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How are the Networked Connections of Reflexive Governance the Latest Stage of Negotiated Democracy? But with a Neoliberal Normative Valence?

The following paper was presented at the Eighth Annual Telos Conference, held on February 15–16, 2014, in New York City. It develops ideas that the author previously explored in “The Changing Forms of Contracting in a Society of Transnational Networks,” a paper delivered at the 2011 Telos Conference.

Can Critical Theory—rooted in the observation and dialectical understanding of the tensions and contradictions within the totality of interactions—bind itself like Odysseus in studying neoliberal social forms, so as to learn from them? And in so doing, discern in a Durkheimian manner emergent practices of self-binding and mutual bonds? Without foundering on neoliberalism’s reefs and rocks of sovereignty? Without falling prey to the collective addictions of the self-destructive financialized manipulations some neoliberal thinking spawns?

By neoliberal normative valence, we refer to:

  • a focus on supply-side stimulation rather than on demand-side regulation;
  • a new sense of marketizing time and space with an emphasis on contracting relations rather than on private property relations;
  • a greater awareness of market-engendered discipline upon our everyday life, and where organized pools of exchange are utilized in both in the Peoples’ Republic of China and in ObamaCare;
  • a focus on transaction costs, competition, enterprising yourself, selling yourself like a shark;
  • an understanding of de-regulation as re-regulation;
  • and most significantly for the arc of our argument, a focus on investment location and the attraction of capital investment, from wherever (FDI: Foreign Direct Investment).

After decades of rants about de-regulation, a re-regulation is afoot that is not traditional public administrative law. This is the practice of stakeholder participation in negotiated rule-making and policy-making that points to an evolving global cultural consciousness of interdependencies. shared risks and vulnerabilities across borders, global public goods (GPGs), and a subgroup of GPGs, global environmental goods (GEGs).

This practice is enacted as sectoral loops rather than as structured, or as imposed governmentality. Enacted and evolving processes of institutionalizing rules as collective action, day-to-day negotiated rule-making and standard-setting in the name of the people, as global public goods. This is a social form wherein labor creates use values within a transnational society of networks: such as global environmental goods mediating between humans and society. Imbricated and enfolded within the topography of a so-called reflexive governance of network webs and loops, are newer loops of mutual associational regulation and self-limitation. Loops within loops, where the metaphor of “connections” supersedes that of the immanence of structure. Functional differentiation processes engender what Günther Teubner and Hugh Collins, in Networks as Connected Contracts (2012), refer to as “negotiated connected contracts” in re-scaled space between inter-urban and inter-regional assemblages, a mode of structurally coupling new social partners in emerging social pact-ing is a decentered global meshwork of relational contracts through interlaced hybrid networks of supply-side protocolism of standards and sanctions.

Gerhard Lehmbruch has used the concept of “negotiated democracy” to refer to the associational mutual self-regulatory practices and protocols that transcend the individual prerogative contracting of nineteenth-century laissez-faire capitalism. Civil society associations and their autonomous law in the first decades of the twentieth century came to be recognized as more than legal corporate fictions. Here Lehmbruch follows the German law practice referred to by both Carl Schmitt and Franz Neumann as “connecting institutions” (Konnexion-institüt). These are complementary institutions, which compensate for each other’s deficiencies and reciprocally reinforce each other’s effects: concerning the distribution of risks, and attending to the sustainability issues through “structurally coupling” practices.

We can follow here Karl Renner’s lead in studying the social functions of the institutions of private law. Renner emphasized how the regulatory function was transferred from the State to the legal “complementary institutions” (Konnexion-institüt) such as collective bargaining as practices and processes of co-regulation and re-regulation. Specifically, internal relations with adjudicable claims rather than as merely ad hoc pragmatic regulatory fixes. These internally related standards, codes, protocols, and contracts are what the political economist Robert Boyer understands as the réglementation anticipating and internally related to a change in underlying regulation, the underlying regulatory/ organizing principle of the spheres of associative relations of the new transnational capitalism.

Transnational capitalism spawns a new stage of negotiated democracy “connecting institutions.” These mirror the emergent frame agreements and “negotiated network-connected contracts” where neither the market nor the nation-state suffices. Increasingly there is an emphasis on a reputedly reflexive governance where non-state actors like civil society organizations, INGOs, and transnational advocacy networked-coalitions (TANs), join states, corporations, labor confederations and professional societies as stakeholders. They serve to mutually monitor as well as recursively scrutinize and sanction standards, rules, and practices.

Teubner and Collins point out the extent to which globalization and the digital revolution engender constellations of interests confronting network-specific risks in corporatist hybrids. And at the core of such constellations is “the connected contract.” This emergence reflects a re-scaling of modes of production and divisions of labor: a social partnership of both market groups and non-market groups with increased awareness of interdependence. This is a social pact-ing that is not a delegation of state authority, but emerges in the 1990s as a new stage of associational mutual self-limiting. Social partnerships and social pact-ing are now glocalized negotiation partners embedded within transnational loops of interscalarity and multiscalarity. These pacts enable affected interests serve as participatory stakeholders in reflexive network governance. The model for the core “negotiated connected network contract” is the Frame Agreement. The term “frame” comes from the video compression technique wherein an image is established as a base, and subsequent images are stored only as changes from the base.

The Frame Agreement establishes a common protocol of standard terms on which a succession of task agreements may be based. Each task agreement reasons from the standard terms in light of local circumstances, to reach an agreement specific to the purposes of the task. In this way, the frame agreement provides a common/express basis for negotiation and further negotiated rule-making from the outset. This is not a master agreement in the conventional legal sense. The aim of the base agreement is not to secure all terms entirely acceptable to the parties but rather to constitute a foundation for negotiating some given task, suspending the completion of the formal agreement until the purpose and local conditions of a given task are available.

The recursive frame agreement-based associational contracting characterizes what we can refer to as multi-stakeholder social pacts:

  • establishing endogenous self-reflective deliberative processes to encourage creative critical and continual thinking about global economic goods; and
  • encouraging a negotiated rule-making that is exogenously “Other-referential” in the mutual learning among the self-governing associations themselves.

The affected stakeholders are brought together as different form of social partners to spin out self-regulating “connecting protocols” as a web of encrypted rules and standards. In the case of environmental contract law, for example, the pact is less a discrete voluntarist agreement. Rather, it is what Teubner refers to as a subconstitutional regime delineating the appropriateness of performance and sanctions, establishing incentives and procedures to encourage parties to the pact to think continually about longer range ecological responsibilities. And to do so with a great degree of flexibility without impeding innovation or constraining competition.

The protocols’ focus is on the value of mutual ecological responsibility in both guarding against hazardous substances and replenishing the earth’s resources and not only on design, resource procurement, manufacturing, and distribution of product supply chains. And like labor a century ago, the network utilizes a kind of “union label” certifying to assure quality.

This re-scaling and inter-scalar coordinating of strategic selectivities characterizes a global society of transnational networks that requires a self-regulation process in a horizontal procedural rather than on a vertical basis. The network actors are neither the state functionaries nor the market entrepreneurs of yesteryear, but what Elinor Ostrom has referred to as reciprocators who constitute a regulated solidarity. This in the form of supply-side self-regulatory market practices to compensate for market inadequacies or to improve market efficiency.

In their studies of flexicurity representation in the Netherlands, Yerkes and Achterberg, in The Transformation of Solidarity: Changing Risks and the Future of the Welfare State (2012), point to the re-scaled strategies of supply-side projects at the emerging inter-urban and inter-regional levels to transform and re-invigorate our sense of solidarity as reciprocal solidarity, rather than the depassė welfarist aggregate functionalist solidarity reminiscent of Durkheim, Beveridge, and T. H. Marshall. It is a reciprocal solidarity of horizontal connection/ horizontal power where We share in the responsibility of adapting to risk: buffering, pooling, and mutually managing risks; “nested sense-making” of the scalarity levels that are inter-urban, inter-regional, in-between; supply-side creation; supply-side innovation; and developing social investment pacts to overcome skills deterioration and obsolescence. To capacitate labor for knowledge-intensive services rather than just creating low-paying jobs. These are issues that the Beveridge welfare state was not designed to deal with. Simply put: Recovery as Reciprocity.

Polanyi-like, there is a double movement: a focus on capital investment location and attraction, and a self-reliant counter-movement of protection of GPGs/GEGs as a formative power of society. It is socially and democratically conscious collective action, not compulsive collective addiction. This a democratic transformation of the capillarity of the global financial economy in new forms of global civil society re-regulation practices.

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