Socio-Economic Review 1:335-367 (2003)
© 2003 Society for the Advancement of Socio-Economics
Mind the gap: law, institutional analysis and socioeconomics
Department of Sociology and Law School, University of Minnesota, 909 Social Science, 267 19th Avenue South, Minneapolis, MN 555455, USA
Correspondence: stryker{at}atlas.socsu.umn.edu
First receipt November 2001; final manuscript received April 2003
‘In a capitalist society, to say "markets" or "business" is to say "the law".’ (Sklar, 1988, p. 86)Providing an extended case study of the co-evolution of change in US labor and employment law and change in the US economy, this article argues that unless socioeconomists focus on law as a sustained object of inquiry in its own right, they will fail to adequately understand or explain state–economy interaction in capitalist democracies. The article proposes a rule–resource institutional framework to better conceptualize law as an institution and to elucidate the multifaceted political and cultural processes through which legal action and institutions reciprocally shape and are shaped by economic action and institutions in intersecting legal and economic institutional fields. Because legal rules/schema and legality are socially constructed and mobilized as resources through interpretive and political processes involving cognitive and normative-evaluative as well as instrumental components, law likewise affects the economy through a multi-dimensional set of social mechanisms, rather than by reshaping cost–benefit calculations only. Similarly, law helps constitute not just economic interests, strategies and power, but also everyday economic meanings, identities, roles, relationships and structures, and norms, values, ideas and ideals, including the concept of economic rationality itself. Law may sometimes function as an exogenous shock with respect to the economy, but mutual endogeneity between legal and economic meanings, enactments and power in overlapping and interpenetrating legal and economic institutional fields will likely be the norm rather than the exception.
Key Words: Rule • resource • schema • law • legality • institution • state • economy • culture • politics • power • causal mechanism • endogeneity • instrumental • cognitive • constitutive • normative • feedback • policy • labor • employment • affirmative action • JEL classification: K10 Law and economics, general • J7 Discrimination