Law & Society's project of disentangling and demystifying the relationship between law and socioeconomic relations can seem ambitious with hindsight and positively quixotic in the present moment. Even though Wall Street has always been a source of bewilderment to Main Street, the newest financial inventions—such as derivatives and mortgage-backed securities—and algorithmic operations now exceed what even many investors fully comprehend. How then can scholars unsnarl law's investment in an economic order characterized by organizational and technological opacity? Two complementary books show how much we can, and must, learn.
In opening The Code of Capital, Katharina Pistor reveals a little grudge. Amidst rising interest in inequality, much scholarship has turned toward competing theories of capitalism (including Marxist), or perhaps globalization, but Pistor begs to ask why “most observers treat law as a sideshow when in fact it is the very cloth from which capital is cut” (4). In other words, it is only through law that mere assets become wealth-producing capital. Law transforms because it gives wealth-producing assets four privileges: priority, because of how it ranks competing claims to these assets; durability, because it ensures that they become theoretically immortal; universality across jurisdictions, derived especially through contracts, lobbying, and arbitration; and convertibility, in the sense that it allows them to be turned into state-backed currency. What economists and others overlook is that law's work as code has preceded capital and been its stabilizing force: the law is the engine for the creative adaptation of capitalism, and thus the source of both wealth and inequality.
Following the introductory chapter, Pistor lays out eight chapters that seem to form three sections. The early chapters, 2–5, form a long chronological portrait of how law has extended its reach to create capital from different types of assets. Her retelling of the origins of land out of their medieval sources (Chapter 2), and especially the invention of the trust, quickly establish the role of the state and law in making property rights as we know them. The corporation (Chapter 3) similarly gets its contemporary power from the protections granted by the state, including entity shielding. To many scholars, the corporate form exists to promote efficiency; to Pistor, the protections allow corporations to mint capital by accessing debt finance and engaging in economic arbitrage. The law's creation of debt, the subject of Chapter 4, points readers more firmly to the present, with a sort of handbook to understanding the 2008 financial collapse. Debt is a wealth-producing asset, an IOU that can be a binding legal commitment and a viable financial investment, but only if the private claims are coded in law. Cumulatively making the case that capital is what law makes it, Chapter 5 extends the notion of law's “enclosure” to knowledge, in the form of intellectual property. Pistor leads with the case of genetic patents and breast cancer gene technologies, but she also discusses the global regime of World Trade Organization and TRIPs agreement (Trade-Related Aspects of Intellectual Property Rights), and the way that our own data have become a capital asset.
Although Pistor helpfully frames law's generative possibilities, her historical sweep further allows her to complicate, in Chapters 6 and 7, the relationship of the public and private, and the state and globe. In the former chapter, she details especially the investor-state dispute systems and the International Swaps and Derivatives Association's successful lobbying of various governments to turn their private Master Agreement into state law regulating derivatives trading. In the latter, her focus turns to the role of the legal profession, which has helped construct international arbitration and a body of global law (especially of contracts and property rights) that challenge the centrality of states. Pistor's account of the development of the global legal profession emphasizes the centrality of Anglo-American firms, an analysis which could have been supplemented by revisiting the closer view of the field provided by Reference Dezalay and GarthDezalay and Garth (1996).
Pistor's remaining two chapters take aim at the conceptual tangle between state and private power, offering a striking critique of the failure of the public and the state to retain the reins over capital. The foil here, in Chapter 8, is the digital world in which computer coding, such as cryptocurrencies, could supplant the state. This will not happen, she seems to think, but she does see a tension between the creativity of coders and the reluctance of the state to use its tools. By some accounts, law's creativity is a feature rather than a bug, inherently serving capital (see Reference McBarnetMcBarnet 1984). To Pistor, it remains an open question whether the state's agents can shake off their “passive role” and the depoliticization of the rights framework itself (223). “For democracy to prevail in capitalist systems,” Pistor writes, “politics must regain control over law, the only tool they have to govern themselves, and this must include the modules of the code of capital” (224).
Through her historical scope and appreciation for legal creativity, Pistor builds the dominance of global capital into an awesome force. With her imploring conclusion, she nevertheless aspires to rein it in. Among numerous convergences between these two books, in Between Truth and Power, Julie Cohen similarly stands in awe of the world economic order. Like Pistor, too, she worries that a world constructed by law cannot easily be undone. And reading these two books together could make Cohen's seem a sequel to Pistor, drilling further into the economy of the information age.
Still, Cohen's ambitions stand apart, taking her further in scope and theoretical underpinnings. The scope is foretold by the division of the book into two parts, each of four chapters. The first part bears on the substantive transformation of the economy and law, while the second explores the transformation of institutions and instruments of control. Cohen laces the book throughout with theoretical heft, collectively drawing on an interesting range of thinkers, including Foucault, Polanyi, Schmitt, and Hohfeld. Such ambitions' tradeoffs, including its jargon, leave Pistor's book more approachable to advanced undergraduates and graduates seeking an introduction to law's role in contemporary capitalism.
As with Pistor, Cohen sees information capitalism performing new enclosures—not of land but of intellectual property—through the mobilization of law. Chapter 1 establishes Cohen's abiding interest in platforms, an evolution of firms into networked organizations dealing in digital information, which provide services and extract surplus value from user data. Google is the example par excellence. Where do platforms get their power, and what holds them accountable? With strains of Reference ZuboffShoshanna Zuboff (2019), Cohen turns in Chapter 2 to the work being done to construct the “biopolitical public domain,” in which users' behaviors are seen as available resources—open to an industry that seeks to capitalize on data by harvesting and marketing data, which then can be put into service to predict consumers' behaviors. But there's work to be done, because this public sphere requires discursive justification and legal protection. Chapters 3 and 4 follow with a wide-ranging tour of secrecy, surveillance, and intellectual property. The law supports platforms in legal developments and higher-order logics, all of which “express a distinctively neoliberal ideology within which profit-motivated private enterprises are appropriate and morally virtuous guarantors of social progress….” (103–4). In turn, ideological hegemony gives industry an “anti-regulatory force field” (104). Cohen's last chapter in this part complicates the narrative by considering how competing interests, namely content providers and nation-states, who deployed similar logics in their struggles with platforms. Do states still hold the ultimate authority? Cohen appears more agnostic on the puzzle of sovereignty, but she is equally concerned with the consequences of law's transfer of authority to capital. “The ongoing construction of constitutional, statutory, and de facto immunities for information-processing activities,” she concludes, “principally benefits powerful economic interests in their quest to construct a device for jacking directly into the volatile and fractious collective id” (107).
The first part might have stood well alone, but Cohen widens the project further in the second part to examine the evolution of institutions under the pressure of socio-technical change and neoliberal ideologies deployed for “managerialist” ends (141). These chapters have a different agenda—less conceptual, less sociological, more programmatic—and hence are less unified by a hypothesized relationship between information and governance. Some of the challenges described in Chapters 5 (judicial processes) and 6 (regulatory processes) flow inherently from the struggle to adapt old approaches (e.g., antitrust) to the less legible practices of platforms. The information era also provides exemplars of governance problems—for example, how data breaches illustrate perfectly the difficulty adjudicating intangible harms and increasingly numerous plaintiffs through aggregate litigation—but Cohen seems to elide the consequences of sociotechnical development with governance problems that are coincidental to a postindustrial economy.
After accounting for the “reconfiguration of old, familiar legal institutions” (202), in Chapter 7, Cohen tracks the new ones that have emerged in transnational spaces. Whereas Pistor's account of international trade emphasized the benefits to capital, Cohen's study complements those distributional effects with the charge that multistakeholder, “network and standard” governance threatens the rule of law and political accountability. Cohen satisfyingly accounts for several dynamics that give private stakeholders outsized influence over the complex, technical issues that global networks manage. Chapter 8 flows easily from there to a parallel concern for the “digital disruption” (238) of fundamental human rights transpiring at a number of levels. Many strains of this analysis have been emerging for a decade or more (see, e.g., Reference ZittrainZittrain 2008), and now there is widespread appreciation for how our experience of freedom is interwoven into our digital lives. In the immediate, Cohen nods approvingly but tentatively to Europe's experiments in fundamental rights and data protection.
But in the long-term? Taken together, Pistor and Cohen hint at courage where it is easy to despair. For Cohen, the technological forces and economic power that drive “the logics of dematerialization, datafication, and platformization” should be understood in terms of Polanyian movements and countermovements. Countermovements, if durable, will be co-opted, but “that does not make [them] futile nor their gains illusory” (270). To make tangible gains when the windows of opportunity open, that effort must engage the new logics and find new institutional forms. Pistor is similarly sensitive to the possibility that her first list of eight “roll-back strategies” may not be enough. But, while considering some more radical visions—both sincere proposals and the specter of revolution or authoritarianism—Pistor sides with incrementalism and an appeal to popular sovereignty as the only viable paths. In short, Cohen and Pistor offer a long, difficult, uncertain struggle.
One might yearn for a simpler, more direct program of reform but diagnoses as rich and rigorous as Katharina Pistor's and Julie Cohen's leave little choice but resignation to a protracted fight. Together, they call us to arms: Pistor's compelling historical survey exposes the law's long service for capital, and Cohen delivers a detailed blueprint for platforms' twenty-first century ambitions. Like the wider tradition of Law & Society scholarship, their shared portrait of the present age begins with sensitivity to inequality and power dynamics; then, it seeks to know how law constructs, and is constructed by, social forces. Since we imagine the law into being, it is only appropriate to ask, who is the author of our imagination? With these books, we have some very good answers.
