"One of the Financial Times' Best Books of 2019: Economics" "One of the Financial Times' Readers' Best Books of 2019" "One of Business Insider's Richard Feloni's best books of 2019 on how we can rethink today's capitalism and improve the economy" "A Project Syndicate Best Read in 2019" Katharina Pistor is the Edwin B. Parker Professor of Comparative Law and director of the Center on Global Legal Transformation at Columbia Law School. She is the coauthor of Law and Capitalism: What Corporate Crises Reveal about Legal Systems and Economic Development around the World and the coeditor of Governing Access to Essential Resources. She lives in New York City.
A compelling explanation of how the law shapes the distribution of wealth
Capital is the defining feature of modern economies, yet most people have no idea where it actually comes from. What is it, exactly, that transforms mere wealth into an asset that automatically creates more wealth? The Code of Capital explains how capital is created behind closed doors in the offices of private attorneys, and why this little-known fact is one of the biggest reasons for the widening wealth gap between the holders of capital and everybody else.
In this revealing book, Katharina Pistor argues that the law selectively "codes" certain assets, endowing them with the capacity to protect and produce private wealth. With the right legal coding, any object, claim, or idea can be turned into capital-and lawyers are the keepers of the code. Pistor describes how they pick and choose among different legal systems and legal devices for the ones that best serve their clients' needs, and how techniques that were first perfected centuries ago to code landholdings as capital are being used today to code stocks, bonds, ideas, and even expectations-assets that exist only in law.
A powerful new way of thinking about one of the most pernicious problems of our time, The Code of Capital explores the different ways that debt, complex financial products, and other assets are coded to give financial advantage to their holders. This provocative book paints a troubling portrait of the pervasive global nature of the code, the people who shape it, and the governments that enforce it. "The result is nothing less than a crisis theory of law. Law as it currently functions is, for Pistor, constitutive of the order that creates and perpetuates inequality, opacity, dysfunction, and crisis, and ultimately puts at risk the legitimacy of the rule of law as such."---Adam Tooze, New York Review of Books "Almost anybody who reads this book will benefit; a must-read for corporate lawyers, investment bankers, capital providers."---Rahul Saikia, Financial Times "Those of us concerned with inequality should be focusing a great deal of attention on the basics of valuation, which means looking hard at the way law makes money."---Roy Kreitner, LPEblog "The wealth drawn from both the digital darkness and the dark pools of Wall Street exists only by virtue of the law's encasement. . . . [Pistor's] metaphors allow us to see how, by ceding democratic control of law, we've 'depoliticized critical questions of self-governance,' preserving mobility for some and blocking it for others."---Quinn Slobodian, Boston Review "So much discussion around wealth and inequality involves gawking at statistics people don't understand. Katharina Pistor offers a fascinating argument as to why inequality is increasing, and does so without having to construct class identities, as Marxists feel compelled to do, or to make heroic assumptions about the rationality of human beings, as rational choice theorists would have it."---David Murphy, Open Letters Review "Through extensive case studies, Pistor demonstrates that no one deliberately set out to construct the 'empire of law.' Rather, it is the result of a decentralized, unplanned process in which individual private lawyers helped individual clients protect their assets through the use o
