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Economic Law: Anatomy and Crisis


Peer Zumbansen (@PZumbansen) is Professor of Business Law at McGill University.

In my recent JLPE article, I consider the emergence of LPE against the backdrop of discourse about the concept of “economic law” dating back to post-war Germany. I advocate for a transnational turn in LPE that focuses on the relationship between public and private power in the context of state transformation and globalization.

Like other problem-based depictions of a legal field—such as, “antiterrorism law”, “climate change law”, “cyberspace law” or “transnational law”, the phrase ‘economic law’ must strike us as linguistically bulky, conceptually ambivalent, and doctrinally unsettled. My engagement with the phrase aims at using a concrete example to illustrate how breaking open of legal fields can reveal their inherent instability, contingency, and regulatory inconclusiveness.

There is nothing natural or inevitable in how a field becomes the container of a ‘body’ of rules, principles, and standards. While the succession of court decisions and case books illustrates this point quite literally, it is all too easy to approach the bulk of existing and established legal fields as a self-explanatory reference system of normative coherence. What exists outside of that system, be it that we refer to it as “non-law” or “not-yet law”, a new “field”, right or concept, challenges the boundaries of this system while reinforcing the defensive instincts on the inside. Even in moments when law does “turn” to recognize the interests of those previously on the outside, the legal mainstream is silent about the struggle and human suffering that led to this result. Just think of consumer protection law, environmental law, poverty law, and others.

So, why focus on “economic law”? Can that term actually work as a critical tool? Aren’t the two elements connected here so fundamental and infinite in their complexity to defeat any attempt at unpacking? I suggest that the phrasing “economic law” insists on the open question of how to relate “law” to the “economy” but also functions to question the meanings of those terms themselves. The phrase serves as a provocation of the seemingly obvious or natural distinction between “public” and “private” areas of law and between those areas that are market related and those that allegedly aren’t. It embarrasses the assertion of law or economy/market as being self-explanatory, defined, and confined. Instead, it exposes both as black boxes of intimidating dimensions.

LPE is a timely and crucial intervention in the socio-legal discourse challenging the purportedly self-explanatory relationship between law and “the economy.” I believe that LPE’s historical sensitivity and contextualism can be especially productive if turned transnational. I propose that LPE do more to interrogate how the focus on states, markets, and public and private power can keep pace with the emerging actors, norms, and processes that arise in the context of state transformation and globalization. In an organizational register, the invocation of “law” here raises the question which law: domestic, international, transnational, public, private? And does the body of “law” that relates to the economy and its infinite realm of economic exchanges encompass privately made rules, recommendations, codes of conduct, or only state-made statutes?

And, what about “economic”? Where does the space of the economy begin and where does it end? While the space of financial capitalism is quintessentially economic, is the same not also true for the nurse in a long-term care facility? After all, her fate is entirely subjected to the market logics of investor capitalism. Is FIFA’s disregard for the workers building the 2022 World Cup stadium’s a human rights matter or a segment of global value chain capitalism? Is the transnational surge of domestic violence among intimate partners during the pandemic an expectable ‘side effect’ of lock down rules or, actually, a tragic aggravation of power differentials which themselves are linked to the economics of racism, labour markets, child care access and gender inequality? Is the cause of Squid Game’s ‘success’, as some allege, the economics of debt and structural poverty, or an exceptionally heightened acceptance for displays of inhumanity and degradation?

The present moment confronts us with the dire consequences of individualization and responsibilization. In designing a response, we must consider where and how we draw the boundary of “the economy.” Should we aim at adhering to the logics of Polanyi’s double movement, where we strive to respond to market ‘excess’ with protective policies, or is something different required? Is marketization actually reversible, or must we learn to work within markets? Are democratic, inclusive and sustainable markets possible? Can their realization be left in the care of the state, given the dismantling of state capacity under neoliberalism? Has the time finally come for us to put the “economic” into a larger context rather than continue to indulge self-fulfilling distinctions as that between “economics” and “justice”, “state” and “market”?

These questions have renewed urgency amidst rumblings of crisis and disruption, of state or market failure,  which bring law’s role into the foreground. Economic law represents – like climate change law – a jurisprudence of crisis that encompasses both ‘the before’ and ‘after’ of a catastrophe (be that the meltdown of financial markets in 2008 or the repeated failures to prevent and respond to the tragic impact of the Haiti earthquakes in 2010 and 2021).

My proposed transnational expansion of LPE does not refer to an ephemeral theoretical space into which the legal pluralist wishes to lure the analytical jurisprudence scholar. In fact, get off of my cloud! Transnational LPE is deeply rooted in the localities where negotiations of power occur. It is comparative both in spirit and design and extends socio-legal methods into the legal and institutional pluralism of regulatory structures of neoliberal global capitalism. The analysis of “economic law” can therefore focus on the politics that drive the public/private contestation in the case of investment treaty arbitration or the economic/non-economic distinction in refugee law. It can help us unpack the law/non-law distinctions regarding, say, the Bangladesh Accord or interrogate the corporate “purpose” of Facebook or Amazon.

Transnational LPE can also engage economic law in relation to a concrete historical example of welfare state creation and transformation. In my attempt to investigate its usefulness in the present moment, I retrace the concept of “economic law” in postwar Germany, during the transition from the Nazi regime to the liberal democracy of the ‘Bonn Republic.’ The German phrase for economic law – Wirtschaftsrecht – joins the words law and economy, positing that the two can be rendered functional from the perspective of legal theory and doctrine. In the German context of re/building a rule of law for a democratic, post-authoritarian society, the identification and demarcation of existing and new legal fields engaged loaded understandings of law’s relation to different dimensions of ‘state and society.’ Everything was inescapably political and charged with the historical weight of what the Bonn Republic stood against. The invocation of law, any law, resounded in the echo chamber of anxieties, guilt, and, of course, denial. The mobilizing of law carried an implicit recognition of the many rules that had pertained to and operated during the Nazi time and that might be inherited by the young, vulnerable democracy if left undetected or confronted. A seemingly formalist organization of laws into “public” and “private” could – if fleetingly – create the impression of coherence, integrity, and legitimacy. It was into this context that critical jurists injected the concept of “economic law” into the discursive fabric of the Bonn Republic’s legal democratic order. Their goal was to show the enormity of the task that law – public and private – had to tackle in this fragile historical constellation. The term was mobilized precisely to lay bare the unresolved issues of democratic governance in a fast-economizing society that had just engaged in more than a decade of individual and collective violence.

As a critical tool, “economic law” was employed to challenge the rhetorical distinctions between public/private, state/market, and political/economic that accompanied the country’s economic reconstruction and legal re-affirmation. As society allocates to its citizens distinct packages of political participation rights, on the one hand, and economic interaction rights, on the other, the very volatility of this legal-political community risks being invisibilized. The introduction of “Wirtschaftsrecht” into the post-war German collective legal imagination aimed at exposing the relativity of the legal fields being connotated as public or private, as having more or less proximity to the market and the state. Economic law / Wirtschaftsrecht was meant to call into question the normalization of law and governance at a politically fragile moment in time.

We are today again at such a point.