To explore this new social fracture and its challenge to the legitimacy of Anglo-American capitalism, this Article presents a case study of the attempt by the Chinese government and major Wall Street investment banks to complete an initial public offering by a major Chinese corporation. Their efforts represented a classic example of the effort to build a new global capitalist order from above without significant concern for the legitimation question. And, as we shall see, the effort was met from below with a vigorous social response. Thus, I suggest that a kind of syndrome, the PetroChina Syndrome if you will, is emerging that reflects the failure to resolve new conflicts caused by the globalization process.
Part II of the Article examines the PetroChina IPO itself, explaining the reasons why the stock offering occasioned such controversy and demonstrating the unwillingness of the Chinese regime, the company and its advisors to consider its associated social and political problems.
Part III discusses the unprecedented campaign against the IPO itself so that the political forces generating the PetroChina Syndrome are better understood. Part IV describes the key features of the resulting Unger Letter.
Part V reviews conventional explanations and arguments that help, in part, to explain the Unger Letter and the PetroChina Campaign, including traditional securities law concerns, a change in the political climate represented by the anti-globalization movement and structural changes in the global capital markets.
Part VI begins the discussion of the emergence of the legitimation deficit by exploring the work of economic historian Massimo De Angelis. De Angelis' innovative reconsideration of the work of two archetypal economists of the twentieth century-John Maynard Keynes and Milton Friedman-helps us come to a deeper understanding of the issues raised by what can be called the PetroChina Syndrome.
I will argue, in Part VII, that this understanding is incomplete without a deeper exploration of the role of process in generating legitimacy in the modern industrial era. Without that concern for process, the PetroChina Syndrome cannot be correctly diagnosed. The legitimation deficit this Syndrome signals can only be filled by the design of new institutions that respond constructively to the problems of the new era.
29 J. Corp. L. 39 (2003-2004)