PROJECT ENDED. Duration: 2001-2004 [this page is no longer updated]
European theoretical and historical perspectives on the political forms of market-based economic life
A working group at the Robert Schuman Centre,
directed by Christian Joerges (Department of Law) and
Peter Wagner (Department of Social and Political Sciences)
'Globalisation' is today often seen as the tendency towards the effective creation of a world market subjected to the laws of neo-classical economics. Political and legal regulation would then appear to have merely one of two purposes: to facilitate the emergence of global market exchange or to deal with any undesired consequences of such exchange in a compensating fashion, or a combination of the two. The debates about globalisation and its consequences are often dominated by a short-term and policy-oriented perspective derived from this view. The study of European integration and 'Europeanisation', in particular, is often shaped by the preconception of these processes as mere responses to globalisation processes driven by economic incentives and with a determined and rather limited range of adaptive possibilities. It is the objective of a newly established working group on 'The economy as a polity' at the Robert Schuman Centre to gain a more long-term and a theoretically more broadly conceived perspective on these processes. A number of fellowships at the Robert Schuman Centre during the year 2002/2003 have been reserved for this working group. We invite applications for research projects that relate to the following, broadly defined research area.
The work of the group is intended to have a theoretical and a historical axis, the interrelations of which are seen as twofold. First, a move beyond any futile continuation of abstractly discussing the relation between 'state' and 'market' has to provide a historical contextualisation to identify the specific issues at stake. And second, rather than proposing in any simplistic way that a look at history provides - analytical or political - guidance for the present situation, we propose a historical comparison as a means to retrieve forms of conceptualising the economy as a polity. In the European context, two periods invite for comparison with the current era of 'globalisation': the inter-war debates and measures designed to deal with the world-economic crisis and apparent profound crisis of liberalism, and the attempts of the 1970s towards a rather 'politics-driven' acceleration of European integration. The approach of the working group evidently needs to be interdisciplinary, drawing in particular (but not exclusively) on the disciplines of economics, law, political science and sociology.
Theoretical perspectives
The analysis and understanding of the relation between markets and forms of their non-market regulation, was in the focus of the social sciences ever since the argument for the beneficial logic of market exchange was raised in Europe in the eighteenth century and ever since laws about the freedom of commerce were introduced in European states, mostly during the nineteenth century; it was bound to become one key controversy in legal policy and constitutional politics ever since the emergence of 'Economic law' (Wirtschaftsrecht) as a separate discipline at the turn of the last century.. The very separation of economics from the other social sciences is an intellectual outcome of those interconnected legal, political and economic transformations. 'Economy' and 'polity' have in the history of legal science, for instance, been perceived as a dichotomy. The tensions economic rationality and the logic of the political, especially of political democracy were a continues concern in the critique of classical formalism, the establishment of fields like labour law and economic law; they were and continue to be a core concern of constitutional law and legal theory. This problématique early and famously raised by Max Weber, has changed in a way the title 'economy as polity' seeks to capture.
If that separation indeed provided an appropriate analytical perspective, the intellectual controversies within and between the social sciences as well as the historical struggles over the political forms of modern societies, both of which characterised the past two centuries, would finally have been overcome in our era of globalisation. Every 'economic' theorising, however, resides on presuppositions of legal and political philosophy and thus cannot achieve separation from those concerns. And any historically and empirically existing 'market' always shows analysable socio-cultural forms of what has been - somewhat infelicitously - called 'embeddedness'. The processes of European integration and 'Europeanisation' then, rather than merely modernising European political and economic life with a view to a global market era, are exactly the site at which issues of legal and political philosophy and of socio-cultural forms are at stake and re-emerge in a new guise.
Two basic observations serve to broaden the picture: On the one hand, there is not just erosion of the politico-legal structures of the nation-state and of the socio-cultural forms of European 'life-worlds' due to 'globalisation', but rather a transformation of existing forms that entails creative-agential involvement of European actors. And on the other hand, a global market is as little self-sustaining as the markets of the nation-based economies have ever been. In politico-legal terms, transnational regimes and new patterns of juridification are emerging, and in socio-economic terms, the globalising transformations entail the development of new 'worlds of production' (Robert Salais and Michael Storper) that always have specific and often territorially based structures of networks and material engagement. If indeed the intensification of global economic exchanges demands to reconsider the relation between markets and forms of their non-market regulation, the relation of 'the economy' to other aspects of social life, in particular to 'politics', 'society' and 'culture', has to be more generally brought back onto the onto agenda of the social and historical sciences and of legal scholarship. In this context, the working group 'The economy as a polity' intends to review some of the theoretical controversies about the political forms of market-based economic life - that is precisely what is meant by proposing to see the economy as a polity.
The activities of the working group will thus focus on the political / institutional / constitutional dimension of the economy. This focus implicitly shares the many sceptical views of the potential of states and/or the political system to 'govern' or control modern economies. It does not share, however, non-political or non-normative conceptualisations of the economy. Quite to the contrary, we look at the economy as a polity rather than an ensemble of processes and mechanisms oscillating towards efficiency. Deregulation and privatisation have not eliminated the tasks and functions which states proved unable to cope with. They have rather been accompanied by the emergence of new governance structures within which the 'regulatory' potential of economic and other non-governmental actors is essential. This 'delegation' of regulatory tasks to non-governmental actors is accompanied by new concerns with the social responsibility of the economy, its performance and the legitimacy of its governance structures.
Historical perspectives
To avoid the barren repetition of time-honoured debates, the work at reconceptualisation needs to be accompanied and underpinned by means of historical contextualisation. Specifically, the working groups aims at exploring possibilities of historical comparison of the current situation with European debates about the politico-legal embedding of the economy during the first half of the twentieth century, in particular during the inter-war period, and with the first major attempt at politico-economic integration in the EC framework during the 1970s.
Famously, Karl Polanyi (The Great Transformation, 1944) offered a view of the entanglement and complexity of the state-market relationships and conceptualized - without using those terms - the economy as a polity, i.e. in its social and political embedding. Economic integration often had social disintegration as unintended effect. Social disintegration provoked social protests, which, in turn, provoked political intervention in order to regulate and contain the economic forces. Polanyi saw himself as writing at a historical point at which, after its rise during the nineteenth century, 'the fall of the market economy' was nearing its completion. The experience of deep crisis and the responses to it during the inter-war period is in this view no doubt a point of historical reference and theoretical retrieval for the current debates.
The Great Depression, and the political response in the form of state responsibility for unemployment and crisis therapy that it provoked, is the case in point. It was a state intervention with highly diverse forms of justification and legal-political rules: national socialism in Germany, front populaire in France, red-green worker-farmer coalitions in Northern Europe, the New Deal in the USA, and so on. Solutions to the problem had the same point of departure and the great difference between them emerged to a great extent only in retrospect. World War I witnessed the emergence of developed planned war economies everywhere. In the search for new market positions, economic forces in the 1920s tried to expand beyond the political regulation under concentration (cartels, oligopolies, monopolies) with new kinds of market regulation, which after the market breakdown from 1929 onwards triggered social protests and new political regulation.
The 1970s can be seen as another period of experienced crisis with responses in the form of re-orientation and rethinking of the concept of Europe. The construction of Europe started out as an economic and technocratic project. However, it always has been more than just that, and the more successful it became, the more attention it attracted among constitutionalists and political scientists, in particular during the (brief) period of a more 'politics-driven' integration in the 1970s, interrupted not least by the oil crisis and world-economic turbulences. And yet, the economic and technocratic heritage in the integration project remains of utmost relevance in a quasi ironic or inverse sense. European integration has certainly furthered the erosion of the nation state without replacing it by some supranational equivalent. By the same token it has contributed to a rebirth of regulatory politics and a rediscovery of inherently political dimensions of the economy. It is this process the title 'Economy as polity' seeks to capture with regard to European integration. It is hardly necessary to point to current events. The 're-politicisation' of the market seems to be of paramount significance. And it seems crucial to take up the theoretical and normative challenges of these developments.
The outcome of this latest rethinking became visible in the 1980s with a new configuration of the European institutions. This European response to the crisis of the 1970s should be seen in the context of the recent transformation of welfare capitalism. Luc Boltanski and Eve Chiapello have tried to analyse the currently emerging 'new economy' on the basis of this perspective (Le nouvel esprit du capitalisme, 1999). This analysis, without explicitly being cast in terms of processes of Europeanisation and globalisation, thus allows to raise similar substantive concerns for the current transformation of the economic world. European integration as well as the internationalisation processes are of course stimulated by economic incentives; but they cannot be adequately understood as purely economic projects. And although they are widely, and with many good reasons, perceived as the main contributors to the erosion of the potential of states to maintain welfarist agendas, it seems nevertheless important to take note of the building up of new governance structures within the EU, of the establishment of transnational regimes and the emergence of new patterns of justification and juridification. One particularly challenging dimension of all these processes is their non-state and transnational character. If and because economic and social processes are no longer respecting territorial boundaries, one should indeed reckon with new types of polities.
The 1920s/1930s and the 1970s/1980s are, thus, considered here as examples of crisis junctures, in which historico-cultural depositories of innovative institutional experiences can be invoked and used in very different ways. These periods mark at the same time the pre-history, and early history, of European integration, with all its contradictions, contingencies and ambivalences. Our situation today at the entrance to a new century can probably also be seen in terms of such a crisis. These crises have had one common denominator: they can be described as crises of legitimacy and of the need for a novel register of justification as much as of new institutional rules. Political legitimacy, which was at least partly derived from socially constructed beliefs in political control and mastery of the economies, has eroded. Some ten years after the implosion of the Soviet Empire, an implosion which can be seen in the light of the failure of the politically planned economy and the concomitant collapse of political legitimacy, a basically similar kind, if of different degree, of legitimacy crisis hits the Western market economies. The attempts to construct new certainty and legitimacy, in response to the collapse of the Bretton Woods order in the early 1970s, through the neoliberal market rhetoric seems today to have reached their limits.
The current debates about processes of Europeanisation and globalisation are very much shaped by that context. Inquiries into theoretical traditions and current debates which portray the 'Economy as polity' will hence link up with the renewed conceptualisations of governance at national, European and international level. At the European level pertinent debates have resorted to concepts of 'networks' (as opposed hierachically structured regulatory controls), to public-private 'partnerships', to governance modes which rely or exploit the expertise and management capacities of private organisations while at the same time seeking to ensure their 'political' responsibility through indirect ('proceduralized') controls. At the international level, the resort to private governance regimes seems even more significant. 'Private' governance is, however, exposed to politicization by a broad range of actors and accompanied by an intensified 'public' juridification of the international economy, especially of conflicts over health and safety standards, environmental protection, new technologies etc.
In this context, then, it seems appropriate to ask what the resources are, in terms of intellectual traditions, cultural depositories and institutional experiences, that are available in developing a politico-legal and socio-cultural 'embedding' for the European economy in this period of 'globalisation'. Our proposal is situated in this context: It emphasises the necessity to analyse the economy as a polity. And it aims to do so by a combined theoretical and historical approach. Theoretically, European registers of political and legal philosophy are to be retrieved that tend to be forgotten, or seen as superseded, in the current situation. Historically, European attempts at creating rules and institutions will be re-analysed from the perspective of the experiences with the processes of their building and with their consequences.
Transdisciplinary approach
The substantive concerns outlined above need to be addressed in a multidisciplinary way. Our interest in post-national economic governance structures and their legitimacy, is indeed shared within many disciplines. International relations theory can be said to have taken the lead in many pertinent debates. But even there the new developments require paradigmatic shifts in the very conceptualisation of 'international relations'. And it seems obvious that analyses of tensions between the new governance structures and established national and/or supranational institutions and any effort to come to terms with legitimacy issues will have to build upon general social and political theory and accompanying efforts of individual disciplines such as law and history. Even there they can hardly be delegated to one particular branch. To elucidate - by way of example - the situation in law: the problem we have described is certainly of interest for constitutionalist thought linking analyses of positive institutional experiences with theoretical reflections on the validity of law and the legitimacy of governance This shift from 'authority' to 'reason' affects not just constitutional thought but all the other legal disciplines contributing to the transformation of the economy into a polity: The law of industrial relations (labour law), economic and social regulation (economic law including environmental law) are thoroughly affected.