11.1 Introduction
This chapter examines prominent solidarity conceptions used in legal discourses in the context of unfair economic arrangements, typically associated with neo-liberalism. It looks at solidarity conceptions in legal discourses about and within law, combining an external with an internal perspective. The chapter finds that some prominent solidarity conceptions are not helpful to critically analyze neo-liberal economic arrangements, especially from a legal theory perspective. These findings echo the conceptual analyses of solidarity elsewhere in this volume.Footnote 1 The solidarity conceptions in question are circular or redundant, because they either presume solidarity to be the foundation of and thus present in every legal order (including legal orders supporting unfair economic arrangements) or they equate solidarity with cooperation. This chapter also finds that the standard policy proposals to counter and unwind neo-liberal economic arrangements, which are often informed by solidarity, are too aspirational.
These policy proposals typically involve imposing new legal duties on dominant economic actors and states, making their effectiveness depend on adopting new national and regional legislation and treaty law, on compliance with this legislation by dominant economic actors, and on enforcement by legal authorities. Moreover, the proposals imply that the normative resources for change lie outside the law. This suggests that the neo-liberal economic arrangements are only morally wrong, but that they cannot be questioned on the basis of existing positive law. To address this gap, this chapter explores an alternative understanding of law based on existing positive law, namely law as a public service. Dominant economic actors rely on the law as a public service. They need legal authorities, especially judges, to declare their neo-liberal economic arrangements legally valid and enforceable. Positive law already offers judges the normative resources to refuse the help of the law whenever the neo-liberal economic arrangements structurally lack minimal reciprocity and fairness. This chapter’s main proposition is that elite experts, namely judges sitting on the bench of Western civil and commercial courts – as opposed to or along with weaker economic actorsFootnote 2 – may be the agents of change.
Section 11.2 analyzes three types of solidarity conceptions from a legal theory perspective: sociological, moral philosophical, and legal conceptions of solidarity. Section 11.3 discusses how conceptual shortcomings of solidarity are echoed in the standard critiques of neo-liberal economic arrangements and typical proposals to counter and unwind them. Section 11.4 explains the concept of law as a public service through the lens of private law. Section 11.5 concludes by exploring some practical implications and limitations of law as a public service.
11.2 Solidarity Conceptions in Legal Discourse
11.2.1 Sociological Conceptions of Solidarity
Émile Durkheim’s conception of solidarity is probably one of the most widely used when scholars try to explain the relationship between solidarity and law. As a sociologist Durkheim sought to identify, describe, classify, and explain social order. For him, solidarity as a form of cooperation was constitutive to social order.Footnote 3 He wanted to see how the division of labor was an essential factor in producing solidarity.Footnote 4 But “solidarity” is not an empirical phenomenon which a sociologist can simply and directly identify and measure.Footnote 5 To identify and measure solidarity as an empirical phenomenon, Durkheim needed a proxy for solidarity. To this end, he used legal systems, which can be identified, described, classified, and explained. For Durkheim, the evolution of law represented the evolution of solidarity. Each form of law represented a form of solidarity. Hence, the transformation of the well-known forms of solidarity: from the dominance of mechanical solidarity (collective economic and social relations) to the dominance of organic solidarity (division of labor, where actors operate as organs in a body with exclusive and distinctive, but interdependent functions). For Durkheim, solidarity was the explanans for social order. And, in order to identify and measure the various stages of solidarity, he used the law as empirical data. Durkheim thus used the law to explain solidarity in order to, ultimately, explain social order.
For Durkheim, solidarity has a foundational function. Solidarity constitutes the basis for any social and legal order. Thus, whenever there is a social and legal order there is solidarity. It is the task of social science to identify, describe, and characterize the type of solidarity in any given social order. And Durkheim’s methodological invention was to use law as a proxy for solidarity, because law is a phenomenon that can be empirically observed.
Interestingly, in legal philosophical accounts of law and solidarity, Durkheim’s sociological conceptions of solidarity, for example, mechanical and organic solidarity, remain a trope.Footnote 6 Solidarity then operates as a diagnostic concept to explain and criticize the shortcomings of positive law. Accordingly, existing arrangements of positive law (e.g. property rights, consumer rights, trade law, etc.) lack or undermine solidarity. The solution or cure is to call for more solidarity within the law, typically involving new legal duties through the adoption of new national and regional legislation and treaty law. The use of Durkheim’s sociological concept of solidarity in normative legal discourses is problematic from a methodological perspective. The law cannot be critically examined through Durkheim’s concept of solidarity, because for Durkheim law is already an expression of and a proxy for solidarity. In fact, it is thanks to law that one can empirically observe solidarity in any given social order. Hence, it does not make sense to speak of law “lacking or undermining” solidarity, because solidarity is the foundation of law. All law – by definition – is based on solidarity. In short, Durkheim’s notion of solidarity is a foundational concept. Such a foundational concept can work for a sociological inquiry into the sources of social order. But a foundational conception of solidarity is not helpful to critically examine the lack of solidarity within existing arrangements of positive law.Footnote 7
11.2.2 Philosophical Solidarity Conceptions
Like the classical sociological conceptions, philosophical solidarity conceptions also pertain to the foundations of the social, political, and legal order. But they differ methodologically in two ways. First, philosophers are using solidarity conceptions to determine what the content of positive law ought to be. Second, their approach is philosophical, not sociological, because a set of uncontested values constitutes the starting point of their analyses. I will limit myself to two philosophical approaches: standard liberal philosophies of distributive justice and phenomenological accounts of what makes a political community. Within these broad traditions I will focus on solidarity between insiders and outsiders of a national political or legal order.
An articulated elaboration of solidarity between insiders and outsiders from a standard liberal philosophy perspective can be found in debates on so-called ethics of migration.Footnote 8 Here solidarity operates as a normative source for duties vis-à-vis outsiders that do not follow from the existing moral and legal sources for duties, for example, free will, wrongful conduct and special ties (family, friends, community, country). What do insiders owe to outsiders? There are roughly two grounds for solidarity towards outsiders. First, the predicament of the outsiders may be directly or indirectly caused by an unfair distribution of resources and public goods (e.g. an unfair global economy). The community of insiders has created this unfair distribution. The insiders keep in place and benefit from it. Helping outsiders constitutes a kind of compensation or correction for this unfair state of affairs. Insiders should reform the global economic system, introduce a global tax, give generous development aid and/or open their borders. Second, insiders may also have a duty to help out outsiders even if the former are not directly or indirectly responsible for the predicament of the latter. A case in point is the moral duty to offer asylum to those fleeing persecution or war. The classical argument for a duty to offer asylum is that the habitable places on the earth are limited and originally belonged to all humans. Nobody ought to be denied a share of the resources needed for a life in dignity. No community has an absolute right to the resources of its territory. Since every human being has a right to a safe place on earth, insiders have a duty to offer asylum.
This standard liberal conception comes closest to a colloquial understanding of solidarity. Solidarity urges us to help others to whom we would otherwise not have a duty to offer such help. The help typically involves a positive action that is costly to the helper and involves an extra effort. Moreover, the helper does not necessarily receive anything in return for the help.Footnote 9 This liberal argument is a matter of solidarity because it appeals to a commonality between insiders and outsiders. The resources of the earth belonged originally to both insiders and outsiders. Both insiders and outsiders have equal moral rights to dignity and basic needs.
With respect to the law, standard liberal solidarity operates as an aspirational argument de lege ferenda based on normative resources external to law. Unlike the sociological conception of solidarity, applying this philosophical conception of solidarity to positive law does not run into methodological problems. But it does put much faith in the persuasiveness of morality. Moreover, from a legal theory perspective it is somewhat problematic if the solidarity obligations turn out to be too one-sided for the insiders. It happens to be the case that effective legal arrangements imposing legal duties without reciprocity, directly or indirectly, are extremely rare in law.
To many readers the idea of reciprocity as a basic feature of law may appear counterintuitive. Though some may accept that many private law arrangements are based on reciprocity (see discussion in Section 11.4.3), they will find it more difficult to accept this in the context of public law which often imposes duties on persons without any direct pay-off for the duty holder. One of the clearest cases is the duty to pay taxes. Some philosophers even tried to make the case that taxation amounts to forced labor.Footnote 10 Furthermore, there are arguably innumerable examples in the past and at present of rulers levying taxes for their own particular private interests. Even so, the power to levy taxes was claimed in the name of reciprocity throughout history in legal discourse.Footnote 11 This is illustrated nicely by the politico-legal justification for the absence of a right to levy personal taxes on foreigners: “strangers do not enjoy the honors (honores) or the amenities of the place [of taxation], so they must not be burdened by taxes. This alone is in accordance with natural reason (naturalis ratio).”Footnote 12 This same rationale was much later captured by the so-called benefit principle: “Taxation is the equivalent for the protection which the government affords to the person and property of its citizens; and as all alike are protected, so all alike should bear the burden, in proportion to the interests secured.”Footnote 13 Taxes were supposed to serve the public good, and not the private interests of the prince, as was clearly reflected in the central politico-legal concept to justify special and, later on, general taxes, namely necessity.Footnote 14
Like the standard liberal solidarity conceptions, the phenomenological approach also starts from features that all human beings and political communities have in common. But the way solidarity operates as a source of duties is quite different. Under the standard liberal approach, the outsider is a victim of social injustice. Under the phenomenological approach the outsider is not so much a victim but an agent who is co-constitutive for the self or identity of the political community. The self or identity of a political community is always constituted in relation to the other.Footnote 15 You can only make sense of the self by acknowledging the other. As a result, if you ignore the other you ignore the self. When a community determines its inside, it must also recognize the outside. Moreover, nobody has direct knowledge of or access to what counts as the inside and outside. In effect, the inside and outside are only established by proxy, they must be re-presented. Here lies precisely the opportunity to reach out to outsiders who may have been previously excluded. Phenomenological solidarity calls insiders to recognize and acknowledge an inevitable solidarity that is already there. In this respect, the phenomenological account of solidarity amounts to a kind of foundational concept similar to the sociological conception of solidarity. By not showing solidarity towards outsiders a political community misrepresents itself. In this vein, Menke argues that Germans deny their own Germanness if they do not open up to migrants.Footnote 16 While the aspirational standard liberal solidarity urges insiders to help outsiders as victims of injustice, the phenomenological account claims that insiders will become victims of their own lack of solidarity if they do not include outsiders: they will betray the experience of their own self.Footnote 17
Compelling from a philosophical perspective, it is unclear how the phenomenological approach will ever have any practical or institutional traction. Betraying the experience of their own self does not seem to hurt the insiders that much. Their non-reciprocal self-perception does not prevent them from maintaining and exercising a dominant position over marginalized outsiders. Invoking the phenomenological conception of solidarity is like telling a bully that he is actually the weaker party and a victim of his own insecurities. This will not stop the bully. Bystanders not lending their support or acquiescence will.
The standard liberal account of solidarity amounts to an aspirational conception of solidarity. But this conception has little explanatory or diagnostic force. Solidarity is simply an antonym for the fact that insiders do not have or do not feel a duty towards outsiders. Furthermore, the aspirational conception also lacks curative force. The diagnosis and the cure fully coincide. The problem: not enough solidarity. The solution: more solidarity. The phenomenological approach does not fare better. The phenomenological and foundational conception lacks diagnostic and curative force. If it is true that solidarity is already there, and that taking into account outsiders is actually inevitable in order to constitute a meaningful community, how come this is not happening? Apparently, political communities can flourish, at least on their own terms, while betraying the experience of their own self. While the aspirational conception has at least the benefit of clarity as to its practical implications, namely new legislation, advocates of the phenomenological approach are unclear about what more solidarity means in concrete policy and legal terms.
11.2.3 Legal Conceptions of Solidarity
The philosophical conceptions of solidarity have much in common with solidarity conceptions appearing in instruments of international and European law. Legal documents writ large, especially preambles and judicial argumentation, make reference to solidarity in two, often combined, forms: aspirational and foundational.Footnote 18 Aspirational are the references to solidarity in proposals to incorporate new legal obligations of solidarity in positive law.Footnote 19 But often these calls for solidarity are not merely aspirational. They are also declaratory: there ought to be new legal duties of solidarity, because solidarity is the basis of the already existing legal order. Solidarity then has a foundational meaning: it constitutes the very foundation of the legal order. Solidarity is necessary and inevitable. The new duties of solidarity merely confirm what is already there.
Here, we might raise the same objections against the aspirational and foundational nature of the philosophical conceptions of solidarity. As an aspirational conception, legal solidarity may ask too much from the law. As a foundational conception, it lacks diagnostic and curative force. If solidarity is already there, why does it not deliver? Still, these legal conceptions differ from the philosophical conceptions of solidarity in one respect. The philosophical solidarity conceptions seek to justify obligations for insiders that are one-sided: the insiders must give up economic and political privileges.Footnote 20 The legal solidarity conceptions are less morally demanding. The legal solidarity conceptions do not call for strong and affluent actors to help the weak and poor. They call for cooperation and mutual support between equally strong parties. At best it is about solidarity between strong actors cooperating when helping persons in need (cf. solidarity as burden or responsibility sharing in the context of refugee protection). This conception of solidarity is neither aspirational nor foundational. But it is redundant because solidarity simply means that all strong actors will be better off if they cooperate. But, if solidarity is now equated with the need or utility to cooperate, it loses any conceptual and normative value added: all legal arrangements are about facilitating cooperation.
Moving away from international legal discourse we may ask ourselves if domestic law does not impose duties to help the weak and poor. In Section 11.2.2, I pointed out that the right to levy taxes and the duty to pay them are based on reciprocity, not solidarity. But it could be argued that in many Western countries tax revenues are used to finance welfare programs. Welfare programs may be conceived of as policies of solidarity par excellence. Still, we must be careful not to confuse the particular experiences of those claiming to be a net contributor to the welfare system and the self-acclaimed rationale of the system. When introducing welfare arrangements, legislators rarely present them as exclusively promoting the interests of those receiving welfare benefits. Many welfare programs have more to do with the logic of insurance, stabilizing the labor market, de-politicizing the labor movement and, more generally, promoting social stability.
Paradoxically, the legal solidarity conception doing most semantic work is the rather prosaic and neglected conception of solidarity as joint liability dating back to Roman law.Footnote 21 Solidarity is then a modality of a legal obligation, whereby a creditor has multiple debtors and the creditor can claim the entirety of the debts from each single debtor. This joint liability thus creates an additional security for the creditor, which may have motivated the creditor to enter into the transaction in the first place or offer more favorable terms to the contracting party. This solidarity conception can much better account for the (dis)connection between solidarity and law. First, solidarity is exceptional. Solidarity as joint liability is not presumed: it requires consent or special legislation.Footnote 22 Second, the solidarity is between those having a duty, not between a stronger party and a person in need. Law is based on reciprocity and fairness, but not on altruism. Accordingly, the underlying rationale for the joint liability is that the debtors must have a common interest, typically a common enterprise.Footnote 23 Classical legal solidarity as joint liability is another illustration of how positive law does not normally cater to legal arrangements that impose legal duties without any direct or indirect benefits for the duty holder.
11.3 Solidarity and Global Justice versus the Neo-liberal Economic Order
The practical focus of this chapter is on neo-liberal economics. Schematically, there are two central tenets of the neo-liberal economic order.Footnote 24 First, in principle, scarce goods must be distributed through a market-based price mechanism driven by supply and demand. This mechanism relies on three pillars: freedom of contract, right to property and competition.Footnote 25 Second, the dominance of this model is beyond political and legal deliberation and discussion. Thus, political and legal institutions have no choice but to adopt and facilitate the free market.Footnote 26 According to its proponents, a neo-liberal economic order will inevitably lead to economic inequalities. But these material inequalities are not problematic. They are a precondition for a well-functioning economy and society because, in a liberal market with free competition, inequality is an incentive for today’s have nots to become the haves of tomorrow. Even if in the short term the have nots will not acquire a level of personal welfare acceptable to most people, at least they have the benefit of personal liberty and thus human dignity. For they live in liberty, free from unnecessary interference by collectively organized political bodies, such as the state or trade unions.Footnote 27
Many oppose the optimism of neo-liberalism.Footnote 28 Competition does not produce a fair re-distribution of wealth and resources. If there is competition between dominant economic actors, it will not lead to a significant redistribution of wealth between dominant and weaker actors. Neo-liberal arrangements mostly amount to competition among weaker actors reducing even more their bargaining power.
As a result, neo-liberal economic arrangements have catered for an on-going unequal distribution of wealth and resources giving relatively few dominant economic actors exclusive control over resources (money – cash and credit, natural resources, raw materials, minerals, metals, labor, real estate, hardware, software, data) at the expense of a large majority of weaker economic actors. The result is that large parts of the global population – in both the global south and the global north – live in economic and social precarity, in relative and absolute terms. When basic needs (e.g. work, food, housing, healthcare, education, energy, etc.) are governed by neo-liberal economic arrangements they tend to favor the particular private interests of dominant economic actors, marginalizing weaker economic actors. Weaker economic actors will find themselves in a structural unequal position with little to no bargaining power, alternatives or exit options, leading to social economic precarity and disenfranchisement for many of them. By contrast, dominant economic actors continue to accumulate wealth and expand their exclusive control over resources, reinforcing their already dominant economic position. Apart from structural economic inequality, dominance and precarity, neo-liberal economic arrangements facilitate the on-going depletion of planetary bio-diversity and sustainability. In short, on the basis of these critical observations it is clear that many neo-liberal economic arrangements lack minimal reciprocity and fairness, as they almost exclusively favor the interests of dominant economic actors at the expense of other stake holders, such as weaker economic actors and even nature.Footnote 29
There is a huge variety of policy proposals to counter neo-liberal economics in the name of social justice and solidarity. The proposals fall roughly in one or more of the following three categories: direct redistribution of wealth, radical reform of the economic and financial system, and measures to stop the depletion of earthly resources and bio-diversity.Footnote 30 In an obvious way these proposals can be understood as an expression of solidarity, namely solidarity between haves and have nots, present and future generations, humans and non-humans. But also in a more conceptual way the proposals show many similarities with the solidarity conceptions analyzed in Section 11.2.
First, like solidarity, the proposals often seek to impose new duties (e.g. paying taxes, paying minimum wages, negotiating fair trade deals, creating healthy working conditions, refraining from mining). Second, the duties are largely one-directional: dominant economic actors do not directly benefit from the execution of the new solidarity duties. They are a burden for which they receive nothing in return in the short term.Footnote 31 Third, dominant economic actors may consider the duties a sacrifice: they must renounce benefits to which they are normally legally entitled. Fourth, the normative source for the solidarity lies mainly outside the law. The duties must be imposed not in the name of already applicable law but in the name of solidarity among human beings. The solidarity duties are not laid down in positive law, but they ought to be (cf. proposals to incorporate human rights into the WTO framework). As a result, practically speaking, like solidarity, the proposals require a mass mobilization of non-legal actors to put pressure on legislators and governments to adopt new legislation and treaty law. Finally, even when incorporated into positive law, the effectiveness of the new legal duties depends on the willingness of dominant actors to comply with the law and on the capacity and willingness of authorities to enforce the new laws.
In short, the dominant proposals make social justice depend on compliance by dominant economic actors, either as a result of free will or by force. But what if this logic is reversed? What if the starting point is that dominant economic actors actually depend on the law and legal authorities, instead of the other way around?
11.4 Law as a Public Service
11.4.1 The Point of Law as a Public Service
Law’s basic communicative structure is not so much bi-lateral in the sense of the right holder invoking law vis-à-vis an individual duty holder (as a result of a contract, tort, property right or another legal obligation). Rather the communicative structure is in essence about the right holder invoking the law vis-à-vis third parties to secure the execution of the obligation by the duty holder.Footnote 32 So, appeals to or statements of law are ultimately aimed at other members of society who are called on to help the right holder to secure his rights. The other members can be private persons (allies of the duty holder, bystanders, and so on) or public authorities. The obligations can be negative or positive. The help may comprise active physical intervention and help, or simply non-resistance. Crucially, the help is sought from other members of society and based on the law. The help is not sought from kin, friends and close neighbors. The help is based on anonymous publicness, not on special ties of blood, friendship, or proximity. From this communicative structure follow two things: (i) law must claim to be fair, and (ii) law is a public service.
The first consequence of law’s communicative structure is that legal authorities must claim that legal arrangements are minimally fair and reciprocal. Legal duties deserve to be enforced against a duty holder, because the legal duty is part of a legal arrangement from which the duty holder stands to benefit directly or indirectly. For every legal duty there must be a direct or indirect counterpart, a quid pro quo. The reason is that ultimately other community members are supposed to help secure the performance of a legal duty. Securing, and ultimately enforcing, the execution of a legal duty can be costly and risky for those third parties. Therefore, members of society, that is, the potential helpers, will only give their support to securing the execution of obligations that deserve to be secured. Executing obligations that lack any quid pro quo, directly or indirectly, are unreasonable and do not deserve the help from others. Even if the legal arrangements are not in reality reciprocal and fair, legal authorities certainly cannot afford to openly declare that the arrangements are not fair and reciprocal.Footnote 33 As a result, law will always make sure, at least on paper, to show that a legal arrangement is also in the interest of the duty holder.Footnote 34 Law’s claim to fairness and reciprocity means that the law’s own internal discourse, namely legal doctrine and legal techniques, is engrained with the logic of fairness and reciprocity. Since virtually all legal concepts are premised on the logic of fairness and reciprocity, albeit self-serving and sometimes cynical, there are opportunities for change from within the law. The second consequence of law’s communicative structure is that, when a right holder invokes the law, she makes use of the law as if it were a service.Footnote 35 She calls on the law to help her secure her right. The law is a service ensured by the public at large, hence a public service. The actor invoking the law needs the service of the law, not the other way around. It also means that actors fully depend on legal authorities, more specifically judges, who decide whether or not to declare the legal arrangements valid and enforceable. Furthermore, since law is a public service, it follows that it should serve the public equally to a certain degree. So, in theory, everyone should have a more or less equal share of the public service ceteris paribus. It becomes problematic when particular actors make much more use of a public service than others without good reasons, making the use disproportionate or excessive.Footnote 36
11.4.2 Law and the Neo-liberal Economic Order
Law is, thus, a public service for the members of the legal community. This is also the case for economic actors. Law makes it possible to organize economic transactions whose execution is secured by the members of the legal community. Without the law, a sophisticated and complex division of labor, means of production and credit would be impossible. In fact, the basic building blocks or code of the economic system are legal. So, in my view, the communicative code of the economic system (payment/non-payment) can be fully reduced to the communicative code of the legal system (legally valid/invalid). Similarly, quintessential economic notions such as competition and exchange value fully depend on and can be reduced to legal validity.Footnote 37 In a modern economy, virtually all economic transactions constitute legal transactions or rely on them. The economic system (even the informal economy) relies on the bulk of economic arrangements and transactions being legally valid.Footnote 38 If courts cease to sanction the legal validity and legal enforceability of property titles, contracts, mortgages, and so on, the entire modern economic order will collapse. Thanks to law, economic actors can call on the help of the members of the legal community, especially officials (both senior and rank and file), to secure and enforce the execution of economic arrangements. The upshot is that it allows economic actors to obtain and maintain exclusive control over resources beyond their own physical span of control.Footnote 39 Creditors no longer need to visit their debtors personally to collect and secure payments. Principals and employers can have others work for them without being physically present to ensure the execution of the work. Owners can safely enjoy their property without being physically present to protect it. In short, law allows economic actors to obtain and maintain exclusive control over economic resources (e.g. money, movable assets, real estate, labor, natural resources).
Law as a public service has two crucial implications for the economic order. First, the economic arrangements which the law is expected to secure and enforce must to a certain degree be reciprocal and fair for all stakeholders involved. This applies in particular to stakeholders who have legal duties ensuing from those economic arrangements. So, when a creditor calls on the law and thus the public to secure the execution of a contract against his debtor, this contract should be more or less fair, or at least one must claim this to be the case. More importantly, the legal authorities will have to claim that the particular arrangement or particular area of law in general leads to reciprocal and fair arrangements. Why else would the public and thus the legal authorities help the creditor? Secondly, law as a public service also means that it is a service at the disposal of the public at large and not of only some privileged actors. There should be good reasons why we would allow some economic actors to make more use of a public service than others.
Precisely when it comes to the claim to minimal fairness and reciprocity neo-liberal economic arrangements tend to fall short, as indicated in Section 11.3. The problem is not that sometimes incidental individual neo-liberal economic arrangements lack minimal fairness and reciprocity. Whole segments of national, regional, and even global economy are governed by neo-liberal economic arrangements that structurally favor dominant economic actors at the expense of weaker actors and non-human stake holders.
Not only do neo-liberal economic arrangements lack minimal reciprocity and fairness, they also lead to an excessive appeal on the service of the law by dominant actors. Neo-liberal economic arrangements promote a massive concentration of wealth and exclusive control over resources in the hands of relatively few dominant economic actors. Obviously, these resources and wealth are beyond the dominant economic actors’ physical span of control. It is only thanks to the law that they can secure the effective exclusive control over and monetization of their resources and wealth. The fact that the law allows actors to exercise exclusive control over resources beyond their own physical span of control is not problematic per se. This is simply the public service that the legal order offers to its members. However, under neo-liberal economic arrangements, dominant economic actors make excessive use of this public service, because of their massive accumulation of wealth.
There is an important difference between the public service of legally protecting massive amounts of wealth and other public services, for example, infrastructure such as public roads. The use and costs of the latter is highly regulated and subject to political decision making. How (e.g. speed, weight, freight), how much (e.g. designated lanes for trucks), and when (e.g. truck-free days, hours) the roads may be used is regulated. It is the result of an explicit balancing of interests between various users and other stakeholders (e.g. local residents, environment, other economic actors emitting N2). The perceived utility and costs of transportation companies making more use of the roads than individual citizens are weighted, balanced, argued, and decided in a process of explicit political decision making. The same goes for how much and how transportation companies must pay for the public service. Similar regulations and political decision making are lacking when it comes to the legal protection of massive wealth accumulation.
11.4.3 Reciprocity and Fairness within Private Law
In Section 11.3, I indicated that proponents of a neo-liberal economic order believe that economic inequalities will lead to a more efficient redistribution of wealth and resources thanks to competition based on an almost unfettered freedom of contract and right to property. Advocates of global justice do not share this belief. They see the almost unfettered freedom of contract and right to property as the root cause of the problem. Therefore, they want to get rid of it. Yet, both camps seem to agree on two things. First, the neo-liberal economic arrangements are made possible thanks to positive law, especially contract, property, and company law. Second, the neo-liberal logic is engrained in positive law, especially private law (including company law). Accordingly, both camps believe that there are no normative resources within positive law to resist and counter neo-liberal economic arrangements.Footnote 40 As a result, proponents of a neo-liberal order confidently adopt what they believe is a kind of originalist interpretation of private law. Since it will automatically lead to an almost unfettered individual autonomy and free will. By contrast, opponents of neo-liberal economic arrangements have recourse to instruments outside existing private law. As mentioned,, they call for legal reforms imposing new legal duties on dominant economic actors. They urge for radical changes in existing positive law through adopting new legislation and treaty law.
I am not sure why advocates of social justice concede so easily to the neo-liberal interpretation of law. Critical scholars have showed aptly how law and lawyers have been complicit in shaping exploitative colonial and, later on, neo-liberal economic arrangements.Footnote 41 But they have not considered that these legal interpretations may be contrary to the law itself. They rarely explore the possibility that the law itself may point to better interpretations. In a similar vein, when legal scholars criticize private law and propose more just arrangements, they often seek recourse to normative sources outside positive law and rely on political philosophy.Footnote 42
I am not contesting here the value of the external perspectives on law. But there is a risk of giving up too easily on the law, as if neo-liberal economic arrangements are only unsound from a philosophical perspective but perfectly fine from the perspective of positive law. It may make judges complacent: as if they do not have the resources from within existing positive law to refuse lending legal support to neo-liberal economic arrangements.
A powerful example of such resources from within the law is revealed by the work of Robé. He makes a basic but incredibly important observation that shareholders do not own the company, legally speaking. It means that the neo-liberal mantra of shareholder value and the individual autonomy of shareholders allowing them to do with a company as they deem fit as if it was their property simply has no basis in law. The firm has a purpose, interests, assets, debts, and prerogatives of its own that do not coincide with those from the shareholders.Footnote 43 In the remainder of this section I will superficially glance over some legal concepts and legal materials of private law to show how much reciprocity and fairness are engrained in the logic of private law. Unlike Robé, I am not an expert on company law and private law. But this is precisely the point. Any jurist having some familiarity with private law could come up with these and surely many other examples of how the basic legal institutions of private law are premised on minimal reciprocity and fairness.Footnote 44
The definition of the right to property in the French civil code tradition asserts that the right to property gives the owner “the most absolute right over a thing.” This also includes the jus abutendi. The notions absolute right and the jus abutendi have led to the belief that the modern right to property constitutes the basis for the neo-liberal doctrine of unfettered individual autonomy of the property owner. The property owner should be completely free to use his property as he deems fit. If he decides to use his property in an inefficient way, he will be ultimately sanctioned by the market. Yet, this interpretation is simply not correct. “Absolute” simply means the “fullest” right one can have over a thing compared to other rights over a thing. Property right is, thus, fuller than the right to use and the so-called naked property right.Footnote 45 Moreover, the owner’s so-called jus abutendi associated with property does not mean a right to abuse, but simply means that the owner had the ultimate say in when and how to dispose of – as in transfer – the property.Footnote 46 Furthermore, the very provision that establishes the right to property immediately allows the legislator to limit the right to property. At a more functional level, the general rationale behind the extensive right of property under modern law was to promote the free circulation and utilization of assets, especially land, that was often very much restricted under the laws of the ancien régime leading to unproductive asset utilization.Footnote 47 The point was that society at large was to benefit from this circulation of goods. This also explains that the owner cannot stipulate that his good can never be transferred except by inheritance (e.g. clauses d’inaliénabilité perpétuelles).Footnote 48 By the same token, easements on property, thus limiting the exclusive use of the land by the owner, were still possible precisely because in the interest of third parties.Footnote 49 In other words, the owner has been granted the prerogatives of the right to property on the premise that it would lead to the common good.Footnote 50
Inheritance law is arguably the regime that is most complicit in increasing the discrepancy between the haves and have nots in terms of wealth accumulation.Footnote 51 But even the underlying rationale of modern inheritance law in the civil law tradition is based on fairness. After the reform of inheritance law under the Napoleon civil code it was no longer possible for a property owner to transfer by will his entire estate to his oldest son only. The new civil code ensured that a large part of the estate was reserved to all his children in equal parts. It was felt that this distribution was fairer and more productive than the accumulation of wealth in the hands of one person, often the eldest son.Footnote 52 Similar concerns of fairness informed the possibility to still allow the testator to legate a part of his estate to non-family members. This would allow illegitimate children and persons working for the testator who structurally contributed to his wealth (e.g. household personnel, laborers, artisans, overseers) to get some fair compensation for their efforts.Footnote 53
The fairness is probably most clearly reflected in the basic legal structure of contract law, namely reciprocity. Most contractual arrangements must have a cause or consideration. It means that contractual obligations must have a quid pro quo character: for each duty there must be counterpart. To be sure there are one-sided contracts but they are the exception and in a way suspect. This is precisely why, under the law of gifts, the donor receives a preferred treatment allowing him to escape from his duty to transfer ownership which would not be possible under normal reciprocal contracts.Footnote 54 Similarly, it is telling that the one-sided contract of a loan of a thing (for free, if not it would be a lease) presumably originated as a special favor for friends and neighbors.Footnote 55 It, thus, escapes the normal logic of contract law as a way to organize cooperation among parties without a special tie (e.g. blood, friendship, proximity). Interestingly, it has become a rather common contract because the lender often has a direct (economic) interest in lending the thing to the borrower (e.g. replacement vehicle, shopping carts, bottles and glasses with deposit). The logic of reciprocity is clearly reflected in the exceptio non adempleti contractus: the duty to perform your part of the deal is suspended because of lack of reciprocity in the execution of the contract.Footnote 56 Fairness and reciprocity are equally prominent in the possibility to have a contract nullified if a contracting party abused circumstances of dependence, putting the other party in a weak position.Footnote 57 Also, the reciprocal character of the law when organizing cooperation follows clearly from the prohibition on the leonine clause: a contract that attributes all the profit to one partner is null.Footnote 58 Precisely, when confronted with a lack of reciprocity in economic arrangements, the essentially reciprocal character of contract law becomes evident. This is powerfully captured by the explanatory memorandum of the legislative proposal of 1901 introducing the regulated labor contract in Dutch law in 1907:
It is indeed true: in other [normal] contracts one can see that sometimes one party is stronger, sometimes the other. But the roles change. For example, in the context of sales contracts, at one moment the buyer has the upper hand, at another it is the seller who dictates. On the contrary, when it comes to [labor contracts] it happens that the same party is almost always the weaker one, namely the laborer.Footnote 59
In short, already a quick glance at basic legal institutions and materials of private law shows that the law enabling economic arrangements is premised on a logic of reciprocity and fairness. If so, it means that positive law already has the normative and technical resources to counter structurally unfair and non-reciprocal arrangements. There is no need to seek recourse to solidarity conceptions in legal discourse to criticize and even unwind unfair and non-reciprocal neo-liberal economic arrangements. For the dominant solidarity conceptions are either foundational, circular and redundant, simply equating solidarity with cooperation. Or they are too aspirational, requiring massive changes in legislation and treaty law, inspired by moral resources located outside existing positive law. Too much reliance on solidarity conceptions may distract us from what can be done already in the name of existing positive law.
11.5 Practical Implications and Limitations of Law as a Public Service
If indeed law is a public service and legal arrangements must display minimal reciprocity and fairness, then legal authorities have a powerful instrument in their hands. In this respect, law as a public service points directly at the main agents for change, namely judges and strategic litigators.Footnote 60 Whenever dominant economic actors seek to secure and enforce economic arrangements through law, judges may refuse to validate or enforce them in part or whole, if they lead to a structural lack of reciprocity and fairness. The most obvious cases are those where weaker and adversely affected actors are parties to these agreements. But one could also imagine third parties bringing cases. The legal possibility has already been convincingly explored in the context consumer–retailer contracts for garments produced in sweatshops. The contracts may be declared null because they are against public order and good morals.Footnote 61 One could envision a similar exercise in the context of the contractual arrangements facilitating the depletion of planetary resources (e.g. engineer contracts, mining contracts, sales of minerals, etc.). In the latter case it is clear that the contracting parties do not have an interest in seeking invalidation or non-enforcement of the economic arrangements. But some third parties clearly have an interest. The interests of third parties are identical to those who brought successful climate cases before national courts and even the ECtHR.Footnote 62 Still, there is of course a crucial legal difference. These climate cases are based on non-contractual liability and human rights violations, the remedies being compensation and a binding order to take measures. In these cases, the remedies are not declaring the economic arrangements legally invalid and not enforceable. Still, it may be legally possible and conceivable for a third party to request a court to order a contracting party to refrain from executing a contract or particular aspects thereof. It is not the same as an invalidation of the contract or a court refusing to enforce the contract. But it may have similar effects. For what really matters is that the wider economic and financial community (e.g. investors, banks, suppliers, clients, traders, governments issuing licenses, credit rating companies) knows that the contracts are legally tainted. This will directly impact the economic and financial attractiveness of a dominant economic actor (e.g. share prices, credit rating). For most dominant economic actors rely for credit and equity on financial institutions and capital markets. Moreover, casting legal doubt on contractual arrangements in a single case is likely to have an impact on the wider economic sector.
To be sure, the law as a public service has clear limitations. The obvious one is jurisdiction. If the dominant economic actors make use of legal arrangements outside the jurisdiction of European judges, then there is not much for the judges to declare invalid or non-enforceable. For the dominant actors simply do not need the help of Western law. As a result, in these cases judges cannot counter or unwind neo-liberal economic arrangements by refusing dominant actors the help of the law. This is not a minor limitation as the majority of natural resources and a large part of the human resources are sourced from the global south under arrangements not governed necessarily by Western law. By the same token, it is also a fact that the monetization of the proceeds from these extra-territorial arrangements often take place in Western jurisdictions. It remains to be explored how invalidation or non-enforcements of the legal titles pertaining to this monetization may be operationalized.
Another limitation may be the attitudes of Western judges. If, as I claim, private law in Europe already has the resources to deny the legal validity and enforceability of neo-liberal economic arrangements, how come judges failed to do so? Probably, the principles of private law, such as minimal reciprocity, are not enough. According to some observers, judges may need more explicit legal rules to counter neo-liberal economic arrangements.Footnote 63 Also judges may think that these are matters that go beyond points of law and solely belong to political decision making. A lot depends on how individual judges will conceive of and do their job. Interestingly, even when securing structurally unfair economic arrangements, courts typically do not conceive of themselves as merely serving the private interests of dominant actors. A case in point is the notorious Argentine sovereign debt case in which a court in New York ruled in favor of so-called “vulture funds” (the plaintiffs) against Argentina.Footnote 64 The court secured an economic arrangement which, according to most observers (including major financial institutions, financial newspapers and even the US government), was not reciprocal and fair towards the debtor, that is, Argentina, other creditors and other stakeholders and interests (e.g. the Argentine people and economy). Still, the court made clear it was not merely serving the particular interests of a single private party, but the public interest, the rule of law, and the financial markets.Footnote 65 Furthermore, the court explicitly balanced the various public interests at stake when enforcing the duty to pay the debt. The court found that enforcement would not have adverse consequences for Argentina as a debtor, the Argentine economy and the other external debt creditors.Footnote 66 The court also found that bringing the case to court was the only way for the plaintiffs to secure payment, suggesting that the plaintiffs made a fair use of the US court system.Footnote 67
To be sure, the Argentine sovereign debt case, like most judgements today, is in terms of its actual legally binding decision, clearly not an example of judges refusing to lend support to structurally unfair economic arrangements. But the objective of this chapter was not to show that judges today only secure economic arrangements when they find them to be sufficiently fair and reciprocal. The point of this chapter has been to show that judges could potentially do so. Judges could refuse to offer the help of the law to dominant actors if an economic arrangement structurally lacks fairness and direct or indirect reciprocity. Judges may refuse the help of the law, not out of solidarity or other moral reasons located outside positive law but simply because law is a public service.
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