Something important happened here on Monday.
In a guest post, Professor Andy Spalding included a mention of his new law review article. It’s called “The Irony of International Business Law: U.S. Progressivism, China’s New Laissez Faire, and their Impact in the Developing World” (Irony for short). It’s available at SSRN and will soon appear in the UCLA Law Review.
Irony describes the role reversals of the U.S. and China — their completely different extra-territorial business laws, and the impact of those laws on foreign direct investment in the developing world.
The originality of Spalding’s ideas is striking, and he can really write. Irony is 63 pages of law review-style text, so it’s a long essay or short book. As scholarship it’s first rate. But it’s a lot more than that.
Occasionally, something comes along that changes how a lot of us look at the world. Examples might include Edward N. Luttwak’s brilliant essay in Foreign Affairs from 1999, Give War a Chance.
George Orwell’s brilliant essay, Politics and the English Language, from 1946.
And The True Believer, Eric Hoffer’s brilliant (long) essay from 1951.
And Irony? Yes, it’s that good. Strip away the law review accoutrement — the long title, the obligatory legal history lessons, and the 349 footnotes — and you’re left with, well, a brilliant essay.
Spalding sets out, “for the first time in the legal academic literature,” he says, “to identify and define the actual U.S. paradigm of international business law, and to then more accurately compare it to the alternative that China now represents.”
From there he’s off, having a great time with his subject. As the first person to stake the territory, Spalding makes the most of it. Listen to this:
In the U.S., the Civil War, Great Depression, civil rights movement, Watergate, and the accounting scandals of the 1990s would successively enlarge the power of the federal government and expand the federal regulation of commercial affairs. On the opposite side of the spectrum, and the globe, China would experience economic stagnation, the failed economic reforms of the Great Leap Forward, the atrocities of the Cultural Revolution, and finally, the death of Mao. China would then undertake to promote economic development by limiting the government’s role in economic regulation, while the role of the U.S. federal government was expanding.
Spalding calls the U.S. approach progressive capitalism. It comes with the threat of severe penalties for U.S. companies, he says, including those who violate the FCPA. So the companies “inevitably invest less in countries whose practices are most inconsistent with progressive values,” he writes. The result? Chinese companies, ruled by the PRC’s “alternative” system of business laws, rush in to fill the investment vacuum.
The developing countries, Spalding concludes, are “left to be ravaged by socially irresponsible business conduct.”
Where, then, is the FCPA taking U.S. foreign policy?
Irony is brilliant. And the story it tells is just beginning.