Colorblindness and Liberal Racial Paternalism in Bailey v. Alabama

Noah Zatz – 

Anyone familiar with Bailey v. Alabama understands that it was a case about racial domination in the Jim Crow South. Lonzo Bailey was a Black agricultural laborer who quit his job with a white farmer. For that, a white legal system convicted him of a crime. The prosecution was characteristic of an effort throughout the post-Civil War South to reestablish the brutal exploitation of Black labor in the aftermath of chattel slavery’s formal abolition. The Supreme Court Justices who sided with Bailey surely knew this, too.  And yet they went out of their way to deny it.

This willful, absurd denial makes Bailey an excellent vehicle for critical engagement with colorblindness rhetoric, including the limits of formally race-neutral legal doctrine as a means to address racial inequality. In particular, we can see in Bailey a particular and pernicious dynamic by which, constrained by colorblindness, liberal efforts to remedy racial injustice turn to a form of racial paternalism (terminology I adapt from a forthcoming essay by historian Nathan Connolly). Rather than treating state intervention as correcting the exploitation of systemic racial imbalances of power, racial paternalism treats legal protection as an exceptional intervention on behalf of the incompetent, often relying on the same racial stereotypes that underwrite the exploitative practice at issue.

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From Form to Reform in Law and Finance: Tammy Lothian

Robert Hockett –

As with most topics having to do with our primary modes of production and distribution – “microeconomics,” “macroeconomics,” “industrial economics,” “labor economics,” … – so with “financial economics” there is a well-entrenched orthodoxy that seems to enjoy pride of place in the academy and on the hustings. Indeed, one often hears “the financial markets” described as that site of economic activity which most closely approximates, in respect of its principal players, constitutive features, and felicitous outcomes, the received Smithian wisdom on decentralized market economies and their virtues.

Financial market participants lack market power, we are told, and the trading mechanism quickly impounds privately held value-pertinent information into publicly observable securities prices. Hence the financial markets can generally be relied upon smoothly to channel investment capital toward its “most valued uses” on a real-time basis. Continuous buying and selling produce informational efficiency, that’s to say, while informational efficiency produces allocative efficiency. Et voila, we are all of us left better off, producing more of what’s most valued and less of what’s least valued than could otherwise be reasonably expected. All thanks to our financial system – like our healthcare system, “the envy of the world.”

If there is any realm, then, in which public intervention should be “light touch” and minimal, orthodoxy tells us that it is the realm of finance. Sure, many a self-styled progressive economist will concede, there are market failures aplenty in some spheres that warrant public intervention. There is “the labor market,” for example, where monopsony power on the part of employers must be counterbalanced by state-sanctioned monopoly power on the part of employees. Or there is “the environment,” in connection with which pollution externalities are an ever-present source of inefficiency that must be made to be re-internalized. But the financial markets are one place where nature is best left to take its beneficent, Scottish Enlightenment course.

It is almost as if the vaunted “Fundamental Theorems” of welfare economics were conceived and derived with the financial markets as their “intended interpretation.”  And maybe they were: note the work done by futures markets, for example, in Hicks’s foundational Value and Capital – work of which Hicks’s intellectual descendants Ken Arrow, Gérard Debreu, and others made similar, and seminal, use later. Surely, then, the financial markets are our most market-like markets – they are markets at their just and efficient best, they are markets par excellence.

Now to anyone who has been paying attention to “real world” economic or even political developments over the past decade or so, the foregoing remarks must ring facetious. Isn’t “Wall Street” the seedbed of all that went wrong in the American and global economies during the lead-up to 2008 and its aftermath? Isn’t Wall Street itself what was accordingly “occupied” once it grew clear that neither Congress nor President Obama were going to do much beyond Dodd-Frank to put things right? And didn’t bank-bashing figure prominently, even if cynically, in certain “AstroTurfed,” pseudo-populist rightwing political movements in 2010 and 2016?

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What Role for Global Finance in a Course on International Trade Law?

David Singh Grewal –

Most years, I teach an introductory course on International Trade Law. And every year since I began I’ve included a session on the international financial architecture, on the view that this architecture is intimately bound up with the functioning of the trade regime.

Euro Dollar The European Union United States

I begin the course predictably enough with a series of sessions on the history and political economy of international trade before we get into what I call the “guts of the GATT.” Here, we study the key articles of the General Agreement on Tariffs and Trade (GATT) and the main disputes that have arisen concerning their interpretation, both before and after the establishment of the World Trade Organization (WTO). Any course on international trade law would have to introduce core elements such as “most favored nation” status (Art. I), “national treatment” (Art. III), key exceptions (for example, as elaborated in Article XX), and the main “annex agreements” of the WTO (such as the TRIPS agreement, which Amy Kapczynski has discussed on this blog), as well as the various remedies and safeguards available to states facing disruptions from international trade. But toward the end of the course, I bring my friend and colleague, Robert Hockett, to discuss the international financial architecture underpinning economic globalization as a whole.

I suspect few international trade law courses address international finance as an integral part of an introduction to trade liberalization. Given the evolution of international economic law, this choice is probably unsurprising. Neither in the treaty text of the GATT (nor in the other “annex agreements” that make up the WTO) is financial architecture explicitly regulated. By contrast with international trade law, international financial law is elaborated through a different set of governing texts, institutions, and international monetary practices—prominently, the IMF Articles of Agreement, the IMF itself, and the practices that have developed among affiliated national central banks and finance ministries. Trade law scholars may be understandably wary of bringing such complex or seemingly extraneous considerations into a course that will already be full enough.

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Is “the Market” the Enemy?: Racial Exploitation in Bailey v. Alabama

Noah Zatz –

vote communist

“In our current moment, anticapitalism and struggles against state violence and incarceration tend to be separate movements.” So wrote renowned historian Robin D.G. Kelley recently in a new preface to his classic book Hammer and Hoe, which examines the largely Black Communists of early-mid 20th century Alabama. Kelley’s protagonists, in contrast, saw struggles against economic inequality and exploitation and also against specifically racialized state violence as “inextricably bound together.” This same milieu produced the groundbreaking 1911 case of Bailey v. Alabama. There, the Supreme Court struck down under the Thirteenth Amendment Alabama’s use of criminal law to hold Black workers in peonage.

This post extends my prior treatment of Bailey. My focus here is on Bailey as a case study in “racial capitalism”, and I want to challenge specifically the common conflation of all things “economic” with the outcomes of “markets,” even markets understood in Legal Realist fashion to be structured by laws of property and contract. Like Kelley, I do this with one eye on the contemporary, and in particular on the separation between critiques of “precarious work” in today’s labor markets and those aimed at our racialized carceral state.

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International Investment Arbitration in Critical Focus

David Schneiderman – 

How might we come to better understand the complex, multilevel, and interdependent world in which we live? This is a particular challenge for international and global legal scholars whose methods of analysis typically are confined to empirically observable legal phenomena in the form of international conventions, treaties, custom, and the like. In this post, I propose bringing international legal studies into conversation with a particular branch of international political economy (IPE), one that brings both an interdisciplinary and a critical edge to the global study of law.

The field of IPE in the English-speaking world has been described as being divided between two competing schools. A U.S. version emphasizes the testing of scientific models via empirical methods, focusing on state behavior as its unit of analysis. Modeled on ‘hard science,’ the U.S. version adopts a state-centric view. A more ambitious British version aims to be more qualitative and normative, emphasizing society, power, and history. It is this latter version that merits attention from legal scholars. It is a mode of analysis that is more interpretive than narrowly empirical, asking what values are promoted and who benefits from particular institutional arrangements. Susan Strange, one of the founders of the British school, has defined the study of IPE as concerning: ‘the social, political and economic arrangements affecting the global systems of production, exchange and distribution and the mix of values reflected therein. Those arrangements are not divinely ordained, nor are they the fortuitous outcome of blind chance. Rather they are the result of human decisions taken in the context of man-made institutions and sets of self-set rules and customs.’

This is a mode of analysis that will be familiar to critical scholars working in many disciplines, but an IPE approach has the advantage of thinking about contemporary global problems on multiple scales. Critical IPE is ontologically inclined, in other words, to theorize law as interacting with actors operating at various levels. It looks to the ‘complex whole,’ Robert Cox writes, rather than to the separate parts.’ Cox, in his own work, helpfully distinguishes between ‘problem solving’ theory and critical theory. The first has as its object the smooth operational working of international institutions. Such approaches serve ‘particular national, sectional or class interests.’ Problem solving is about managing the world, not changing it. Critical theory within IPE, by contrast, does not take institutions or relations of power for granted. It attends instead to how they arise and change. This is a style of understanding the world that is both multidisciplinary and normative.  It is, as Benjamin Cohen puts it, about ‘making the world a better place.’

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Where Is Race in Law and Political Economy?

Angela Harris

In their first post on this blog, Amy, David, and Jed assert that “politics and the economy cannot be separated.” Nevertheless, as they also observe, the separation of the two – as, for example, in the idea that economic activity is determined by laws of supply and demand that lie outside the power of governments to influence, other than through misguided “intervention” – continues to influence law and policy. A similar separation runs through scholarship in several disciplines, including law, between the study of economics and the study of race. As the new field of “law and political economy” grows, one of its tasks must be to trouble this separation as well.

We know the separation most familiarly as the “race or class?” question (note the either/or framing). In the affirmative action debate, it manifests as this: Isn’t a poor white kid from Appalachia more deserving of the last spot in a freshman class than a black doctor’s kid? In academic discussions, here’s how it typically goes: All this stuff about race, or more broadly, all of this “identity politics,” is a distraction from the deeper and more fundamental realities of wealth and poverty, production and exchange. Sometimes race distracts because it is considered to be a matter of “culture,” which is “epiphenomenal” to material relations: It’s about exploitation, stupid! Other times, race is considered a distraction for pragmatic reasons, because its appearance is “divisive,” threatening the solidarity of labor, or the electorate, or progressive communities, or women. At still other times, especially within academia, the separation of race from economics looks something like a polite form of intellectual self-segregation: while all the black kids are sitting in the cafeteria together talking about critical race theory, the law and economics kids are at their own table, drawing supply and demand curves and talking about Pareto optimality. To each their own, and everybody’s happy.

But this story of race and racism as either irrelevant to or reducible to the story of production, exchange, and consumption is wrong. Black studies scholars have been saying so for quite some time. In 1935, W.E.B. Du Bois argued that what turned the tide of the Civil War was a mass withdrawal of slave labor, amounting to a “general strike.” In his view, the North’s victory was neither a race story nor a labor story, but a powerful demonstration of how the two were intertwined. Generations later, Cedric Robinson’s Black Marxism provided a similar attempt to take race seriously within a materialist frame, arguing that the Eurocentric origins of Marxist theory left it unable to adequately account for black history.

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State Power and the Construction of Contractual Freedom: Labor and Coercion in Bailey v. Alabama

Noah Zatz – 

If forced to choose, I might pick Bailey v. Alabama as my favorite contract law case. That is, if it even counts as one. Which is pretty much my point. Decided in 1911, Bailey is a criminal case – Lonzo Bailey was convicted for fraud.  It is also a constitutional case – the Supreme Court struck down the conviction as violating the Thirteenth Amendment’s prohibition of involuntary servitude. A labor case, too – the criminal statute specifically targeted workers who took advances on wages and then later quit before paying the debt. And a race case, though the Court denied it – Alabama’s “false pretenses” statute was one cog in the wheel of Jim Crow neoslavery. But yes, also a contracts case (in a libertarian’s casebook, no less!) because the Court used the case to erect a boundary between criminal and civil consequences for breach of contract.

This overflowing of conventional doctrinal boundaries makes Bailey the perfect vehicle to deliver key insights of a Law & Political Economy approach. So much so that I will do it over multiple posts.

In this first installment, Bailey punctures the ubiquitous conceit that there is or could be an autonomous sphere of economic life – “the free market” – that stands apart from politics, from contests over whether and when to authorize the coercive exercise of governmental power. That contrast between economic freedom and political power is ubiquitous, as in the language contrasting “private” law with government “intervention” in the market (via “public” law). This conceit renders unremarkable what might seem contradictory: a ubiquitous politics that abhors government regulation (of “the economy”) yet thirsts for a state that is “tough on crime.” Continue reading