Transnational Connections: the US-China Labor Exchange

On January 23^rd 2010 US China labor exchange met for the 6^th time. The China Labor Exchange group has been meeting for 2 ½ years now. It is a meeting between some US labor union members and individuals with close ties to the Chinese labor movement. But despite the absence of official Chinese union representatives, these meetings present an important opportunity for exchange and mutual learning about the labor movement in the US and China, as well as for discussing potentials for future collaboration. This is of particular importance in a context, where high level union talks between the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations) and the ACFTU (All-China Federation of Trade Unions) are not yet taking place.

What do Chinese and American workers have in common? Where are potentials for cooperation? Before summarizing the meeting, I first give some background information about the US labor movement and China to make clear why such a meeting is rather unusual for the US context.

Extending Private Copying Levies: Approaching a Culture Flat-rate?

While around the globe copyright critics advocate the adoption of Creative Commons licenses as a way for enabling remix and non-commercial file-sharing, in Europe a second solution is debated more and more intensively: a so-called “culture flat rate”. Internet users should be mandated to pay a fixed amount per month and in return be allowed to non-commercially remix and share copyrighted files. Of course, differently to the private regulation approach of Creative Commons, such a “culture tax” would require legislative changes.

Technically, most countries already have a minor form of such a culture tax called private copying levies: a special tax or levy is charged on purchases of recordable media – in some cases also on recording or copying devices – and then redistributed to rights holders via copyright collectives. Regularly copying levies are justified as being a compensation for limitations and exceptions to copyright such as the right to make a private copy (see, for example, the US Audio Home Recording Act).

Compared to other aspects of copyright regulation, which are increasingly harmonized across jurisdictions in the course of international treaties such as the WTO’s TRIPS agreement, copying levies still vary significantly from country to country – both in terms of the types of devices and recordable media covered and in terms of levy levels. And these differences are far from being diminished, as recent developments in the neighbouring countries Germany and Austria illustrate: while in Germany the Association of Computer Manufacturers and a consortium of different collecting societies agreed on a new copying levy on any computer with a recording device (German press release), the Austrian supreme court of justice ruled against a similar levy (Austrian supreme court ruling, German).

In his contribution (PDF) to last year’s Free Culture Research Workshop at Harvard’s Berkman Center, the German media sociologist and activist Volker Grassmuck, argues in favor of a “Culture Flat-Rate to end copyright extremism and bring information freedom and remuneration for authors to the Internet.” He describes the model as follows:

Pamela Samuelson on the Future of Books in Cyberspace

Books are the most traditional of all copyrightable works. Copyright as a legal institution was developed particularly for protecting authors and publishers of books. Over the years, copyrights have been granted to creators of all kinds of works, ranging from music over films to software. While most of these other types of copyrighted works are strongly affected by new forms of content production and distribution in the course of the so-called “digital revolution”, books seem to have been relatively immune to the very same technological changes – at least until Google started with the mass digitization of books and Amazon launched its increasingly popular e-book-reader “Kindle” (see “Google Books and the Kindle Controversy: Merging Conflict Arenas?“).

Especially Google Book Search (GBS) has inspired intense controversies between supporters, painting the highly optimistic picture of universal access to all books ever published for virtually everybody, and adversaries, fearing the rise of a knowledge monopolist, who exploits authors, publishers and readers alike. The best and most comprehensive comparison of both lines of argumentation I have encountered so far is a recent piece by Berkeley’s Pamela Samuelson titled “Google Book Search and the Future of Books in Cyberspace” (PDF).

After identifying overly restrictive copyright as the major impediment for any mass digitization project, Samuelson turns to the pros and cons of the GBS settlement in its current, amended version. As optimistic predictions she lists the following:

Regulating Over the Counter Derivatives: Is Global Agreement Possible?

This post is provided by our “guest blogger” Glenn Morgan. Glenn Morgan is Professor of Organisational Behaviour and Associate Dean for Research at Warwick Business School.

The last few weeks have seen a number of news stories indicating that the broad agreement reached by the G20 in early 2009 regarding the regulation of Over the Counter (OTC) derivatives is breaking down. On January 5th 2010, for example, the Financial Times titled ‘Cracks in transatlantic derivatives rules‘. In the UK, the Financial Services Authority and the Treasury published in December 2009, a report on regulation of these marketswhich, whilst couched in supportive language, made a number of criticisms of the Commission of the European Communities document on this topic published in October 2009 .

Meanwhile in the US, the US Treasury is aiming to achieve legislation on this topic; in Congress, the House has agreed a draft bill which differs again in some respects from both the UK and the EU and the Senate is due to consider the issue this month. Most recently, non-financial companies in the EU under the aegis of the European Association of Corporate Treasurers have protested strongly about some of the existing proposals in a letter addressed to the EU Commission on the grounds that they will financially penalize them .

The result is a somewhat confusing situation in which the danger is that regulation will not be coherent across the main financial markets and regulatory arbitrage will emerge, potentially paving the way for a further destabilisation of the global economy.  Many of these debates and differences appear very technical but as I have sought to show in a recent article on ‘Legitimacy in financial markets: credit default swaps in the current crisis’ in Socio-Economic Review, underlying them are major issues of politics and power.

Bono Bashes File-Sharing: Learning from China’s Online Censorship?

Paul David Hewson, better known under his stage name Bono Vox as a frontman of the rock band U2, is undisputedly one of the world’s best-known philantropists. He holds – and expresses – pointed opinions on a huge variety of subjects, leading him to the foundation of his organization DATA, an acronym for “Debt, AIDS, Trade, Africa”.  So it was no surprise, when in his recent New York Times op-ed he addressed issues covered by this blog. Of his piece “Ten for the Next Ten” especially number 2 dealing with intelletual property caught my attention:

“A decade’s worth of music file-sharing and swiping has made clear that the people it hurts are the creators — in this case, the young, fledgling songwriters who can’t live off ticket and T-shirt sales like the least sympathetic among us — and the people this reverse Robin Hooding benefits are rich service providers, whose swollen profits perfectly mirror the lost receipts of the music business.”

Is it really true that the biggest losers of file-sharing are the creators? Bloggers at the UK Times come to different conclusions in their recent analysis, presenting the following “graph the record industry doesn’t want you to see”:

Transnational Studies and Governance # 3: Studies on ‘global’ markets in history

Many believe that global markets are a new phenomenon. But that is not the case. Not only had the late 19^th century already reached a level of global trade and financial flows which approached that of today, but there have been long distance trading circuits across jurisdictions and continents which date back as far as medieval times. In the 12^th and 13^th century, the Italian city states of Venice and Genoa maintained long distance trading networks that reached as far as North Africa and Central Asia, providing the basis for ‘global’ markets for luxury goods, such as spices and silk.  In the North, the Hanseatic League formed a federation of trading cities along the coastlines of the Northern and Baltic Sea generating cross-border markets for bulk goods such as fish, salt, grain and wood.

These markets were transnational in the sense of their interconnecting economic actors from multiple political jurisdictions (i.e. kingdoms and city states) across the world into a multilayered system of rules and regulations which governed their exchange relationships.

Economic historians have produced a rich literature on these markets which is also instructive for economic sociologist studying the governance of contemporary ‘global’ markets. In a recently published article I combine both approaches to analyse how key coordination problems were resolved in medieval long-distance trading systems.

One Year Blogging about Governance Across Borders: Statistics for 2009

When we started our blog with one year ago in January 2009 many things were unclear: Will it work out to subsume very different empirical fields under the heading of transnational governance? Will we manage to find enough time for blogging? Will blogging influence our research? What issues will be of greatest interest?

At least regarding the last question, our open source blogging software WordPress provides some data, which we present in form of the all-too popular end-of-the-year-listings:

Top 5 blog posts 2009 (in terms of visitors):

1. Pirate Parties: Transnational mobilization and German elections
2. Fair Value Accounting and the ‘Inactivity’ of Markets
3. Fair Value Accounting in Retreat?
4. The Kindle Controversy: No Right to be a Reader?
5. Accounting at the G20 London summit: Watering down or walking the talk?

Top 5 search terms guiding visitors to our blog in 2009:

1. Kindle controversy
2. Fair value accounting
3. Transnational governance
4. Copyright example
5. Epistemic community

Top 5 tags attached to blog posts in 2009:

1. Creative Commons
2. Microfinance / Microcredit
3. Copyright / Copyright Regime
4. Development
5. Transnational governance

Top 5 series started in 2009:

1. Microcredit Myths (4 posts)
2. Kindle Controversy (3 posts)
3. Eastern Frontiers (2 posts)
4. Transnational Studies and Governance (2 posts)
5. Wikimania Preview (2 posts)

In total we published 64 posts in 2009, with a total of 63 comments attached to them. While this means we reached our self-imposed goal of publishing at least one post per week, we hope to improve our comment-per-article ratio above the current average of 1 in our second blogging year 2010.

“Group pressure makes us go to moneylenders” – microfinance’s unwanted lateral linkages

The microfinance industry, which once set out to protect the poor from extortionate moneylenders, may depend on those same moneylenders for its business success; and these moneylenders in turn may be profiting from microfinance. So reports the Wall Street Journal today.

Ketaki Gokhale is a Stanford University graduate student currently working for the WSJ as this year’s Daniel Pearl Memorial Journalism Intern. Earlier this year Gokhale reported on credit bubble tendencies brewing in the microfinance sector in India, an article which provoked controversy and some indignation among the microfinance industry and its advocates.

One of Gokhale’s interviewees reported being overwhelmed by the sudden and forceful supply of credit in her neighbourhood. “Suddenly, in the shantytown where she lives, lots of people wanted to loan her money. She borrowed $125 to invest in her husband’s vegetable cart. Then she borrowed more.” The lady descended into a borrowing binge, at the end of which she even bought a television. She was forced to sell virtually all of her assets and still remained in debt worth around a quarter of her annual income.

Refinancing microfinance loans through the grey market

Gokhale has now followed up her earlier investigation into the dark side of microfinance and uncovered structural complementarities and interdependencies between the microfinance business and local moneylenders. The irony and sadness of the story is that microfinance originally set out to put these same moneylenders and their practices of extortion out of business by offering the poor loans which they could afford. Moneylenders in India are reported to charge interest rates even beyond 1000 per cent annually, leading to debt bondage and other existential problems for the poor.

The entry of microfinance banks into the market may have pushed down the interest rates of some moneylenders, but paradoxically the moneylending business appears to be growing. As Gokhale reports, more than 80% of registered moneylenders in Mahabubnagar started their businesses after the year 2000, which coincides with the phenomenal bout of growth in microfinance in India in the past decade.

It appears that many microdebtors cannot afford to comply with the extremely rigid repayment schedules of microfinance banks, so they must turn to moneylenders, thereby re-financing their loans through the grey market – the market which microfinance sought to protect them from.

Unilateral Governance Negotiations: News Corp. vs. Google

In preparing this post I struggled with the question how to call the process between two parties offering complementary services that obviously refer reciprocally in their actions to each other but do not directly and explicitly negotiate? This question came to me, when recently the German debate on an ancillary copyright (see “Dilbert on Ancillary Copyright“) for publishing houses arrived in the US. “Editor & Publisher”, proud of being “America’s Oldest Journal Covering the Newspaper Industry”, features an article asking “Change in Copyright Law: A Possible Solution to News Content Crisis?”  As a solution suggest by industry representatives, the article reports demands for introducing compulsory licensing fees for Web-based agregators or re-distributors of news content.

But aside this transatlantic discourse coalition addressing legislative bodies, we can see interesting dynamics of unilateral (non-)negotiation between two big players in this game, thereby changing the rules as they “play”: Google and Rupert Murdoch’s News Corp. The latter’s opener were plans of a partnership with Microsoft regarding the new search engine Bing. Business Week’s Douglas MacMillan describes the potential deal as follows:

“In an effort to keep News Corp.’s newspaper content out of Google’s search results, Murdoch’s media giant has held early-stage talks to forge a deal that would put content from The Wall Street Journal, and possibly other company-owned publications, exclusively in Microsoft’s Bing search engine. […] In exchange for the exclusive content, Microsoft would pay an undisclosed fee[.]”

Only about a week later Google announced its counterstrike on its corporate blog, explicitely referring to concerns of newspaper publishers:

Financial Markets, Environment and Hunger: A Crisis of Global Governance?

The last several weeks have been extremely frustrating for many activists, international organizations and general public. Several international summits have shown that the global governance system was significantly damaged by the global financial crisis. The crisis created uncertainty about the future and made governments of the world’s leading economies careful about their commitments. After the meeting of parties of the UN Framework Convention on Climate Change on 2-4 November 2009 in Barcelona it became clear that the conference of parties to be held in Copenhagen in December was not likely to result in any legally binding arrangement to succeed the Kyoto Protocol. The World Summit on Food Security held on 16-18 November also did not result in any significant binding commitments. Meanwhile, the Food and Agriculture Organization of the UN reports that due to the global economic recession, the number of hungry people in the world will exceed one billion in 2009. In 2008, it was 850 million people. Only the G-20 Summit in Pittsburgh in September 2009 can be seen as a success of international regulatory efforts, at least to some extent. G-8 was transformed into G-20. The general principles of the new global economic architecture were approved. One of such principles is tough regulation of financial markets.