Money and Property

Money and Property

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

Lua Yuille and Rohan Grey —

Money and property law are mutually constitutive. Property rights are defined and valued in terms of their relationship to monetary instruments, while whether something counts as a monetary instrument for this or that purpose is itself a result of bundling property rights a certain way. Yet property law treats money as opaque: a neutral measuring stick that happens to prove useful in the process of doing the real work of property.* This is partly because money is grossly under-theorized and misunderstood by property law scholars. In property law, “money provides the unit in which prices appear, supplies a medium of exchange, and acts as a store of value”, but it does so as if by magic. Unlike students of economics, who are introduced to money through the self-consciously ahistorical fable that money evolved as an evolutionary response to the inefficiency and inadequacy of barter, American law students are not formally introduced to money at all. Money is taken as an idea that needs no articulation or unpacking. The result is a  ‘functional monetary illiteracy’ that fails to conceptualize the complicated relationship between money and property law, serving to obscure the role of the state and of private power in defining each.**

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The Public Law of Private Promising, And Not Even That: LPE 101 for Contracts

Noah Zatz—

What would a 1L Contracts course look like from a law and political economy perspective? I can’t claim to have designed my course from the ground up to answer that question—and indeed I am intentionally more eclectic than that. Nonetheless, several of my choices—about how to thematize the material and what to include at all—clearly reflect an LPE approach.

From start to finish, I present Contracts—perhaps the quintessential “private law” topic—as a study in public power. That is among the main reasons to start with remedies (as many Contracts professors do). Ultimately, the question is whether a government institution (a court) will render a judgment and back it up with the threat of publicly authorized violence: seizing property to satisfy a judgment or throwing someone in jail for contemptuously defying a court order. I underline this point on the first day of class by assigning a recent ACLU report on incarceration for nonpayment of private consumer debt. This reading also challenges conventional field boundaries, enabling students to follow a thread of debt and poverty that connects their Contracts class to Ferguson and racialized mass incarceration.

The publicness of Contracts goes beyond the brute fact that it is law. Rather, the field reflects policy judgments about when to make the force of law available to private parties. Although invocations of party intent typically submerge this point, it actually appears on the surface of the most conventional place to start Contracts: the very first section of the Restatement (Second) of Contracts. “A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.”  Well then, when and how does “the law” (speaking for we, the people) choose to transform private promises into legal duties? Continue reading

Toward a Law and Political Economy of Gender Violence

Martha T. McCluskey –

What does political economy have to do with the issue of gender violence that roiled Kavanaugh’s Supreme Court confirmation?  One answer is that law should not separate economics from the social inequalities that mediate power.  Violent enforcement of social hierarchies has long been a core capitalist strategy for securing selective economic advantage, as Angela Harris and Frank Pasquale have written in this blog.

The recent #Metoo movement suggests the strong arm and insidious shadow of physical force is common, not marginal, to the everyday economic lives of many women, a factor to bargain with in the process of securing opportunities for education or work, housing or health care.  Conventional law and economics tends to assume a background of private voluntary exchange that belies continuing contests over the power to gain through violence. In contrast, a political economy perspective recognizes that government does not monopolize force. Instead, government enables and distributes private force by how law defines, punishes, monetizes, and immunizes private acts of violence.  Neither formal law nor social norms have firmly settled the questions of what forcible acts and impacts count as normal, excusable, trivial, implausible, or invisible.

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Criminal Justice and Slow Violence in Keilee Fant v. City of Ferguson, Missouri

Ed note: This post is the first in a four-part series on Teaching Law and Political Economy through Keilee Fant v. City of Ferguson, Missouri by Angela Harris. Look out for the subsequent posts in the weeks to come!

Teaching Law and Political Economy through Keilee Fant v. City of Ferguson, Missouri
Part I: Criminal Justice and Slow Violence in Keilee Fant v. City of Ferguson, Missouri

Angela Harris – 

More than ten years ago now, Emma Coleman Jordan of Georgetown Law Center called me on the phone and invited me to join her in what she laughingly called an act of “academic imperialism.” She wanted us to collaborate in assembling a casebook – the first in the United States legal education market, we believed – on “economic justice.”

The target of our imperialism was a bifurcation within legal education. Emma and I, at Georgetown and Berkeley respectively, saw two distinct groups of students in our classes. Social justice students took courses on critical race theory, constitutional equal protection, and civil rights, while business-minded students focused courses related to economics, like securities regulation, international trade law, business associations, tax, and banking.

One effect of this divide was that our politically progressive students tended to have little understanding of how markets and market-related institutions work. Instead, they found themselves limited to a moral language under which, for example, corporations could be denounced as “evil” but corporate power and its workings remained opaque. A second, more subtle effect of this divide was to impoverish our teaching about structural inequality. The infamous “public-private split” in legal doctrine reinforces the popular belief that market power represents freedom while government embodies coercion. A similar split, insidious in a different way, limits anti-discrimination law to individual and interpersonal relations: the “intent requirement” in constitutional and statutory law protects institutional and structural subordination. At the same time, business law courses and “law and economics” seminars seldom engage with race, gender, or other forms of subordination – save for a day or two on “corporate social responsibility.” Our imperial project, then, sought to pull down the walls, disrupting both the citadel of law and economics and the cloister of critical race theory.

Though we didn’t succeed at building an empire with our book, we did develop an approach to teaching law and political economy that LPE teachers and scholars can use today. In a series of four posts, I’ll outline that approach using Keilee Fant v. City of Ferguson, Missouri, a class action filed in federal court in the Eastern District of Missouri in 2015. In my Economic Justice classes, I use the case to teach students about ways in which structural inequality in the United States is produced by both racial domination and capitalist exploitation, and what this inequality looks like in the age of “neoliberalism.” I also use it to teach students about how legal doctrine shields this structural inequality from effective challenge, giving them a perspective on the intellectual apartheid of legal doctrine and legal education. In this first post, I explain how I use the complaint in Fant to frame a discussion of law, political economy, and the “slow violence” of the criminal justice system. Subsequent posts will discuss how I use the case to teach students to connect racial and economic inequality to the concepts of neoliberalism, legal geographies, and municipal finance. Each post presents a different way to advance the LPE project in the classroom.  Continue reading

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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