Book Symposium The Electronic Silk Road: Comment by Paul Stephan

by Paul Stephan

[Paul B. Stephan is the John C. Jeffries, Jr., Distinguished Professor of Law and David H. Ibbeken ’71 Research Professor at the University of Virginia School of Law.]

I applaud Anupam Chander for picking a great subject for his book. New communications technologies have transformed the way we deliver services by radically lowering the cost of dematerialized, long-distance transactions. The resulting explosive growth of cross-border sales of services is one of the most significant aspects of the modern global economy. There are, of course, a host of books about the Web, some silly cheerleading and some exceptionally good (my favorite is Who Controls the Internet? by my sometimes colleagues Jack Goldsmith and Tim Wu). What Chander seeks to do is bring international law, and especially international economic law, into the mix. He explores how a body of rules developed three decades ago in a pre-Web world (the General Agreement on Trade in Services started in the Uruguay Round, born in 1986) can be brought to bear in the new, radically changed environment.

Much of the book describes the new face of international services. These accounts are apt and vivid. As a legal academic, however, I want more. In general I expect a careful study of a complex set of social relations either to propose a positive theory that links legal developments to social conditions with more or less rigor, or a normative vision of the world that will inspire us to correct unseen problems and cash out unrealized opportunities. I realize these categories are messy. The development of a positive analysis rests on certain normative choices, beginning with the decision to concentrate on one set of phenomena rather than another. A normative vision is incomplete without at least a rudimentary account of how we might get from here to there. But they provide a start.

I take Chander’s project to be at its heart more normative than positive. He reports on the fascinating growth of the information sector in the global economy, but he does not have a more general story about what explains this growth or how one might predict the next transformation. Rather, he wants to manage the transformation, to promote human flourishing, to expand the range of choices people can freely make, to respect local diversity, and to fight tyranny. Not bad work if you can get it! How to pull it all off, however, is not terribly clear from the book.

Take the flourishing-diversity tradeoff. Protection of local cultures, whether it be francophonie or condemnation of German National Socialism, requires repression. Governments in France and Quebec forbid certain uses of the English language. Governments in continental Europe criminalize commerce in Nazi artifacts. The United States tries to stamp out on-line gambling. Some countries fight the circulation of pornography. The power of global communications networks makes all of these measures more costly and less comprehensive. Should we celebrate the thwarting of state repression or look for new ways to bolster local culture?

One can tell this story as either dystopia (internet as Big Brother, stamping out everything that makes us interesting and distinct as humans, relegating us to a commodified and alienated existence) or utopia (with abundance comes equality and happiness; knowledge is power and tyranny is vanquished). Chander, however, seems to want to have it both ways. He recognizes the liberating potential of a liberal international regime, but wants to preserve local policy. He advocates glocalization, a term (too cute for my taste) borrowed from sociologists that study the interpenetration of the local and the global in various environments. The Columbia sociologist Saskia Sassen has done what I (admittedly an outsider to the field) consider the most interesting work in this area, but Chander doesn’t seem to draw on her work. Nor does he do what a lawyer should do, even if a sociologist won’t: Give the reader help about how law might navigate areas where interpenetration leads to conflict. He calls on states to harmonize when possible, but does not tell us how harmonization might work. Is this supposed to be standard-setting by technical experts, or political bargaining by interest groups? If the latter, what do we do with the anodyne, kick-the-can-down-the-road outcomes that often result, except when one particular interest group gets to dominate the process? We privilege experts at the expense of democratic politics. We privilege democratic politics at the expense of political economy. We worry about where political economy leads us. We cannot assume away any of these problems, and invoking democracy and legitimacy, without explaining what those terms mean concretely, doesn’t help.

Chander also advocates that businesses engaging in cross-border sales of services do no evil. Hard to quarrel with this, but also hard to tease out what his admonition means in practice. To begin with, we have to sort out the difference between local culture (good) and repressive regimes (bad). What particular aspects of local culture are so repugnant as to demand repudiation? Chander suggests that universal values based on human-rights law answers this question, citing the Universal Declaration and the International Covenant as authority. But moving from the abstractions of those instruments to operational rules is hardly automatic. Chander seems to think that brutal treatment of political dissidents is an easy case and uses China as an example. But China’s Great Firewall, that country’s principal affront to the internet’s ethic of free information, is neither brutal nor focused largely on political dissidents. Rather, it raises the cost to the masses of broadcasting and consuming information that the regime regards as undesirable. The Firewall’s masters engage in an ongoing arms race with net-savvy citizens and their virtual proxy networks, seeking to balance rapid and broad information flows with control over (supposedly) dangerous content. Unlike North Korea, the regime keeps the net going, and indeed, as Chander acknowledges, treats it as platform for commercial opportunity and investment. Rather than write off China as a repressive limiting case, we might study more carefully how it tries to manage the sharply opposed interests of commercially valuable information flows and restraining a huge population undergoing extraordinary economic and social change.

Next, what is the instrument for inducing businesses to do no evil? Chander alludes to Alien Tort Statute litigation, but after Kiobel that prospect seems dim. Incidentally, I could find no reference to that litigation in the book, although the Second Circuit decision would have come out long before his book went off to the publisher. I remain a skeptic about the efficacy of civil litigation as a force for social change. In my classes, I try to focus my student’s attention on brand management, using Nestlé and Nike as case histories that illustrate the potential for consumer action as a means of constraining companies. That may not work in commodities industries, but dematerialized cross-border services seems especially susceptible to this kind of pressure. The problem, of course, is that consumers are fickle, and some consumers (the Chinese government comes to mind) may express their preferences in a way that does not align with Western human-rights values.

Which brings us to the General Agreement on Trade in Services, which Chander portrays as a portal for opening up China’s information highway. He concedes that China’s accession commitments leave it lots of room to maintain its current practices, such as its barring from its domestic market of information-processing companies that do not use domestic servers. His hope is that a WTO dispute settlement body ultimately will decide that only domestic political repression can justify such a measure, and that such an objective can never justify anything. But it seems far more likely that possibly pretextual justifications, such as cyberwar defense, may suffice to protect these rules from judicial scrutiny. I mean no disrespect for WTO dispute resolution, but that’s not the first place I would look when considering China’s evolution.

The real question, which Chander does not fully confront, is whether the gains from further liberalization of information flows will drive Chinese firms, their Western counterparties, and ultimately the Chinese government to accept the inevitable loss of control over domestic conversations on the net. The ongoing and remarkable evolution of the Great Wirefall suggests that the outcome remains in doubt. I am not persuaded, however, that well intentioned lawyers, as opposed to engineers and entrepreneurs, will make much of a difference.

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