October 31, 2013
by ar254@cornell.edu
2 Comments

Abe, Reagan, and the Three Arrows

There has been lots of talk about the “three arrows” of Abe’s economic policy. It turns out the term is something of an American import.

A few weeks ago I heard Prime Minister Abe give a speech on foreign policy at the Hudson Institute in New York.  He mentioned something surprising in passing: he had borrowed the term from a speech he heard Ronald Reagan deliver to the Diet in 1983.  Here is the text of the speech:

http://www.reagan.utexas.edu/archives/speeches/1983/111183a.htm

But guess what? Reagan was talking not about economic issues, but about national security.  What Reagan said, was the following:

These threats to peace and freedom underscore the importance of closer cooperation among all nations. You have an old proverb that says, “A single arrow is easily broken, but not three in a bunch.” The stronger the dedication of Japan, the United States, and our allies to peace through strength, the greater our contributions to building a more secure future will be. The U.S.-Japan Treaty of Mutual Cooperation and Security must continue to serve us as the bedrock of our security relationship. Japan will not have to bear the burden of defending freedom alone. America is your partner. We will bear that burden together.

So maybe economic issues and national security issues have an even deeper connection than we might think.

August 9, 2013
by ecp96@cornell.edu
3 Comments

How structured are markets?

On June 4th, I gave a talk to a broad group of scholars at the University of Melbourne Business School about my book Collateral Knowledge. I’m very grateful to those who attended and especially to those who asked really thoughtful questions about my work. Here’s an excerpt of an exchange I had with a sociologist who participated:

Sociologist: I think there is a thickness to the society in which [market participants] live, if you want to call it a society. They may not have  personal links with each other but they all are schooled in the same economic texts by and large. They attend the same  conferences, they work for the same big four, big six or however many there are now. They get socialized through corporate  training programs, through conferences and all that. So there is a thickness to a shared knowledge that they have and they recreate  that world through shared knowledge and shared practices.

 AR: Right, but that’s not what we normally think of as thickness. We normally mean they went to the same prep schools, they’re  married to each other’s cousins, that there’s all this social stuff there that’s really what’s motivating them. But actually you’re right: it’s training manuals, it’s conferences, it’s education in certain texts.

 Sociologist: Of course, but this is actually very structural. It’s not just mundane practices, they are structurally informed mundane practices, I think.

 AR: What do you mean by that?

 Sociologist:  Well, there’s a structure that says this is what the market should be and this is what the market practices are. There are some  practices that are deemed acceptable by the market through this shared common knowledge. Then they adapt their practices to this shared knowledge. So the shared knowledge might be at a very personal level very mundane, very personal, but they’re  informed by these structures that they have been socialized into. So there’s this interconnection between these broader structures  of knowledge and practice that translates into individual practices.

 AR: I remember there was a week when I decided I was going to experiment, that I would ask people about netting. I asked one informant: what do you think about the fact that if you’re a labor union you don’t really get a seat at the table in this deal. I was  looked at like I had six heads. It wasn’t a bad question it was just like I had said the sky is purple today. It was a nonsensical  question. So there’s a situation where – it’s what you’re saying – there are certain things that are inconceivable which relate to  larger structures.

I did a lot of case studies of how those manuals and documents get produced. Over 10 years I worked on making a lot of them. I  never heard anybody say now this is what a market looks like, now I should produce a document that is in line with what an ideal  market should be. What I’ve heard people say is well how do they do it in London and can somebody get a copy of the document from Shanghai and let’s compare those. Could somebody translate it? We really should use professor so and so’s theory because he  was my professor, so could we just copy and paste some language. 

I mean it looks very different from deep structural thinking when you’re in the midst of it, but you’re right, its effects are certainly connected.

The question for me remains how we can represent the structural constitution and effects of markets while still being ethnographically responsive to even the most unexpected representations and commitments financial market actors experience in their everyday lives.

July 31, 2013
by ecp96@cornell.edu
1 Comment

Retooling: Techniques for an Uncertain World

Last night, Hiro Miyazaki and I finished the first draft of our new book, Retooling: Techniques for an Uncertain World. Our co-author, labor economist Yuji Genda, plans to work on revisions this month. The book is scheduled for publication in Japanese by NTT press in a few months. The book pulls together some of the key lessons from Hiro’s fieldwork among Japanese traders and my fieldwork among lawyers in the financial markets with insights from Hope Studies as pioneered by Yuji Genda. We hope to work on an English language version soon.

The central question of the book is, What makes a person a great expert? What is it like to be an expert at this moment of profound uncertainty? What are the challenges and the possibilities?

Over the last fifteen years we have been studying various categories of experts in the financial markets. We argue that the main feature of expert work is the necessity to make decisions in conditions of profound uncertainty. In other words, an expert is a person who confronts uncertainty at every turn and who has to decide what to do, constantly.  This was always true, but it is even more true at this time of market volatility, environmental crisis, and geopolitical instability.

We have found that the best of experts across various fields are constantly retooling–they almost can’t stop themselves from tinkering with their expert tools (whether legal theories, statistical tools for market prediction, or bureaucratic information gathering techniques).  Often, these truly exceptional experts do not get much support, at least at first, from their own institutions for this retooling work, and so their greatest achievements often begin as something they call “play”–something they do in their own time, on the side, collaboratively with other exceptional experts in their own fields and in other fields.

Right now many of these experts–we academics included–are facing something of a crisis.  The old theories, the standard ways of doing things, the old divisions among fields no longer seem up to the task of current problems.  For example, central bankers used to think they knew how to manage the economy, but they have lost any such confidence.  The public has less faith than ever in experts of all kinds, from financial professionals to lawyers to doctors to university researchers.  We have plenty of doubts about ourselves too.

So how can we live with the unknowability all around us? How can we face a future that is impossible to control? There is no expert manual.  Yet we have no choice but to create expert techniques to live with it–no choice but to retool.

So we would like to hear from you:

-What are the major kinds of uncertainty in your field at the moment, challenges you were not necessarily trained to deal with in your formal education, challenges that seem to lead to the demise of many able members of your profession? How, in other words, is your kind of expertise facing limits? How are these forms of uncertainty linked to current events in your country or in the world at large?

-How do these uncertainties impact on your daily work, from how you choose to manage your time, to how you communicate with various constituencies for your work inside and outside your own institution, to how you solve problems or manage projects? Concrete examples from your own work or the work of others in your field would be fantastic.

-How are you confronting these challenges to your own expertise? What other kinds of creative responses have you observed from others? What ideas do you have about how you or others might address these challenges?

July 30, 2013
by ecp96@cornell.edu
3 Comments

Four new reviews of Collateral Knowledge

Four new reviews of Collateral Knowledge were recently published in Chinese. You can read the reviews online here:

http://newspaper.jcrb.com/html/2013-07/11/content_136113.htm

http://www.legaldaily.com.cn/Frontier_of_law/content/2013-06/14/content_4554343.htm?node=33425

http://fuwu.12371.cn/2013/07/25/ARTI1374730377685901.shtml

http://item.jd.com/11238951.html

July 26, 2013
by ar254@cornell.edu
1 Comment

Defending Japan’s Peace Constitution

Last week, I had the opportunity to attend a remarkable meeting of legal experts and members of the general public opposed to Prime Minister Abe’s stated goal of revising Japan’s constitution. The meeting, at Doshisha University, was organized by feminist political theorist Yayo Okano on behalf of the Article 96 Society, a group of prominent legal scholars and political theorists opposed to constitutional revision. Article 96 is the constitutional section that defines the procedures for constitutional amendment.

The issue is Article 9, which states that  Japan forever renounces war as a  method of conflict resolution. Here is the  text:

ARTICLE 9. Aspiring sincerely to an  international peace based on justice and  order, the Japanese people forever  renounce war as a sovereign right of the  nation and the threat or use of force as  means of settling international disputes.  (2) To accomplish the aim of the  preceding paragraph, land, sea, and air  forces, as well as other war potential,  will never be maintained. The right of  belligerency of the state will not be  recognized.

Nationalist Prime Minister Abe wants to revise Article 9 so that Japan can build a larger standing army and become involved in foreign conflicts, in response to threats from China in particular.

The meeting involved presentations by eight prominent academics and lawyers, each of whom made a different kind of case against constitutional revision. What was so moving about this event however was the audience. Over 500 people were in attendance–virtually every seat in Doshisha University’s largest auditorium was taken and people stood in the staircases and aisles to hear what the speakers had to say. These members of the public moreover were mainly retirees, not young people. Many were very elderly people old enough to remember the horrors of war. They are adamantly opposed to Japan returning to its nationalist past.

The speakers talked about all kinds of dimensions of the issue–from the importance of the Peace Constitution, to Japan’s national image in Asia, to how nationalist arguments that the constitution was imposed on Japan by the American occupation forces and therefore lacks legitimacy is a red herring. Interestingly, two speakers out of eight specifically addressed constitutional reform as a feminist issue. One of these emphasized the importance of peace as a feminist cause. The other emphasized that if you wish to reform something about the constitution, there are many aspects of women’s constitutional rights that still have not been enforced or made into reality. Why not focus on this sort of reform rather than militarism, she argued.

The lead speaker for the evening, the constitutional law professor Youichi Higuchi of Sophia University, spoke eloquently and passionately about how the real point of all this debate is about the fact that the constitution gives the people power. The government wants to take this power away from you, he said. Don’t be fooled by other side issues. This is about your power. No matter how you got this power (i.e., what the drafting process was), the constitutional reality is that you now have it. And the government wants to take it away.

Professor Higuchi has a point here. Prime Minister Abe has stated clearly that his objective is not just to revise Article 9, but to revise Article 96 to make it easier for his majority party to revise the constitution at will. At the moment, Article 96 requires that a super-majority of two thirds of each house of the Diet approve the amendment followed by at least 51% of the voters in a general plebescite. Prime Minister Abe would like to eliminate the need for a super-majority vote since his party easily holds a majority of seats in both houses.

Having recently heard a brilliant series of lectures by constitutional lawyer Kim Scheppele (Princeton  University) about how Hungary moved from  democracy  to fascism through the skilled deployment  of just this sort  of legislative politics, I think there is  real reason to be  concerned about the consequences of  any revision to  Article 96. This is especially true given Abe’s nationalist politics, his family’s fascist history, and his troubling statements on issues such as the comfort women problem.  The experience in  Hungary deserves careful analysis in  Japan: in  Hungary, a leader with similar political  leanings as  Abe managed to gain control of both houses  through a legitimate democratic election. Then he squeaked  by with a victory on the same revision to the procedures for constitutional amendment Abe hopes to promulgate, almost while no one was looking. The  next step was easy for him: using his majority in  parliament to eliminate virtually all procedures for judicial review of government decisions, and to severely curtail individual rights. The result is  fascism, sadly, created through perfectly democratic  means.

So I was deeply impressed by the courage and eloquence of these Japanese law professors and members of the public. I hope that legal scholars like myself can support them in any way possible. I also wonder if in Hungary, and now Japan, there is not a cautionary example for the United States as well about the ease with which democracy slips into something far more sinister.

June 25, 2013
by Annelise Riles
1 Comment

Managing Regulatory Arbitrage: An Alternative to Harmonization

How can the Conflict of Laws achieve for international financial regulation what international agreements have so far failed to achieve? A short summary of my forthcoming paper in the Cornell International Law Journal on the subject, in Risk&Regulation Magazine, makes the case.

 

Managing Regulatory Arbitrage: an alternative to harmonization (.pdf)