On the Sociology of Law in Economic Relations
| Published date | 01 February 2022 |
| Date | 01 February 2022 |
| Author | Sol Picciotto,Iagê Miola |
| DOI | 10.1177/09646639211002881 |
| Subject Matter | Review of the Field |
On the Sociology of Law
in Economic Relations
Iagˆ
e Miola
Federal University of Sa
˜o Paulo, Brazil; Brazilian Center for Analysis and
Planning (CEBRAP), Brazil
Sol Picciotto
Lancaster University Law School, UK; University of London, UK
Abstract
A focus on law’s role in economic activities was central to many of the classical sociolo-
gists, and it remains a key theme in the sociology of law, although no longer central. The
view of capitalism as a market economy is reflected in formalist perspectives on eco-
nomics, law and even sociology, and limits these understandings. Economic sociologists
and institutional economists have examined the extensiveinstitutionalisation of economic
activity due to theshift to corporate capitalism sincethe last part of the 19th century, and
have focused onlaw’s role in these processes. The neo-liberal phase of capitalismsince the
1970s broughta renewed emphasis on propertyrights and market-basedmanagement, but
accompaniedby an enormous growthof new forms of regulation, often of a hybrid public-
private character, leading to a new view of law as reflective or responsive, very different
from traditional formalist perspectives. We argue that law’s role in the economy can be
better understood by examining the social processes of lawyering, mediating between the
realms of political and economic power,through practices of legalinterpretation that both
reflect and shape economic activity.
Keywords
Corporation, economic law, law and economics, lawyers, property rights, regulation
Introduction
A focus on law’s role in economic activities was central to many of the classical
sociologists, and it remains a key theme in the sociology of law, although no longer
Corresponding author:
Sol Picciotto, Lancaster University Law School, Lancaster, UK; Institute for Advanced Legal Studies, University
of London, London WC1B 5DR, UK.
Email: s.picciotto@lancs.ac.uk
Social & Legal Studies
ªThe Author(s) 2021
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DOI: 10.1177/09646639211002881
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2022, Vol. 31(1) 139–161
Review Article
central. Much of this is due to the divergence between sociology and economics, espe-
cially since the emergence of neo-classical economics. From the end of the 19th century,
mainstream economics and sociology both increasingly distanced themselves from their
origins in the political economy of the enlightenment. This also separates both from law,
which is tied to politics and the state, and so has long been a focus for political philo-
sophy. Hence, the challenge for a contemporary sociology of law in the economy is to
restore a more holistic perspective that combines structural analysis from political econ-
omy with actor-centred perspectives from sociology, to examine legal concepts, insti-
tutions and practices in relation to economic activity.
This article
1
aims to provide an introductory overview of socio-legal approaches to
the role of law and lawyers in the economy, particularly since the 1980s, but in a longer
historical perspective. Given its purposes, and the constraints of space, we do not
engage in depth with even the authors we pick out, but aim to indicate what we
consider they have contributed to the jigsaw of this complex field. The picture we
present of that field is of course ours, but we hope that others find it recognisable, at
least as a guide to its characteristics and important features. It is therefore not intended
to be a complete survey, rather we hope that it can contribute to other efforts aimed at
refining socio-legal approaches to research on law and economic relations (e.g.
Britton-Purdy et al., 2020).
Our approach traces how the role and forms of law, as well as their understanding by
theorists, has changed with the transformations of capitalism and of the state, from the
generalisation of commodification, through the institutionalised forms of corporate
capitalism, to neoliberalism, the regulatory state and financialised rentier capitalism.
The key economic legal forms remain rights of property, liability and contract, but they
have been adapted and refashioned far beyond the forms of exclusive rights and volun-
tarist bargains, to underpin the highly institutionalised structures of a corporate capital-
ism that paradoxically also rests on febrile trading, espec ially in financial products,
which brought the great financial crash in 2007–2009.
We begin by considering how the view of capitalism as a market economy is reflected
in the formalist perspectives of neo-classical economics and legal positivism, largely
echoed in Max Weber’s sociology of law and taken to an extreme in Chicago-school law-
and-economics, and the limitations of these understandings. Focusing on the key legal
institution of the corporation, the second section outlines the extensive institutionalisa-
tion of economic activity due to the shift to corporate capitalism since the last part of the
19th century, and the increasing attention from economic sociologists and institutional
economists to law’s role in these processes. The third section discusses the neo-liberal
phase since the 1970s, with a renewed emphasis on property rights and market-based
management, but accompanied by an enormous growth of new forms of regulation, often
of a hybrid public-private and corporatist character, leading to a new view of law as
reflective or responsive. The final section argues that law’s role in the economy can be
better understood by examining the social processes of lawyering, mediating between the
realms of political and economic power, through practices of legal interpretation. We
analyse the sources of law’s indeterminacy to provide an essential element in under-
standing how law can both reflect and shape economic activity.
140 Social & Legal Studies 31(1)
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