Regulation
| Author | Sol Picciotto |
| Published date | 01 December 2017 |
| Date | 01 December 2017 |
| DOI | http://doi.org/10.1177/0964663917729873 |
| Subject Matter | Articles |
Article
Regulation: Managing
the Antinomies of
Economic Vice and
Virtue
Sol Picciotto
Lancaster University, UK
Abstract
In the quarter-century that Social & Legal Studies has been published, regulation has
emerged as a new, and for many exciting, interdisciplinary field. The concept itself
requires a wider view of normativity than the narrow positivist one of law as command.
It is certainly protean, ranging over many fundamental questions about the changing
nature of the public sphere of politics and the state, and its interactions with the ‘private’
sphere of economic activity and social relations, as well as the mediation of these
interactions, especially through law. This survey aims to outline and evaluate some of the
main contours of the field as it has developed in this recent period, focusing on the
regulation of economic activity. Regulation is seen as having emerged with the with-
drawal by governments from direct provision of many economic and social services, to
be replaced by corporatist bureaucracies and quasi-public agencies managing the com-
plex public–private interactions of financialized capitalism. The arguments for ‘smart’
regulation have, in an era fixated on neo-liberalism, generally legitimized delegation of
responsibility to big business. Its advocates, having been drawn into policy fields, have
perhaps too often lost their critical edge, and allowed it to become instrumentalized,
reflecting the technicist character of its practice.
Keywords
Corporations, capitali sm, expertise, governanc e, indeterminacy, intern ational, multi-
level, reflexive, regulation
Corresponding author:
Sol Picciotto, Lancaster University, Leamington Spa, UK.
Email: s.picciotto@lancs.ac.uk
Social & Legal Studies
2017, Vol. 26(6) 676–699
ªThe Author(s) 2017
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DOI: 10.1177/0964663917729873
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Origins and Approaches
The recent concern with regulation emerged in the 1970s, as a field of political battle as
much as scholarship. The first issue of Regulation: AEI Journal on Government and
Society, published by the Cato Institute, aimed to address the ‘extraordinary growth in
the scope and detail of government regulation ...one of the two or three most significant
political facts of our times’ (Brunsdale, 1977: 2). A paper in the same issue by Irving
Kristol, while recognizing the need for regulation and even for its increase in a complex
society, attacked the ‘new class’ who in his view benefited from powerful government,
naming them as Naderites, with career jobs in US agencies such as EPA or OSHA
(Kristol, 1977).
This critique drew on the economistic analysis of the politics of regulation by Stigler,
who argued that ‘as a rule, regulation is acquired by the industry, and is designed and
operated primarily for its benefit’ (Stigler, 1971: 3). Although in some ways similar to
analyses of regulatory ‘capture’ more familiar in socio-legal studies, this perspective
challenged the need for regulation, while more left-wing approaches tended to take that
necessity for granted, seeing ‘capture’ as diverting public purposes to private ends. The
right-libertarian critique of the arguments for government action targeted the weaknesses
of the assumptions for such action in classical welfare economics and saw capture as
intrinsic to state action.
Far from being tamed, and despite the dominance of neo-liberal ideas since the 1970s,
regulation has continued to expand. Nevertheless, the battles continue today, as one of
the first actions of the Trump administration was to slash the budgets of these same
agencies. Once the Reagan–Thatcher era was under way, the field became more main-
stream, for example, with the foundation of the Yale Journal of Regulation in 1983. In
the United States, of course, it became dominated by the law and economics perspective,
which saw regulation as government ‘intervention’ in market transactions, justified only
by ‘market failures’, due to ‘bounded rationality’, ‘information asymmetry’, or where the
costs of market transactions exceeded those resulting from government action.
In parallel, a very different approach led to the formation of a ‘regulation school’,
based in France, which later established its own Revue de la Re
´gulation.
1
It resulted from
the seminal Marxist revisionist work of Aglietta (1976/1979), building on the concepts
of social reproduction and regimes of accumulation. Although this perspective was also
focused on the economic, it was a very different one from that of law and economics, as it
stemmed from political economy and economic sociology. Also, it was concerned with
bringing broader social science perspectives into economics, while the economic anal-
ysis of law led to mutually reinforcing formalisms (Campbell and Picciotto, 1998).
While law-and-economics considered regulation to be an external political intrusion into
economic activity, seen essentially as consisting of natural processes of market
exchange, the French regulation school viewed the economic sphere as part of the
ensemble of broader social relations.
Despite their differences, the two approaches had some commonalities. In particular,
they both pointed to the need for analysis of the role of law and institutions in economic
activity. They can also be seen to have emerged in response to structural social and
economic changes, following the end of the 30-year period of post-war capitalist growth
Picciotto 677
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