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Recoding capital: how transforming the law is vital for a green recovery

Published by Anonymous (not verified) on Tue, 22/09/2020 - 6:18pm in

Capital dominates economic co-ordination under capitalism. The deep inequalities in power and resource this monopolisation of decision-making rights generates is codified by the law. A vast social coding system, the law is therefore fundamental to our intersecting economic and environmental crises. As a unique party conference season begins amid profound uncertainty, one thing is therefore clear: securing the deep decarbonisation and democratisation of our society we urgently need will require a profound reimagining of the law.

Hitherto, debate around a green and just recovery to Covid-19 has rightly centred on the need – and historic opportunity given the ultra-low cost of public borrowing – for a transformative, debt-financed increase in public investment to stabilise and restructure the economy and drive a decade of decarbonisation. But unless this is accompanied by a similarly ambitious reordering of the UK’s legal architecture to rewire behaviours and outcomes and generate a new purpose and governing logic for the economy, then a just and green transition will inevitably – and dangerously – fall short.

Transformation will depend on challenging the dominant Anglo-American legal ideology and practice under neoliberalism: the “law and economics” school of jurisprudence. As the emerging “law and political economy” movement argues, this approach has resulted in two profound shifts that have facilitated the growth of inequality and accelerating climate damage in recent decades.

First, the legal treatment of “the economy” has increasingly centred narrow definitions of ‘competition’ and ‘efficiency’ as guiding legal principles, limiting the scope for democratic participation, co-operation, and the public good to regulate economic activity. Second, in more “political” domains, the capacity of formal political institutions to contest and reorder economic power has been progressively neutered, the operation of the economy increasingly insulated from democratic intervention. The neoliberal turn in the law and legal institutions has in turn been fundamental to neoliberalism’s ‘disenchantment of politics by economics’, shielding the ‘market’ and market-mediated inequalities from political reconstruction, privileging capital’s right to coordinate economic activity, and defining and policing the boundaries of what is deemed public and private spheres.

The result: law codes capital and stacks bargaining power in favour of employers, managers, and asset-owners against labour, creating and consolidating structural inequality and stark asymmetries in economic power. Our inequality crisis is inseparable from how the law structures the economy. And it decisively defines the terms of our encounter with the environment, enabling and rewarding behaviours that are driving the accelerating nature and climate emergency. Law also ensures that younger generations, marginalised economic and social communities, and vulnerable nations, which are and will continue to suffer the worst consequences of climate damage despite being least responsible, have no representation in economic management that is driving breakdown, while protecting those whose actions are accelerating the crisis. The UK’s legal framework defines who has voice and agency in shaping the speed and nature of decarbonisation, in the UK and beyond, as well as who bears the costs and reaps the benefits, both socially and environmentally. As Jedediah Britton-Purdy explains, then, the law does not just manage a pre-existing and untouched nature, but is itself a mechanism for active world-making.

The way in which existing legal infrastructures drive the interlinked inequality and climate crisis is arguably most clear in the operation of the firm. As Gareth Dale points out, ‘the relentless increase in global resource throughput and environmental despoliation is not principally the result of states aspiring to a metric – higher GDP – but of industrial and financial firms, driven by market competition to expand turnover, develop new products, and increase profits and interest.’ The dominant model of the firm – organised to maximise shareholder wealth, with coordination rights held exclusively by capital and management – limits workplace democracy, generates steep inequality, and in aggregate drives the economy to operate beyond environmental limits.

This is not a ‘natural’ or inevitable outcome but instead legally and politically constructed. As Sanjukta Paul argues, the public through the law already allocates economic coordination rights in notionally wholly private spheres such as the firm – but does so in ways that currently work against the possibility of democratising production and provision through forms of economic democracy. We can reimagine this. But currently company law generates and sustains unequal distributions of political-economic power and erodes the capacity of democratic power to order our common life in ways that support mutual flourishing.

Any effort to restructure our economy toward justice and sustainability must then have a plan for legally reimagining the firm: how it is governed, how it operates, in whose interest, and for what purpose.

Common Wealth’s proposed Green Recovery Act 2020 offers a blueprint for such a transformation – an intervention that seeks to rapidly decarbonise economic activity, democratise economic decision-making, and fairly wind down the fossil fuel industry for workers and frontline communities while simultaneously scaling up a post-carbon economy of shared prosperity. The Green Recovery Act requires change as fast as technologically practicable, not distant target dates, and does so by rewiring the law to effect change.

The Green Recovery Act reflects a key insight: neither the firm nor the economy is a fixed, ‘natural’ institution, but instead is constituted by politics and law, where rights and powers are publicly granted, legally defined, and capable of being transformed. The market is not a space of private contract and property that precedes social action, but rather one made possible by public power, both a product of and subject to democratic intervention and reordering. There is not one inevitable ‘market’, but many market possibilities, depending on how the rules are defined and the resources with which participants are endowed. These can be redefined and reallocated to hardwire sustainability and shared prosperity into the economy, democratising governance rights and decarbonising economic activity.

In contrast to the concentration of coordination rights among property-holders, a deep legal turn must disperse and democratise economic control and association both within and beyond the firm. Against the naturalisation of inequality and unequal power, the law should open up the space for democratic ordering of and participation in economic and social life, including through the progressive extension of decommodified forms of ownership and provision. And instead of enabling activity that is driving us deeper into crisis, it must approach environmental law as a means to securing the conditions we all need to thrive, treating ecological and social functions and needs not as external to the economy, but central to its operation and purpose.

Law, of course, has an ideological character of its own, one that often has ingrained biases toward an existing and unequal status quo. This can preclude its progressive repurposing, placing limits on how far it can recodify and construct a democratic and sustainable economy. But if the Covid-19 crisis, like so many crises before it, has underscored the inseparability of economics from politics and the deep plasticity of our institutions, our response must be to transform the economic rules to reflect this in ways that build a more equitable commonwealth. Such a transformation will require more than a step-change in public investment, vital and affordable as that is; we also need a reimagining of the law. In place of supporting extractive economic institutions, the law should nurture a new economy: one that is purposeful, sustainable, and democratically governed, where all its stakeholders have a stake and a say in the wealth we create in common, infusing rights and collective rule into relations previously defined by unequal power and subordination. As the Covid-19 crisis deepens, securing a recovery rooted in the deep democratisation and decarbonisation of society will require a transformative reimagining of the law.

Mathew Lawrence is founder and director of Common Wealth, a think tank that works on ownership for a democratic and sustainable economy.

The post Recoding capital: how transforming the law is vital for a green recovery appeared first on Political Economy Research Centre.

Dems Pressured to ‘Pick a Fight for Once’ Over RBG Seat as Collins and Murkowski Oppose Pre-Election Vote

Published by Anonymous (not verified) on Mon, 21/09/2020 - 8:50pm in

Each side squares off ito fill Ginburg’s seat. Do Democrats have the stomach to use all tools to block another right-wing judge?

RIP Ruth Bader Ginsburg: What’s Next?

Published by Anonymous (not verified) on Sat, 19/09/2020 - 11:55pm in

Pancreatic cancer claims Ruth Bader Ginsburg; will Republicans succeed in confriming her replacement, even if Trump loses the 2020 election?

JUSTICE RUTH BADER GINSBURG HAS DIED

Published by Anonymous (not verified) on Sat, 19/09/2020 - 10:00am in

Bill Moyers sit down with Justice Ruth Bader Ginsburg to discuss the most pressing global issues faced by present-day women leaders. Continue reading

The post JUSTICE RUTH BADER GINSBURG HAS DIED appeared first on BillMoyers.com.

It’s Time for a Debt “Jubilee”

Published by Anonymous (not verified) on Fri, 18/09/2020 - 7:59pm in

Households and businesses are overloaded with debt. Richard Vague offers a set of proposals for how to restructure it.

Brexit: Snake Eyes

Published by Anonymous (not verified) on Wed, 16/09/2020 - 8:11pm in

Boris Johnson is pressing his Brexit luck, which wasn't looking all that hot.

Trump’s Eviction Moratorium Opens the Door for Medicare for All by Executive Order

Published by Anonymous (not verified) on Wed, 16/09/2020 - 2:06pm in

Since Covid-19 will be with us till at least the end oe 2021 (and I suspect longer), it opens the path for emergency Medicare for All.

CalPERS Cooks Its Books: Grossly Understated Investment Consultant Meketa’s Expenses in Annual Financials; Made a Criminal False Account by Burying the Cost

Published by Anonymous (not verified) on Fri, 11/09/2020 - 11:05am in

CalPERS violates accounting rules by hiding outside consulting costs in internal investment overheads. None of the possible reasons are good.

Brexit: Pear Shaped

Published by Anonymous (not verified) on Wed, 09/09/2020 - 8:05pm in

A desperate Government Brexit ploy, perhaps conceived to increase its negotiating options, has quickly become an own goal.

Another Compliance Failure: CalPERS Discussed Recusal of Ex-CIO Ben Meng but Failed To Enforce It; CEO Marcie Frost Says “Not My Job”

Published by Anonymous (not verified) on Tue, 08/09/2020 - 11:48am in

CalPERS CEO Marcie Frost told the press that she's punting on her compliance duties.

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