Bertram Lomfeld, ‘The Power of Law to Reshape Markets’

This contribution surveys the field for experimental bricks within a liberal utopia of democratic capitalism. Contrary to libertarian economic readings, such a liberal utopia means that market structures should be subordinate to democratic projects. Yet, the Global Financial Crisis fully revealed the deep crisis of democratic capitalism. With the given financialization and globalization of markets the logic of capital accumulation undercuts democratic influence. As global redistribution is hardly politically feasible, the creeping overthrow of democracy could only be stopped or reversed by reshaping the structure of markets itself. Here private law comes into play. The initial governance function of private law is not to limit or redistribute market outcomes, but to constitute the market mechanism itself. Basic private law institutions like property or contract do not only constitute, but could thereby also reshape markets. The legal arrangement of property rights for example could decide upon the amount of social inequality. Politically assigned rights shape economic life and not vice versa. To enfold this legal realist position for recent market structures, the epilogue makes three related claims. First: Markets are a legal construction. Second: Legal analysis could reveal (deconstruct) the political background imperatives of markets. Third: To change legal institutions could fundamentally reconstruct markets ‘from within’.

Lomfeld, Bertram, The Power of Law to Reshape Markets (2016). In Lomfeld, Somma and Zumbansen (eds), Reshaping Markets, Cambridge University Press, 2016.

First posted 2018-05-07 07:28:11

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