Sociologists of law and economic sociologists will be enthusiastic about Edelman's bold call for heavier sociolegal traffic across the bridges between the legal system and the economy. The Presidential address constructively conceives of this traffic at two levels: one operates at the intellectual level and creatively envisages law and society (L&S) scholars, allied with economic sociologists, increasing the density of exchange with law and economics (L&E); the other operates at the institutional level and imagines an increasing volume of traffic that is two-way, i.e., not only from economic theory toward legal systems, but from sociolegal theory toward markets and economies. On both levels and in both directions, Edelman's expansive vision offers intellectual excitement and pragmatic value.
It may be that this call will puzzle some in L&S for two, seemingly contradictory, reasons. Some will say that the call is unnecessary: a cursory glance at a Law & Society Association annual conference program will show a plethora of sessions that deal with regulation (often of economic entities), corporations, globalization—all of which are implicitly or explicitly about law and the economy. Others will say the call is unwelcome: in the L&S movement historically we have aligned ourselves consciously with society and against the economy. Our finest achievements have often been scholarship on behalf of the poor, of minorities and the objects of discrimination, of the weak and the objects of arbitrary power, of the marginalized and the objects of avoidance or repression.
Edelman, if I read her correctly, would answer “yes” and “yes,” but “no.” Yes, there are welcome currents of scholarship that treat the economy, but it is another matter to see them in a systematic theoretical context, whether the foil or frame be L&E, on the one hand, or economic sociology, on the other. And yes, L&S has a noble record for championing those usually without defenders or spokespersons, for providing “a mirror and a conscience” (Reference Burawoy, Gamson, Ryan, Pfohl, Vaughan, Derber and SchorBurawoy et al. 2004) to a society whose practices deviate from its precepts, and this record should be sustained. But no, she would say, studies of those subject to predatory practices in a society nevertheless leave unexplicated the institutions that can turn predatory, aid and abet discriminatory practices, or possibly ameliorate them. On both counts she rightly maintains that L&S requires a new seriousness and sustained theoretical and empirical endeavor about the market—that seemingly most valorized institution in contemporary ideology and rhetoric.
In my brief comments, I seek to show that Edelman's call not only enriches theory and research within the United States, but it also presents an excellent springboard for extending the L&S collective project into global engagements of law and markets.
The Endogeneity of Law and its L&E Foils
Let me summarize the high points of Edelman's arguments and then build and expand upon them. She properly takes deliberate aim at two concepts at the heart of L&E theory: efficiency and rationality. She effectively demonstrates their origins (i.e., shows how they are socially, politically, legally constructed), undermines their taken-for-granted foundation (i.e., that the mere mantra of efficiency or rationality should not be taken as self-validating), indicates their limits as explanations of market behavior, shows their variation across social arenas, reveals the asymmetries of power that are hidden within disarmingly “neutral” terms of art, and shows their shortcomings for prescriptions of policy (i.e., that taken alone as bases of action, implementations of policy will likely be subverted). This formidable feat in itself should open up a strong engagement by L&S scholars with vulnerabilities of L&E theory that warrant unveiling.
Edelman provocatively offers a four-fold strategy for this line of attack. Edelman advocates an explanation of L&E's core terms (i.e., where do rationality and preferences originate—in the market or outside of it?). She argues that it is necessary to complement or amplify aspects of the L&E theory (e.g., to complement rational with irrational or nonrational behavior in the market; to balance efficiency with justice as a criterion of market performance). She seeks to contextualize the L&E model from “above” (i.e., to move to a macro-level to understand the interplay between legality, morality, and rationality). And, not least, she would critique the L&E model in toto (e.g., for its simplification; or for assuming that what is good for theory will also be good for policy; or for its neglect of power).
Most particularly, from her own pioneering work, she would urge an exploration of the endogeneity of preferences. This has the merit of turning inside the economy to see the law that originates within. Ironically, the power of the endogeneity concept is that it suggests that the economy, through the behavior of firms, adapts to perceived problems without by producing law-like adjustments within, and these eventually become affirmed by the formal legal system. Irony upon irony, at the outset the initiatives of firms are not to be explained by the fact of rationality in a firm although the final result may be to establish a norm of rationality in the market. Hence rationality becomes an emergent process bubbling up from within a market actor to become a market norm ultimately institutionalized in law. Rationality emerges; it is not given.
These strategies for pushing forward the law-economy front clear the way for a visionary expanded sociolegal agenda. I believe that if we in L&S were to follow the broad vision of Edelman's address, we could go a long distance into engagement with the most potent trend of our time: the globalization of law and markets.
A word on L&E as a counterpoint. I have some ambivalence about this point of departure. I believe we should at once be enthusiastic supporters and enthusiastic critics—and indeed the first will lead to the second. As enthusiastic supporters of L&E we should recognize the mileage obtained from its simplifying assumptions, the crispness of its parsimonious models, and the boldness of its extrapolations from such radical self-limitations. The more ambitious the reach of this theory, the more readily we should observe its potential and its limits. Thus Edelman is absolutely right to unveil the leaps necessary to lay the primitive terms of the model, to observe where it succeeds and where it falters, to recognize what is arbitrarily excluded and thus what is inadvertently distorted, to define the boundary conditions under which the models will and will not operate. L&E has considerable currency in some parts of the legal academy, in particular, and so it makes eminent sense to take it very seriously.
But if we place L&E in the gladiatorial arena as L&S's principal intellectual counterpart, it risks allowing L&E to set our own agenda, even negatively. It tempts us to start with its problems and to elaborate upon its conclusions. Thus L&S scholarship risks placing itself in a complementary or even derivative position, operating around the margins rather than counterposing a unique agenda and distinctive set of theoretical approaches to that agenda. This potentially has L&S fighting a battle on the field of its rival's choosing. Hence we may find it self-limiting for our own scholarly enterprise. Edelman, of course, is well aware of this and goes far beyond it, setting a fresh agenda that draws on much broader theoretical materials—most prominently, economic sociology.
Pressing L&S into the Global Arena
I will run with the baton passed by Edelman and demonstrate the salience of her call for the global arena of law, markets, and economic development.Footnote 1
An enormous enterprise of legal construction is currently taking place in the global arena. Precipitated by the collapse of command economies in the late 1980s and the Asian crisis in 1997, and stimulated by continuing rounds of global trade agreements, the world's dominant supranational institutions press energetically for law reform. The global agents of reform range from multilateral international financial institutions, such as the World Bank, International Monetary Fund (IMF), and the regional banks (e.g., Asian Development Bank, European Bank for Reconstruction and Development), to international governance bodies, such as the European Union and the United Nations, to clubs of nations (e.g., the Organisation for Economic Co-operation and Development, G-22), and to multilateral negotiating forums, such as the General Agreement on Tariffs and Trade talks. International professional associations and networks of scholars aid and abet the initiatives of global and economic institutions. Together they seek to create substantive and procedural law and to build the institutions that will implement law: courts, professions, and regulatory agencies. All areas of commercial law—contracts, bankruptcy, secured transactions, corporate governance—are on the global agenda. And every law-delivering institution has its champions and “model-mongers,” as Reference Braithwaite and DrahosBraithwaite and Drahos (2000) label the missionaries to transitional and developing countries.
Edelman's lead would challenge L&S research to enter the arena of global inquiry by following four theoretical lines of attack, namely, explicating (1) the norms being contested in global lawmaking, (2) the formal attributes of the law being made, (3) the power struggles that ramify through at all levels of this global construction project, and (4) the cultural currents that potentially pit West versus East and the center versus peripheries. Let me amplify.
Global Norms
To the extent that many legal construction programs are driven by international financial institutions (IFIs), the economists dominate, and where their legal departments lead the way, they, too, reflect dominant economic ideologies.Footnote 2“Efficiency,” for instance, is valorized as the primary criterion for a market-sustaining legal system. The World Bank initiative on insolvency regimes worldwide, for instance, is labeled “efficient and effective insolvency regimes.” Yet many nations making the transition from societies where workers were celebrated remain reluctant to adopt laws where “efficiency” would vanquish equity. In insolvency law, the strong creditor orientation of IFIs conflicts with domestic concerns about treating workers fairly when companies fail, not to mention treating domestic economic actors fairly in relation to foreign economic interests. This alternative norm links to another, for China, in particular, insists that any new commercial law must not threaten social stability by throwing workers into labor markets without alternative employment or social safety nets. That is to say, distributive norms can weigh as heavily on the shoulders of political leaders as efficiency norms. And without a careful balancing of efficiency, equity, and stability, market construction may lead to social destruction. Lawmaking, therefore, must occur for pragmatic reasons in a normative environment where values are carefully negotiated. As Edelman warns, efficiency cannot be taken for granted as a self-vindicating market norm in theory or practice.
Global Rationalization of Law
Global lawmaking might also be viewed as a giant experiment in legal rationalization. Global actors prepare normative templates, standards, and guides that are designed to influence adoption by transitional and developing countries. The frequent criticism of “one-size-fits-all” models (Reference StiglitzStiglitz 2002) that are developed by IFIs reflects skepticism that a global convergence in law and markets will produce an artificial rationalization where the form of law adheres to global standards but the practice of law will deviate according to local constraints. Codification, unification, and harmonization—three manifestations of rationalization—stumble over the particularities of local custom, variations in legal families, and variations in forms of market. More important, perhaps, there recurs in the politics of global rationalization the hoary conflict between formal and substantive rationality, or as Reference Nonet and SelznickNonet and Selznick (1978) would have it, between autonomous and responsive law. Global institutions frequently style their reform proposals in terms of autonomous law; that is, that good law can be crafted apart from policy preferences, or that somehow policy preferences should be externalized from a given legal code. Yet since “rationality is itself a social phenomenon,” as Reference EdelmanEdelman states (2004:186), these supposedly neutral, rational norms carry invisible marks of substantive interest and may need to be deconstructed in the national policy context in order to reveal what is fair or unfair, equitable or inequitable, culturally-specific rather than culturally universal.
Global Contestation
The politics of rationality that Edelman observes within the United States can also be observed in cross-cutting dimensions of power and contestation in global lawmaking and market-building. IFIs and global governance organizations jostle among themselves for ascendancy in global standard-setting. The dominant creditor nations vie for the primacy of systems with the most affinity to their own practices and preferences. Professions contest on the global stage their relative advantage in new jurisdictions of work that are opened up by law reform. Hegemonic global actors find themselves resisted in a variety of ways by nations reluctant to adopt the normative and formal models they are pressured to adopt (Reference Halliday and CarruthersHalliday & Carruthers 2003b). And actors within transitional and developing economies variously ally themselves with or against global players as it suits their local interests (Reference Dezalay and GarthDezalay & Garth 2000). And in classic L&S manner, laws put on the books may be subverted upon implementation. Lawmaking that occurs with full exposure to the global arena, therefore, likely multiplies the range of actors in contestation over the institutionalization of norms and interests and thus produces even greater indeterminacy in outcomes of law reform.
Global Culture Conflicts
And then there is culture. Scholars find themselves caught between the Scylla of using culture as the catchall explanatory variable that thereby explains too much to be useful, or the Charybdis of hyper-skepticism that pretends institutionalized ways of thinking and acting do not systematically vary across religions, intellectual heritages, and legal families. But Edelman is entirely right about culture's salience in global market regulation. Culture cannot be theoretically whisked away on either count. It must be seen both constitutively (i.e., infusing economic and legal behavior with taken-for-granted ways of being and acting) and instrumentally (i.e., as a rhetoric of colonization or resistance). On the one side, a global culture of “best practice,” international standards, and “advanced” practices confronts, on the other side, deeply embedded practices in economic exchanges and legal engagement. “Culture” is also a terrain of power, a field where agents of reform or resistance deploy devices that seek to capture minds and hearts (Reference Halliday and CarruthersHalliday & Carruthers 2003a). This occurs within the global center as well as within its various peripheries. Culture constitutes and effects markets. And so it is that law—in the hands most notably of Western, northern agents—now clamors for recognition as a constitutive element of market-shaping and institution-building.
The Legal Constitution of Markets
Together these theoretical elements add up to a legal constitution of markets. They do not exhaust the explanation of market behavior, but neither can they be relegated to marginality in any compelling theory of legal or economic globalization. Edelman's macroscopic outlook and theoretical concepts provide a platform on which L&S scholars can join hands with economic sociologists to provide distinctively sociolegal perspectives on economic behavior, labor, and financial markets, among others, in their encounters with the norms of justice in the global arena. And indeed, as we press this platform forward in the global arena we may discover, as Edelman would anticipate, that a surprising degree of lawmaking is endogenous to the economy: the generative moment for law and economic development comes frequently from within the global economy, i.e., from multilateral credit institutions, private international banks, treasury departments of major creditor nations, and even professions—the very institutions that occupy the high ground of the global economy.
While we do not begin our analysis of the global economy from L&E postulates, therefore, by following Edelman's timely theoretical lead we end up by placing L&E in a creative tension with an indigenous theory of L&S, neither conceding to L&E the high ground nor ignoring it altogether. This places L&S scholarship not only in vigorous tension with scholars of L&E, but also with its practitioners, for many of the lawyers driving the globalization of law find themselves fellow-travelers with economists to valorize efficiency over equity, rationalization over power, and harmonization over localization.
Let us pursue Edelman's expansive agenda to both elaborate sustainable and constructive theory and build decent and effective institutions in the Third World as well as in the First.
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Sociologists of law and economic sociologists will be enthusiastic about Edelman's bold call for heavier sociolegal traffic across the bridges between the legal system and the economy. The Presidential address constructively conceives of this traffic at two levels: one operates at the intellectual level and creatively envisages law and society (L&S) scholars, allied with economic sociologists, increasing the density of exchange with law and economics (L&E); the other operates at the institutional level and imagines an increasing volume of traffic that is two-way, i.e., not only from economic theory toward legal systems, but from sociolegal theory toward markets and economies. On both levels and in both directions, Edelman's expansive vision offers intellectual excitement and pragmatic value.
It may be that this call will puzzle some in L&S for two, seemingly contradictory, reasons. Some will say that the call is unnecessary: a cursory glance at a Law & Society Association annual conference program will show a plethora of sessions that deal with regulation (often of economic entities), corporations, globalization—all of which are implicitly or explicitly about law and the economy. Others will say the call is unwelcome: in the L&S movement historically we have aligned ourselves consciously with society and against the economy. Our finest achievements have often been scholarship on behalf of the poor, of minorities and the objects of discrimination, of the weak and the objects of arbitrary power, of the marginalized and the objects of avoidance or repression.
Edelman, if I read her correctly, would answer “yes” and “yes,” but “no.” Yes, there are welcome currents of scholarship that treat the economy, but it is another matter to see them in a systematic theoretical context, whether the foil or frame be L&E, on the one hand, or economic sociology, on the other. And yes, L&S has a noble record for championing those usually without defenders or spokespersons, for providing “a mirror and a conscience” (Reference Burawoy, Gamson, Ryan, Pfohl, Vaughan, Derber and SchorBurawoy et al. 2004) to a society whose practices deviate from its precepts, and this record should be sustained. But no, she would say, studies of those subject to predatory practices in a society nevertheless leave unexplicated the institutions that can turn predatory, aid and abet discriminatory practices, or possibly ameliorate them. On both counts she rightly maintains that L&S requires a new seriousness and sustained theoretical and empirical endeavor about the market—that seemingly most valorized institution in contemporary ideology and rhetoric.
In my brief comments, I seek to show that Edelman's call not only enriches theory and research within the United States, but it also presents an excellent springboard for extending the L&S collective project into global engagements of law and markets.
The Endogeneity of Law and its L&E Foils
Let me summarize the high points of Edelman's arguments and then build and expand upon them. She properly takes deliberate aim at two concepts at the heart of L&E theory: efficiency and rationality. She effectively demonstrates their origins (i.e., shows how they are socially, politically, legally constructed), undermines their taken-for-granted foundation (i.e., that the mere mantra of efficiency or rationality should not be taken as self-validating), indicates their limits as explanations of market behavior, shows their variation across social arenas, reveals the asymmetries of power that are hidden within disarmingly “neutral” terms of art, and shows their shortcomings for prescriptions of policy (i.e., that taken alone as bases of action, implementations of policy will likely be subverted). This formidable feat in itself should open up a strong engagement by L&S scholars with vulnerabilities of L&E theory that warrant unveiling.
Edelman provocatively offers a four-fold strategy for this line of attack. Edelman advocates an explanation of L&E's core terms (i.e., where do rationality and preferences originate—in the market or outside of it?). She argues that it is necessary to complement or amplify aspects of the L&E theory (e.g., to complement rational with irrational or nonrational behavior in the market; to balance efficiency with justice as a criterion of market performance). She seeks to contextualize the L&E model from “above” (i.e., to move to a macro-level to understand the interplay between legality, morality, and rationality). And, not least, she would critique the L&E model in toto (e.g., for its simplification; or for assuming that what is good for theory will also be good for policy; or for its neglect of power).
Most particularly, from her own pioneering work, she would urge an exploration of the endogeneity of preferences. This has the merit of turning inside the economy to see the law that originates within. Ironically, the power of the endogeneity concept is that it suggests that the economy, through the behavior of firms, adapts to perceived problems without by producing law-like adjustments within, and these eventually become affirmed by the formal legal system. Irony upon irony, at the outset the initiatives of firms are not to be explained by the fact of rationality in a firm although the final result may be to establish a norm of rationality in the market. Hence rationality becomes an emergent process bubbling up from within a market actor to become a market norm ultimately institutionalized in law. Rationality emerges; it is not given.
These strategies for pushing forward the law-economy front clear the way for a visionary expanded sociolegal agenda. I believe that if we in L&S were to follow the broad vision of Edelman's address, we could go a long distance into engagement with the most potent trend of our time: the globalization of law and markets.
A word on L&E as a counterpoint. I have some ambivalence about this point of departure. I believe we should at once be enthusiastic supporters and enthusiastic critics—and indeed the first will lead to the second. As enthusiastic supporters of L&E we should recognize the mileage obtained from its simplifying assumptions, the crispness of its parsimonious models, and the boldness of its extrapolations from such radical self-limitations. The more ambitious the reach of this theory, the more readily we should observe its potential and its limits. Thus Edelman is absolutely right to unveil the leaps necessary to lay the primitive terms of the model, to observe where it succeeds and where it falters, to recognize what is arbitrarily excluded and thus what is inadvertently distorted, to define the boundary conditions under which the models will and will not operate. L&E has considerable currency in some parts of the legal academy, in particular, and so it makes eminent sense to take it very seriously.
But if we place L&E in the gladiatorial arena as L&S's principal intellectual counterpart, it risks allowing L&E to set our own agenda, even negatively. It tempts us to start with its problems and to elaborate upon its conclusions. Thus L&S scholarship risks placing itself in a complementary or even derivative position, operating around the margins rather than counterposing a unique agenda and distinctive set of theoretical approaches to that agenda. This potentially has L&S fighting a battle on the field of its rival's choosing. Hence we may find it self-limiting for our own scholarly enterprise. Edelman, of course, is well aware of this and goes far beyond it, setting a fresh agenda that draws on much broader theoretical materials—most prominently, economic sociology.
Pressing L&S into the Global Arena
I will run with the baton passed by Edelman and demonstrate the salience of her call for the global arena of law, markets, and economic development.Footnote 1
An enormous enterprise of legal construction is currently taking place in the global arena. Precipitated by the collapse of command economies in the late 1980s and the Asian crisis in 1997, and stimulated by continuing rounds of global trade agreements, the world's dominant supranational institutions press energetically for law reform. The global agents of reform range from multilateral international financial institutions, such as the World Bank, International Monetary Fund (IMF), and the regional banks (e.g., Asian Development Bank, European Bank for Reconstruction and Development), to international governance bodies, such as the European Union and the United Nations, to clubs of nations (e.g., the Organisation for Economic Co-operation and Development, G-22), and to multilateral negotiating forums, such as the General Agreement on Tariffs and Trade talks. International professional associations and networks of scholars aid and abet the initiatives of global and economic institutions. Together they seek to create substantive and procedural law and to build the institutions that will implement law: courts, professions, and regulatory agencies. All areas of commercial law—contracts, bankruptcy, secured transactions, corporate governance—are on the global agenda. And every law-delivering institution has its champions and “model-mongers,” as Reference Braithwaite and DrahosBraithwaite and Drahos (2000) label the missionaries to transitional and developing countries.
Edelman's lead would challenge L&S research to enter the arena of global inquiry by following four theoretical lines of attack, namely, explicating (1) the norms being contested in global lawmaking, (2) the formal attributes of the law being made, (3) the power struggles that ramify through at all levels of this global construction project, and (4) the cultural currents that potentially pit West versus East and the center versus peripheries. Let me amplify.
Global Norms
To the extent that many legal construction programs are driven by international financial institutions (IFIs), the economists dominate, and where their legal departments lead the way, they, too, reflect dominant economic ideologies.Footnote 2“Efficiency,” for instance, is valorized as the primary criterion for a market-sustaining legal system. The World Bank initiative on insolvency regimes worldwide, for instance, is labeled “efficient and effective insolvency regimes.” Yet many nations making the transition from societies where workers were celebrated remain reluctant to adopt laws where “efficiency” would vanquish equity. In insolvency law, the strong creditor orientation of IFIs conflicts with domestic concerns about treating workers fairly when companies fail, not to mention treating domestic economic actors fairly in relation to foreign economic interests. This alternative norm links to another, for China, in particular, insists that any new commercial law must not threaten social stability by throwing workers into labor markets without alternative employment or social safety nets. That is to say, distributive norms can weigh as heavily on the shoulders of political leaders as efficiency norms. And without a careful balancing of efficiency, equity, and stability, market construction may lead to social destruction. Lawmaking, therefore, must occur for pragmatic reasons in a normative environment where values are carefully negotiated. As Edelman warns, efficiency cannot be taken for granted as a self-vindicating market norm in theory or practice.
Global Rationalization of Law
Global lawmaking might also be viewed as a giant experiment in legal rationalization. Global actors prepare normative templates, standards, and guides that are designed to influence adoption by transitional and developing countries. The frequent criticism of “one-size-fits-all” models (Reference StiglitzStiglitz 2002) that are developed by IFIs reflects skepticism that a global convergence in law and markets will produce an artificial rationalization where the form of law adheres to global standards but the practice of law will deviate according to local constraints. Codification, unification, and harmonization—three manifestations of rationalization—stumble over the particularities of local custom, variations in legal families, and variations in forms of market. More important, perhaps, there recurs in the politics of global rationalization the hoary conflict between formal and substantive rationality, or as Reference Nonet and SelznickNonet and Selznick (1978) would have it, between autonomous and responsive law. Global institutions frequently style their reform proposals in terms of autonomous law; that is, that good law can be crafted apart from policy preferences, or that somehow policy preferences should be externalized from a given legal code. Yet since “rationality is itself a social phenomenon,” as Reference EdelmanEdelman states (2004:186), these supposedly neutral, rational norms carry invisible marks of substantive interest and may need to be deconstructed in the national policy context in order to reveal what is fair or unfair, equitable or inequitable, culturally-specific rather than culturally universal.
Global Contestation
The politics of rationality that Edelman observes within the United States can also be observed in cross-cutting dimensions of power and contestation in global lawmaking and market-building. IFIs and global governance organizations jostle among themselves for ascendancy in global standard-setting. The dominant creditor nations vie for the primacy of systems with the most affinity to their own practices and preferences. Professions contest on the global stage their relative advantage in new jurisdictions of work that are opened up by law reform. Hegemonic global actors find themselves resisted in a variety of ways by nations reluctant to adopt the normative and formal models they are pressured to adopt (Reference Halliday and CarruthersHalliday & Carruthers 2003b). And actors within transitional and developing economies variously ally themselves with or against global players as it suits their local interests (Reference Dezalay and GarthDezalay & Garth 2000). And in classic L&S manner, laws put on the books may be subverted upon implementation. Lawmaking that occurs with full exposure to the global arena, therefore, likely multiplies the range of actors in contestation over the institutionalization of norms and interests and thus produces even greater indeterminacy in outcomes of law reform.
Global Culture Conflicts
And then there is culture. Scholars find themselves caught between the Scylla of using culture as the catchall explanatory variable that thereby explains too much to be useful, or the Charybdis of hyper-skepticism that pretends institutionalized ways of thinking and acting do not systematically vary across religions, intellectual heritages, and legal families. But Edelman is entirely right about culture's salience in global market regulation. Culture cannot be theoretically whisked away on either count. It must be seen both constitutively (i.e., infusing economic and legal behavior with taken-for-granted ways of being and acting) and instrumentally (i.e., as a rhetoric of colonization or resistance). On the one side, a global culture of “best practice,” international standards, and “advanced” practices confronts, on the other side, deeply embedded practices in economic exchanges and legal engagement. “Culture” is also a terrain of power, a field where agents of reform or resistance deploy devices that seek to capture minds and hearts (Reference Halliday and CarruthersHalliday & Carruthers 2003a). This occurs within the global center as well as within its various peripheries. Culture constitutes and effects markets. And so it is that law—in the hands most notably of Western, northern agents—now clamors for recognition as a constitutive element of market-shaping and institution-building.
The Legal Constitution of Markets
Together these theoretical elements add up to a legal constitution of markets. They do not exhaust the explanation of market behavior, but neither can they be relegated to marginality in any compelling theory of legal or economic globalization. Edelman's macroscopic outlook and theoretical concepts provide a platform on which L&S scholars can join hands with economic sociologists to provide distinctively sociolegal perspectives on economic behavior, labor, and financial markets, among others, in their encounters with the norms of justice in the global arena. And indeed, as we press this platform forward in the global arena we may discover, as Edelman would anticipate, that a surprising degree of lawmaking is endogenous to the economy: the generative moment for law and economic development comes frequently from within the global economy, i.e., from multilateral credit institutions, private international banks, treasury departments of major creditor nations, and even professions—the very institutions that occupy the high ground of the global economy.
While we do not begin our analysis of the global economy from L&E postulates, therefore, by following Edelman's timely theoretical lead we end up by placing L&E in a creative tension with an indigenous theory of L&S, neither conceding to L&E the high ground nor ignoring it altogether. This places L&S scholarship not only in vigorous tension with scholars of L&E, but also with its practitioners, for many of the lawyers driving the globalization of law find themselves fellow-travelers with economists to valorize efficiency over equity, rationalization over power, and harmonization over localization.
Let us pursue Edelman's expansive agenda to both elaborate sustainable and constructive theory and build decent and effective institutions in the Third World as well as in the First.