Katharina Pistor Diretora do Center on Global Legal Transformation, Columbia University, Nova Iorque
M
y core argument is that the source code for wealth creation is actually the law — the law being a public good, not a private good —, a legal system that ensures people, holders of assets, interests and claims, that they can enforce a claim against others. It is somewhat intuitive to say the legal system is supposed to enforce property rights and contracts, assuming that people just enter into these arrangements and then all the law does is enforce whatever arrangements they make. I am arguing that the private law institutions used for several centuries to code capital are much more malleable than is very often assumed, especially amongst economists. They can be used to create a hierarchy of rights, create stronger rights versus weaker rights, protect some interests over time, while leaving others to deal with the fluctuation of business cycles or major crises, like the one we are currently experiencing. The legal system allows you to put your assets on “legal steroids”. Suppose we are ranking assets: somebody has a property right, others might have a collateral interest, others only have an unsecured interest. We are extending these rights
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Conferência de Lisboa – 4 _ 2020 Lisbon Conference – 4
Director of the Center on Global Legal Transformation, Columbia University, New York
over time and making them durable by ensuring that we can protect assets against too many claimants in the future. We are also ensuring that these arrangements are enforceable not only between the parties to that arrangement but against the world erga omnes, which means they are universally valid, at least as far as a particular legal regime goes, as we have conflict of law rules by which other states commit to enforcing the private law arrangements of foreign states. Last but not least, a critical aspect for our current age and also for the Covid-19 crisis, is convertibility, which means that asset holders, especially of financial assets, can attain the durability of the wealth they have already created in the past by converting them into safer assets, ideally into cash. The only financial asset that does not lose its nominal value in a crisis is state-issued legal tender. All privately issued financial assets can lose their value in a financial crisis. The law can be used to create structural inequalities, and that is the purpose of private law: to create stronger and weaker rights. We also have to understand that we are creating these rights, typically, under conditions of great uncertainty. We don’t really know how this pans out in the future. The parties with the better bargaining powers will try to use the legal devices — with the help of sophisticated lawyers, whom I call the masters of the code — to shift the risk of dealing with the future uncertainty to the other side, typically to the weaker side.
A ACELERAÇÃO DAS MUDANÇAS GLOBAIS THE ACCELERATION OF GLOBAL CHANGE