pharmaceuticals as well as finance, insurance, and real estate.

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