GLOBALIZATION AND THE EMPIRICAL CHALLENGE OF PRIVATE POLITICAL POWER
The spread of charters of rights has led to the claim that constitutionalism now stands ‘on the brink of a world-wide hegemony.’[25] However, taking a broader empirical perspective shows how constitutionalism is under often intense pressure from shifting patterns of geo-political power.
One prominent theme of recent constitutional scholarship concerns how to reconcile existing conceptual structures with forms of social organisation not readily contemplated in the state-centred approach. This arises at both the sub-national—such as the issue of the recognition of indigenous forms of government in aboriginal societies[26]— and supranational levels—where attention has focused on the task of ‘translating’ state-based constitutional ideas to ‘postnational’ bodies such as the EU.[27] However, the most pressing challenge comes from economic globalization, which has led to ‘the formation of a transnational system of power which lies in good part outside the formal interstate system.’[28] Accordingly, any discussion of states’ constitutional authority now has to take account of the disciplining effects of the global economy, and the power networks formed by transnational corporations.One of the most significant political phenomena of the past twenty-five years has been the spread of the ideas and practices of economic neoliberalism which stressed the virtues of the free market and the vices of big government. Neoliberalism first found political expression in the Thatcher and Reagan ‘revolutions’ of the 1980s, but attained global status in the 1990s through the reach of the ‘Washington consensus’ which promoted policies of:
... liberalization, privatization, minimizing economic regulation, rolling back welfare, reducing expenditure on public goods, tightening fiscal discipline, favouring free flows of capital, strict controls on organized labor, tax reductions, and unrestricted currency repatriation.[29]
The result of these changes in public policy has been the achievement of neoliberalism’s main objective, namely ‘a global economy, characterized by global production and global markets for goods, services and finance.’[30] While, for some, neoliberalism’s zenith has passed,[31] its legacy in the form of the global economy is still highly influential in shaping the terms of political debate, not least in revising ideas of the state as the principal repository of political power.
As a result of deregulation and privatisation, the active and interventionist state that informed the postwar Keynesian consensus has been significantly reshaped. In many areas of traditional public policy, from school meals and refuse collection to prisons and air traffic control, the state has moved from being provider to enabler. Instead, private bodies, including primarily corporations, are increasingly performing these functions, sometimes in partnership with public agencies, at other times (particularly in developing countries) bypassing the state completely. In either case, this generally involves the reorientation of the principles guiding the delivery of these services, emphasising market-related ideas such as value for money, rather than traditional concerns of the public interest. Furthermore, any account of the extent of state power must take notice of the obligations that states accept in signing up to the global economy. For example, while constructed and administered by states, the antiprotectionism policing mechanisms put in place by the WTO to ensure fidelity to the principles of free trade, narrow the range of the permissible policy options available to states.[32]
An important corollary of these developments is the rise of new forms of political authority which do not fit readily within the template of the nation state. While the state’s capacity to exercise political power may be relatively diminished, this does not lead to the disappearance of politics, but rather its reconfiguration. Crucial to understanding this changing landscape of governance is the emergence of ‘private or quasi-private regimes and circuits of power, both formal and informal, surrounding and criss-crossing the state in a new web of complex relationships.’[33] For example, international commercial arbitration has become the predominant means of settling transnational commercial disputes.[34] International business associations often operate as ‘self-regulatory associations’ setting norms and standards across a wide range of industries and professions.[35] International financial markets assign credit ratings to states with a view to influencing their policy decisions.[36]
One of the most significant aspects of the rise of these alternative forms of political authority is the enhancement of the power of multinational corporations (MNCs). In the context of the global economy, the idea that MNCs are simply economic entities is unsustainable.
Rather, they are major political actors capable of setting the agenda for debates over public policy, of mobilising and constraining political constituencies, and of generating normative regimes that govern key areas of social life.[37] With regard to the latter point, Claire Cutler discusses how international firms have co-operated to create ‘private international regimes’ which provide ‘an integrated complex of formal and informal institutions that is a source of governance’[38] within particular industries. While not replacing, but often interacting with the state, these regimes are important in explaining the rules and procedures applying, for example, to ‘the regulation of the internet, the international minerals industry, the regulation of intellectual property, the insurance industry, and the maritime transport industry.’[39]The diffusion of political authority in the context of the global economy has led to concerns about the ability of constitutionalism to operate as a check on political power if it speaks only to the state. Moreover, there is a growing awareness—perhaps fuelled by recent examples of corporate corruption and wrongdoing—that private power, as much as public power, has the capacity to oppress.[40] Accordingly, the issue of private power has become an increasingly central preoccupation of contemporary constitutional debates. A number of commentators have proposed updating rights constitutionalism in response to these empirical developments to overcome the criticism that its default position has been to protect the private sphere.[41] Two ways in particular have been canvassed to subject all forms of political power to constitutional scrutiny. The first extends the reach of classical negative constitutional rights to private actors, so that they have to take account of obligations, for example, to respect freedom of expression or basic due process rights. The second broadens the scope of constitutional protection to impose positive obligations on the state and also to protect rights against encroachment from any source.
Sometimes this is to be achieved by reinterpreting existing texts, giving a more expansive reading to provisions that limit constitutional application to the state, so that, for example, they reach non-state actors performing public functions. At other times, this is to be achieved by adding innovative terms to new constitutions, for example, that they should have (some) horizontal application, or protect social and economic rights.Locating our discussion of rights constitutionalism in the wider processes of globalization addresses the question—so far neglected in the literature—of the connections between them. It has been argued that the very nature of the modern constitutional state, operating under the liberal legalist rule of law with its emphasis on rights and individual autonomy, provided the permissive structure for the rise of transnational neoliberalism.[42] And this is a point made not only by critics of globalization: the World Bank, for example, has also stressed how clear and enforceable property rights provide the necessary infrastructure for the global economy.[43] Thus, the idea that the Washington consensus evolved out of, and in many ways is consistent with, the values of liberal legalism raises the key issue of whether constitutional rights can operate as a counter- hegemonic restraint on private power.