Economy and Law: Old Paradigms and New Markets

Since Max Weber, sociologists and other social scientists have recognized the role of calculable law in capitalist economies. This chapter revisits Weber’s arguments by considering the recent growth of financial markets, particularly over-the-counter markets in financial derivatives, the shift from public to private regulation, and the shift from national to global legal systems. Different strategies are identified for reduction of legal uncertainty, and it is shown how these have been applied. How law relevant to finance has been made calculable has implications for the public accountability of financial markets.