Financial Regulation and Social Reproduction

Financial Regulation and Social Reproduction

NB: This post is part of the “Piercing the Monetary Veil” symposium. Other contributions can be found here.

Donatella Alessandrini —

Even amongst critical scholars, there is a tendency to treat international regulation of money and finance as “strictly economic”, distinct from the “social” domains of labor, the environment, and socio-economic rights. This conceptual separation cedes the realm of finance to the “neutral” neoliberal technocracy while occluding interrelationships between finance, production, and social reproduction. Placing social reproduction at the center of our analysis forces us to overcome these false dichotomies and confront finance’s role in the shaping of the “social”.

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Piercing the Monetary Veil

Piercing the Monetary Veil

NB: This post is part of the “Piercing the Monetary Veil” symposium. Other contributions can be found here.

Luke Herrine —

This blog has already hosted several examples of re-thinkings of the nature of money and its relationship to law and power, most recently in a symposium on LPE Contributor Mehrsa Baradaran’s book on money and Black capitalism. This may seem like a niche project that those without an interest in finance can afford to ignore or leave to others. But that would be to ignore a fundamental principle: cash rules everything around us. Especially in capitalist societies, power is channeled through money and vice versa.

And justifications of power rely on mystification about money. If anything can be called the core of the neoliberal project it is the proposition that cash should rule us. Hayek’s foundational argument, after all, is that allocation via the price mechanism is the essence self governance. Making all resources and activities interchangeable with money enables each person to pursue her own version of the good life in a way that interferes with others’ only as much as they consent to while simultaneously directing resources towards their most valuable use (see here for instance). Payment of money is how we each individually express how much we value different resources and how much of others’ interference we are willing to bear. Price is the aggregation of those individual valuations. Money thus serves as the common currency that enables us to commensurate our processes of valuation without deliberating and without forcing anything on anybody else.

But that’s not how money works. Treating money as a neutral arbiter of values that the legal system can simply take for granted is a classic example of “transcendental nonsense“. As with any form of such nonsense, explaining why requires a careful analysis of how law structures money, tracing who has the power to shape that law, and exploring the dialectic relationship between the law, money, and the markets they coordinate. A small but growing group of scholars has been undertaking this task. Many of these scholars have begun to converge in a new international network called the Law and Money Initiative. An overlapping group will also be launching a new site at

Over the next two weeks, we will host a symposium on how close attention to the role of money in law and political economy changes one’s analysis of a whole range of areas of society, with a particular focus on how the legal infrastructure of money shapes areas of non-financial law. The idea is to open up conversations about how power shapes law to conversations about how money and law shape each other, and vice versa.

Join us!

Luke Herrine is a PhD Student at Yale Law School.

Law and Politics in Employee Classification

Benjamin Sachs – 

As has been widely reported, the U.S. Department of Labor issued an “opinion letter” yesterday concluding that an unnamed “virtual marketplace company” does not employ the workers who make the company viable. Instead, the letter finds that these workers are independent contractors. The letter is flawed in multiple ways. As Sharon will explain, deciding a major issue of employment law – maybe the major contemporary issue of employment law – through an informal process that allows one party to present all the facts is decidedly inappropriate. There are also multiple substantive problems: as Charlotte pointed out, the letter considers relevant to the control inquiry the fact that this VMC’s workers can also work for other VMCs. I suppose the fact that Wal-Mart workers can also work for Target suggests that Wal-Mart workers are independent contractors of Wal-Mart. Generalizing, I suppose if low wage workers must rely on multiple jobs to make ends meet this should incline decisionmakers to conclude that those workers are all independent contractors.

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Institutions of the Solidarity Economy

Geoff Gilbert –

In my first post, I introduced the framework for solidarity economy political economy power that grassroots social justice movements are building around the world and in the US. This post will elaborate how solidarity economies actually work.

Democratic Land

Community land trusts (CLTs) facilitate community ownership and control of land, and land banks allow communities to democratically redistribute land. Movement groups are hard at work building CLTs and land banks, which, when combined with broader changes to property rights associated with land, like the creation of a land value sales tax, help us imagine the beginnings of a land system designed for human use, as opposed to the status quo design for financial profit.

Community land trusts are nonprofit corporations that: 1) enter into covenants to not sell land for a specified period of time, typically up to 99 years; and 2) are controlled by boards comprised of members who use or live near land. By covenanting to not sell the land for a long period of time, CLTs tie the cost of using the land to the cost of purchasing and maintaining the land and the structures it contains, and thereby divorce the cost of using the land from the ever-increasing market price of the land. Detaching the land from its market price can insulate land from the gentrifying forces – such as rising rents, rising property taxes and irresistible offers to individuals to sell land to the highest bidder – that are displacing working class people, and disproportionately people of color, in cities throughout the world. Democratic governance of the CLT by members who live on, use, and/ or live near the land facilitates democratic land use decision-making.

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The Solidarity Economy and Economic Democracy

Geoff Gilbert 

Even though humanity possesses the wealth necessary for every person to have everything they require in order to live with material freedom and dignity, current property regimes allow for 26 billionaires to own as much wealth as 3.8 billion people around the world while billions of people around the world, including in the US, live without access to food, water, adequate shelter and clothing, health care, education, transportation, the information and communication capacities made possible by digital technology, leisure time, and other aspects of material freedom and dignity. Many grassroots movements are trying to change this by imagining and building democratic political economy planning capacity throughsolidarity economy institutions premised on transforming the legal and institutional forms through which humans can coordinate to produce, exchange, and distribute, everything that we need in order to live.

Solidarity economies are rooted in direct democracy, community power, and local control of economic institutions. They include and build upon many of the ideas in the Movement for Black Lives’ ‘A Vision for Black Lives’ and the Black Youth project 100’s ‘Agenda to Build Black Futures.’ More specifically, solidarity economies are built around local and democratically controlled institutions that own and control land, labor, and money. Land banks allow communities to democratically (re)distribute land, and community land trusts facilitate community ownership and control of land. Cooperatives create democratic ownership and control of productive capital and workspaces. And public, city-owned banks can coordinate with one another to produce the money needed to finance production for human need. Movements around the world – the Zapatistas in Mexico; the municipalists in cities like Barcelona and Jackson, Mississippi; and the democratic confederalists of Rojava– are leading the way on building local solidarity economies that prioritize production for human need over profit.

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Announcing the New Law and Political Economy Project

A collaboration of law faculty across several law schools announces a new initiative, the Law and Political Economy (LPE) Project. The Project will bring together a network of legal scholars, practitioners, and students developing innovative methods to challenge the dominance of market fundamentalism within legal scholarship and practice today. It is currently centered at Yale Law School, and partners with a wide range of other institutions.

The Project seeks to offer an alternative vision for law and legal scholarship that starts from the premise that politics and the economy cannot be separated and that both are undergirded in essential respects by law.

Yale Law School professor and project co-director Amy Kapczynski noted the motivation for the project: “We live in a time of increasing inequality, eroding democratic institutions, and accelerating ecological destruction. Law has fueled these crises and will be central to reckoning with them.”

Conventional legal scholarship fails to address these problems and, by relying too much on free-market models, may even reinforce the perception that they are beyond redress. Columbia Law Professor and project co-director Jedediah Purdy explained, “A new wave of legal scholarship needs to move beyond conventional divisions between ‘public’ and ‘private’ law, and between ‘economic’ and ‘social’ issues. The legal subfield of ‘law and economics’ has tended to focus on questions of wealth maximization and efficiency without regard to distribution, while public law questions concerning constitutional rights and democratic self-rule are too often treated as separate from questions of economic inequality and concentrations of private power.”

Building on the energy of the emerging law and political economy movement, the LPE Project aims to reconnect conversations about the economy to questions of dignity, belonging, and power. The Project aims to transform legal scholarship and pedagogy by centering issues of economic power, racial and gender subordination, and meaningful democratic inclusion. It aims to move beyond postwar models of the liberal welfare state in order to develop new policy solutions, intellectual approaches, and political strategies adequate to the crises of our time.

In pursuit of these goals, the LPE Project will support scholars working across an array of doctrinal areas and disciplines through the development of conferences, working groups, and scholarly networks. The Project will contribute to legal pedagogy by developing seminars, lectures, and course materials that foreground political economy, and integrate issues of racial capitalism and social and ecological reproduction. In addition, the Project will continue to develop the LPE Blog as a space to catalyze scholarship, test ideas, and foster debate.

The Project will also reach beyond the academy to connect scholars with activists, practitioners, and policy specialists. LPE Project Executive Director Corinne Blalock said that this approach “will ensure both that LPE work helps to shape policy-making and that social mobilizations and institutional debates inform LPE work in an ongoing way.”

The Law and Political Economy Project is funded by a grant from the Hewlett Foundation as part of its Beyond Neoliberalism Initiative. It is led by four faculty directors: Yale Law School Professor of Law Amy Kapczynski, Yale Law School Professor of Law David Singh Grewal, Columbia Law School Professor of Law Jedediah Purdy, and President of Demos and Associate Professor at Brooklyn Law School K. Sabeel Rahman.

The LPE Blog, launched in 2017, can be viewed at

Inquiries concerning the LPE Project can be directed to:

Corinne Blalock, Executive Director

Amy Kapczynski, Faculty Director

David Singh Grewal, Faculty Director

Jedediah Purdy, Faculty Director

Sabeel Rahman, Faculty Director

The Origins of the Supreme Court Bar: The Political Economy of Legal Services

 Jeremy Pilaar –

Why do the laws underlying capitalism so heavily favor the wealthy and corporations? One answer, according to my research, lies in the political economy of the legal profession. At the most elite level of the profession sits the Supreme Court bar, lawyers with enormous influence over key rules that structure market relations. In a recent piece, I trace the origins of the Supreme Court bar to better understand the Court’s rightward shift.

Over the past several years, the Court has used its power to give corporations a significant edge over average Americans—making it harder for consumers and employees to hold companies responsible for unlawful behavior, more difficult for workers to form a union, and easier for firms to engage in monopolistic practices and spend unlimited sums on elections.

Though part of this is due to the appointment of increasingly pro-business justices, Harvard Law Professor Richard Lazarus has shown that the Supreme Court bar has also played a role. This bar consists of the attorneys admitted to argue before the justices. As Lazarus and others have revealed, a handful of these lawyers appears before the Court much more frequently than the rest. This elite group also disproportionately works on behalf of large corporations, skewing the Court’s docket in favor of business and deepening the competitive imbalance between big companies and their opponents.

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The Erosion of Public Control Over Public Utilities

Sandeep Vaheesan –

Cable Electricity Electrical Energy DistributionSince the 1970s, Congress and federal agencies have replaced regulator-established rates with market-derived pricing in many sectors of the U.S. economy. Electricity and natural gas are two such industries. Congress and the Federal Energy Regulatory Commission (FERC) have abolished regulated rates and instituted market-based pricing in a part of the electricity and gas supply chains. (At a simplified level, both industries have three segments: production, transmission, and distribution. Policymakers generally still treat the transmission and distribution functions as monopolistic.)

These legislative and regulatory decisions are premised on the belief that markets are superior to direct public control of rates and other terms of service. While this process is often described as “deregulation,” the term is a misnomer. This industrial restructuring is a transfer of discretionary authority from public bodies to private actors. Instead of structuring competitive markets in this new environment, the federal courts have defended private market power and helped scale back all public control of sellers and traders of electricity and gas. A case before the First Circuit (in which my Open Markets Institute colleagues and I filed an amicus brief in support of the plaintiffs) illustrates this theme.

In Breiding v. Eversource Energy, New England residents have accused two large utilities of violating antitrust and consumer protection laws by creating an artificial shortage of gas and engineering a chain of events that dramatically drove up the cost of electricity. The district court dismissed the plaintiffs’ complaint and expanded a judicial doctrine intended to protect the integrity of regulator-set rates to also insulate market-based prices from private lawsuits. This decision, which is consistent with rulings by other courts, grants gas producers, power generators, and traders the freedom to engage in exclusionary and other unfair practices. In electricity and gas, the net effect of legislative, regulatory, and judicial choices over the past 40 years has been a dramatic erosion of public control over public utilities.

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Central Banking and Finance—The Franchise View

Robert Hockett & Saule Omarova—

It is common to claim that finance is about ‘credit-intermediation,’ a matter of channeling funds from virtuous savers to needful end-users. The picture behind this assertion is that of a gargantuan broker—the financial system as ‘go-between.’ But modern financial systems are much more about credit-generation than intermediation. We need a new metaphor.

In our view, a modern financial system is best modeled as a public-private franchise arrangement. The franchisor is the sovereign public, acting through its central bank or monetary authority. The franchised good is the monetized full faith and credit of the sovereign—its ‘money.’ And the franchisees are those private sector institutions that are licensed by the public to dispense, in the form of spendable credit, the franchised good.

Like any good franchisor, a public acting through its central bank works to maintain the ‘quality’ of the good that its franchisees distribute. In the contemporary ‘developed’ world, the quality in question has been understood primarily in terms of over-issuance.

The central bank’s task has been understood, that is to say, in modulatory terms, the primary objective being to prevent consumer and, in some enlightened jurisdictions, asset price inflations and hyperinflations. Allocative decisions, for their part, are thought best left to the market, on the putative ground that the public’s ‘picking winners and losers’ is apt to be ‘politically arbitrary’ rather than ‘financially sound.’

Two conceptual errors, one of them partly corrected since 2008, seem to have hampered the ‘quality control’ efficacy of many central banks and monetary authorities in the pre-2008 period.

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