Leaping the Atlantic?
Introductory remarks on Law and Political Economy in Germany
One is tempted to write: There is a spectre haunting European legal academia – the spectre of Law and Political Economy (LPE). Described as a movement, discourse or a methodology, LPE originates in the United States, and more precisely, US law schools. An LPE manifesto has been formulated in 2020, a journal founded, LPE courses are overbooked and LPE chapters have formed at top US law schools. Leading proponents of the US-LPE movement state:
“Our work is rooted in the insight that politics and the economy cannot be separated and that both are constructed in essential respects by law. We believe that developments over the last several decades in legal scholarship and policy helped to facilitate rising inequality and precarity, political alienation, the entrenchment of racial hierarchies and intersectional exploitation. We aim to help reverse these trends by supporting scholarly work that maps where we have gone wrong, and that develops ideas and proposals to democratize our political economy and build a more just, equal, and sustainable future. “
Reactions in the US range from scathing criticism to enthusiastic support. The European LPE discourse is increasingly gaining traction, as is illustrated by the announcement of a Cambridge University Press book series.
How relevant is this for Germany? In this blog symposium, we would like to think about implications and questions that could be taken from the US LPE discourse and translated into German legal thinking. They may be answered differently here or have yet to be addressed. Evidently, transatlantic imports are a tricky business, and only succeed if done thoroughly.
Therefore, translations of LPE to Germany need to be informed by an analysis of German and European economic, social and cultural history. Moreover, there is much to be gained by contextualizing questions of methodology in their respective institutional settings. The following blog symposium kicks off the German conversation by bringing together contributions from a wide range of legal fields and approaches.
LPE as a response to a new Gilded Age in the US
The LPE manifesto’s diagnosis in 2020 refers to a specific US-American tradition: economic inequality and social inequities in the United States are described as rising to levels comparable to the “Gilded Age”. In US collective memory, the Gilded Age is a period of rapid industrialization in the last decades of the 19th century, which today is widely associated with the memory of massive social upheavals and the emergence of an oligarchy – the worst aspects of unfettered markets. In this narrative, the Gilded Age was followed by decades that led to the expansion of the American administrative and welfare state through the reforms of the New Deal under F.D. Roosevelt from the 1930s onwards and the subsequent Civil Rights Revolution with significantly lower levels of economic inequality. However, history did not end here. What followed is described by the LPE manifesto as a backlash from the 1970s onwards. This backlash has created a cluster of predominant ideas, shifted legal theories and changed ways of approaching the legal education and profession profoundly. Taken together, it is termed the “20th century synthesis”. This synthesis “makes up the air we breathe, and is the only disciplinary atmosphere younger scholars and lawyers have known.”
To describe this synthesis, the manifesto focusses less on abstract political thought. Rather, the authors roll up their sleeves and analyze concrete developments in US law, approaching these developments historically and inductively. Firstly, the manifesto emphasizes that a certain generation of scholars in law & economics reworked central doctrines of economic law in favor of moneyed interests with a methodological toolkit that hides highly normative assumptions and focusses attention persistently on a very limited set of questions. Moreover, the manifesto points to a range of developments in private law that supposedly profoundly shifted the respective fields. For instance, intellectual property has been strengthened in an unprecedented way even though the concept of property in intangible goods had not been accepted easily before. Corporate Law turns to shareholder value maximization. Civil procedure turns to judicial managerialism and arbitration to the detriment of consumers. Competition law is rewired in a lopsided manner while the institutional conditions of the Federal Trade Commission deteriorate at the same time. International economic law is described as increasingly dominated by a neoliberal conception of cross-border activity aiming at its isolation from political interference. Furthermore, the manifesto analyzes constitutional law as a central element of the so-called 20th century synthesis. According to this analysis, US constitutional case law has been developed into a deregulatory force. This has supposedly happened by excluding matters of class or structural inequality from constitutional law and by extending First Amendment protection to strike down economic regulation. This development is analyzed in parallel with a deep-seated skepticism of everything related to the state, pronounced sharply by Public Choice Theory. Taken together, all these developments form the so-called “20th century synthesis”. And while all these developments on their own have been met with academic criticism before, the manifesto considers former criticisms unable to meaningfully change perceived mistakes.
The need for contextualization
Against this background, we propose to take the questions of LPE to shine light on issues that have often been neglected in German legal academia. Given the historical-inductive approach to defining the LPE manifesto’s interest, contextualization is key. For one, contextualization is needed to detect parallel movements at their respective levels of regulation in the respective legal fields (from the local to the state, national, EU, international or transnational level). More broadly, such contextualization requires thinking and doing research on three levels.
Firstly, putting on the LPE glasses requires looking at the politics of ideas. What paradigms, ideas, thinkers could have played a comparable role to the ones described by LPE? How did their influence translate into legal arguments?
Secondly, putting on the LPE glasses requires contextualizing the path-dependencies of German economic and social structures: What’s parallel and what is and has possibly always been fundamentally different compared to LPE’s US diagnosis? The question is intentionally phrased in a very broad and holistic way because this would correspond most closely to how LPE analyzes the US development. Contextualizing such path-dependencies requires looking at the broader economic and social model as well as the particularities of the respective fields and their respective legal rules. Luckily, such questioning doesn’t have to start from scratch. Most easily accessible for a transatlantic comparison of the German socio-economic model is probably the literature on the „Varieties of capitalism“, or more generally Comparative Political Economy (CPE). Moreover, LPE could connect well with work that has been going on for a while in Germany, ranging – among others – from the Neue Verwaltungsrechtswissenschaft which emerged in reaction to doubts about the capabilities of the state to regulate effectively, to Legal History, Political Theory, Science and Technology Studies and Feminist Legal Theory. Research on the empirical realities underlying the respective legal fields should be equally integrated, as will be shown for the sociology of the housing market by Emma Sammet’s contribution.
Thirdly, and most obviously for lawyers, putting on the LPE glasses inevitably involves contextualizing existing norms. In that sense, LPE asks legal fields to do their homework and give room for self-reflection. How and where do they work with oversimplifying naturalized assumptions about markets? Where do these naturalizations happen and what role do they play? Has there been a shift comparable to the one described in the so-called 20th century synthesis, and how did this shift come about? And, on the other hand, also: where have such assumptions always been different? And: what are possible developments that point in different directions?
Contextualize methodology
Beyond the process of observing and describing changes comparable to the “20th century synthesis” in German legal discourse, the question of how to deal methodologically with the results of such inquiries must be equally contextualized. Debates about legal methodology are unavoidably intertwined with questions about the relevant concept of law, and democracy. Regarding these foundations, shared assumptions of LPE have not even been consented yet for the US. German legal scholars should especially bear in mind three contextual differences when translating the questions LPE asks.
Firstly, the most recent particularities of the US political system that pertain to the difficulties of a two-party-system with high levels of polarization and a highly politicized judiciary. Why is that relevant? LPE seems to be marked by a considerable disillusion about the US political system post- and possibly pre-Trump. This disillusion may be shared by many in US legal scholarship especially against the background of recent Supreme Court appointments and the consequently aggravated problem of a counter-majoritarian difficulty. In such a context, the sensitivity for a confrontation between political decisions and judicial restrictions with weakened legitimacy must be heightened. And political decision-making is hampered by levels of political polarization that have frequently been compared to those of the Civil War. Therefore, it is – for instance – not surprising that the LPE movement thinks a lot in categories of social movements as a method of functioning policymaking. The German legal context may differ to a certain degree: At least for the moment, the democratic theory underlying German mainstream legal thinking can be different because we do not doubt the legitimacy of our judiciary and parliamentary system at a similarly profound level. Thinking about questions similar to LPE in Germany will therefore require looking at different actors, at the national level especially the democratic legislator, and argue differently.
Secondly, and relatedly, LPE questions come from a legal system whose understanding of law differs fundamentally from European, and especially German approaches. This relates centrally to the US tradition of legal realism, and perhaps also to a legal culture of Adversarial Legalism. Closely related, the consensus on a shared legal methodology is much more tenuous in the US than in Germany.
And thirdly, American legal education differs in central aspects in that Law School is more skills-oriented and there is – still – a certain emphasis on law and economics in the first year of Law School.
Kicking off the debate
This blog symposium brings together contributions to the Law & Political Economy in Germany conference on June 28 and 29 in Berlin, where scholars from a variety of legal fields discussed the American Law and Political Economy Discourse and possible translations into and exchanges with German legal thinking. We first opened the horizon of possible questions and situated them within a German context. In the blog symposium, Dominik Rennert compares and contrasts LPE’s historical diagnosis for the US situation with recent developments in Germany. Andreas Kerkemeyer adds a perspective on ordoliberalism’s characteristics compared to the paradigm underlying LPE assumptions. We then focus on the question of how German lawyers can deal with LPE’ shapeshifting character as a social movement, network or methodology – Thomas Wischmeyer tackles the question of constitutionalizing the Political Economy in Germany. Contrasting alternative progressive approaches, Bettina Rentsch shows parallels and differences to early German critical theory and points to the problem of an LPE epistemology. We then zoom in and translate LPE thinking to different legal fields. Emma Sammet focuses on the development of German housing policy, Max Petras on regulatory law following the privatization of certain infrastructures and Victoria Guijarro Santos on interactions between algorithmic and legal regulation in the workplace of an Uber driver. Alexander Hellgardt compares the LPE movement in the US to German debates on a substantive approach to private law and Marvin Reiff takes the debate to one institution of Private Law by discussing what “Steward Ownership” (Verantwortungseigentum) might have to offer regarding LPE.