Economics faculty member Jamee K. Moudud recently published Legal and Political Foundations of Capitalism: the End of Laissez Faire? as part of Routledge’s Economics as Social Theory series. Drawing on the insights of the American Legal Realists and Original Institutional Economics, the book argues that the “free market” or the notion of laissez faire constitutes the foundational myth of capitalism. The book discusses the implications of this framework for the Washington Consensus, social and international inequalities, Project 2025 and far right politics, and climate change, and explores the politics of law and how that is inflected by relations of power, language, and culture.
“Institutions matter” is a common refrain among all economists—including many who have proposed progressive alternatives to free market fundamentalism. However, this sentiment does not go far enough.
This book draws principally on the Original Institutional Economics and American Legal Realist traditions to propose a theory of legal institutionalism or institutional political economy. By arguing that society is a political community it challenges the private law versus public law or state versus markets distinction. Focusing on property, money and credit, constitutional law, and corporations this book argues that laissez-faire has never existed and that “state intervention versus de-regulation” and “market failures versus free markets” are false dichotomies. This book proposes the need to engage with legal-economic theory and history to understand what institutions are, what economic regulation means, law’s intrinsic connection to the economy, and the distribution of power relations within capitalism.
This book will be of interest to readers of economics, law, public policy, international and development studies, and all those seeking to explore progressive alternatives in this period of multiple crises.
1. Laissez Faire: The Fruitless Pursuit of a Chimera
2. Messiness Matters: The Analytical Basis of the Legal-Economic Nexus
3. Visible Hands and Corporations: Beyond the Public versus Private Separation
4. Constitutional Vulnerability, the Struggle for Human Dignity, and Monetary Sovereignty
5. Variants of Monetary Hardwiring: Money as a Governance Institution
6. Liberalism’s Dark Side
7. Conclusion: Reconstructing Economics or Toward a Political Political Economy
Index
