1. Linguistic preamble

Consider the following question: ‘is the law constitutive of the economy in particular, and of society, more in general?’

Consider the following answers to this question:Footnote ¹

1. 1. Yes, of course. The law determines the entitlements people have, and the conditions, if any, at which those entitlements can be exchanged. Accordingly, the law plays a very important role in shaping the economy.

2. 2. Yes, of course. If there is a place in the world where it should be clear to anyone that a market is not a natural entity and that it takes blood, sweat, and tears to use the law to construct markets, it is the European Union.

I would imagine that the other contributors to this symposium and its readers largely – especially those that belong to the Law and Political Economy movement – agree with these two answers. Comparing these two answers allows me to illustrate some linguistic facts that will be useful later in this article.

At one level of generality, the two answers are identical. Both answers confidently assert, ‘yes, of course’. When we move to examine the justification provided, the answers are not identical; nonetheless, they are similar. In fact, both answers appeal to very general facts about the law and the economy, which are meant to provide sufficient support to the unequivocal answer provided to the question.

Nevertheless, there are some differences. This is to be expected, as the answers are similar but not identical. In cases of similarity, some differences still exist; otherwise, the answers would be identical.

If we focus on the differences, we can observe at least the following:

• • Answer 1 is more general than answer 2. In fact, answer 2 refers to a specific set of facts, namely those regarding the European integration project and the creation of the European Economic Community, and subsequently the European Union, with its internal market now known as the single market, and so on. Instead, answer 1 is presented as a general feature of the idea of law, and is, therefore, a theoretical statement that is not contingent on the European integration project.

• • Answer 2 is richer than answer 1. In fact, answer 2 explicitly contradicts a position that is incompatible with it and emphasizes the complexity of using the law to construct a market. The position explicitly articulated is that, in opposition to constitutivists, some people believe that the market is a natural entity.

• • Answer 1 is more emotionally neutral than answer 2. In fact, answer 2 uses emphatic language (‘it takes blood, sweat and tears’) to stress the complexity of the task.

These considerations remind us of one crucial fact about speech acts. When we compare them, the criteria we use for comparison are critical in identifying the relationship between these speech acts. As seen, if one focuses only on the highest level of generality, the two answers are identical in that they are equally committed to the truth of the proposition: ‘the law is constitutive of the economy in particular, and of society, more in general’. Yet, the first answer is grounded in a universal justification, whereas the second one is grounded in a particular justification. At the same time, the second answer is better articulated but also more emotionally charged.

Theorists in various disciplines use the expression ‘the map is not the territory’ to remind us that one can view the same phenomenon in vastly different ways.Footnote ² For example, Anscombe has cogently shown that one can give different descriptions of a man pumping water, depending on the degree of focus on the man’s goals and actions (she considers four).Footnote ³

In this case and many others, we perform complex linguistic and conceptual operations. Some of these operations focus specifically on the words used. Is the text grammatically correct? Is the style appropriate? Is the text written in the correct language? (Eg, a student essay written in one’s native language while the student is required to submit a text in English; or following the spelling conventions of a particular journal.) Some of these operations focus on the concepts. Is the answer precise? Are the concepts relevant?

Some operations examine the relationship between the words used and the concepts expressed. The central operation in this regard is extracting concepts from words. This operation is performed via arguments, and the most important family of arguments in this regard is interpretive arguments.

The above-mentioned ideas of identity and similarity, when applied to two different texts, invoke the idea of linguistic equivalence. Indeed, very different words can convey exactly the same meaning. Translators, whether between natural languages or between epistemic communities, are engaged in the activity of conveying meaning originally expressed in one language into another. The translator’s perspective enables one to emphasise the complexity of knowledge transfer across epistemic boundaries, as well as the obligation to preserve the message while respecting the linguistic conventions of the target epistemic community.Footnote ⁴

Even in the same language, two sentences that look very different can be equivalent. For example, ‘5x=15’ is equivalent to ‘x=3’; similarly, ‘Massimo Pilotti was born in Rome’ is equivalent to ‘the first President of the Court of Justice was born in Rome’. To make the equivalence explicit, one needs to note the following: I can divide both 5x and 15 by 5 and the identity still holds; the person referred to in the first sentence (Massimo Pilotti) is the person who became the first President of the Court of Justice.

This article emphasizes the importance of equivalence for scholars who, like me, believe that the law is constitutive of the economy, in particular, and of society, more generally.Footnote ⁵ More precisely, I will claim that two approaches to studying the legal–economic nexus deserve more attention: structural integration and epistemic translation. In a first approximation, structural integration requires showing that two concepts that appear to be in conflict can be put into a relation of justification with each other. Epistemic translation consists of ‘the semiotic processes (verbal and nonverbal) involved in the transfer of information between different “epistemic systems”’.Footnote ⁶

More precisely, structural integration is a justificatory relation between conceptual frameworks, in which one framework is normatively foundational and the other derivative. By contrast, epistemic translation is a linguistic-relational practice: it does not justify one framework by another, but rather re-expresses the claims from one epistemic system in the idiom of another, enabling cross-framework communication without presupposing justificatory hierarchy.

Applied to theoretical perspectives, the map-territory distinction is quite useful. Once one realises that different theories are just different representations of the same object, it is easier to see their potential complementarity. For example, it is common to have different plans for a house, such as one for electric circuits and sockets, another for water pipes and heating, etc. It is possible to consolidate all the information in a single map, but in most cases, the resulting complexity is detrimental to the map’s practical use.

The relation of equivalence that I plan to explore in this article is justificatory. In the examples mentioned above, the equivalence is not justificatory. In the case of Massimo Pilotti, it is evident that the equivalence is referential; both sentences refer to the same person. In the first example, instead, the equivalence is inferential (numbers do not have references in the world): the correct use of the term ‘=’ requires understanding that the sentences in the first example are equivalent.

In the case of justificatory equivalence, two arguments equally contribute to justify a claim. As we will see in Section 5, structural integrations and epistemic translations achieve justificatory equivalence in very different ways; yet, for the moment, this difference is irrelevant.

Asking systematically if structural integrations and epistemic translations are possible in one debate reduces the risk of succumbing to unjustified isolationist tendencies. Theoretical isolationists believe that their set of conceptual and analytical tools is sufficient to offer adequate solutions to the social problems at hand and that people using other tools are performing irrelevant activities. In other words, isolationism is a form of adversarial attitude towards methodologically pluralistic disciplines where the goal is to silence alternative views.Footnote ⁷

The integrationist strategies proposed here operationalise a general commitment to inclusion, and more specifically, a commitment to epistemic justice.Footnote ⁸ Put differently, integrationism helps to ‘really listen’ to each other, despite of disciplinary, methodological, and ideological boundaries, as recently pleaded by Deirdre McCluskey in Humanomics.Footnote ⁹ This point is discussed further in Section 7.

Section 2 discusses the appeal and perils of the constitutive turn, and sketches how structural integrations and epistemic translations effectively mitigate the perils associated with the constitutive turn.

2. The appeal and perils of the constitutive turn

This symposium is part of a renewed interest in the constitutive role of law in the economy.Footnote ¹⁰ What is the appeal of this scholarship? I believe that it is twofold, at least.

First, it is widely accepted that ‘naturalizing’ the economy is a conservative move. For example, Kwak has written a wonderful book detailing how Economics 101 is a source of ‘absolute truth’, which he calls ‘economism’: it is best not to twinkle with markets.Footnote ¹¹ Indeed, in his widely used textbook (alas, also in my own law school), Harvard economics professor Gregory Mankiw reassures the reader that it is ‘natural’ to present the monopoly problem as a problem about the reduction of total welfare.Footnote ¹² This statement is a textbook example of a naturalistic fallacy.

Kwak and others have highlighted the importance of Posner-style economic analysis of law in this naturalisation process.Footnote ¹³ Long before, Hirschmann had pointed out that conservatives often like to claim that a market intervention will not work (‘futility thesis’), will actually backfire (‘perversity thesis’), or will have other negative effects, making it, overall, undesirable (‘jeopardy thesis’).Footnote ¹⁴ In recent years, especially in the field of antitrust, ‘naturalisation’ has led to scholars advocating increasingly stringent standards of proof (this is, in particular, the ‘dark side’ of the so-called more economic approach to EU competition law).Footnote ¹⁵ This move aligns with the ‘objectification’ and isolation of economics as a discipline after World War II, a phenomenon that Colander and Freedman have powerfully criticised.Footnote ¹⁶

Against this background, emphasising the constitutive role of law weakens the idea of unavoidability associated with naturalising economic processes.

This pars destruens is complemented by an important pars construens. The constitutive perspective compels us to recognise the significance of law in producing both positive and negative social outcomes. For example, Pistor’s Code of Capital Footnote ¹⁷ and Giraudo’s theory of legal bubblesFootnote ¹⁸ show that naturalistic narratives conceal how legal professionals contribute to processes that are tolerated, if not incentivised, by legal systems. Accordingly, a constitutive perspective highlights the significant social power and connected social responsibility that the legal profession possesses, extending well beyond the narrowly circumscribed fiduciary duties toward one’s client.

The main peril I see in the pars destruens is well illustrated by the open hostility to neoclassical economics and even to economic language in general, which characterises at least part of the Law and Political Economy scholarship and movement.Footnote ¹⁹ As carefully reconstructed by Woodcock, early 20^th-century American progressives, such as Robert Hale, John Commons, and Wesley Hohfeld, did not shy away from using neoclassical economics as the ‘grammar’ of their debate.Footnote ²⁰ Indeed, developing a ‘post-naturalistic’, artefactual account of the economy, where law as a set of formal institutions plays a key role, does not imply or require doing without economics, as illustrated in book-length detail by Klammer and Scorsone.Footnote ²¹ At the same time, research on social norms reminds legal researchers that, to be effective in practice, legal norms must take into account a set of material constraints related to the social context in which law intervenes.Footnote ²² As existentialists would put it, there is a specific materiality in the social processes that the law contributes to constituting, which legal research and practice must take into account.

The saying goes that the best proof of the pudding is in the eating. Alas, for some decades now, the ‘neoliberal recipe’ of the pudding we have been served has a distinctive integrationist flavour. In the words of Britton-Purdy and co-authors: ‘prevailing models of legal thought and scholarship … have been profoundly shaped by a misconception of the relationship between politics and the economy’;Footnote ²³ more precisely, neoliberals succeeded in disseminating a ‘Twentieth-Century Synthesis’ that integrates a focus on efficiency, understood as total welfare maximisation in legal disciplines ‘considered to be “about the market”’ with the exclusion of ‘economic power and other structural forms of inequality’ from constitutional law.Footnote ²⁴ Notably, while the result was institutional isolation, the method involved integrating insights from economics and political theory into legal thinking.

The takeaway seems to be: if the Twentieth-Century Synthesis is integrationist, the ‘Synthesis for the Twenty-First Century’ we must replace it with will probably have to be integrationist as well.Footnote ²⁵ Indeed, the expression ‘law and political economy’ ultimately points us in the direction of increasing, rather than reducing, the level of integration of legal, political, and economic theory.

I am aware that this claim will irritate part of this journal’s readership. However, I appeal to the spirit of openness this journal is explicitly committed to and ask for a bit of patience. At the same time, cognitive psychologists suggest that mild irritation can improve the quality of our reasoning.Footnote ²⁶ Hence, having mildly irritated the reader might actually be desirable.

Hoping that cognitive psychologists are correct, I plan to substantiate my claim in four steps. By the end of these four steps, I hope to have shown that there is much to lose and little to gain from doing without economics (mainstream or otherwise). First, in Section 3, I will articulate an account of the legal–economic nexus which makes explicit the different ways in which legal and economic research interact with each other and with legal and economic practice, which, in turn, interact among them. If this account is correct, doing without economic research impoverishes our understanding of the legal-economic nexus. Second, Section 4 discusses some isolationist accounts and highlights some of the insights and perspectives that we are compelled to set aside to accept them. Third, Section 5 presents the proposed integrationist strategies in more detail: structural integration and epistemic translation. Fourth, Section 6 applies these integrationist strategies to the isolationist perspectives presented in Section 4. Section 7 concludes.

3. The legal–economic nexus between map and territory

The metaphor “the map is not the territory” applied to the idea that the law is constitutive of the economy identifies four nodes, composed of two maps (legal research and economic research) and two portions of territory (legal practice and economic practice). Warren Samuels has condensed this insight into the idea of the ‘legal-economic nexus’:Footnote ²⁷

The connection between legal and economic practice is central to the ideal of law as constitutive of the economy. First, legal practice influences economic practice. Indeed, law creates the legal entitlements that form the baseline for negotiations and substantiate one’s ‘freedom’.Footnote ²⁸ Second, economic practice influences legal practice. This influence happens in different ways. For example, market prices and other economic uses can be used to fill gaps in contracts. At the same time, lobbying and public consultations are more or less institutionalised mechanisms to give voice to economic actors in legal practice. A ground-breaking contribution of institutional scholars in this regard is dissecting how the existence of economic alternatives is constitutive of one’s economic power.Footnote ²⁹

Samuels does not see the nexus only at the level of the practice (or territory). The nexus also includes the meta-level of ‘research’, broadly understood (the maps); in Samuel’s words, the legal–economic nexus includes the ‘belief system’ that ‘governs the definition of reality that influences policy’.Footnote ³⁰ Scholars reflecting on the idea of transformation through law seem to agree. As Bartl puts it, the transformative use of private law aims at ‘creating the space necessary to unfold the legal imagination that socio-ecological transformation requires. To change how we produce, distribute, and consume, we need to change how we think about humans and the economy – what we are and how we live’.Footnote ³¹

Legal and economic research influence each other and, in turn, impact legal practice. Economics is often used to shed light on the harmful consequences of certain economic or legal practices. These insights can be applied in legal research and practice to inform legal interpretations, propose legal reform, and justify policy decisions.

However, the opposite is also true: legal and economic practice influence legal and economic research. Institutional reviews, legislative proposals, and market-driven innovation are all practices that legal and economic research customarily studies.

Even the performativity view of economics as a discipline recognizes its constitutive role.Footnote ³² The performativity view laments that economics is a discipline with a weak scientific status due to its poor predictive power; instead, economics can influence reality because it acts as a self-fulfilling prophecy: economists predict the economy will slow down; people believe the economy will slow down, and the economy slows down because people believed economists.

To the extent the analysis of the appeal of the constitutive turn offered in Section 2 is correct, legal scholars interested in the constitutive role of law in the economy are particularly dissatisfied with the lack of impact their research about legal and economic practices has on economic research. Even Guido Calabresi, a central figure in the economic approach to law, expressed similar concerns when he distinguished Economic Analysis of Law from Law and Economics. His main point is that Economic Analysis of Law systematically disregards the perspective of legal research and dismisses it as irrelevant.Footnote ³³

Against this background, one specification of the idea that the law is constitutive of the economy is necessary.Footnote ³⁴ Legal practice and research are constitutive of the legal-economic nexus. But so are economic practice and research. Each of them is co-constitutive and related to the others. The interaction of all these elements constitutes the legal-economic nexus, as illustrated by Figure 1.

Figure 1.

Interactions constituting the legal-economic nexus.

In sum, no less than 12 interactions between theories and practices constitute the legal-economic nexus. Of course, the number of interactions would increase significantly if one were to consider other disciplines examining the legal-economic nexus, such as business ethics, management, marketing, and so on.

A proper account of the legal-economic must be able to take into consideration all these interactions. In other words, the account must be able to integrate legal and economic maps of legal practice and economic practice.

4. The problems isolationists face about the legal–economic nexus

A topic as complex as the legal–economic nexus understandably invites the proliferation of various methods and approaches for its study. Mindful of the difference between the map and the territory, this proliferation is arguably beneficial. One can never know which method or approach will provide the best set of conceptual and analytical tools to address a problem.

With effort, it could be possible to identify commonalities within this Babel Tower of scholarship. The concept of integration or unification can be applied to various disciplines, theories, and paradigms within a specific field.Footnote ³⁵ Its supporters present it as a ‘noble quest’Footnote ³⁶ and ‘a central aim of intellectual inquiry’.Footnote ³⁷ Integration makes access to information easier.Footnote ³⁸ Perhaps even more importantly, integration ‘can create bridges between disparate theory enterprises so as to help break down particularistic barriers’.Footnote ³⁹ At worst, theoretical proliferation may reduce social trust in a field of study because the field may end up including “all kind of intellectual nonsense”.Footnote ⁴⁰

Isolationists are not interested in theoretical integration. Isolationism has a rational justification if it is true that the different approaches under consideration are incommensurable.Footnote ⁴¹ When this is the case, attempts to integrate them will fail.

Isolation from a specific set of ideas could also be justified. For example, mainstream law and economics scholars keep insisting that the goal of certain institutions is the maximisation of total welfare, even when the analysis of institutional practice shows otherwise.Footnote ⁴² Similarly, it is not surprising that isolation is what you get when comparativists lamenting that comparative law and economics is unpersuasively focusing on efficiency as the sole or primary legal goal, are answered by the latter’s proponents, in an article discussing the virtues of comparative law and economics, that the law and economics ‘gold standard is a demonstration that a particular legal rule or standard is demonstrably inefficient’.Footnote ⁴³

Integration requires effort from both sides. If one side ignores what the other is objecting to, isolation is better than the frustrating attempt to pose questions that remain unanswered.

However, perhaps naively, this author believes that the most desirable attitude in the face of ideas that one fundamentally disagrees with is engaging with them and proving them wanting.

Be this as it may, contemporary legal scholarship studying the legal–economic nexus is markedly isolationist. It is not the only discipline to face this issue. Management scholars have been aware of this problem for many years now.Footnote ⁴⁴ And so have sociologists,Footnote ⁴⁵ psychologists,Footnote ⁴⁶ and cognitive scientists.Footnote ⁴⁷

It is to be expected that academics’ self-esteem aliments isolationist tendencies.Footnote ⁴⁸ It is understandable that self-esteem is very important to academics. Often underpaid and overworked compared to their university colleagues who opt for corporate careers, academics compensate with the social prestige of their profession.

Being associated with a specific view is particularly rewarding. I am sure Dagan enjoyed very much that Hesselink wrote about ‘Daganistan’ (instead of Razland, for example) in his book about leading theories of contract.Footnote ⁴⁹ It is thus natural that one wants to protect said view as it is part of one’s self.Footnote ⁵⁰

Cognitive psychology has long studied the mechanism humans can use to resist beliefs that challenge our worldview, which are particularly powerful when our self-esteem is at risk.Footnote ⁵¹ Since unreasonable resistance to scientific discoveries has long been studied in ‘hard sciences’,Footnote ⁵² it is unsurprising that these forces also play a role in legal studies.

The real problem is that, sometimes, the alleged incommensurability of different perspectives rests primarily on self-esteem rather than reason. Sadly, legal research about the legal-economic nexus illustrates this point rather well.

In legal scholarship, efficiency-based accounts are customarily distinguished from and presented in opposition to other (moral) normative accounts.Footnote ⁵³ Isolationism is thus an organisational premise of market-related legal scholarship. Yet, attempts to overcome isolationism exist. For example, Kraus has identified three possibilities for integration: convergence on outcomes and independence of reasoning; horizontal independence, which involves specialising in different questions regarding the same issue; and lexical ordering of one approach over the other.Footnote ⁵⁴

Alas, these options are not taken very seriously in the literature. A pivotal example of this is offered by a joint analysis by four leading scholars, Dagan (Berkley), Dorfman (Tel Aviv), Kreitner (idem), and Markovits (Yale); in their view, there are ‘three normative market ideals: efficiency-based, democratic markets, and liberal markets’.Footnote ⁵⁵ Efficiency-based accounts view markets ‘as means to and end’, and the end is that something is maximised; a precise metric is not needed and the ‘core of the view lies in the maximizing, not the maximand’.Footnote ⁵⁶ Instead, liberty-based accounts ‘groun(d) markets in the moral quality of individual traders rather than in collective benefits’. Notably, in their view, a focus on collective benefits is tantamount to using a maximand;Footnote ⁵⁷ instead, the moral quality in question is freedom or autonomy, which can be understood narrowly (freedom-as-independence or formal equality) or broadly (freedom-as-self-authorship; substantive equality).Footnote ⁵⁸ Finally, ‘[d]emocratic markets have a very different ideal in mind. Markets are sites for exchanging entitlements over resources’ (emphasis added)Footnote ⁵⁹ and the core issue is ‘the ways to allocate authority’.Footnote ⁶⁰

If Dagan, Dorfman, Kreitner, and Markovits are correct in presenting the debate as isolationist, then the following authors and strands of literature are all doing something that is impossible.

The first group consists of Robert Alexy and all the scholars and practitioners who rely on his account of proportionality reasoning. In fact, Alexy shows that when human, fundamental, or constitutional rights are in conflict, proportionality in the strict sense can be described effectively as an activity aimed at maximising the joint value of these rights. If isolationists are correct, Alexy is presenting an efficiency-based account of legal reasoning, as he is maximising ‘something’, even if that ‘something’ is rights.

Second, and even more surprisingly, Weinrib has justified property rights in terms of efficiency. The surprise comes from the fact that Weinrib is the pivotal example of anti-instrumental isolationism in (universalFootnote ⁶¹ ) contract theorising: private law has its proper function (which his reading of Kantian philosophy illuminates) and nothing else can be demanded from private law.Footnote ⁶² Yet, Weinrib justifies property exactly as economists would: property is a just institution if even those who do not enjoy it are better off because of its existence; this is a hardcore Pareto efficiency claim. Similarly, Joseph Heath has articulated an influential theory of business ethics where deontological constraints on managerial decisions are derived from the idea of efficiency.Footnote ⁶³

Perhaps the biggest challenge to the isolationist approach to markets is that it overlooks the following. The only well-formed argument in favor of the claim that the monopoly problem is a problem of reduction in total welfare is grounded in an equality norm.Footnote ⁶⁴ More precisely, it is an idea of formal equality: political institutions have no reason to prefer one side of the market over the other; however, while treating market participants with equal respect, one can still criticise monopolistic allocation because the resources available to society as a whole are reduced.

There is more. Likewise, the alternative view, namely that an efficient market maximises consumer welfare, rests on an equality norm. It is a very different equality norm, based on an ideal of reciprocity: everyone, when acting as consumer is sovereign and when acting as producer is subject.Footnote ⁶⁵

The effort to keep separate democratic accounts is even less convincing. What is allegedly distinctive about them is that these accounts focus on allocating authority in a market economy. Yet, as noted above, a central tenet of constitutive analysis of markets is that the law necessarily allocates authority since, in Hale’s lexicon, entitlements are coercive. This is something traditional economic analysis of law can readily agree with, considering it has long recognised that the ability to pay influences the capacity of one agent to represent the intensity of their preferences. For the Law and Political Economy movement, these observations are particularly significant. The need for a ‘democratic political economy’Footnote ⁶⁶ does not represent an effective way to isolate one’s theory from efficiency- and liberty-based accounts. This is the case because the legal–economic nexus necessarily allocates authority, and any ‘map’ of legal practice and economic practice has to come to terms with this fact.

5. Two promising integrationist tools: Structural integrations and epistemic translations

The previous section has shown that isolationism is problematic because it creates multiple tensions in our belief systems. More precisely, ideas that are peripheral to the topic the isolationist is discussing but central to the way we think about other important topics cannot be accommodated into the isolationist’s picture. Our ability to systematise is impoverished. Integrationists think that holistic thinking is valuable. Two analytical tools seem particularly promising to integrate: structural integration and epistemic translation. Table 1 summarises their differences.

Table 1.

Structural Integration vs. Epistemic Translation

As early as 2001, Kraus pointed out the importance of structural integrations.Footnote ⁶⁷ In a structural integration, two conceptual frameworks are shown to be in a relation of justification with one another: this approach ‘unifies two otherwise incompatible justificatory theories into one coherent justificatory theory by assigning one theory to a normatively foundational role and the other to a normatively derivative role’.Footnote ⁶⁸ As an example, Kraus discusses how Harsanyi has famously argued that people in Rawls’s original position (a liberty-based theory) would choose average utility maximisation (an efficiency-based theory).Footnote ⁶⁹ Thus, Harsanyi and Rawls agree on the foundational role of the liberty-based theory; however, they disagree on the type of efficiency-based theory that people in the original position would choose. The relevant point here is that an isolationist cannot consider (or at least admit) that Harsanyi’s move is possible. Note, however, that also Rawls’s move would be impossible to consider. To see this, consider that under the definition of efficiency-based justification used by Dagan, Dorfman, Markovitz and Kreitner, maximising the welfare of those who are worse-off (ie, Rawls’ maximin principle) is a form of efficiency-based justification. Therefore, an isolationalist cannot use the original position to justify the maximin principle.

If we look back to the examples provided in the previous section, we can see that structural integration was taking place in some of them. For instance, Weinrib – despite his explicit isolationist position – has provided an efficiency-based justification for the existence of property, which, in his account, is a liberty-enhancing institution. Heath has done the same in business ethics.

The equality-based justifications of the efficiency analysis of the monopoly problem are also structurally integrationist. When market efficiency is concerned with total welfare maximisation, the idea of formal equality, defended by Weinrib (among others), justifies the efficiency-based account of markets. When market efficiency is concerned with consumer welfare maximisation, the idea of substantive equality, defended by Dagan (among others), justifies the efficiency-based account of markets.Footnote ⁷⁰

Accordingly, structural integrations are relatively common and often go unnoticed, arguably due to the strength of the forces mentioned earlier that support isolationist research in this area.

However, it is not the case that Alexy is offering a structural integration. Instead, Alexy is borrowing from economic theory ideas that help him elucidate aspects of legal practice.Footnote ⁷¹ Borrowing from another discipline requires identifying sufficient similarities to incorporate some insights developed in the other discipline. Similarly, as noted, an account of the allocation of authority (core to democratic accounts in the framework used here) will always emerge from efficiency-based and liberty-based theories.

Unlike conventional interdisciplinary borrowing or analogical reasoning, epistemic translation does not depend on identifying substantive similarities between frameworks or phenomena. Borrowing seeks to import concepts because they are thought to work the same way in both contexts; analogies suggest that because A is like B in certain respects, insights about B can guide reasoning about A. Epistemic translation instead requires to justify the equivalence (‘X counts as Y in context Z’), allowing foreign concepts to be evaluated within the inferential norms of the target discourse. This is a linguistic alignment, not a claim about shared structure or function.

Thus, not all significant integration is structural. Indeed, I believe that there is a set of linguistic interventions that deserve greater attention. I will call them collectively ‘epistemic translation’ techniques, tools, methods, approaches, or (my preferred expression) strategies.Footnote ⁷²

An impressive example of epistemic translation is provided by the literature on social welfare functions, which is magisterially surveyed and made accessible in Adler’s book, Measuring Social Welfare.Footnote ⁷³ Adler shows that the leading positions on distributive justice in contemporary scholarship can all be expressed using the analytical framework developed by welfare economics. More precisely, utilitarianism, sufficientism, prioritarianism, and other views can be presented as different types of social welfare functions. Adler’s book then demonstrates that presenting all these views in rigorous and uniform terms facilitates critical reflection on them. The important point here is that this is simply one way – more precisely, one language – to express these ideas. These ideas can also be expressed in other languages.

An epistemic translation can be formally presented as a constitutive rule:Footnote ⁷⁴ X counts as Y in context Z. Thus, X and Y are in a token-type relation: outside context Z, X does not count as Y. To introduce the idea, let me use a relatively simple culinary example about an Italian and a Brazilian talking about pizzas and ketchup.

The Italian says: ‘putting ketchup on a pizzaFootnote ⁷⁵ is wrong in Italy’. We can break down this sentence to make it fit with the formal representation of the constitutive rule.

In this example, X is the action; Y is a negative judgement about the action; Z is the context where X counts as Y – that is, the situation where a negative judgement is ascribed to the action.

The same inferential logic that applies to this sentence also applies to more relevant sentences for the current reflection, such as: ‘finding that this contractual term is inefficient is a reason to declare it invalid in my jurisdiction’. The sentence can be broken down into:

Recently, the Court of Justice of the European Union has answered two questions with deep theoretical implications regarding epistemic translation, Servizio Elettrico Nazionale and Compass Banca.

In Servizio Elettrico Nazionale, the Court of Justice was asked: ‘Is the purpose of the concept of abuse to maximise the well-being of consumers … or … [to] preserv[e] in itself the competitive structure of the market?’Footnote ⁷⁷ The Court answered thatFootnote ⁷⁸

This statement can be expressed as a constitutive rule as well:

Put in a different form, the well-being of intermediate and final consumers (X) counts as the ultimate goal (Y) in the context of EU competition law (Z).

In Compass Banca, the Court of Justice was asked: “Should the concept of ‘average consumer’ … be worded according to the best science and experience and thus refer not only to the classic concept of homo economicus?”.Footnote ⁷⁹ The Court answered thatFootnote ⁸⁰

This statement can be expressed as a constitutive rule as well:

Put in a different form, cognitive biases (X) count as relevant sources of information (Y) in the context of EU competition law (Z).

Essentially, in both judgments, the Court is tasked with the delicate task of performing epistemic translations to address academic doubts that eventually became the source of practical problems in real-world disputes. And in both cases, the answer can be presented as the application of a constitutive rule.

Generalizing, an epistemic translation takes place when: Z is a linguistic practice; Y is a commitment to the correctness of an inference that includes X; X is an idea from a linguistic practice different from Z.

Importantly, in all examples, the original sentence counts as a claim about what someone should or should not do. The claim can be all things considered, such as the first and third or pro tanto like the second and fourth. The difference is irrelevant here. What needs to be emphasised, instead, is that for the epistemic translation to occur, one need not agree with the conclusion. All that is needed is to agree that the sentence is worthy of consideration.

More than 30 years ago, Craswell defended the claim that all efficiency claims should be taken as pro tanto reasons in legal argumentation.Footnote ⁸¹ However, Craswell overlooked the fact that two distinct notions of efficiency (with two maximands: total and consumer welfare) must be considered.

Esposito and Tuzet have extensively discussed the far-reaching implications of this fact.Footnote ⁸² In a nutshell, a sentence like ‘finding that this contractual term is inefficient is a reason to declare it invalid in my jurisdiction’ is too vague because it does not specify which notion of efficiency it refers to. More recently, Esposito has shown that, in the context of EU antitrust and consumer law, said sentence fails to establish its credentials when the maximand is total welfare.Footnote ⁸³ In the present analysis, the finding can mean that the epistemic translation of claims about total welfare in EU antitrust and consumer law is doomed to fail (because the Y is rejected).

6. Integrationist tools in practice: Consumer welfare and sovereignty and market exchanges

In this journal, Martijn Hesselink has claimed that it is self-evident (in the sense that he has provided no argument in support of the claim) that:Footnote ⁸⁴

Hesselink operates in a distinctly isolationist framework: he ignores the possibility that the good justifies the right (or vice versa). In a footnote, he associates this view specifically with the idea of consumer sovereignty. To illustrate the promise of integrationist strategies further, it is helpful to highlight the challenges Hesselink’s claim faces – several of which have been introduced above already.

If Hesselink is correct, then the late Norbert Reich was irremediably confused when he integrated into the same narrative consumer welfare and liberal views:Footnote ⁸⁵

Likewise, the European Court of Justice also misstates when it identified, in decisions such as Roquette Frères,Footnote ⁸⁶ the welfare of European citizens as the goal of a social-market economy and the welfare of intermediate and final consumers as the goal of the rights and duties established by EU antitrust law.Footnote ⁸⁷

These are just instances of a multitude of cases where – in Hesselink’s terms – the right-based language of European Union law can be integrated well with good-based language (once the good is the maximisation of consumer welfare).Footnote ⁸⁸

Moreover, it follows that the United Nations Guidelines on Consumer Protection are poorly written because they mix consumer welfare, consumer rights, and consumer responsibility in one integrated account: United Nations ‘Member States should seek to enable consumers to obtain optimum benefit from their economic resources’; this goal is institutionalised in a series of rights, but also includes an explicit recognition of consumers sharing the responsibility of sustainable consumption.Footnote ⁸⁹

Of course, scholars in the Aristotelian tradition, who also derive ideas of the right (distributive, commutative, and corrective justice) for the idea of a good life, are misguided.Footnote ⁹⁰ And so is John Rawls in his articulation of rule-utilitarianism; in said occasion, it is apparent that Rawls considers utilitarianism just as a map meant to provide an ‘explication of our considered moral judgments’.Footnote ⁹¹

Yet, as seen above, widely accepted views of the right justify widely accepted views of the good: ideas of the right (formal equality) justify the use of a ‘good’ (the total welfare standard) in market analysis; alternatively, ideas of the right (substantive equality) justify the use of a different ‘good’ (the consumer welfare standard) in market analysis.

Thus, the late Norbert Reich, the legal experts appointed by Member States as judges of the Court of Justice of the European Union, the UNCTAD experts who drafted, and the representatives of the United Member States who approved in 1985, 1999, and again in 2015 the United Nation Guidelines on Consumer Protection, the Aristotelians and the late John Rawls are not doing something linguistically or conceptually inadmissible. The same applies to scholars and practitioners who routinely rely on these ideas.

Each one of them is simply (perhaps inadvertently) operating in an integrated account of the legal–economic nexus, while Hesselink believes that they cannot (and also that he is not).Footnote ⁹²

To be clear. The problem in Hesselink’s quote is not the explicit statement that the right has lexical priority over the good (no increase of mere good can justify a minimal reduction of the right). Instead, it is the fact that Hesselink ignores that the good can be relevant in a discussion of the right because the good can justify the right.

Importantly, an integrationist account of efficiency-, liberty-, and democracy-based justifications of the market is already available. It is based on consumer sovereignty and consumer welfare and is composed of the following claims:

X1 Efficiency-based account: ‘a market allocation is efficient when it maximises consumer welfare’.

X2 Liberty-based account: ‘The concept of consumer sovereignty … gives an account of the market mechanism that simply substitutes a substantive hierarchy between the parties to the formal equality that Dagan and Heller (following Scott and Schwartz) grant to sophisticated parties’.Footnote ⁹³

X3 Democracy-based account: ‘“The consumer is sovereign when, in his role of citizen, he has not delegated to political institutions for authoritarian use the power which he can exercise socially through his power to demand (or refrain from demanding)”’Footnote ⁹⁴ or when legal institutions act on consumers’ behalf.Footnote ⁹⁵

Putting these three accounts together, one obtains an integrated account of the legal-economic nexus according to which ‘under the authority of democratic legal institutions, … when we act as consumers, we are entitled to expect that our interests prevail over the interests of our counterparties (the producers). The correlative is also true: when we act as producers (entrepreneurs, workers, sellers, service providers), we have the duty to put the interests of our consumers first’.Footnote ⁹⁶

Let us make explicit how the constitutive rule scheme applies to this account. Z is the theoretical context of any discussion about the legal-economic nexus. Finally, regarding Y, one can see that the integrationist account allows for the following claims:

Y1: an efficient market makes consumers sovereign.

Y2: a market where consumers are sovereign is efficient.

Y3: authority is allocated to make a market efficient.

Y4: authority is allocated to make consumers sovereign.

The advantage of this account is that it can be shown to an efficiency-isolationist that the account has efficiency credentials (by combining X1 with Y1 or Y3);Footnote ⁹⁷ to a liberty–isolationist that the account has liberty credentials (by combining X2 with Y2 or Y4);Footnote ⁹⁸ and to a democratic–isolationist that the account has democratic credentials (by combining X3 with Y3 or Y4).Footnote ⁹⁹ This integration is made possible by the linguistic activity of epistemic translation.

The integrated account ultimately operates as the medium for piercing the alleged incommensurability between isolationist accounts. To the extent that each framework has its own comparative advantages, an integrationist approach enables transformativists, in general, and Law and Political Economy scholars, in particular, to leverage the comparative advantages of each approach.

An immediate implication of this integrated account is dispelling the concern that the European Union is treating consumer contract law ‘merely instrumental(ly)’.Footnote ¹⁰⁰ The instrumentalist critique, on both sides of the Atlantic, is intimately connected to the idea that markets serve a collectivist goal, specifically the maximization of total welfare.Footnote ¹⁰¹ The just-proposed integrated account is, instead, in line with the optimistic understanding of instrumentalisation shared, for example, by Stephen Weatherill: harmonisation is based on a view of the legal-economic nexus according to which a larger market is beneficial to European residents, especially in their capacity as consumers.Footnote ¹⁰²

All of the above is nothing more than an application of the map-territory distinction introduced in Section 1 to the study of a part of the legal–economic nexus.

7. Towards integrationist legal scholarship about the legal-economic nexus?

Legal scholarship in Europe and elsewhere is going through significant developments. This symposium illustrates that one of these developments involves asserting loudly that the law is not a passive reflection of economic ideas and forces. At the same time, this article has defended the view that while the law does not merely mimic economic ideas and forces, it is indeed influenced by them at the research and practical levels: all these interactions constitute the legal-economic nexus.

In this context, this article highlights the difference between isolationist and integrationist approaches to the study of the legal-economic nexus. Indeed, some reasons explain and some potentially justify the proliferation of isolationist accounts. At the same time, the considered isolationist accounts impoverish one’s way of thinking by severing many reasonable connections between beliefs.

Integrationist approaches to the study of the legal–economic nexus seem, therefore, worthy of attention. Two methods, techniques, tools, approaches, and strategies have been presented to achieve this integration: structural integrations and epistemic translations. Structural integrations are more common than isolationists recognise or admit. Epistemic translations are less common but arguably more promising. A prominent example of epistemic translation is the representation of leading theories of distributive justice as different types of social welfare functions.

More relevant to the study of the constitutive role of law in the economy is the finding that efficiency-, liberty-, and democracy-based accounts of the market can be integrated into one thanks to the concept of consumer sovereignty.

In the European Union, this integrationist approach is particularly significant because it addresses the concern about the instrumentalisation of private law for a collectivist goal, total welfare maximisation, which is external to private law.

The integrated consumer-centric account presented in Section 6 shows that, whether efficiency-, liberty-, or democracy-centred, the account is always about consumers and their place in a market economy. In the proposed integrated account, consumers are not mere instruments; they are the lead actor, with all the entitlements in terms of powers, rights, and responsibilities that this position of authority entails.Footnote ¹⁰³

Wittgenstein has famously claimed that philosophical work is a form of therapy aimed at freeing us from the linguistic traps we fall in.Footnote ¹⁰⁴ In particular, proposition 4.003 states that

Along these lines, this article suggests that actively trying to reframe seemingly opposing views in an integrated account can help one escape the pitfalls of isolationist approaches.