The New Trust Code

Allison Tait–

Legal scholars who care about how law creates wealth and power cannot afford to disregard the trust. As Katharina Pistor mentions in her recent book, The Code of Capital, the trust stands out as one of Anglo-American law’s “most ingenious modules for coding capital.” Trusts are a longstanding component of the “feudal calculus” that Pistor shows us is still “alive and kicking” in our financial regulation. Since their inception in the early eleventh-century in England, trusts have been essential instruments in the great and continuing quest to preserve and protect family wealth.

Trusts have always played a central role because they partition assets, thereby confusing the question of true ownership. That is to say, because trusts divide legal and equitable ownership, the real owner of the assets – the beneficiary – doesn’t have legal title to the assets and the legal owner – the trustee – doesn’t have any real rights to the property. In this way, trusts magically code their managed wealth as obscure and unavailable, without a true owner who can be held accountable for debts and obligations. As Roger Cotterrell pointed out some thirty years ago, “[t]he trust provides a way of freeing the property owner from constraints which the ideology of property otherwise imposes on her or him through its logic.” Accordingly, trusts have helped high-wealth families avoid unwanted taxation, shelter assets from surviving spouses, circumvent all manner of creditors, and protect family fortunes from spendthrift children.

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The Failure of Market Solutions and the Green New Deal – Pt 2

Alyssa Battistoni – 

As I argued in Part I of this post, we need to rethink not only the scope of state intervention in the economy, but what exactly the economy is. Instead of focusing on the industrial manufacturing “inside” the economy and trying to clean up the externalities that inevitably spill out, we need an economic policy that takes seriously the social and ecological functions that have been treated as external to the economy altogether. That is to say—we can no longer think of things like social and ecological wellbeing as “post-material” concerns or something to address as a “justice” bonus after we’ve gotten the economy growing again. Rather, these things are fundamental to how the economy works. So how far does “industrial policy” extend, and what would it mean with respect to social reproduction and ecological reproduction, from care work to carbon sequestration? And what in turn does this mean for the future of state action?

Climate discourse frequently moves almost seamlessly between the language of the “Green New Deal” and the call for “wartime mobilization.” World War II, this argument goes, is an example of undertaking rapid economic transformation in the face of emergency. As Bill McKibben writes, “Turning out more solar panels and wind turbines may not sound like warfare, but it’s exactly what won World War II: not just massive invasions and pitched tank battles and ferocious aerial bombardments, but the wholesale industrial retooling that was needed to build weapons and supply troops on a previously unprecedented scale.” To move away from fossil fuels, we need to “build a hell of a lot of factories to turn out thousands of acres of solar panels, and wind turbines the length of football fields, and millions and millions of electric cars and buses.” We do need to build a lot of solar panels and other clean energy technologies. But that’s a short-term transition strategy—not a model for a new economy. After the war, the expanded productive capacity was redeployed again, towards mass production of consumer goods for the benefit of private capital, with serious environmental consequences. But the emphasis on building factories also fits uneasily with the New Deal analogy.

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The Failure of Market Solutions and the Green New Deal – Pt 1

Alyssa Battistoni – 

market failures.jpgFor the three decades that climate change has been a political issue, it has been understood primarily as an instance of severe “market failure”: as the 2006 Stern Review on the Economics of Climate Change explains, “greenhouse gas emissions are externalities and represent the biggest market failure the world has seen.” In other words, carbon emissions do not have a direct price, meaning that emissions send no market signals and are not included in economic decision-making. The most prominent solutions to climate change have followed this model, recommending a carbon tax or other economic measures by which to “internalize the externality” of greenhouse gas emissions—to account for the social and environmental costs of carbon. Pricing carbon is supposed to make fossil fuels more expensive, ostensibly creating incentives for innovation in clean energy and other green technologies, and in turn prompting a shift towards their use.

In this first of two posts, I’ll explain how this model developed, and what kind of intervention the Green New Deal represents. In short, the scale of transformation called for implies a far more robust role for the state, going beyond mere market corrections to more substantial intervention in the economy. I’m not convinced, however, that the current framing of the Green New Deal is steeped in a vision of the old economy, and doesn’t address necessary support for social and ecological reproduction. (I’ll elaborate that critique in my second post.)

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The App and the Operating System: Neoliberalism and “Social Reproduction”

Angela Harris 

In the LPE community, issues of race, class, sexuality, and environment are sometimes referred to collectively as “social and ecological reproduction.” In this post and others to follow, I want to think about the place of the social and the ecological in “law and political economy.”

As others have written on this blog, one of LPE’s central commitments is the idea that economic and political governance are both constituted through legal rules, reasoning, and institutions. A second commitment is that in a democratically constituted society, economic governance ought not to be treated like a fully autonomous machine, but rather as bound to some extent by political norms. These ideas, of course, are not new (even to legal scholarship, which tends to be a late adopter of new ideas). But they have new force today. As the late Erik Olin Wright observed in a paper on “strategic logics of anti-capitalism,” in the early decades following World War II (the “Golden Age of Capitalism”), federal government policy worked to ameliorate the most damaging effects of capitalism in at least three ways: reducing the exposure of households to catastrophic risk through social insurance; heavily subsidizing public goods such as libraries, education, transportation, parks, and basic science research and development; and creating a regulatory regime to address some of the most devastating “negative externalities” caused by corporate capital, including environmental degradation, predatory market behavior, and workplace exploitation. The reversal of all of these policies, here in the United States and elsewhere in the world, goes under the name “neoliberalism.” And “law and political economy” is critical legal scholarship reinvented for the age of neoliberalism.

What, though, does LPE want? Would rolling back neoliberalism lead us to pack away our laptops and go home? Take, for example, some infamous features of the “Golden Age:” the omission of agricultural and domestic workers from the Fair Labor Standards Act, the endorsement of “redlining” by the Home Owners Loan Corporation, the embrace of gendered labor markets, and the failure of the federal government to provide free child care (let alone abortion and contraception). Stirring as FDR’s “four freedoms” speech continues to be, I wouldn’t want to live in 1941. We need to do more than un-install the neoliberalism app; we need to change out the operating system, and that operating system runs on caste.

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