The Laws of Capitalism Episode 6: A Code for the Globe

Professor Katharina Pistor examines how the law codes international capital.

Laws are national, but international capital transcends borders. Prof. Pistor explains how the domestic law of two hegemons – the United Kingdom and the United States – have become the default legal systems used internationally. Globalization has been made possible by using these two dominant jurisdictions to code a global system for trans-national commerce, finance and corporations. But individual countries may have ceded too much as a result. Pistor uses the example of bilateral investment treaties to explore the tension between democratic sovereignty and globalization. Desirable domestic regulations and protections sought by the democratic process can be hampered by the threat of expensive lawsuits from foreign investors. The freedom of capital movement across borders brings along an alien legal jurisdiction, imposing restrictions on local governments, elevating the private rights of capital above the public interest, and eroding democracy.

First aired on The Institute For New Economic Thinking.

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