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As part of my ongoing deep dive into the early history of capitalization, I’ve been stumbling onto papers that have sparked the first hints of an idea for me.
There is a strong narrative in mainstream thought that the Public Sector, and the Private Sector, are predominantly antagonistic toward each other. A big part of this narrative suggests that one of the major roles of the State is to act as a protector of the public from the evil excesses of private industry. That through regulation, corporations can be held accountable for their avarice and unconscionable behaviors. This narrative is then bolstered by stories of corruption of elected and careerist government officials, by means of special interest contributions to political party campaign coffers, in exchange for favorable legislative decisions. And then again by the revolving door of regulatory capture, and more broadly by state capture.
I recently watched the mini-series Dopesick (which was excellent, and I highly recommend it) about the Opioid Crisis in the US, and Purdeu Pharma’s role in the crisis. The story very neatly showed the FDA’s complicity and the revolving door of individual regulators passing harmfully favorable Medication labels that were used by Purdue Sales teams to convince doctors of the safety of OxyContin, so that those regulators could later be offered lucrative positions at the company they were meant to regulate.
On the flip side of this story, we are also shown the Assistant District attorneys who relentlessly pursue the truth and eventually bring purdue pharma’s actions to the public eye.So what we have here is the government good guys, protecting us from the government bad guys colluding with the private sector bad guys.
It’s a powerful narrative, and honestly, nobody can try to say that all government workers are bad people.But the papers I’ve been stumbling into, paint a picture, not of a few rotten apples spoiling the bushel, but rather a few good apples stuck at the bottom of shipping containers of rotten apples. (Something more akin to the TV show Billions)
Without getting into the details just yet, because I’ve still got a lot of reading to do on the subject, I want to propose here that Regulatory legislation falls into a few very broad categories
- Regulation that draws the legal line in the sand for Capitalists. This type of regulation is the result of public outcry over specific widespread abuses, and due to public pressure, the State is forced to legislate changes to industry. These regulations are not actually intended as public protection, but rather as a Clearly indicated boundary for Capitalists, to avoid protracted legal and media exposure when they cross the boundary.
- Regulation that is conceived and created by the very industries being regulated. Or at the very least created in conjunction with the regulators. This explains the very rapid and favorable “adjustment” some corporations are able to make to new regulations.
- Regulation that raises the barriers of entry to specified markets, thus assisting Dominant Capital within that market to solidify forecasts and make positive pronouncements at earnings calls.
- Regulation as a catalyst for differential accumulation. By using very specific verbiage within the regulatory legislation, some companies are harmed, while others benefit, due to their specialized supply chains, or internal structure, or strategic partnerships.
This is by no means an exhaustive, or even an accurate categorization. But rather, the beginning of an article I intend to write in conjunction with my article on the history of capitalization.
If anyone has any books or sources or studies they would like to recommend, I would be very grateful. Also, if there are any angles I’m missing (I quite certain there are) assistance there would be appreciated too. I am starting my foray near the 1887 introduction of the Interstate Commerce Act, and building forward from there, all the way to the present (assuming that it doesn’t get so murky and convoluted after the introduction of Cost-Benefit Analysis in the 1970s, that I find myself drowning in literature that says nothing but wont shut up)
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Pieter,
You may want to focus on the developments of a specific time period. The reality is the laws of England and America at the dawn of capitalism were deemed unfriendly to business, i.e., they restricted dominant capital because they restricted everyone, not because of public outcry, and the law was gradually transformed over time to loosen restrictions on dominant capital, culminating in the late 19th century at a time when the so-called legal positivists were ascendant in law. In the U.S., this is when resistance to dominant capital swelled and the Sherman antitrust act was born. (The Horwitz books, linked to below, are a great resource for understanding this phenomenon.)
The time after the beginning of the 20th century around the birth of the administrative state under Democratic administrations (FDR for certain, but I believe Wilson ushered in the era) should be of great interest. It would be interesting to read the original scholarship advocating administrative agencies as rule setters over the traditional bright line rules.
Of particular interest to me is the history behind the formation of the U.S. Securities and Exchange Commission (SEC). As general counsel of two publicly traded companies (and corporate secretary of a third), I became convinced that the SEC existed to support businesses, not to restrain them. All you had to do was make sure you were in a “safe harbor,” of which there are many built into the law, for whatever action you took. They made it easy.
Personally, I believe that most, if not all, administrative agencies functioned correctly as rule makers and enforcers, but that those institutions have degraded over time, a circumstance hastened over the last 50 years by neoliberal policymakers (see Bork and antitrust).
–Scot
Here are some books that provide a strong foundation for your topic:
Berle and Means The Modern Corporation and Private Property
John Commons Legal Foundations of Capitalism
Morton Horwitz’s The Transformation of American Law (both volumes)
Katharina Pistor’s The Code of Capital
Adam Winkler’s We The Corporations
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Without getting into the details just yet, because I’ve still got a lot of reading to do on the subject, I want to propose here that Regulatory legislation falls into a few very broad categories
The categories you list are potentially useful and informative, but they are not always easy to delineate in practice. ‘Regulation’, like every other important form of capitalist creordering, has multiple consequences, which, in principle, can affect every one of your categories. In order to make this classification useful, we need not only to theorize it, but also to research its multiple consequences.
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Thanks for the feedback Jonothan,
I added the caveat about the categories not being exhaustive or necessarily accurate, mainly because I have not yet read the necessary literature, but also because the eventual categories would need to be mappable and testable. I had not even considered the multiple consequences yet, but it makes perfect sense. All actions have multiple intended consequences, and multiple unintended consequences. Mapping the unintended consequences would be supremely difficult, if not outright impossible, but I intend to give it a go nonetheless.
It is encouraging to know that you think this might be worth pursuing. My thinking is simply that regulation as it currently exists must be a COP (Concept of Power) under the current Capitalist Mode of Power, and that its evolution should be observably (as illustrated by early studies of it’s effect on railroad stock prices)
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Without getting into the details just yet, because I’ve still got a lot of reading to do on the subject, I want to propose here that Regulatory legislation falls into a few very broad categories
The categories you list are potentially useful and informative, but they are not always easy to delineate in practice. ‘Regulation’, like every other important form of capitalist creordering, has multiple consequences, which, in principle, can affect every one of your categories. In order to make this classification useful, we need not only to theorize it, but also to research its multiple consequences.
I was going to mention this, as well. For example, much of the “regulation” we see in the U.S. today is actually being performed by courts (not legislative or administrative bodies), particularly by judges influenced by the Law and Economics movement, which I’d argue is the dominant legal philosophy today.
If I were to start in on this kind of project, I would focus on the Sherman Antitrust Act of 1890 and follow the thread of federal antitrust law and enforcement through to the present day. We know many of the consequences, e.g., the rise of the modern corporation to avoid antitrust laws, breaking up AT&T, curtailing Xerox’s IP rights, etc., and we can find others through applying CasP logic. Moreover, the Sherman Antitrust Act began as a standalone, bright line law whose enforcement was gradually pushed to administrative agencies, many of which have become captured by the industries they are supposed to monitor.
Other potential areas/topics would be environmental protection laws and copyright laws (there is a massive schism in patent law that has shaped an oddly schizophrenic regime of patent enforcement, but that’s interesting, too; how does dominant capital deal with civil wars among capitalists?), the histories of which are pretty well-established and are likely to yield new insights if subjected to CasP analysis..
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If I were to start in on this kind of project, I would focus on the Sherman Antitrust Act of 1890 and follow the thread of federal antitrust law and enforcement through to the present day. We know many of the consequences, e.g., the rise of the modern corporation to avoid antitrust laws, breaking up AT&T, curtailing Xerox’s IP rights, etc., and we can find others through applying CasP logic. Moreover, the Sherman Antitrust Act began as a standalone, bright line law whose enforcement was gradually pushed to administrative agencies, many of which have become captured by the industries they are supposed to monitor.
Sherman Antitrust and a ton of associated literature is already on my reading list.
I was going to mention this, as well. For example, much of the “regulation” we see in the U.S. today is actually being performed by courts (not legislative or administrative bodies), particularly by judges influenced by the Law and Economics movement, which I’d argue is the dominant legal philosophy today.
Regulation being done by courts, rather than agencies, seems like a counterintuitive idea. To my understanding, legislators and agencies are tasked with codifying the rules. The agencies are expected to enforce the rules. Courts are meant to adjudicate transgression of the rules. Obviously the judicial interpretation of rules holds massive sway on how the rules are applied in reality, but that would only be one piece of the puzzle right?
Theoretically, the full regulatory capture would encompass Legislators, Agencies and the ideological influence of political economy theorizing that affects judicial interpretation.
For Dominant Capital to effectively use Regulation as a support structure for the Power of Capital, they would need to ensure that the 3-pronged approach be as robust as possible.
Other potential areas/topics would be environmental protection laws
Environmental protection regulation and the associated Tort Law will definitely be a fascinating aspect of this entire journey.
and copyright laws (there is a massive schism in patent law that has shaped an oddly schizophrenic regime of patent enforcement, but that’s interesting, too;
IP laws are equally fascinating, but I’m hesitant to go there, because it feels more like the domain of Strategic Sabotage
how does dominant capital deal with civil wars among capitalists?), the histories of which are pretty well-established and are likely to yield new insights if subjected to CasP analysis..
The Civil War in Dominant Capital is actually something I enjoy thinking about. Given the imperative for Differential Accumulation, it makes sense that Dominant Capital would wage war on Dominant Capital. But this, also, would be a topic for another day. The regulation and capitalization stuff will have me busy for months yet.
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The history, practice and effects of the legal fiction of corporate personhood might be worth researching. Also political donations from the early days right up to the SuperPacs. And, the rising practice of think tanks and lobby groups writing legislation for legislatures. The American Legislative Exchange Council (ALEC) was formed in 1973, 48 years ago. That’s about at the time of the early rise of neoliberalism.
ALEC Type: Tax-exempt non-profit organization. Legal status 501(c)(3). Revenue (2017) $10,352,239 Expenses (2017) $10,237,195. Formerly called Conservative Caucus of State Legislators.
If you want to look at how power is embedded in the Democratic Party and The Council on Foreign Relations and how this goes right back to the “Boston Brahmins” look at the Monthly Review Online for “The Council on Foreign Relations, the Biden Team, and Key Policy Outcomes – Climate and China” by Laurence H. Shoup.
But how you “follow the money” and “plot the differentials” in the CasP-ian method I do not know. My analyses seem to be informed only by broad Marxian considerations, undisciplined speculative philosophy, some readings of history and general outrage at the current system: not because I have suffered in political economy or class terms (I haven’t) but because squeezing vulnerable people for more and more just seems so unnecessary. There would be plenty for everyone if equitably shared: enough for need, just not enough for greed.
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The history, practice and effects of the legal fiction of corporate personhood might be worth researching. Also political donations from the early days right up to the SuperPacs. And, the rising practice of think tanks and lobby groups writing legislation for legislatures. The American Legislative Exchange Council (ALEC) was formed in 1973, 48 years ago. That’s about at the time of the early rise of neoliberalism.
We the Corporations, linked to above, is probably the single best discussion of the history of corporate personhood under U.S. law.
This article from Morton Horwitz is a chapter in the first volume of The Transformation of American Law, and can be used to find pretty much all law review journal articles on the topic of corporate personhood.
But how you “follow the money” and “plot the differentials” in the CasP-ian method I do not know. My analyses seem to be informed only by broad Marxian considerations, undisciplined speculative philosophy, some readings of history and general outrage at the current system: not because I have suffered in political economy or class terms (I haven’t) but because squeezing vulnerable people for more and more just seems so unnecessary. There would be plenty for everyone if equitably shared: enough for need, just not enough for greed.
Following the money is pretty easy, but plotting the differentials may be difficult, even if you are a lawyer (it is often difficult to find and understand the law as it was, especially the farther back in time you go). That’s why I would focus on sea changes in the law such as corporate personhood and the elimination of courts in equity (or chancery).
Instead of focusing on specific changes in the law, you can focus on movements within the legal profession, e.g., American legal positivism of the late 19th century. The present Law and Economics movement could be of particular interest because it pushes the Coase Theorem, a doctrine that, if taken to its logical conclusion, would eliminate private property as we know it: the ownership of property would always be awarded to whoever can economically exploit that property most efficiently, regardless of who initially holds title to that property.
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