Privatisation of law
The privatisation of law relates to the process by which the central concepts of law are adapted for use in specific contexts with the result that those central legal concepts are transformed significantly: this process has been considered already as the “contextualisation of law”. More particularly, the privatisation of law relates to that aspect of contextualisation which sees particular areas of commercial activity develop their own autopoietically-closed environments within which those legal norms which are considered desirable by members of those markets are admitted to the closed environment while other legal norms are excluded. Significantly this decoupling of legal concepts from their roots is also accompanied by an expansion of models of arbitration and dispute resolution which seek not simply to keep market actors away from the risks and costs associated with litigation in the mainstream courts but which seek positively to exclude mainstream courts, judges and jurists from affecting the resolution of disputes affecting members of the market. It is suggested that this development should be viewed pejoratively for two reasons: first because it signals a power relation which favours commercial people and secondly because it disturbs the understanding that the rule of law applies equally to all in a society such that it ought not to be capable of avoidance by those who have close off the means of resolving their disputes.
The privatisation of law, as an expression, mirrors the trend towards the movement of elements associated with the public sphere into the private sphere. In this context it is the rule of law which is being disturbed such that legal concepts are removed from their even application to all persons – whether individuals or legal persons – within a society.
The simple model of the privatisation of law in commercial contexts
The globalised model of the privatisation of law in commercial contexts
The increasing re-globalisation of commercial activity in the early twenty-first century has changed this phenomenon from being merely the effect of arbitration of commercial disputes outside the ordinary court structure into a challenge to the possibility of a commercial law based on the sovereignty of particular legal jurisdictions into a means by which commercial actors seek to select the legal norms which will govern their transactions. The notion of the jurisdiction assumes the sovereignty of a nation state over the activities of commercial actors whose activities take place across the borders of nation states. The so-called “offshore jurisdictions” are, in truth, cyphers which purport to be legal jurisdictions which have minimal regulatory, legal or taxation requirements but which in truth do not exist in space: rather, the offshore jurisdictions mirror the spatial non-existence of the company by suggesting that a company can be deemed to exist in a jurisdiction which need not house that company physically (a shell company need have no premises, nor employ any people, and can have shareholders which are themselves all companies or trusts) and yet the offshore jurisdiction purports to offer a legal code characteristic of a nation state but which gives the company whatever features it wishes to have and which limits the obligations of that company.
So it is that commercial actors can select the governing/proper law of their contracts without the need for any connection with that jurisdiction which supports that system of law: indeed, the well-established division between system of law and jurisdiction is well-understood.
It is said that there is “re-globalisation” precisely because the international effect of trade between nation states (or between tribes in the time before the nation state as a concept took sway) is nothing new. Rather, the Mediterranean, for example, has long been the situs for trade between Europeans, Arabs, Africans and so forth. The growth of empires linking various parts of the world (whether China, India, the Americas, as confronted by the empires of Alexander the Great, Rome, Tamburlaine, the British, the colonial expansion of France, Spain, Portugal and so on) pushed trade into new territories but human beings have traded with one another for many centuries. There was a law merchant for centuries before nation states retreated into the use of law as a means of protecting trade by citizens of those nations: this was a globalised system of legal rules. The spread of Indo-European languages spread with trade together with writing systems and systems of mathematics (whether notation or the techniques of performing calculations): all of these processed are testament to the various ways in which peoples communicated and inter-acted with one another long before the period of globalisation which we now consider to be unique, primarily because much of this communication is now capable of being conducted by personal computer without it being possible for national governments to obstruct the physical manifestation of this communication in a way which would have been possible, for example, when ships could have been physically prevented from docking.
The really unique characteristic of the latest period of globalisation is that it has been dematerialised. Dematerialisation has occurred in a number of ways. It is no longer necessary for people to present themselves physically in the place where the communication must take place. This because unnecessary when uniform systems of writing and language permitted messengers to carry letters or verbal messages but, importantly, there was still a need for a physical messenger. Now communication can happen by telephone or by fax or by e-mail. It is true that telephone lines could be physically controlled but now there is satellite and other mobile, wireless communication. Again, it should be possible to restrict access to the satellites or to the means by which mobile wireless communications are transferred but it is noticeable that, for example, the use of satellite telephones even by operatives associated withAl Quaeda in Afghanistan and so on is monitored by intelligence agencies and not prevented from taking place at all.
Therefore, the possibility for physical control appears to have receded.
The other context in which late capitalism is different from other forms of trading activity is that so much of this form of capitalism is carried on by companies which exist, in effect, in time but not in space. The company which has offices in many companies and which selects in which geographical spaces it will hold its executive meetings or from which spaces it will source its physical products is not a company which is locked to any geographic space. Its real connection is with the time in which markets measure its performance and the time in which its customers deal with its products.
The pejorative impact of the globalised model: the spatial impact of free selection
The globalised model
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