Law and governance: The law of the European and the financial crisis

“The juridical gives form to the economic, and the economic would not be what it is without the juridical.” Michel Foucault has understood this. Europe provides right illustration. European integration project was launched as “Economic Community”, albeit one which would overcome was a bellicose past and enhance the welfare of all. The mechanics of this response were in essential respects economic, and this was to remain so. By the same token, integration was accomplished “through law” and driven by an activist jurisprudence of the European Court of Justice. The reconstruction of this foundational synthesis will depart from the discussion its conceptual history and of liberal traditions (American laissez-faire; German ordo-liberalism; Austrian individualism) and their respective conceptualisation of functions of law in the ordering of economy and society.

These traditions will be contrasted with two strand of critique. One is the economic sociology submitted by of Karl Polanyi at the end of World War II. The other is the defence of the post war welfare state in Jürgen Habermas’ “discourse theory of law and democracy”. Both of these theoretical endeavours are a challenge to the European project simply because this project remained committed to its foundational reliance on market building and economic rationality. The Maastricht Treaty and the establishment of Monetary and Economic Union were widely perceived as a consummation of this trajectory. The financial crisis, however, was a turning point. Within a decade of crisis, the original interdependence of law and economic was turned upside down. “The juridical” ceased to “give form to “the economic”. The crisis has instead established a “rule of economics” outside constitutional constraints. The ensuing query is: did European integration go too far with its reliance on ever more intense economic governance or did it not go far enough with its failure to proceed to the deepening of Political Union?

This course is for 1st year MPP students only.