Wednesday, September 26, 2012

Book Review: What Chinese Want: Culture, Communism and the Modern Chinese Consumer by Tom Doctoroff

By Professor Jeffery Atik

In this unabashedly pop business book, Tom Doctoroff, head of the J. Walter Thompson advertising firm in China, tells us What Chinese Want. Yet the implicit question is complex: what do the Chinese want for themselves? For their children? For China? And to answer the question coherently involves considerable psychological framework. Doctoroff is an ad guy -- so the question that lies squarely within his expertise might be: what does the Chinese consumer want to consume? And this question he begins to answer. He is less certain -- and less convincing -- when applying the insights he draws from Chinese consumption habits to the more mysterious nature of Chinese culture, politics and foreign policy.

I suppose we can learn something meaningful about the Chinese from studying their patterns of material consumption -- even using the tools of an advertising executive. In some sense, Doctoroff's inquiry is an exercise in applied cultural anthropology -- though his ends are more instrumental than scientific. So which firms are doing well in China -- and what do their successful adaptations suggest?

Starbucks, Doctoroff tells us, has configured larger stores in China which serve as group meeting places. The Chinese consumer would not pay the equivalent for $4.00 for a cup of coffee for private consumption (this may reveal the inherent cross-elasticity of Starbucks coffee and ubiquitous hot tea). The consumer will do so, however, when observed by others; the Starbucks customer's extravagant expenditure for a latte is justified by a gain in social standing. And so by facilitating the prospect of mutual observation -- by providing large, welcoming meeting spaces -- Starbucks sells coffee in China.

Monday, September 24, 2012

The Trans-Pacific Partnership and IP Crimes

By Professor Jeffery Atik

True, we know little about the current form of the draft Trans-Pacific Partnership -- a regional trade agreement to involve the United States and ten other countries (Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam) -- but we can be certain that TPP will include an Intellectual Property chapter with a battery of TRIPS Plus features. We can get a hint at the IP content of an eventual TPP -- or at least at the negotiation goals of the United States -- by examining the IP provisions of recent U.S. Free Trade Agreements such as those concluded with Peru, Panama and South Korea. Or we could look back at the recently concluded ACTA, now abandoned by the European Union, one of ACTA's principal sponsors. Or we can look at the text of a leaked draft that may or may not be accurate. So let's apply all three approaches to create an amalgam for conversational purposes -- and explore the criminalization mandates found in the leaked TPP draft.

TRIPS introduced criminalization obligations to the international IP system. With the passage of years, these provisions are regarded as inadequate by crucial U.S. IP constituencies (along with TRIPS' enforcement more generally). The United States has included expanded criminalization mandates as part of its TRIPS Plus program. Additional activities are subject to criminal liability under the terms of recent FTAs and ACTA and in the leaked TPP draft.

Article 15.1 of the leaked TPP draft echoes TRIPS Article 61: "Each Party shall provide for criminal procedures and penalties to be applied at least in cases of willful counterfeiting or copyright or related rights piracy on a commercial scale." Ignore for a moment the insertion of the phrase "or related rights." The TPP leaked draft tracks the first sentence of TRIPS Article 61 word-for-word, including the problematic "on a commercial scale" limitation. It also replicates the language found in the recent FTA entered into with South Korea.

Thursday, September 20, 2012

Revisiting China's IP Conviction Thresholds

By Professor Jeffery Atik

Among the many changes to the international IP landscape wrought by the WTO's TRIPS Agreement was the unprecedented mandate to impose criminal liability for the most egregious acts of trademark and copyright infringement. Criminal sanctions add to civil and administrative remedies to create a climate of observation of IP rights throughout the WTO space. In anticipation of its joining the WTO -- and in response to pressure from the United States -- China amended its domestic criminal law to provide for the possibility of imprisonment or fines in certain instances of IP infringement as a complement to civil and administrative remedies. Nonetheless, there remains continuing concern held by IP holders about the effectiveness of China's IP enforcement. Much of the current 'TRIPS-plus' program (including the discarded ACTA and the emerging Trans-Pacific Partnership [TPP]) is intended to indirectly influence China with regard to IP enforcement.

In 2007, the U.S. brought a three-prong challenge to China's IP system within the WTO dispute settlement system. The central part of the dispute involved a U.S. assertion that China failed to give full effect to the TRIPS criminalization mandate. Article 61 of TRIPS obligates WTO members to provide "for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale."

Guest Speaker Kevin Noble Maillard on Family Values

Kevin Noble Maillard from Syracuse University College of Law presented on "Rethinking 'Family Values'" as part of Loyola's Faculty Workshop Series.

Proposition 32: The Battle Heats Up

By Associate Clinical Professor Jessica Levinson

On November 6, California voters will be faced with 11 ballot measures. Ten are initiatives, one is a referendum (what's the difference?), and none of these were legislatively initiated. One of these initiatives is Proposition 32, which is deceptively being peddled as a good government reform. It is not.

Prop 32 would prohibit unions from using funds deducted from payroll for political purposes. The prohibition also applies to corporations and government contractors. Among other things, it would also prohibit unions and corporations from giving campaign contributions directly to candidates or the committees that candidates control.

While it may seem even-handed, it will have a much, much greater impact on unions, dramatically reducing their power, than corporations. Corporations have many other avenues to raise political funds. Money is, after all, power, particularly in political campaigns in California.

So who would support Prop 32, a proposal to similar, rejected ones in 1998 and 2005? Recently an organization connected to the conservative Koch brothers (who have spent enormous sums to support conservative causes and candidates throughout the nation) gave $4 million to a new committing supporting the passage of Prop 32. It is important to note that the non-profit organization that came forward with these funds does not have to report its donors.

Supporters of Prop 32 had previous raised approximately $3 million; opponents have raised more than $36 million. For a breakdown of who is donating (at least of who is legally reportable), check KCET's campaign finance database here.

If you want unions to have much less political power in California but are comfortable with corporations maintaining their current level of control, and you don't mind voting "yes" on ballot initiatives, then you might want to take a look at Prop 32. If you are either opposed to initiatives, or believe in a more even-handed approach to reducing the influence of money in politics, then Prop 32 is not for you.

Monday, September 17, 2012

Scholarship in the Swirl of an Election

By Associate Professor Justin Levitt

Every four years, the presidential election contest dominates the news, bringing with it not only daily policy and political scuffles, but plentiful skirmishes over the rules for conducting elections and persuading the electorate. Every 20 years, the presidential election roughly coincides with the decennial redistricting process, as political lines are drawn to restructure representation across the country. The year 2012 represents one of those comet-like convergences, where the full infrastructure of democracy is not only buffeted by winds of change but becomes suddenly, fleetingly, salient -- and new and old media alike examine every development in painstaking detail.

In such an environment, just as vulcanologists flock to the latest eruption, election law scholars tend to find the daily developments irresistible. We rationalize the engagement by understanding that we can offer context and texture and a bit of both legal and historical perspective. But when we're most honest with ourselves, perhaps it's just that we want to be where the action is, in a field to which we've devoted our professional lives. Your Loyola election law faculty aren't immune -- both Jessica Levinson and I have attempted to engage the day-to-day in a way that we hope contributes more good than harm.

But perhaps particularly in the swirl of an election season, it's also tremendously useful to be able to step back as well. Which is why I'm grateful for two opportunities this past week to think more deeply about election law scholarship that's not dependent on yesterday's headline.

On Thursday, Josh Douglas (Kentucky), Derek Muller (Pepperdine), and Jessica Levinson (Loyola) joined me at Loyola for a small junior scholars' gathering on the law of democracy, taking advantage of Josh's trip to southern California. The research, though preliminary, promises to be both bold and diverse, encompassing an investigation of civil pleading pertinent to election litigation, an examination of the curious constitutional structure of candidate qualifications, and a reconceptualization of the fundamental struggle at the heart of campaign finance law. I learned quite a bit, and am grateful for my colleagues' critique of my own early thoughts.

Then, on Friday, I took Rick Hasen up on a gracious offer to join him at UC Irvine for an election law symposium featuring many of my heroes in the field. The symposium was titled "Foxes, Henhouses, and Commissions: Assessing the Nonpartisan Model in Election Administration, Redistricting, and Campaign Finance." The papers and discussants' remarks represented a broad array of outlook and methodology, from the rigorously empirical to the richly philosophical to the painstakingly historical. The room was super heated, but the discussion was coolly engaging; proceedings are here for those who wish to see for themselves. I'm delighted to have had such spectacular fora to develop long-term research in the midst of the madness of the moment.

Book Review: A Capitalism for the People: Recapturing the Lost Genius of American Prosperity by Luigi Zingales

By Professor Jeffery Atik

In the preface to A Capitalism for the People, Luigi Zingales recounts his departure from an Italian university for the wonderland of American academia. Here merit, neither contacts nor obsequious devotion to one's supervisor, is the key to success and Zingales' triumphs. He becomes an admired professor at the University of Chicago business school, a place he praises for its openness, its devotion to excellence and its rejection of status-based primacy (pity the poor dean, newly arrived from Stanford, who is devastated by the slashing comments of a junior colleague).

But the broader America he sees around him does not match -- in aim or reach -- what Zingales finds at Chicago. Zingales returns to the theme developed in his earlier writing: the United States is burdened with crony capitalism, the same social disease he sought to escape in emigrating from Italy. American business -- and American politics -- is dominated by corrupt elites who prefer protection and status quo to competition and innovation. Zingales introduces a neat distinction -- America remains pro-business, but it is no longer pro-market. And so Zingales seeks to reintroduce and reinvigorate competition in American economic and political life.

Zingales invites us to revive American populism -- and by this he intends the trust-busting populism of Theodore Roosevelt and not the proto-fascism of Huey Long nor the toxic nativism of the KKK. The focus is returning prosperity to the common American, and not further enriching Wall Street, Pharma, agriculture, government contractors, and the greater bulk of big business. Yet his populism is capitalist at heart. If the ties between government and business can be broken, new and vital businesses will thrive. Political life will improve as well, if the distortions and distractions introduced by lobbyists can be pruned back.

Monday, September 10, 2012

Book Review: Why Nations Fail - The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James Robinson

By Professor Jeffery Atik

Acemoglu and Robinson's Why Nations Fail is a thrilling read. It proposes answers to grand questions: Why are some nations rich? Why are others poor? Why are there such great disparities? Their theory is seductive -- yet it ultimately fails to give much guidance as to what can be done.

The key to prosperity, in the authors' view, can be found in a nation's political and economic institutions. The operative distinction is whether these institutions are extractive or inclusive. The most successful countries will have inclusive political and economic institutions; the most desperate will be afflicted with extractive institutions. Prescriptions seem tantalizingly accessible at first: simply replace extractive institutions with inclusive ones. But this is not so easy, Acemoglu and Robinson caution.

Labeling the 'bad' institutions extractive (as opposed to the more symmetrical 'exclusive') is a nice turn of phrase. Economists use the term extractive to describe economies that exploit endowments of valued natural resources, such as oil, gold or Mr. Kurtz's ivory, that are literally extracted. But the authors intend to characterize the relationship between the elites and the masses; elites 'extract' power and wealth from human resources through oppressive political and economic institutions.

In proposing an institutional account of prosperity, Acemoglu and Robinson reject cultural and geographic explanations. There is nothing peculiar about Northern European Protestantism (despite Weber's assertion) that suits it to the accumulation of wealth -- and folks living in temperate climes are not more industrious (or if they are -- they are not more likely to be successful). Technology is also non-determinative -- as opportunities for technological progress are frequently rejected by extractive states. Inclusive states -- the authors argue -- tend to be more receptive to new technologies, and hence enjoy the welfare gains innovation throws off.

Tuesday, September 4, 2012

Book review: What Money Can't Buy: The Moral Limits of Markets by Michael J. Sandel

By Professor Jeffery Atik

In What Money Can't Buy, Michael Sandel decries the emergence of markets that displace older norms, "commodifying" earlier forms of social organization that better correspond to our (or Sandel's) ethical intuitions. Sandel is bothered by fast track lanes, priority boarding, sales of organs or surrogate mothering services, paying for grades, and what he describes as the "skyboxification" of American society. While there remain some things money cannot buy, many things can be bought today that in prior times were allocated using non-market norms.

Sandel views with alarm the increasing hegemony of markets -- where markets are the go-to policy prescription for every social want. If we wish to boost the performance of inner-city school children, we should pay them for academic achievement -- according to a market-line of thinking. There's a cost, argues Sandel, to the application of market notions to novel domains, as markets operate (through "incentives," a neologism that Sandel mocks) to displace other values, such as inculcating a love of learning, devoting oneself to one's children and savoring a sense of community. Markets intrude on moral domains and limit the scope for moral discourse -- and this loss is under-appreciated.

All true enough -- but in at least some cases non-market values have displaced markets. For much of its history, the draft had market features. One could buy one's way out of Lincoln's draft -- or find a replacement to serve. And during most of the Vietnam era, the wealthy could avoid the draft by remaining in school. The draft, of course, has been suspended for several decades, but it is hard to imagine its return in any form with buy-outs. There may be other examples where the relevant institutional shift is away from markets: it was much easier to buy one's way into an Ivy League school a generation ago than it is now (Sandel concedes that even now it may be possible for some to do so).