Due Diligence and "Reasonable Man," Offshore

Abstract

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"Due Diligence ." December 11, 2012 via Eventslisted.

In the November 2005 issue of Cultural Anthropology, Bill Maurer demonstrates how ostensibly economic practices such as due diligence in fact rely extensively upon social negotiations that involve judgment and ethical refashioning.  Drawing upon the controversy sparked by the Organization for Economic Cooperation and Development's (OECD) blacklisting of numerous countries for serving as offshore tax havens, Maurer explores the sociality of due diligence, a bureaucratic procedure that Caribbean countries were required to adopt in order to be removed from the blacklist.  Presumably a litmus test to confirm the bona fide nature of an offshore entity, due diligence instead “operates casuistically and in an open-ended fashion; it is not geared toward establishing truth or certainty so much as it warrants personal regard and ethical scrutiny."

Crafting a meta-analysis, Maurer proceeds to argue for the similarity in form between due diligence and anthropology.  The recursivity of [academic personnel] review, Maurer maintains, is like the recursivity of due diligence.  They both use “ethical modes of knowledge to guarantee adherence to an order of conduct that in turn assays a customer’s or candidate’s reputation and warrants a bank’s or university’s ability to generate confidence.”  For Maurer, pursuing this analogical relationship promises a fruitful rethinking of capitalist formulations and anthropological theory and method.

Cultural Anthropology has published a number of other essays on capitalism, finance and law; see in particular "Code is Speech: Legal Tinkering, Expertise, and Protest among Free and Open Source Software Developers" by Gabriella Coleman (2009); "The Productive Life of Risk" by Caitlin Zaloom (2004); "Situating Global Capitalisms: A View from Wall Street Investment Banks" by Karen Ho (2005), and "Designing Women: Corporate Discipline and Barbados's Off-Shore Pink-Collar Sector" by Carla Freeman (1993). 

About the Author

Bill Maurer is Professor of Anthropology at the University of California, Irvine.  He is also the Director of the Institute for Money, Technology and Financial Inclusion.  Read more about him here.

Links and Multimedia

OECD Web site: http://www.oecd.org/home/0,2987,en_2649_201185_1_1_1_1_1,00.html

OECD - Harmful Tax Practices: http://www.oecd.org/topic/0,3373,en_2649_33745_1_1_1_1_37427,00.html

In September 2009, the OECD initiated new multinational agreements to intensify crackdowns on tax evasion.  Watch a CNBC story about the agreements: http://video.msnbc.msn.com/cnbc/32663150#32663150

Questions for Classroom Discussion

1) Discuss the OECD's decision to blacklist countries engaging in "unfair tax competition" and the controversy ignited by the Bush Administration's criticism of this policy.  Describe the diverging opinions and stakes within this controversy, keeping in mind the author's assertion that the varying opinions do not fit a standard left/right political divide.

2) In what ways does Maurer depart from key assumptions of the scholarship on finance and capitalism? 

3) How does Maurer theorize the relationship between due diligence and anthropology?

4) Describe the due diligence process and notions of "reasonable man" and "economic man" implicit in it.  How do judgment and discernment transform this seemingly economic process into a social one?  

5) Discuss the recent history of economic development in the Caribbean.  What impact have economic shifts had upon sovereignty?  What role does due diligence play?

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