Interdisciplinarity, Law, and Global Capitalism at Northwestern University (USA): A Q&A with the Global Capitalism and Law Research Group

SASE Newsletter Editor-in-Chief Agatha Slupek met with Professors Karen Alter and Cristina Lafont of Northwestern University when she attended the University of Chicago’s Workshop in International Politics for the first time. Alter is the author of, among several other books and articles, the award-winning The New Terrain of International Law: Courts, Politics, Rights (Princeton University Press, 2014), and her latest research focuses on the construction of global economic rules regulating trade and money, and on the determinants of politically sustainable capitalism. Lafont’s newest book, Democracy without Shortcuts is forthcoming from Oxford University Press, and her current research focuses on normative questions in political philosophy concerning democracy and citizen participation, global governance, human rights, religion and politics. Together, their research for the Workshop confronts pressing international issues in a novel and interdisciplinary way. The members of their team were gracious enough to answer some questions we thought would interest the SASE readership.

Interview conducted by SASE Newsletter Editor-in-Chief Agatha Slupek.

To begin with, could you tell our readers a bit about what led you to start this interdisciplinary group and about its composition?

We formed the Global Capitalism and Law Research Group in response to a “Big Ideas” call from the Buffett Institute on Global Affairs. The leaders of the Buffett Institute believed, as did we, that interdisciplinary research is the way to generate new and fresh ideas. In addition, we had all come to realize that the only way to grasp a system as complex as “global capitalism,” and to understand global capitalism’s enmeshment in and effects on law, was to bring specialists from different disciplines together.

We aimed to bring together scholars from a range of different disciplines, creating a big tent in which to discuss the relationship between global capitalism and law. The group included economic sociologists, legal scholars, philosophers, and political scientists. The members who joined brought different interests to the table: some were more interested in global economic systems and their interactions with domestic institutions; some focused on the rules and institutions of global economic governance; others honed in on the legal dimensions of regulating the global economy; and still others explored how global economic structures are adversely affecting the achievement of other goals (e.g., protecting human rights, democratic choice, or greater justice). What united us was a desire to better understand the relationship between capitalism, globalization, and law.

All of us wanted to better understand the historical origins of the system of global capitalism, the forces that challenge it, and the ideas and processes that sustain global capitalism.   We invited every discipline to join in, but we had little luck encouraging economists to join our group. Anyone who has engaged in interdisciplinary work will be familiar with this challenge. A unifying theme among our core members is that there is no “one size fits all” solution that will work in different parts of the world. Thus our group includes scholars that expect and accept that people in different parts of the world will have a range of goals, and that there are many valid choices that populations can choose.

Since the financial crisis in 2008, one might say (using a somewhat cliché formulation) that capitalism has been “brought back in” to the center of analysis, at least in the field of political science. Would you agree? If so, how do you think it has been brought in—as a problem to address? An analytic framework? How do you see your Research Group either building on or departing from the approach to capitalism in the social sciences?

Every discipline will have its own story as to why global capitalism fell out as an object of focus. For political science, a somewhat general explanation is that the end of the Cold War meant the end of a socialist alternative. Those of us who were educated during the Cold War were taught Marxism alongside other theories of politics, the economy, and society. We were taught to think about class as an organizing principle, and about superstructures of ideas. But the end of the Cold War suggested that democracy and market economies were the best, and perhaps the only, viable governance models. We then entered an era in which many scholars came to presume that democracy and markets were background conditions or objectives. Social scientists Arrighi, Harvey, and Streeck continued to grapple with capitalism, but in mainstream political economy there was also a loss of interest in systemic theorizing of the kind that characterized much of the work on global capitalism. The seeming inability of dependency theorists, for example, to explain East Asian growth “miracles” like South Korea and, later, China motivated a shift to more middle-range theorizing, focused more on domestic-level institutions than the system of global capitalism.

The hubris of the post-Cold War period is that some economic, political, and academic leaders became drunk on the idea of markets as a solution to most problems. Yes, we needed to worry about market failures and negative externalities, but these were considered small problems that one tinkers to fix. This market ideology made it easy to discount what was happening to the middle class. Markets are disruptive by nature. For economists, the disruptive nature of markets is a good thing. Inefficient firms die; workers retool; new strategies emerge. So while it was clear that some individuals, communities, and industries were losing out to the forces of globalization, the presumption shared by many was that markets—or perhaps markets governed by a light-touch regulatory structure—would cure the problems they created. The alternative view was drowned out by an over-confidence in markets.

The point is certainly not that studying capitalism is about resurrecting Marxism. Genuine Marxists would never own what our group does. Indeed many scholars consider our group not nearly radical enough. Many of our group members remember too well the Cold War. We still presume that democracy and markets are background conditions. This is to say that fascism, nationalism, and Communism hold little appeal as an alternative to markets.

Our research vision is to study and envision what would make capitalism politically sustainable. We formed as a group before the 2016 presidential election. Back then, few wanted to consider the idea that global capitalism might not be politically sustainable. This conversation is still not easy to have. Many business and political leaders do not want to suggest that capitalism might not work. On the one hand, it is obvious that the current system is not working for many people. It is equally obvious that the current system generates outcomes that are indefensible from the perspective of justice, however one might conceive the term.   Yet ours is a conversation that accepts that the current capitalist system is going to continue. We are actually a rather middle of the road group, living in a world of political extremes. We are not extreme enough for Marxists, and are too radical for free-market loyalists.

The topic of this year’s SASE Conference is “Fathomless Futures: Algorithmic and Imagined.” Your group certainly takes inspiration from a set of problems adjacent to those animating the conference theme (uncertainty, lack of trust). How does your research help us to think about the “future,” broadly conceived?

There’s a difference between research that helps us think about the future and research that helps us think about how we think about the future. Most of the work by the group’s members falls in the latter category. For example, the perspective shared by some of our members sheds light on how law is not just an efficient response to coordination problems that market players face; law and legal “fictions” are also useful devices that help actors operating in an extraordinarily complex global economy cope with the radical uncertainty associated with an unwritten future.

Finance, an area of particular interest for some of the group members, is a domain that really forces you to think about how market players and regulators cope with the future. And law is enormously important for financial market innovation, as Katharina Pistor’s work shows. Debt contracts, for example, are simply the promise of the borrower to pay down the road. If we’ve learned anything from the past decade it’s that what lies down the road cannot be forecasted with much accuracy. Given uncertainty about the future, how do we get the “unbundling” of debt contracts so that different risks associated with the contract can be priced and traded? Lawyers, following Pistor, can creatively “re-code” existing contracts to make new financial assets that have the character of enforceability; thus these assets become legible and more valuable to market participants. Law doesn’t necessarily make the future in financial markets any less unknown—but it does outline the rights and obligations of parties to the contract and thus makes promises embodied in the contract appear more credible. Uncertainty about the future can be swept under the rug, to an extent, and you can then make the markets larger and more liquid.  

An aspect of your Research Group that, in my view, makes it very unique is your incorporation of humanistic inquiry with social scientific analysis. Can you say a bit more about the philosophy behind your project? How does the conversation between your collaborators change or get refigured when disciplinary boundaries are pushed? Is this challenging?

We were looking for group leaders who would be real team players. Anyone who was willing to invest was welcome to join and lead.   This is oblique way of saying that the answer to your question is: Cristina Lafont.   Professor Lafont was willing to invest, and our social science members were open to learning.

All of us were committed to serious interdisciplinarity. Cristina wanted to engage with social scientists, and the social scientists therefore had to invest in philosophy. This is how collaboration works—you must find a way to meet in the middle.

Numerically speaking, most of the master classes we have held come from the disciplines of social science. We have also invited lawyers, judges, and philosophers to teach our group members. The humanist and social science perspectives are always engaged elements of the conversation, and thus the social scientists have learned more about philosophy than many might have originally expected.

The investment in crossing the humanist-empirical divide is huge. Karen admits that she would never dare to enter the world of philosophy without a philosopher by her side. Cristina feels the same about law and empirics. She would hesitate to make claims about law or empirics on her own. This is why interdisciplinary collaboration is so essential. It is the best and maybe only way to seriously and simultaneously engage humanistic and empirical worlds. When Karen and Cristina present co-authored work together, Cristina can respond in ways that philosophers can accept. Karen can respond in ways that (most) lawyers and political scientists will accept.

We have found humanist and social science audiences extremely receptive to our collaboration. That said, it remains a challenge to speak to both worlds. Part of the challenge is that each discipline has its own language and jargon. If you say your message in ways that both can understand, then the collaborative work has twice the jargon. One must therefore speak to different audiences, one at a time, yet in ways that do not alienate the other discipline. It is a time-consuming yet also very rewarding challenge.

To give our readers an idea, what are the current projects your Group is working on? What are your hopes for the future of the Group?

We are in a year of rebuilding. Since we were founded, the vision of the Buffett Institute changed. Our plans to engage in a national global debate about the determinants of politically sustainable capitalism gave way to the need to recover our funds and find a new institutional home.  

Current projects include a philosophical and empirical engagement with what we call “second best theorizing.” We develop in philosophical and normative terms the problem of the second best, and apply the framework empirically to suggest a strategy to reform the World Trade Organization. One way to explain this project is that we are rejecting realistic utopian thinking that adopts piecemeal reforms pushing towards a new ideal, in favor of defending elements of the current system—including democracy and human rights—as needing greater protection. We are therefore engaged in second-best theorizing, recognizing that this is not about identifying the highest ideals but about protecting important normative and political objectives that could be made worse by the search for ideals that cannot be realized under current conditions.

A second collaboration follows the trade and monetary politics that created the current system of global economic management. We focus on the divergent legalization trends in money and trade wherein global trade became increasingly legalized while global money became less legalized over time. The larger issue is that one cannot address the problems of trade and money separately. Yet we have institutional and ideational structures that imagine the two issues as distinct, one that is amenable to global legal solutions and another which is not. In fact, both issues are hard to regulate globally, yet there are real political and economic consequences associated with the failure to subordinate economic goals to political objectives and legal imperatives. The 2008 financial crisis is a case in point. Markets, left to their own devices and profit-seeking incentives, can implode with spectacular social and economic consequences. And elected officials can follow political logics in ways that harm the effective functioning of markets and political systems, which is why legal checks may be helpful.

A third collaborative project is a larger national and global debate over the determinants of politically sustainable capitalism. We hope to discuss every element of this phrase. What makes something politically sustainable? How can capitalism, which is disruptive by design, be politically sustainable?

These three projects again highlight our middle-of-the-road approach. We want serious reform of the current system. We believe that uniting humanist and social science sensibilities and priorities will create new imaginaries of possible goals and practicable solutions. Our goal is not to construct a single one-size-fits-all solution. Instead, our goal is to generate new imaginaries—new benchmarks, new sets of normative and empirical criteria—so that we can have a robust political debate about real alternatives.   The end, we hope, will be enhanced democratic choice of a market-based solution that works better for more people.

* This article is taken from the SASE Summer Newsletter 2019 – Click here to go back to the Contents Page *