In Brief
Features of capitalist law
The puzzle is as follows: Why is capitalism — a system that is coded in law — so resistant to legal constraints? If it’s made of law, why can’t we capture it? Why can’t we contain it and direct it through law?
The simple equation is: Give me any object, any idea, any promise to future payment, and with the right legal institutions, I can code this as capital — capital being defined as an asset with the capacity to generate and protect wealth. So legal coding is about monetization. It’s extracting the monetary value from an asset.
“Every person has the right to live the life they have reason to value.”
After World War II, there was a general understanding that we have to contain the powers of capitalism to make sure that at least people can participate, and it doesn’t create the kind of crisis that can bring entire societies and their political system to the abyss. But what is interesting is that you see these major efforts, and then you see also that slowly but surely, they erode.
There are three features of capitalist law that help the system reconstitute itself time and again. First, the system legally empowers private actors — contract rights, private property rights. Second, access to the means of coercion is available in a highly individualized fashion. We call this litigation. Third, legal arbitrage: If you really know how to play the game, you can pretty much pick and choose the law by which you wish to be governed. If you are a repeat player and a long-term player, you do not litigate just for one specific case — you litigate for the rules.
What we’ve missed for so long, and what we have to reinvigorate, is really the normative agenda — what do we want and where do we want to go? I’m invoking the ideas of individual capabilities that Amartya Sen and Martha Nussbaum have developed, the idea that every person has the right to live the life they have reason to value. If we screen our own legal system on that basis, we can begin a process of saying: These are really impediments to this, and this is how we would have to change certain outcomes to make sure that every person has the right to live that life they value.