The following set of posts comes out of the early career workshop ‘Law and Political Economy in Europe’, which took place at the Centre for Socio-Legal Studies, at the University of Oxford, on the 7th of October 2019. For all the posts this series, click here.
The normative vision of Law and Political Economy (LPE) and its commitment to a more egalitarian and democratic society is shaped by its fundamental presuppositions. Contrary to a liberal understanding of markets as natural and neutral – that is, as prepolitical and apolitical – LPE builds on the realist project to expose the function performed by the law in the production and distribution of wealth. Approaching the market as a product of legal ordering means not only that juridical relations are constituent of social relations of production, but also that law structures the bargaining power of the groups competing over the distribution of the output of the production process. In this direction, law’s permissions, alongside its prohibitions, have distributive importance – law is never absent from the question of distribution; there is no moment of apolitical, neutral exchange between market participants. The emphasis on law’s constitutive role in the economy entails an implicit assumption that the law can also generate social transformation. If it is legal rules that establish a regime of socio-economic inequality and hierarchy, legal rules could also undo it.
From these starting points, LPE develops as a methodology, rather than as an exclusive set of research topics. Considering the ever-presence of the law in questions of distribution means that every area of legal research and analysis will eventually have underlying distributive and power-structuring effects. While this is more obvious in certain fields than others, all legal structures have an unavoidable political economy aspect, manifested through the binary of prohibition/permission and its social consequences.
Nevertheless, LPE has so far remained framed by the priorities and theoretical inquiries of U.S. legal scholarship. The workshop at the Centre for Socio-Legal Studies, at the University of Oxford aspired to contribute to the transnationalization of the discourse by assessing its relevance for Europe.
It is inevitable that in a setting of constitutional fragmentation such as that of Europe, market imperatives may take precedence over social welfare in different ways in different countries. A project that aspires to be normative in the ways LPE does must then find comparative or transnational/supranational points of reference. An example of the latter is the model of economic governance of the European Union (EU), which was designed following the financial crisis of 2008. Unitary and allowing for little, if any, flexibility with regards to the different of needs Member States, this model of economic governance provides a useful lens through which to examine the role of law in the prioritization of market imperatives and the consolidation, in different degrees, of austerity politics across the continent. The quest to transnationalize the LPE discourse sheds a new light, I believe, on the question of the constitutive function of the law, relativizing the implicit omnipotence with which it is sometimes supposedly endowed. Examining questions of distribution and inequality in their transnational nature, in a setting of economic globalization and capital mobility, reveals that the ‘automatic punishment mechanisms’ of the market may prohibit socio-economic transformation by means of legal change. This is especially true for countries that lack the ordering capacities of the U.S.
The workshop covered three thematic areas: Labor law and labor markets, especially in relation to EU policies; the corporation in transnational law; and, finally, normative approaches to democracy and reconstructive approaches to private law. The first two of these thematic areas make are discussed in the present set of posts.
A recurrent theme was how labour markets are created and governed, the role of law and how it privileges the ‘logic of the market’, or whether the analytical lens of the ‘market’ is even a useful way of approaching deeper LPE questions. In addition, both Marco Rocca and Manoj Dias-Abey identified an elasticization or simply deviations from the rule of law in the governing of labor markets, for example in the case of EU conditionality policies or in the case of migrants, restrictive visa regimes. This underscored a possibly tenuous relationship between the rule of law and the fixation on specific economic imperatives. A further question was whether ‘the labor market’ is something that can be reconstructed for progressive ends, and a reassessment of whether public interest is only possible through the mediation of the state.
A tension between ‘centralized’ (focusing on state law and regulation) and ‘decentralized’ (focusing on corporate governance reforms and normative pluralism) perspectives in the quest to democratize the corporation structured much of the discussion in the stream on the corporation in transnational law. Participants asked whether the law can create proximity between the communities affected by corporate activity and the corporation itself and, on the flip side, what the potential of the corporate sphere itself is in achieving its own democratization (e.g. from sustainability clauses in contractual governance of supply chains to shareholder stewardship and non-financial reporting). Yet, this dipole is itself exposed to scrutiny when considering that what is commonly understood as ‘internal’ to the corporation could be the result of an infused or mandatory ‘publicness’. The posts by Laura Knöpfel and Federico Fornasari explore these issues further.
In my opinion, the workshop underlined the relevance and the appeal the framework of the LPE beyond U.S. academia. The focus on the democratization of the economy – across all streams of the workshop – highlights the social background and the commonality of concerns behind the emergence of LPE as a normative project and a methodology. Indeed, the attempt to approach LPE as a methodology was particularly fruitful, creating a common frame of reference across different fields. Importantly, the workshop drew attention to the fact that transnationalizing the LPE discourse means that the discourse will not remain unchanged – the element of scepticism regarding the capacity of social transformation solely by means of national legal change stands as an example. Finally, with regards to Europe and legal academia, considering that the realist critique never had in Europe the ground-breaking effects that it had in the U.S., developing the LPE discourse, especially in continental Europe, means updating the critique against formalism and the quest to expose the function of the law in the distribution of wealth.