The Role of the State in Disrupting the Distribution of Power within GVCs

The Role of the State in Disrupting the Distribution of Power within GVCs

NB: This post is part of a symposium on law and global value chains co-convened with the Institute for Global Law and Policy’s Law and Global Production Working Group.

Ioannis Kampourakis–

The research Manifesto on the role of law in global value chains highlights the centrality of legal regimes for the ‘creation, structure, geography, distributive effects and governance of Global Value Chains’. The recognition of law’s constitutive role in the chain means that law is not simply an institutional backdrop for the operations of the chain but rather endogenous to GVCs. Indeed, transnational corporations that coordinate GVCs are not mere ‘context-takers’ but rather play an important role in producing the rules that govern their own operations. This jurisgenerative capacity of private corporate actors weakens democratic control over the production process and creates the potential for dis-embedding the transnational economy from social values and relations. Yet, the law that is endogenous to GVCs is not impenetrable to attempts to introduce such values within it, as recent “corporate sustaintability laws” imposing transparency requirements have illustrated. The normative project of ‘politicizing’ the endogenous law of GVC capitalism by injecting public values within regimes of private governance has the capacity to limit corporate rationalities of profit-maximization and to generate progressive social reforms across the chain. However, such attempts can only incompletely realize the goal of subjecting GVCs to democratic accountability, while they might reinscribe a neo-colonial dynamic, in which it is up to consumers and investors in the Global North to police the practices of firms exploiting workers and extracting resources from the Global South. Insofar as national and international law remain powerful inscriptions of democratic legitimacy with the capacity to steer collective life beyond market rationalities, any normative undertakings that seek to disrupt the current distribution of power within and across GVCs must also be channeled through them.

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Law and Political Economy in Europe: Transnationalizing the Discourse

The following set of posts comes out of the early career workshop ‘Law and Political Economy in Europe’, which took place at the Centre for Socio-Legal Studies, at the University of Oxford, on the 7th of October 2019. For all the posts this series, click here.

Ioannis Kampourakis –

Politicsineurope.jpgThe normative vision of Law and Political Economy (LPE) and its commitment to a more egalitarian and democratic society is shaped by its fundamental presuppositions. Contrary to a liberal understanding of markets as natural and neutral – that is, as prepolitical and apolitical – LPE builds on the realist project to expose the function performed by the law in the production and distribution of wealth. Approaching the market as a product of legal ordering means not only that juridical relations are constituent of social relations of production, but also that law structures the bargaining power of the groups competing over the distribution of the output of the production process. In this direction, law’s permissions, alongside its prohibitions, have distributive importance – law is never absent from the question of distribution; there is no moment of apolitical, neutral exchange between market participants. The emphasis on law’s constitutive role in the economy entails an implicit assumption that the law can also generate social transformation. If it is legal rules that establish a regime of socio-economic inequality and hierarchy, legal rules could also undo it.

From these starting points, LPE develops as a methodology, rather than as an exclusive set of research topics. Considering the ever-presence of the law in questions of distribution means that every area of legal research and analysis will eventually have underlying distributive and power-structuring effects. While this is more obvious in certain fields than others, all legal structures have an unavoidable political economy aspect, manifested through the binary of prohibition/permission and its social consequences.

Nevertheless, LPE has so far remained framed by the priorities and theoretical inquiries of U.S. legal scholarship. The workshop at the Centre for Socio-Legal Studies, at the University of Oxford aspired to contribute to the transnationalization of the discourse by assessing its relevance for Europe.

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