Buffett Research Group Spotlight: Global Capitalism & Law

April 20, 2016

In fall 2015, the Buffett Institute launched three interdisciplinary research groups after putting out a call for new, “big ideas” in global research. The Global Capitalism & Law group is another intellectually diverse research community at the Buffett Institute that brings Northwestern scholars together to tackle critical global issues in new, exciting ways.

Co-led by Karen Alter (political science, law), Bruce Carruthers (sociology), and Cristina Lafont (philosophy), the Global Capitalism & Law research group investigates how capitalism shapes the law and how law shapes capitalism at the local, regional, and global level. Members include faculty and graduate students in law, political science, sociology, economics, management, history, philosophy, and human development and social policy.

Studying the world's most productive economic and political system

Driving the group’s research focus is a deep appreciation that there is no one-size-fits-all solution, no one set of rules or institutions that can guarantee economic prosperity for all.

“Binding our research group together is an appreciation that capitalism is the most productive economic and political organizing system in world history,” Lafont says. “Capitalism can create great prosperity, but also great inequality, and a level of consumption that is environmentally unsustainable. The conspiratorial perspective of capitalism imagines a smoke-filled room of economic titans plotting to enrich themselves at the expense of others. Were this true, the problems generated by capitalism would be much more easily addressed.”

Members have already observed in their individual research of governments and markets around the world that similar legal rules and policies give rise to varied outcomes depending on context. This perspective puts Global Capitalism & Law at odds with traditional economic and legal scholarship that seeks an idealized set of rules to create the most productive market economies. The group takes both an empirical and a normative approach to the idea that there are multiple forms of politically sustainable capitalism.

Addressing critical global issues

The group emerges at Northwestern at an extremely auspicious time to rethink these issues.

“The highly expensive and failed US efforts to transform national economic, political and legal systems in Afghanistan and Iraq have reinforced the sense that we must better understand local context if external investments are to be helpful in promoting desired political change,” Lafont says. “Financial crises, concerns about inequality, a spreading political instability that is at times coupled with a rejection of neo-liberal economic ideas have created a space which calls for imagining a capitalist system that can be adjusted to the demands and needs of people around the world.”

Dani Rodrik teaching a master class in fall 2015Through regular meetings and discussion, the group is developing a new, common language that transcends disciplinary boundaries that often confine the study of law and capitalism.

The group also hosts quarterly master classes for its members taught by leading scholars in law, economics, political science, and other fields. In November, economist Dani Rodrik of the Harvard Kennedy School kicked off the group’s first class (pictured), exploring debates about institutions and economic performance.

This winter, they drew on the expertise of Joel Mokyr, an award-winning economic historian at Northwestern, to explore the ideational underpinnings of European economic prosperity during the industrial revolution. In April, Lee Buchheit, a senior partner at Cleary Gottlieb Steen & Hamilton and advisor of governments in financial crisis, led a master class based on his work on sovereign debt and the legal foundations of international financial markets.

Plans for 2016–2017 include offering a co-taught graduate seminar where faculty and students explore different topics under global capitalism and law. Learn more about the Global Capitalism & Law research group.