The Google/China issue is a fascinating topic for legal counsel because it brings into stark terms the true challenge of corporate social responsibility (CSR) for business law. At its essence, the question being debated by both sides of this issue is the proper role of "authority" as a guide for corporate conduct. This is the focus of my graduate thesis, and I believe it is a central issue in understanding how corporations should navigate social expectations, be they legal, ethical, or CSR related - or as is most often the case, a tangled amalgam of each.
Note that I distinguish between "authority" and "law". Authority and law are often confused with one another, but are not the same. Authority has been defined as a "right to rule", lying somewhere between “coercion” and “persuasion”, yet remaining distinct from both. As one author has explained:
Authority is thus related to coercion and persuasion in symmetrical ways. Both of these exist as capacities or potentialities implicit within authority, but are actualized only when those who claim authority sense that they have begun to lose the trust of those over whom they seek to exercise it. In a state of latency or occultation, persuasion and coercion alike are constitutive parts of authority, but once actualized and rendered explicit they signal – indeed, they are, at least temporarily – its negation.
The most highly developed account of authority I have come across was put forth by positivist legal theorist Joseph Raz. "Authority", or more precisely "legitimate authority", is a necessary "claim" of law according to Raz. The authority that law claims is the authority to govern conduct in a way that is exclusive of all other rules or reasons that might otherwise be the basis for action in a given circumstance. In other words, the authority of law allows the law abiding actor to fully justify their conduct, and to rebut any challenge to their conduct, from the perspective of the legal system.
Of course, legal conduct can be rebutted on a moral or ethical basis. These types of evaluations differ from "legal" evaluations because, unlike laws, morality or ethics do not necessarily have a "social source". They may be derived from personally held feelings, or cultures, or religions, or inspirations. Law on the other hand must come from somewhere, it must be created by an edict of a legislatures, a ruling of a court, and so on. This distinction between law and morality is the essence of legal positivism, and one of the foundational principles of modern legal thought in the Western world.
Google in China brings all of these theoretical issues into practical focus. The Chinese government claims for itself authority, like all governments, at least over its geographical jurisdiction. For authority to exist, it must be obeyed. When Google questions or disobeys the orders of the Chinese government, it must, necessarily, call into question that government's authority. This is "necessary", because acceptance of authority in the circumstances would result in obedience. Disobedience, or even contemplated disobedience, is inherently a challenge of authority. Once that challenge has occurred, the only response available to the Chinese government is "coercion", or "persuasion". But the utilization of either of these "signal the negation" of authority itself.
The unique circumstances of Google are made possible by the transnational character of business, where commercial activity and indeed viability transcends the geographical bounds of the authoritative state. Google can afford to question, and even defy, state authority insofar as its existence and continued viability is not dependent upon obedience to state authority. Where that is the case, authority is no longer determinative of outcomes. Instead, what matters is the capacity (of the state or non-state actor) to persuade, or coerce. These potentialities are the only remaining tools of the claimed authority, and must be used effectively if authority is to be re-asserted.
Where no meeting of the minds is possible, the commercial non-state actor retains the possibility of "exit" from the market entirely. An "exit" strategy dramatically limits the possibility of coercion. As a result, authority is effectively reduced to only one of its constitutive potentialities, namely persuasion. The exercise of either of the potentialities (coercion or persuasion) results in the "negation" of authority, at least temporarily. Where only persuasion is available, the claimed authority is even more constrained and highly dependent upon actual legitimacy for its effective reassertion.
In the case of Google, it remains to be seen how the Chinese government will attempt to re-assert its authority in relation to the challenge presented by Google. One response would be "persuasive", which might entail increased adherence of the Chinese authorities to international norms regarding freedom from state censorship. This might allow for a revitalized consensus and framework for a new relationship with Google that would allow it to return to the Chinese market.
Another response could be coercive, including prohibiting access to the Chinese market, and taking other measures that would attempt to enforce the normative order that Google had found unacceptable. Google will still have the option of exit, but may be unable to "re-enter" the market unless it adheres to the authority of the Chinese government in future.
While the foregoing is arguably a "political" analysis, it is also quite legal in nature. We may, as the positivists do, say that law emerges from (state) systems that claim legitimate authority, and which is composed of exclusive reasons for action within that legal system. In the transnational scenario facing Google executives however, that exclusivity is, at best, a fiction. The option of exit allows for the legal reasons of the state to be questioned, challenged, and even disobeyed, or ultimately avoided entirely. By consequence, acceptance of the law's outcomes, in light of the exit option, requires tacit acceptance of the legitimate authority that the law claims for itself. Such acceptance could be, and was for Google, in conflict with other competing reasons (i.e. non-censorship) that can be weighed with the reasons provided by authorities, in ultimately deciding how to act.
Such a weighting of reasons, according to positivist theorists like Raz, is not consistent with the existence of law. That, I would argue, is where traditional positivist conceptions of law are flawed in the modern reality of transnational business. The weighting and balancing of claimed "authoritative" legal reasons is in fact inherent to the transnational commercial world. It is a process that occurs in fact, but which should not lead us to conclude there is no "law". Instead, it should lead us to conclude that law's claimed legitimate authority is not inherent. Law, with its claim of authority, can and should be weighed in the balance of reasons for action in a given circumstance.
In this way, authority does not play the determinative role that the positivists appear to have suggested. Instead, authority is, essentially, nothing more than a symbol of the potentiality of persuasion or coercion. It does not, however, offer a perfect reason that can lead one to accept, unquestioningly, legal edicts cloaked in authority as protected reasons for action. In making a rational decision on how to act, the transnational commercial actor must instead identify all relevant reasons, and make a decision on the balance of reasons, which include authoritative and legal reasons, but not necessarily only those reasons to the exclusion of others.
This approach will be particularly challenging for legal counsel used to relying on legal reasons as exclusive bases for action. Ultimately, these kinds of questions will require a new kind of legal reasoning; one that understands the nature and claims of authority, but is not paralyzed by them. This will necessitate a clear understanding of the social context in which business operates and the reasons that apply to a corporation at a given circumstance and particular point in time. Such a broadened perspective will allow the transnational corporate actor to navigate social obligations in a way that forwards the overarching interests of the corporation, which is ultimately the interests of long-term profitability and viability.
To me, that is the essence of sustainability, and explains well the nexus between law and corporate social responsibility, and the relationship of both to the concept of authority.