Katherina Pistor, The Code of Capital: How the Law Creates Wealth and Inequality, Princeton University Press, 2019. Hbk, pbk
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If ever a book exemplified Cammack's Fifth Law of Reading, The Code of Capital is it. The book is very well worth reading - invaluable, even, to anyone who is unaware of the complex and devious devices private lawyers have developed over time in service to the owners of capital. Chapters 2 to 7 run through
Pistor's Code of Capital is an investigation into the historical evolution of the institutional structure of different segments of financial markets as reflected in 'the core institutions of private law: contract, property, collateral, trust, corporate, and bankruptcy law':
'Having identified the core modules of our complex financial system, I began to trace their roots back in time. I investigated the evolution of property rights, of simple debt instruments, the various forms of pledges and gages that were used to collateralized debt obligations, the evolution of the use and the trust, the corporate form and the history of bankruptcy, the critical juncture when decisions over life and death in economic life are made. The more I read, the more I was convinced that what had started as an investigation into global finance had led me to the fountain of wealth, the making of capital' (ix-x).
This leads her directly to the argument that capital is 'coded in law'; the legal coding of assets as capital bestows legal rights, backed by the 'coercive law powers' of the state. The law, then, is a 'powerful tool for social ordering', and it has been 'placed firmly in the service of capital' (xi). More loosely, as reflected in the subtitle, the law creates wealth and inequality.
Pistor's Code of Capital is an investigation into the historical evolution of the institutional structure of different segments of financial markets as reflected in 'the core institutions of private law: contract, property, collateral, trust, corporate, and bankruptcy law':
'Having identified the core modules of our complex financial system, I began to trace their roots back in time. I investigated the evolution of property rights, of simple debt instruments, the various forms of pledges and gages that were used to collateralized debt obligations, the evolution of the use and the trust, the corporate form and the history of bankruptcy, the critical juncture when decisions over life and death in economic life are made. The more I read, the more I was convinced that what had started as an investigation into global finance had led me to the fountain of wealth, the making of capital' (ix-x).
This leads her directly to the argument that capital is 'coded in law'; the legal coding of assets as capital bestows legal rights, backed by the 'coercive law powers' of the state. The law, then, is a 'powerful tool for social ordering', and it has been 'placed firmly in the service of capital' (xi). More loosely, as reflected in the subtitle, the law creates wealth and inequality.