On Law and Value

On Law and Value

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.

Amy Cohen–

We are witnessing a new moment in economic development: what Richard Baldwin calls the global value chain (GVC) revolution. As our symposium suggests, critical legal realist scholars are organizing in response. Some have argued that by mapping the relations between law and value chains we may find strategies for resistance, solidarity, and distributive interventions. Others have ventured that “law cannot but function” to serve the interests of a global capitalist elite. This post does not aim to resolve this generative realist tension. Rather it shifts focus to propose that under GVC capitalism, status quo maintenance and resistance also happen through discourses of value—an observation that may offer insights into how actors themselves view the salience of law in specific local struggles.

To comprehend what I mean by “value,” think business school not neoclassical economics. Business strategists distinguish “supply chains” from “value chains.” In supply chains, firms compete on price and pursue low-cost imitations. Managing a supply chain is thus all about “taking out cost and making process efficient.” In value chains, by contrast, firms are supposed to transform undifferentiated commodities into distinctive products through creativity and innovation: “Value chain management is about how to create value; how to coordinate the continuous innovations of creative contributors and how to make that process efficient for the consumer and the contributor.” For firms to compete on value they therefore need consumers who desire products for reasons other than a low price, and they also need the means to capture this consumer surplus such as brand reputation and proprietary process technology.

In our lead post, Bair and Danielsen argue that mainstream GVC scholars mistakenly describe law as simply promoting efficient exchange and value additions as themselves determining the distribution of rents. But I wonder if law’s role in enabling capital accumulation is in fact today more easily demystified. As firms chase value, they purposefully create legal-institutional barriers to entry to capture value against competitors (such as IP). As our legal realist tools therefore perhaps become less revelatory, we may consider how actors directly invoke value to both defend and transgress a development common sense.

Continue reading