Law on Trial: Can the EU regulate a financial crisis?

This post was contributed by Daniele D’Alvia, MPhil Law student in Birkbeck’s School of Law. Here, Daniele reports on the Law on Trial 2016 event held on Thursday 16 June: “Can the EU Regulate a Financial Crisis?”

This year, Law on Trial – the School of Law’s week-long programme of free-to-attend public lectures and panel discussions – focused on the EU referendum. The annual showcase brought together academic staff, recognised internationally as authorities in their field.

Law on Trial 2016

Law on Trial 2016

The 16th of June 2016 has been a landmark event for the 2016 ‘Law on Trial’ series of conferences. Indeed, the 4th day of ‘Law on Trial’ has been specifically dedicated to the role of financial law in Europe. The main question that Professor Michelle Everson has posed for the panel discussion, namely ‘Can the EU regulate a financial crisis?’ has shown to be a popular topic for the high interest that the audience has manifested during the event.

In particular, Prof. Ellen Vos (Maastricht University) illustrates the regulation and the role of European agencies. She reminds of the importance of delegating powers to agencies in the EU in order to regulate risk and uncertainty (for instance, risks in the environment, food, health and safety and specifically in relation to financial crisis). On this line Prof. Michelle Everson introduces the concepts of moral hazard, risk management and systemic risk. These terms are exceptionally important in the understanding of the current financial crisis and pave the way for the speech of the third guest speaker, namely the head of the compliance office of Wells Fargo, Patrick Devine.

He gives an outstanding presentation by pointing out how the current financial crisis is global in nature, but the solutions provided therein are local. For instance, think of the EU banking insolvency procedures there is not a universal bank insolvency law, because insolvency law is national in nature. To this end, the Single Resolution Mechanism in Europe is a first attempt to provide a uniform regulation of bank insolvency through the operation of the Single Resolution Board. He outlines that the credit-crunch that occurred in America in 2007-2008 was only the trigger, but not the cause of the current financial crisis. Indeed, he concludes that the cause of the current economic crisis is just inside the same economic system, namely capitalism.

This has always been the cause in his view and the legislative frameworks have only tried to regulate the trigger and not the environment in which triggers stand. Finally, Dr. Matthias Goldmann presents the idea of Karl Polanyi on the utopia of the ‘self-regulating market’. Indeed, in 1944 Polanyi wrote the ‘Great Transformation’, which divided between a society that uses markets as one valuable tool, and ‘market society’ that places everything on the auction block, even labour. Therefore, Dr. Matthias Goldmann argues that the idea of ‘market society’ has been one of the causes of the current financial crisis and he, therefore, provides a re-interpretation of the phenomenology of contemporary financial markets, where the market itself should play a more prominent role.

In the end, the panel discussion has been dominated by the conception of risk in financial crisis and how risk can be prevented or regulated.

The conception of risk and financial risk between economic theories and philosophical arguments

I would like to introduce here the concept of the ‘past qualification’ of risk based on a possible re-interpretation of Professor Frank Knight’s book ‘Risk, Uncertainty and Profit’, which has developed a philosophical argument on risk instead of a pure economic theory on profit. The book has always been recognised for its outstanding contribution towards a distinction between risk and uncertainty, namely between objective and subjective dimensions of risk towards a theorisation of insurable form of hazards and true uncertainties.

Prof. Knight’s theory of risk is part of the remarkable story on risk.[1] Indeed, according to Bernstein risk management is a revolutionary idea where far from being an antagonist, as the mysterious fate or the voluntas dei, the future has become an opportunity. The concept of risk-taking has been developed in Western countries from Fibonacci’s Liber Abaci (1202), Cardano’s Liber de Ludo Aleae (1525) and Galileo’s Sopra la Scoperta dei dadi (1623) through the laws of probability framed, inter alia, by Pascal and Fermat,[2] and in particular the science of statistics of Graunt, Petty and Halley,[3] promoting the concept of insurance as a commercial tool in the eighteenth century. In other words, the story of risk has initiated by formalising its ontological meaning based on an objective dimension.

This was a necessary conclusion because from an epistemological point of view the discourse on risk can be complex. Risk under this new light is the probability of occurrence of an event that may or may not occur, but risk is always a measurable uncertainty. In Prof. Knight’s words:

‘the practical difference between the two categories, risk and uncertainty, is that in the former the distribution of the outcome in a group of instances is known (either through calculation a priori or from statistics of past experience), while in the case of uncertainty this is not true (….) the best example of uncertainty is in connection with the exercise of judgement or the formation of those opinions as to the future course of the events, which opinions (and not scientific knowledge) actually guide most of our conduct’[4].

So, it is possible to state that the knowledge about risk is the knowledge of a knowledgeable situation. In other words, the ontological discourse on risk is representing what is knowable in principle or a priori by virtue of laws of probability and the science of statistics. It is knowledge of objective facts. For this reason, in my view the real revolutionary idea of Prof. Knight is the categorisation of risk on the past line.[5]

The practical effect of the ‘past qualification’ of risk in global financial markets

Now, the words of our guest speaker Mr. Patrick Devine are even more intelligible: in his view capitalism has always been the cause of the current financial crisis. In philosophical terms we could say that the past qualification of risk in its objective dimension has always been the cause of every financial crisis because simply it has always been there, but it has never been regulated. In Patrick Devine’s words: ‘we regulate the trigger of a crisis (we could say what has caused the uncertainty), but not the environment in which the triggers stand (we could say the real risk).

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Footnotes

[1] Bernstein (1996). Peter L. Bernstein (1996) Against the gods: the remarkable story of risk (John Wiley & Sons)

[2] Bernstein (1996) pp 57-72.

[3] Bernstein (1996), p 92.

[4]   Knight (2002), p 233.

[5] Knight expressly said that uncertainty is the formation of opinions as to the future course of events (i.e. a subjective belief).

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Law on Trial 2016: Brexit – Should the UK leave the EU?

This post was contributed by Birkbeck Law students Janet Cheng and Henrique Nobre. Here, Janet and Henrique report independently from the Law on Trial 2016 event held on Tuesday 14 June: “Brexit: Should the UK leave the EU?”. Speakers at the event, which Janet and Henrique moderated, were Professor Justin Frosini; Professor Christopher Lord; Professor Albert Weale; Dr Angela WardDr Roch Dunin-Wąsowicz.

This year, Law on Trial – the School of Law’s week-long programme of free-to-attend public lectures and panel discussions – focused on the EU referendum. The annual showcase brought together academic staff, recognised internationally as authorities in their field.

Law on Trial 2016

Law on Trial 2016

Henrique Nobre’s report

The second evening of the Law on Trial event reflected the public expectation in discussing this extremely hot topic. The room was full of students, academics and members of the public eager to listen to our guest speakers’ arguments on Britain’s membership of the European Union.

The beginning of the session was very engaging, especially when Dr Angela Ward showed a copy of the tabloid The Sun full of scaremongering arguments and urging its readers to vote leave. Dr Ward shared with us her extensive experience and opinions on how a leave vote would endanger our economy and international relations.

Arguments were presented in relation to the position that the UK will assume in relation to trade agreements, the impact on freedom of movement, the possibility of national instability, e.g. a second Scottish referendum and the possible end of the United Kingdom, and the general uncertainty of a positive outcome.

The guests were outstanding in presenting positive and negative arguments without trying to compel the audience. The intention of the event was not to campaign for one side or the other, although it is difficult to hide personal views when talking about an issue that will affect all of us. The audience opinions were varied and contributed massively to a very fruitful discussion.

To moderate an event of such a high level and importance was a real pleasure. The panel was highly selected, the event was extremely well organised, the public was participative and there is no better company on stage than Janet Cheng (President of ELSA Birkbeck).

I felt that the event was a great opportunity to voice and discuss our concerns and that Birkbeck School of Law has chosen the right momentum to do it. As mentioned at the end of the event, independent of personal views, I urge everybody to exercise their democratic right and vote to the best outcome.

Janet Cheng’s report

The referendum coverage has been dominated by debate on immigration and trade in the media and national press from both sides of the campaign. These might be the voters’ greatest concerns, however, there are still many other issues we should be aware of.

Our panel was comprised of five outstanding scholars – Dr Angela Ward, Professor Christopher Lord, Professor Justin Frosini, Professor Albert Weale and Roch Dunin–Wasowicz PhD, all from different academic backgrounds. Through their expert presentations, looking at subjects including the review of the latest newspapers’ headlines; environmental ethnic concerns; political views in European countries and so on, the audience gained a better picture of the whole referendum.

When it came to the second part of the evening, the members of the audience were enthusiastic in expressing their views and questions to our panel. Although thoughts and opinions might differ, I think we had a healthy channel to express our views and opinions freely. And this is most important to our democratic society.

Tomorrow, we have to decide whether to leave or remain.

Looking ahead into an uncertain future the two sides weigh up the risks and opportunities and come to different conclusions. Is it safer to continue with our current multi-national arrangements, minimizing risk and change, or is the EU an outdated 1950s concept which ties the UK to the old world and which is dysfunctional and doomed to fail?

Are there realistically alternative modes of international co-operation in a more connected world? Are the advantages of a single market outweighed by regulation and the opportunities of trading with the rest of the world? What should our immigration policy be? From a legal perspective, how should our laws be made in today’s global society and how much democratic control of legislation do we want?

The decision facing us will have far-reaching consequences for the future of the UK. This is the most important decision voters are likely to be asked in our lifetime so we encourage everyone to reflect seriously and to exercise their right to vote.

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Avatar Activism: Limits and Possibilities

This post was contributed by Thomas Travers, a PhD student in Birkbeck’s Department of English and Humanities. He tweets at @TWLTravers

Avatar ActivismCrystal Bartolovich (University of Syracuse) opened her lecture last Wednesday (June 15th) at the Birkbeck Institute for the Humanities with a screening of the narratively condensed trailer for James Cameron’s Avatar. This abridged version of the film, in turn, formed the key reference point around which her presentation on the limits and possibilities of ‘Avatar Activism’ revolved.

Coined by American media theorist Henry Jenkins, ‘Avatar Activism’ describes a strategy whereby social justice movements appropriate images from popular culture and put them into service for struggles in the real world. Jenkins first proposed the term in response to a filmed re-enactment of Cameron’s blockbuster movie in the occupied village of Bil’in. Appearing in the likeness of the embattled Na’vi, Palestinian and Israeli activists stunningly rewrote Avatar as an allegory for the ongoing dispossession experienced by Palestinians in the occupied territories. Opposed to an august Frankfurt School style dismissal of Avatar as industrial spectacle, Jenkins detects within its globally distributed imagery of green anti-imperialism the raw material for a democratic ‘participatory culture’. Participation here refers to the dramatic re-contextualisation, or well-nigh hacking or glitching of the Hollywood cultural form, a tactic that enables oppressed people to re-narrate their struggles through the libidinal apparatus of the culture industry, shocking audiences into a heightened awareness of injustice. Affective and emotional investment in the symbolic realm inexorably leads, in Jenkin’s argument, to progress in the material world.

Yet is it precisely the efficacy of this seamless transition from symbolic gratification to social intervention that Bartolovich wanted to complicate in her bracing account of contemporary climate politics. Situating Avatar within debates surrounding the Anthropocene, Bartolovich highlighted a damaging rift between a symbolic recognition of the imperative to drastically cut carbon emissions and the minimal purchase this recognition has had in actuality. In order to arrest the unsustainable levels of energy consumption in the gated communities of the global North, Bartolovich forecasted the necessary implementation of unpopular, top down, draconian measures. And it is on questions of cost, of consent, of sacrifice that she finds ‘Avatar Activism’ desperately inadequate.

Dialectic of Utopia and Ideology

Where others might have chastised Jenkin’s work as the ‘intellectualisation of amusement’, Bartolovich provided an immanent critique of his thesis and a salutary reminder as to how easily the utopian qualities of cultural texts can reverse into ideological reconciliation with the present. Avatar’s ecological consciousness is typically considered to reside in the successful opposition of the Na’vi to the technological degradation and exploitation of Nature. This antagonism, however, may not be as stark as it at first seems. Nature on Pandora is, in a sense, always already technology: for each weapon or communicational network the colonisers have, the Na’vi have an analogous one. The message, as Bartolovich points out, is clear; not only do the Na’vi want nothing, but that their harmonious relationship with an intensified nature amounts to a purer, superior form of life. As T.J. Clark has recently argued in a series of lectures presented at Birkbeck, the land of Cockaigne is the fantasy of a world already cooked, where the need for sweat, labour, and toil has been thoroughly abolished. What should alarm us about the inscription of such codes in Avatar is that they perpetuate a delusion that the North can shrink its carbon footprint without any serious alteration to its current levels of consumption. Utopian resistance cartwheels into ideological containment as the necessary sacrifices of any viable climate politics are massaged into something more palatable entirely. Avatar offers, in other words, a reassuring image of an improved nature that is already dormant in the present, repressing the inevitable deprivations and constraints that would accompany a concerted effort to avert the worst permutations of the Anthropocene.      

Disavowing Defeat 

Another challenge to the endorsement of Avatar develops out of the observation that the military hardware of the sky people is surprisingly outdated. Where one might expect the fully automated arsenal of drone, chemical, and biological weapons, Cameron mobilises tanks, infantry, and helicopters. Coupled with the astounding ability of the Na’vis’ arrows to penetrate armoured vehicles, Avatar recodes the indigenous encounter with empire—a history of decimation, massacre, and genocide—with triumphant resistance. This aesthetic sleight of hand simultaneously disavows the asymmetry of such conflicts and, in doing so, implies that the vanquished were defeated on account of their own failings. The Bil’in video concludes with the Na’vi protesters doubled up, choking on tear gas; a potent reminder of the lethal economy that the armed state apparatus deals in. Bartolovich pointedly adds that the pristine Eden of Pandora is itself a phantasmagoric revision of the slums and toxic landscapes that the precarious communities of late capitalism are likely to inhabit. There is, then, a significant discontinuity between the types of imaginary identification entertained by the symbolic text of Avatar and the impoverished and defeated reality of the global surplus population.

Possibilities?

Bartolovich convincingly demonstrated the inadequacy of Jenkin’s proposed ‘Avatar Activism’, highlighting its inability to overcome the gap between symbolic attitude and material action. Cameron’s movie offers a green politics shorn of sacrifice, the fantasy of a world already made that the consumer can occupy without detriment to their present lifestyle. Confronted with the dilemmas of climate catastrophe, Avatar conjures away the negative, presenting an altogether agreeable impression of a greener, less alienated form of consumption. What of the possibilities? Against the ‘naïve’ interpretation of the plight of the Bil’in protesters as commensurable with the Na’vi, Bartolovich contends that the video détourns Hollywood spectacle. Wrenched out of its universalising context, the activists expose the particularity of Cameron’s movie, render visible the human damage, loss, and defeat the film silences, making perceptible the material costs the film seeks to vanish. The Bil’in video captures the uncooked raw material of a world in which radical social change can only be achieved through the sacrifices of collective action.

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Displaced Children and Stolen Babies in Contemporary Spain

This post was contributed by Dr Diana Marre, visiting research fellow at the Birkbeck Institute for Social Research (BISR). Here, Dr Marre gives an insight into her BISR Event on 29 June 2016: “Displaced Children and Stolen Babies in Contemporary Spain”

ConcentracionOn 16 June, ten days before the forthcoming Spanish presidential election, several organisations that represent children and babies who were victims of enforced disappearances in Spain between the Spanish Civil War (1936-1939) and the 1990s, called for a public protest in Madrid using the slogan ‘Stop Francoist impunity’.

This call for public action is one of many that have followed the presentation of two reports to the United Nations Human Rights Council in September 2014. The reports focussed on enforced or involuntary child disappearances during the Spanish Civil War (1936-1939), Franco’s dictatorship (1939-1975), and the transition to the restoration of democracy (1976-1990). They argued that the only efforts to investigate these enforced disappearances were by victims’ families or non-governmental organisations, and noted that not only was the state not contributing to such efforts they had in fact systematically blocked or ignored research into the disappearances. Consequently the total number who have fallen victim to these enforced disappearances remains unknown.

Both reports referred to three groups of victims. Firstly, those who are still in mass graves awaiting exhumation, which consists of around 120,000 unidentified bodies in more than 400 mass graves. Secondly, there are the ‘war children’, who were the sons and daughters of the dead, imprisoned and vanquished during the Civil War and who were either adopted or placed in orphanages or similar institutions. Due to the lack of research, there is no clear data on how many children were victims of this practice. Thirdly, the reports referred to the so-called ‘stolen babies’ of Spain. Most of these babies were born using the practice of ‘twilight birth’ between 1950 and 1990, and were declared to be stillborn or to have died immediately after birth. They were then removed from their families and adopted. These victims were the children of single, poor or illiterate women or young couples with multiple children. Again, it is difficult to know the precise number of ‘stolen babies’, but current estimates suggest there were between 200,000 and 300,000 victims.

About the event

This event will ask why, in Spain, the enforced displacement of children in the ways described above still remains unrecognized and unpunished. We will examine what is considered to be one of the biggest, long-lasting and most wide-spread abductions of underage people, loss of custody by biological families and loss of

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identity in the West. As an ex judge of the Spanish National High Court has noted, these enforced disappearances were a result of a ‘peculiar Spanish form of ‘legal’ disappearance of people during the Civil War and post-war period through a pseudo-juridical system that gave ‘legal’ coverage to the systematic abduction system of children’ (Garzón 2008).

This event will examine the role of fear and public secrets – the “unknown knowns” (Simmel 1906) – to achieve the aim of “remembering to forget” (Mookherjee 2006), the objective of the post-Franco dictatorship amnesty laws (1976, 1977), often referred to as the “laws of oblivion”.

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Works Cited

  • Garzón, B. (2008), Auto, vol. 53 de 2008 E, Madrid, Administración de Justicia, Juzgado Central de Instrucción n.º 5 Audiencia Nacional.
  • Mookherjee, N. (2006), ‘Remembering to forget’: public secrecy and memory of sexual violence in the Bangladesh war of 1971, Journal of the Royal Anthropological Institute (N.S.) 12, 433-450.
  • Simmel, G. (1906), The Sociology of Secrecy and of Secret Societies, American Journal of Sociology, 11(4):441-498.
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