A Neoliberal Masterpiece?

Kate Redburn and Amy Kapczynski

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In our market supremacist era, is anyone allowed to bring their full self to the marketplace and the workplace?  Or must we all be “everywhere and only homo oeconomicus,” as Wendy Brown put it?  One of the more arresting aspects of the Supreme Court’s recent Masterpiece Cakeshop case is how neoliberal it isn’t. If neoliberalism casts us all as imbued with equal dignity as consumers, and all equally debased in the workplace, Masterpiece points to a world where markets treat some of us decidedly more equally than others.

What might it mean for our understanding of how neoliberalism works, both broadly, and in relation to a Court that elsewhere shows itself soaked in neoliberal thought?

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Using LPE to Understand For-Profit Colleges

Luke Herrine —

Betsy Devos’s Department of Education spent the summer finalizing its plans to defang Obama-era regulations strengthening consumer protection regulations of for-profit colleges. Undoing these regulations will keep federal funds flowing to companies that line investors’ pockets by imposing a lifetime of indebtedness onto working-class individuals under false pretenses. The ongoing challenges to their delay and repeal (one of which just won in district court!) are thus crucial.Image result for college

But that does not mean that we should celebrate the regulations themselves as victories for progressivism. They are a prime example of the limits that neoliberalism has imposed upon the progressive imagination. From a law and political economy perspective, it is clear that for-profit colleges have become a wealth extraction strategy in which financiers create a revenue stream by using the societal promise of class mobility as a lure to lead structurally disadvantaged individuals into unpayable debt. Shifting from a neoliberal to an LPE lens makes it clear that eliminating for-profit colleges is the first step to a truly progressive vision for the role of higher education in society.

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Political Courts and Democratic Politics

Samuel Moyn —

The nomination of Brett Kavanaugh to the Supreme Court is on the knife’s edge. The stakes are higher than for the confirmation of any American judge in our lifetimes. For MN SUPREME COURT WIKIthat reason alone, it is probably not a good time to stage a general debate whether and in what sense law is something more than politics by other means. But I would conduct it by separating out the sort of high stakes judicial appointments and decisionmaking that has attracted everyone’s interest in the past few weeks.

Low stakes judicial decisionmaking is inevitably political too, obviously. Generations of critical work has established that low stakes judicial process is shot through with politics, and generally helps reproduce illicit structures, especially through criminal and private law. But if that debate will always deserve to continue, one can legitimately conclude that high stakes judicial decisionmaking is different. That it is politics by other means is much more straightforward and undeniable, and the primary question is how progressives should think about it.

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Partisan Warriors and Political Courts

Amy Kapczynski —

Thursday’s Supreme Court confirmation hearing was a stomach churning, nauseating affair. Christine Blasey Ford laid her life on the tracks, knowing full well that trains delivering important men can rarely be stopped.  That was enough, but then came the turn:  Brett Kavanaugh, partisan warrior.  He tore into Democrats for a process almost entirely dictated by Republicans.  He seethed with explosive anger, which he weaponized to advance his own career.  He lied and evaded.  And walked away somehow having improved his chances of being appointed to the Supreme Court.

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If “courts are political,” do we have grounds to object to this display?  Dani Rodrik asked a similar question on Friday in a broader frame: “How do we prevent ‘the Supreme Court has always been political’ argument from morphing into ‘judicial independence and the rule of law are political charades’?  Asking for friends in Hungary, Turkey, Poland, etc.”

The question is much deeper, as he rightly points out, than our immediate American fiasco.  And it is an urgent one for the LPE crowd, raised up as we were on the insights of legal realism and critical legal studies, yet committed – as we also are – to articulating a set of claims to the right and the good that could help make our democracies more fair and just.

In the coming days and weeks, a few of us will offer some ideas on these questions to see where our conversation might lead us.  To start us off, I’ll expand a little on the epigrammatic answer I gave to Rodrik: “In a democratic system judges are not political in the way politicians are. They must hear all comers; give reasons; express a universal principle — they morph politics and produce universalizing argument.”

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Accounting for Incorporation: Part 2

Robert Hockett —

Introduction: From ‘Accounting For’ to ‘Accountable To’    

In an earlier post I welcomed legislation recently proposed by Senator Elizabeth Warren. Her Accountable Capitalism Act, I suggested, not only bids fair in the long run to render incorporated business firms less sociopathic, but also affords in the short run a fine opportunity to recall what corporate privileges are for. The latter, I argued,

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are both analytically and historically best understood as ‘publicly’ conferred advantages accorded ‘private’ entities for ‘public goods’ that they provide. This interpretation of the origin and function of the corporate form, I noted, is simply inescapable when we observe the practice of conditional corporate chartering, and the law of corporate action taken ultra vires, that predominated from the dawn of American incorporation well into the 20th century.

Unfortunately, I also noted, once the 19th century conditions of capital scarcity and unreliable public revenue that had recommended incorporation as a necessary mode of ‘outsourcing’ public functions to private entities in the first place had receded, corporate history took a darker turn. Subnational state governments that once had chartered firms conditionally to discharge public functions now began to bribe them, with a view to gleaning franchise revenue. Charters now grew unconditional and firms were treated as accountable to no one but their largest shareholders. Firms grew ever larger in this new environment, and states grew weaker and ‘divide-and-conquerable’ where holding privileged ‘private’ firms to ‘public’ account was concerned. A ‘race to the bottom’ began.

What, then, I asked, is requisite to restoration of some version of the status quo ante – the world in which the truly extraordinary privileges of perpetual existence and asset-insulation (particularly limited liability, an illuminating synonym for which would be ‘limited accountability’) were conditional upon provision of some public benefit? The answer, I suggested, would involve a number of essential measures, all of which would capitalize upon the fact that it’s our federal government now that stands to mega-firms as our state governments once stood to smaller firms. I therefore promised in a sequel post to lay those out, and then to indicate how Senator Warren’s legislation would begin to take those necessary steps.

Well then, here we go.

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Accounting for Incorporation: Part 1

Robert Hockett —

Last month Senator Elizabeth Warren proposed an innovative – or better yet, restorative – new piece of legislation to the US Senate. Something like the Senator’s Accountable Capitalism Act, which would, among other things, hold corporations accountable to other stakeholders besides shareholders, is long overdue. It is in consequence much more than welcome. This owes less to the bill’s likely passage, however – it will probably die in committee this time around – than to the occasion its proposal affords us to recollect (a) what incorporation legally is and (b) what incorporation actually is for.

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We seem as a society and as a legal culture to have forgotten how the corporation as a ‘publicly’ privileged mode of ‘private ordering’ came into being. Hence we have come likewise to overlook how the irreducible public/private hybridity of this now-ubiquitous institutional form gives the lie to familiar liberal and neoliberal clichés concerning a supposed fundamental divide cleaving both life in communion with others, and that life’s legal emanations, into radically distinct public and private ‘spheres.’

Senator Warren’s proposal accordingly provides not only lawyers, but also the broader public a rare opportunity to recall the true nature and purpose of incorporation – and, with those, the institutional continuum along which our contiguous public and private modes of life and collective agency are arrayed. In so doing, it also affords us an opportunity to restore to America’s productive life a critical institutional element that lay at the core of its economic ‘growth miracles’ and ‘social contracts’ alike during its most prosperous past eras.

I’d like in two posts, then, first to recall in detail what needs restoring and why, then to sketch how to restore it. In the present post I’ll stick to that what and why. In the follow-on post I’ll turn to the how – I’ll elaborate, in short, how Senator Warren’s proposal can be viewed as a sequence of first steps toward the requisite restoration.

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The Allocation of Economic Coordination Rights

Sanjukta Paul —

The concept of economic competition is central to policymaking deliberation in this country. Yet even as our understanding of that concept evolves to take better account of corporate power, our thinking about competition retains a fundamental blind spot. Simply, the boundaries of the business firm insulate many instances of economic coordination that would be deemed anti-competitive if they were to take place between firms or individual persons. The regulatory discrepancies that flow from this fact tend to entrench existing distributions of advantage, power, and opportunity rather than to balance it.

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Economic life necessarily involves competition and coordination; it always has, although our policy choices about how to allocate coordination rights change. Presently, both antitrust law and our dominant frame for economic policy more generally tend to favor top-down, hierarchical forms of coordination

grounded in ownership rights, while viewing more democratic, horizontal forms of coordination with skepticism. This deep-seated preference, which itself precedes the contemporary concern with promoting competition, can be traced in part to antitrust’s (and the law’s) original preference for protecting property rights over workers’ freedom of association and contract – even as the pre-New Deal courts invoked the freedom of contract in other areas of economic and labor policy.

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Summer Break

Dear Readers —

 We are taking a few weeks off to accommodate the end of summer holidays and the scramble toward the new semester.  We’ll be back online in mid-September.  Thanks, as ever, for reading.

Best,

The LPE Team.

The New Class-Blindness

Cary Franklin —

Legal advocates have scored some major class-related victories in 2018. In January, an appellate court held that the administration of California’s money bail system violated the Fourteenth Amendment rights of indigent defendants. In February, the Fifth Circuit held Harris County’s money bail procedures unconstitutional on the ground that they keep the “poor arrestee” behind bars “simply because he has less money than his wealthy counterpart.” But holdings that explicitly vindicate the constitutional rights of people without financial resources remain rare, and that rarity bolsters the widespread perception that Fourteenth Amendment law offers virtually no protection against class-based discrimination.

It is true that class-based discrimination does not trigger heightened scrutiny under equal protection in the way that race-based and sex-based discrimination do. Fifty years ago—in the era of Gideon v. Wainwright and Harper v. Virginia Board of Elections—it looked to many as if the Court was poised to recognize the poor as a protected class (or perhaps, as Frank Michelman famously argued, to recognize a constitutional right to some form of minimum welfare). But in San Antonio v. Rodriguez and the abortion funding decisions, the Burger Court both declined to recognize the poor as a protected class and rejected the idea that the Constitution guarantees minimum welfare.

Scholars have often viewed those decisions as excising all class-related concerns from Fourteenth Amendment law. But that view has obscured an important and ongoing form of class-related constitutional protection: one that resides not in equal protection but in fundamental rights doctrine. My new article (The New Class-Blindness, forthcoming in the Yale Law Journal) examines the long-standing and often overlooked forms of class-related constitutional protection the Court has developed in the fundamental rights context. These protections have played an important role in some areas of Fourteenth Amendment law for over half a century. But they are now under attack by conservative judges, who have begun to argue, for the first time, that it is impermissible for courts to consider class at all when adjudicating Fourteenth Amendment claims.

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