Book Review: The Code of Capital, by Katharina Pistor

I just finished The Code of Capital, by Katharina Pistor. It’s a relatively fast read and a critical commentary in a vein similar to that of Thomas Piketty’s Capital in the Twenty-First Century or David Graeber’s Debt. Pistor is a professor of law at Columbia University and researches corporate governance and comparative international law and regulation. Capitalism, Pistor argues, is disproportionately defined by the efforts of aspiring monopolists to “code” capital, that is, effectively lobby the State to protect capital in a way that allows them to amass more of it. When I mentioned this to some lawyer friends, they laughed. “Someone needed to write a book about that?”

So, perhaps it wasn’t mindblowing. Pistor’s angle is more interesting from how she examines specific examples of the constraints and systems that corporations and wealthier actors use to get their way. One involved Pfizer fighting a Canadian court over a patent issue. Pfizer lost in that case, but it took years. And there were also plenty of examples of companies winning by wielding pseudo-legal arbitration tribunals against challengers. The book is also complementary perhaps to David Korten’s When Corporations Rule The World, but whereas Korten focuses more on consumerism and extractivism, Pistor is focused on legal and regulatory frameworks, and specifically those that transcend specific geographic boundaries. This involves everything from utilizing tax havens to directly subverting especially weaker democratic institutions.

It’s a critical interpretation that is welcome in an era in which we’d all love some explanations a hair more sophisticated than the true-but-dismissive adage that “the rich are getting richer,” because we know that already. The angle of the critique is perhaps not fundamentally novel, as these issues of using state power to enforce the power of capitalists have been well-understood for centuries, but Pistor’s provided us with an unusually deep dive that goes back to the origins of English common law in the practice of enclosure, which began as early as the Norman conquest of England in 1066. She also covers everything from the 2000s housing bubble (how corporations intentionally obscured their activities, but exploited regulatory loopholes to allow them to continue to sell highly risky products) to the still-contested questions of gene patenting.

The Code of Capital, by Katharina Pistor. (⭑⭑⭑⭑)