Financial Markets and Societal Constitutionalism
| Date | 01 July 2018 |
| Published date | 01 July 2018 |
| DOI | http://doi.org/10.1111/jols.12110 |
| Author | Cesare Pinelli |
JOURNAL OF LAW AND SOCIETY
VOLUME 45, ISSUE S1, JULY 2018
ISSN: 0263-323X, pp. S204±S219
Financial Markets and Societal Constitutionalism
Cesare Pinelli*
The global financial crisis of 2008 proved that a sovereign of last
resort would always rescue the financial system from self-destruction.
In constitutional democracies, stability and change are balanced
through constitutional devices and procedures. In global finance's
realm, on the contrary, no room is left for a dialectic between stability
and change. The question of how power is distributed within the
financial system is not only intrinsically connected with the analysis of
its legal functioning but is also a necessary premise for addressing the
issue of reform before the next, and perhaps fatal, `catastrophe
moment'. States might thus recognize that to be treated as sovereigns
only when it fits with the immediate needs of the global finance is not a
good deal. Nor is it to renounce ex ante whichever reform that could
avert a global crisis without threatening the elasticity of the law that
governs the financial system
I.
Controversies over constitutionalism ± whether it should be grounded on
limiting power and/or on legitimizing it through democratic means ±
regularly presuppose its connection with the political power of the state.
Even the fragility of constitutional democracies, for whatever cause ± from
the emergence of unchecked powers, such as `the military industrial
complex',
1
to the `overload' created on government from the `democratic
expansion of political participation and involvement'
2
± assumed that the
state's political power was an irreplaceable paradigm for constitutionalism.
S204
*Law School of Sapienza University of Rome, Piazzale A. Moro, 5, 00185
Roma, Italy
cesarepinelli@tiscali.it
1 See `Transcript of President Dwight D. Einsenhower's Farewell Address' (1961), at
2 M. Crozier et al., The Crisis of Democracy. Report on the Governability of
Democracies to the Trilateral Commission (1975) 161.
ß2018 The Author. Journal of Law and Society ß2018 Cardiff University Law School
Things appeared suddenly different with the rise of globalization, a
phenomenon already depicted in a 1992 OECD study as:
driven by technological change, continued long-term growth in foreign
investment and international sourcing, and the recent extensive formation of
new kinds o f interna tional li nks betwe en firms an d countrie s. This
combination is increasingly integrating national economies and changing the
nature of global competition.
3
Globalization was not only something external to constitutionalism. It also
consisted in a flux of processes, rather than in a clearly established seat of
power alternative to that of the state. Its asymmetry with the national
dimension historically inherent to constitutional democracies was not merely
territorial,
4
to the extent that the realm of economic global power, being
inextricably connected with technological change, is far smoother, and
therefore more difficult to attain than political power's realm. A flourishing
literature emphasized in fact the end of familiar pieces of the constitutional
landscape, such as the nation state, history, geography, politics, democracy,
territory, work, and power,
5
without giving a corresponding account of the
beginning of something else.
Uncertainty was thus coupled with concern for the future of constitutional
democracies. According to Dieter Grimm:
If the modern constitution could only come into existence because of the prior
development of certain conditions, it cannot be denied that these conditions
may disappear, just as they once arrived [. . .] It is therefore of crucial
importance for the future of constitutionalism to inquire whether, or to what
extent, the situation that brought forth the constitution has changed, and to
gauge how this affects the achievement of constitutionalism. The question of
the prospects of the constitution is a question concerning the continued
existence of its preconditions. For two of these preconditions the answer seems
straightforward. They do not pose a problem, at least in most parts of the
world. Questions of political order continue to be open to political decision.
They are not regarded as pre-determined by some transcendental will and
removed from political influence. Furthermore, the idea of limited government
is still the leading concept in countries in the Western tradition. The problem
rather arises in relation to the state and its two constitutive borders: the
boundary between internal and external and between public and private. [. . .]
S205
3 OECD, Industrial Policy in OECD Countries: Annual Review 1992 (1992).
4 For the assumption of a territorial asymmetry, see D. Held, `The changing contours of
political community: rethinking democracy in the context of globalization' in Global
Democracy: Key Debates, ed. B. Holden (2000) 27 ff.
5 See K. Ohmae, The End of the Nation-State ± The Rise of Regional Economics (1995);
F. Fukuyama, The End of History and the Last Man (1992); R. O'Brien, The End of
Geography (1992); G. Guarino, Verso l'Europa ovvero la fine della politica (1997);
J.M. GueÂhenno, La fin de la de
Âmocratie (1993); B. Badie, La fin des territoires. Essai
sur le de
Âsordre international et sur l'utilite
Âsociale du respect (1995); J. Rifkin, The
End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market
Era (1995); M. Naim, The End of Power: From Boardrooms to Battlefields and
Churches to States, Why Being In Charge Isn't What It Used to Be (2013).
ß2018 The Author. Journal of Law and Society ß2018 Cardiff University Law School
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