A Question of Identity

Nobel Laureate Amartya Sen, in his insightful book “Identity and Violence: The Illusion of Destiny,” grapples with the complexity of how individuals define themselves (although Professor Sen seems overly eager at undercutting the generalizations used by the late Samuel Huntington in his “Clash of Civilizations,” which as a conceptual framework can be helpful).  Indeed, Prag Khanna in “The Second World: How Emerging Powers Are Redefining Global Competition in the Twenty-First Century” may offer a more useful model for policymakers.  Nonetheless, the issue of identity is complex with respect to humans as we have multiple identities and even within one category (e.g. ethnicity, religion, profession) are seldom “pure.”

Many people have difficulty understanding that with respect to individuals “citizenship” and “nationality” are seldom identical.  The former is a legal concept and the latter a sociological subject.  Many countries permit their citizens to have more than one citizenship.  This is often allowed since it is often the case that one of the countries that has granted citizenship to an individual ignores the fact that s/he has another/other citizenship as well.  Not so long ago, the U.S. took the position that if one of its citizens actively acquired a second citizenship, the individual lost her/his U.S. citizenship. In recent years, this situation has changed.  Unless one renounces U.S. citizenship or commits treason, the U.S. government does not care about any other citizenship a person may hold.  The U.S. government is unusual in that it taxes its citizens on their worldwide income (though this situation may be made less severe through bilateral treaties), as opposed to merely income earned within the country.

In Canada, many of its citizens live abroad.  Indeed, a debate was triggered among Canadian citizens when its government spent nearly $100 million dollars (Canadian) to rescue Canadian citizens from Lebanon at the time of the Israeli conflict with Hizbollah.  Some of the grateful individuals who were rescued had lived in Canada for a small percentage of their lives.  Many Canadians grumbled as they regarded many of those saved as merely holders of a Canadian passport.  What did it mean to be Canadian?  In reality today, there are few true nation-states — borders are largely historical accidents.

Granted, there are countries like Poland where due to the movements of its borders and the Holocaust, “national minorities” within its territory “disappeared” (the lucky ones largely emigrated to France, Germany or the Soviet Union), while the remaining Polish population in the area of religion are nominally Catholic.  Yet if one considers mixed marriages and conversions, the country is not entirely homogeneous (it is not worth considering generational or educational differences).  While there is no doubt as to the faith of the late Pope John Paul II (the first Polish Pope), there is debate about his lineage on his mother’s side.

Recently, Ingrid Betancourt, a French-Colombian national, was rescued from the FARC guerillas after being held hostage for many years.  Some have suggested that she has political futures in both France and Colombia.  Ironically, France was the first country that sought to rally its citizenry around the concept of the French nation.  Today, the French government is prohibited from keeping data on the religious or ethnic origins of its population.  The country operates under the idea that it is enough that a person is a citizen to be French.  Not all Corsicans would agree.

Across the Channel, Britain has a different problem.  Many people in the country have national identities that are territorially-based (e.g. English, Northern Irish, Scotts, and Welsh).  While others prefer to think of themselves as British (e.g. many people from the Commonwealth countries and Jews). Of course, there are mixed marriages and internal migration that has a major impact on the country.  At the same time, many British citizens have an affinity to the country from which they or their parents came — made possible by advances in technology.  This is a problem that the British government grapples with on a daily basis.

There are many reasons to have multiple citizenships.  One can be the product of a mixed marriage where one parent is Dutch and the other German.  Some counties will grant citizenship to individuals who had one grandparent who held (or would have held if it were possible) the citizenship of a particular country (e.g. Hungary Ireland, Israel, and Lithuania).  Having multiple citizenships is generally a good thing — particularly with regard to the right to live and work in a particular country (or any country in the EU).  It can also present certain problems, such as a risk of conscription into the armed forces.  It can also be a “bad” thing for the world as criminals acquire multiple citizenships to facilitate their illegal activities.  In some instances, citizenship can be purchased (just read the advertisements at the rear of The Economist).

The point of the above discussion is to highlight the difficulty of determining the “nationality” and sometimes citizenships of human beings.  Now let’s turn to legal entities, many forms of which are treated by law as a “legal persons,” even though they are artificial.  In fact, they can be established in a matter of minutes after the payment of certain fees and complying with a variety of local requirements.  Nonetheless, legal persons frequently enjoy the same rights as if they were made up of flesh and blood (such as freedom of speech in the U.S.).  Personally, this idea has always troubled me.

Last year, then-presidential candidate Barak Obama spoke of the desirability of “buying American.”  He was really addressing the U.S. unemployment problem, not the falling value of some U.S. securities.  It probably never entered his (or others’) head that some might misconstrue his comments as an effort to encourage persons to buy Argentine, Bolivian, Canadian, Colombian or Mexican goods.  The States has expropriated the term “American” and “America” and does not pay royalties to anyone for having done so.

This year, U.S. President Obama indicated that it was time to crack down on U.S. corporations “that ship jobs overseas” and avoid U.S. taxes with off-shore havens.  The U.S. has to deal with a huge budgetary deficit and his plan would in theory generate $21 billion a year in taxes for the U.S. government (few will discuss the option of inflating the deficit away).  Many lobbyists for U.S. multinational corporations no longer will have to fear for their jobs since they will have a lot of work to do for the foreseeable future — meeting government officials, trying to influence opinion makers, placing OP-ED pieces, producing advertisements, etc.  These are “good jobs” being preserved or created in America no doubt but probably not the type that politicians have in mind when they speak to their constituents.

This presents an existential question: “what is a “U.S. corporation” in today’s world?”  Is the “citizenship” of a corporation “U.S.” merely because it is registered in the country.  To my knowledge, more corporations are registered in the tiny state of Delaware than any other, but few major corporations have their corporate headquarters or principal operations there — with perhaps the Dupont Corporation being an exception.  The Dupont family was originally of French origin, but its founder was probably a U.S. citizen.  Do we care that Henry Ford or Bill Gates are U.S. citizens?  Is this important when considering the nationality of these car and software manufacturers?

Public companies can be owned by foreign citizens and foreign legal entities.  The identities of the beneficial owner may be known, or hidden through shills, shell companies and trusts.  I suspect that at some time it might be discovered that British Petroleum will have been purchased by the Russian government, its citizens and legal entities.  This will be difficult or at least expensive to ascertain.  How else can one explain that whereas other major Western energy corporations have been driven out of Russia, BP remains a partner in the BP-TNK joint venture?  While some Russians are Anglophiles and apparently enjoy living in London (and who can blame them), there has to be a better explanation.

When determining the citizenship of a corporation, do we care about its employees’s citizenship?  On a day-to-day basis, the citizenship of one’s employees can have practical impact such as the legal right to work and determining the amount of withholdings for taxes.  Many U.S. corporations are learning the hard way that EU directives on data protection relate not merely to intellectual property but also personal information on individuals that are typically readily available within U.S. corporations — concepts of privacy vary.  Similarly, U.S. export laws in some cases would require an export license if a foreign national is given access to certain technical information.  Indeed, today’s transnational business world is complex. Should the nationality of a corporation’s management matter?  Where its operations or personnel are located?  Should we even care about a corporation’s stakeholders?

Today, there is much talk about “saving” the U.S. auto industry (and other employers dependent on it).  In most contexts, this refers to the so-called “Big Three”. Chrysler, Ford and General Motors (i.e. those automobile manufacturers typically associated with Detroit).  Why is it understood that we are not talking about Honda, Subaru, Toyota, and Volkswagon which assemble cars either within the U.S. or our NAFTA neighbors Canada and Mexico?  Apparently, they make many types of cars appealing to the American consumer.  Abroad, one can find a small minivan.  Why did GM not think to make a larger version of the PT Cruiser — it would dominate the taxi industry.  To make our analysis even more complicated, the Big 3 manufacture and sell their products abroad — so are Ford and GM REALLY U.S. companies if they are not creating a large number of U.S. jobs — whatever happened to exporting?  Furthermore, many of the parts that go into U.S. products are manufactured abroad and merely assembled in the U.S. to reduce customs cost or political reasons.  When determining the content of a product, how much has to be made in the U.S. to qualify under U.S. foreign trade regulations?  Each industrial sector deals with these types of issues in different ways — such selling to and buying from wholly-owned subsidiaries.

Let’s look again at the human aspect of this subject.  It is not entirely an accident that companies that have significant trade relations with the U.S. tend to be less criticized for human rights violations than those who do not.  This is not merely a result of governmental decision-making; it is also because U.S. companies do not want to risk their bottom line if bilateral political relations become tense.  In conclusion, there are no simple solutions to the current global economic crisis.  In seeking to craft policies that might accomplish this, the relationships between private entities cannot be ignored.  Governments and international organizations cannot ignore the private sector nor the human component.  The needs of the world’s population can only be ignored at great peril to particular groups of people (typically minorities within larger countries — think Darfur) as well as regional/global stability.  While the world’s wealthiest individuals may be concerned about exchange rates and the implications of changing rules with respect to bank secrecy, one cannot overlook the economic components of the situations in countries such as Pakistan.