Equity – law and idea
Equity – law and idea

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Equity – law and idea

3.2 Laissez-faire capitalism

Like equity, capitalism cannot be fully explained simply by reference to something called ‘capitalism’. It is far more nuanced than that. The type of capitalism referred to in the present discussion is so-called laissez-faire capitalism, which in conjunction with broader liberal ideals such as freedom has had a profound impact on how law and equity are expected to function. That the forces and vagaries of this type of capitalism have for a long time determined the nature, function and complexion of social institutions is uncontroversial. What is more problematic, however, is how social institutions such as those of the law operate under laissez-faire capitalism, and who benefits in both the short and long term from an increasingly financialised ‘justice’ system. That is, a justice system geared towards financial concerns and influence, including those of business, set within a free-market and competitive context.

One expression of how legal institutions function under the type of conditions suggested here is given by John Rawls, who claims that capitalism, ‘secures only formal equality and rejects both the fair value of the equal political liberties and fair equality of opportunity. It aims for economic efficiency and growth constrained only by a rather low social minimum’ (2001, p. 137). In other words, a high-status is given to those systems or institutions able to function most efficiently (cost effectively), that operate in a business-like way and thus, ultimately, in the service and promotion of capitalist ideals. That is, whether a system or institution functions in a way that secures financial savings – for example, State agencies under austerity, or in order to guarantee a profit, for example, a private contractor of civil services, the respective evaluations of success or failure of that system or institution, and any other considerations that might subsequently flow from that evaluation – will be based on strict financial considerations, needs or demands. As a consequence, whichever direction the economic winds are blowing will invariably determine the direction of travel of institutions such as those of law and equity.

It has long been clear that economic or financial crises are part and parcel of capitalism, and key economists have been quick to note the problems and inefficiencies, as much as the strengths, of capitalism in light of this fact (Keynes, 2015, pp. 60–1). And while crises produce what may crudely be called winners and losers, they also produce a number of casualtiesboth directly and indirectly, intentional and unintentional (‘collateral damage’) in the form of broken institutions and systems that need subsequently to be reformed, rebuilt or re-imagined. As such, after a crisis it is arguably more likely to be those things – people, beliefs, institutions, etc. – that appear counter or surplus to primary economic demands and needs that are forced to change or adapt in order to survive. For Ellul, justice represents such a casualty, one that never remains intact or the same post-crisis.

For present purposes it is more precise to talk about the various institutions of law that function in the name of justice, rather than justice alone, and thus how equity is or can be rendered an economic casualty on these terms. Moreover, how opportunism, when framed as the deliberate exploitation of certain financial conditions, is able to take advantage of shifts that occur within the capitalist context. After all, crises do not result exclusively in either injustice or a lack of justice as such, whether it is defined in the form of a specific event such as the Wall Street Crash of 1929 or a more sustained economic downturn such as that experienced during the first quarter of the twenty-first century. Rather, when justice is remodelled during or after a crisis it assumes a new form that is ultimately made to fit a new emerging socio-economic landscape. This is arguably done, in part at least, as a response to opportunistic behaviour that has either created or exacerbated a crisis.

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