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Photo: Reuters/Sigtryggur Ari
The rapid globalization of the past few decades, in part driven by and in part reflected in deep technological changes, now forces us to look at countries as “Portals” merely regulating the flow of ideas, skills, and opportunities based on fast evolving protocols.
It is fitting then that one of the most apt metaphors for counter-illustrating this trend is the growing phenomenon of cloud-hosting companies offering subscribers a choice as to where their data can be hosted. After all, if you think of it, the ‘cloud’ was supposed to be the pinnacle of the internet, and the internet the very essence of ‘stateless borderlessness’, and yet here we are contending with the rise of data nationalism.
We have been here a number of times before. Just before World War One, when transcultural ideas were perceived to be subsuming national boundaries, and just before the 2008 crash, when transnational finance was held up as heralding a world where transnational corporations, not nations, formed the building blocks of the world system, prompting panicky calls for a global Tobin Tax.
Now nations are firmly back in vogue, but not in the old Westphalian, UN General Assembly, sense.
To illustrate this point, take the example of ‘maritime flags of convenience’. More than half of all marine vessels worldwide register in countries such as Antigua, Panama, Liberia and the Marshall Islands, and thus fly their flags. These tiny countries together account for nearly half of all ship registrations.
Is this just another form of the old ‘tax haven’ con of transnational finance, or something deeper?
While it is true that some ship-owners may register their ships in Liberia to evade sound regulation and scrutiny, hide assets, and even maltreat staff, just as it is sometimes the case that a politician will stash funds in the Cayman Islands solely for the purpose of hoarding ill-gotten loot, there are many occasions when arrangements very similar to the foregoing would be made in order to heighten compliance with sound law and regulation.
This is practically the same reason why many contractual parties agree to use New York and London as their jurisdiction of choice.
In fact, research shows the flexible hiring of maritime workers enabled by flying a flag of convenience is designed less to undermine worker rights but more to circumvent unsound labour immigration laws and rules in advanced economies such as the United States. Rather than spurring a competitive race to the bottom, economic actors are actually “deploying countries” to facilitate the emergence of industry models suppressed elsewhere.
Countries are not just portals. A more insightful computer metaphor says that they are “source code” for the building of new, modular, economic programs based on increasingly more creative legal and cultural algorithms.