The Code of Capital?

Capital is the defining feature of modern economies, yet many theorists seem to no idea where it actually comes from, or what “it” is. What is it, exactly, that transforms mere wealth into assets and assemblages of physical spaces and machines that algorithmically create more wealth?
In her revealing new book The Code of Capital (2019), Columbia University Law professor Katharina Pistor 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.
Rather than deploying some lazy occult conception of capital as an objective force, 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 and their wealthy masters are the keepers and programmers of this code.
Pistor analyzes and makes clear the linkages between present-day patterns of wealth inequality and market-centric policy shifts from the 1980s – especially economic and legal reforms coinciding with the demise of the Iron Curtain and socialist governments, and the targeting of emerging markets and networks of influence (corruption) and political alliance (corruption).
Pistor demonstrates that to hold ‘capitalism’ accountable, or to intervene on (hack?) the codes of capital, it is necessary to be cognizant of the specificity of capitalist processes, and how “capital” is actually made. A proper ontography of political economics is thus imperative. To do so is to resist simplifications in which capital is a “thing”, or a core feature of social relations between a proletariat and a bourgeoisie:
“More generally, economists and accountants have clung to the notion that capital is a physical input, one of the two factors of production, when in fact capital has never been about a thing, but always about its legal coding; never just about output and input, but always about the ability to monetize expected returns” (p.116).
Below is a podcast from the Rhodes Center featuring Nick Ziegler talking with Pistor about her book, and how law guided by human interests programs economic activity, and generates vast amounts of capital for those who know how to wield it. Enjoy.
Interestingly, those who justify the expansionary imperative of global capital might also be shocked to learn just how much legal coding has been rigged to present the illusion of such necessity through completely arbitrary legal structures and financial instruments.

7 responses to “The Code of Capital?

  1. there was a moment after the rise in some academic circles of
    poststructualist author-ities when I realized that we didn’t need to get into these sorts of complicated technical ways of thinking (as much as I enjoyed them) we just needed people to pay close attention to how things actually happen (who does what, where, etc), alas it took me decades more to realize the general futility of trying to get people to do such a thing, no amount of arguement or vigorous pointing to events/happenings will shake such faith-commitments/biases
    and then there is the added twist that there is a whole other group of folks who share some of the recognition of the heterogeneities at play who can’t accept that most people can’t come to share this minority interest, and around and around it all goes as we circle the bowl…

    • I don’t think you give some academics enough credit, Dirk. Anthropologists have been paying close attention to the “who” and “where” of happenings for a long long time. And that is all that the mainstream dumbed-down media does: they make everything about personal choices (who) and banal happenings (where).

      As Pistor argues, there are particular agents and practices coding these societal machines. It’s not abstract “capital” shaping a lot of these outcomes but very specific cognitive orientations and habits, and juridical stories, enacted by humans. This certainly highlights key aspects of what is going on. Where it becomes tricky, however, is in trying to theorize how and where these agent subjectivities and orientations are fashioned and influenced. That is not such a simple issue as “who” and “where”, but must be analyzed via different levels of causal influence via onto-specific flows of energy and information.

      Reducing causal matrices to simple human dramas misses a lot of relevant information, as Marx clearly showed re: political economy. It is absolutely necessary to look at both synchronic and diachronic processes at multiple scales in order to understand the conditions of social production.

      • hey m, there are some (not many) folks who do ethnography without resorting to some kind of structuralism/generalization/etc but not many, that aside let’s get back to the particulars at hand in my comment:
        so i say “we just needed people to pay close attention to how things actually happen (who does what, where, etc)” and in response you literally change the subject by saying instead “make everything about personal choices and banal happenings…Reducing causal matrices to simple human dramas misses a lot of relevant information” and do so in order to speculate about abstractions like “causal matrices” and “onto-specific flows of energy and information” which i think illustrates quite well the rest of my comment, cheers, d

        • D, I wasn’t speculating, I was saying that things are often far more complex than what can be captured by simple narratives as you seem to be suggesting.

          Causal matrices are only abstractions in the way ecosystems, or cities, or town hall meetings are. I’m referring to material conditions and causal relations – you know, how things actually happen. And the notion of onto-specific flows is precisely meant to deliver what you are asking for: direct reference how and where things influence each other.

          A causal matrix with onto-specific flows might involve a watershed catchment that affords drinking water to a village in Afghanistan. That village has the ability to maintain social relations viz the ecological and cultural matrix in which they live – e.g., what the watershed provides and the practices created to relate within such flows. Information and energy, all of it.

          Or a causal matrix with onto-specific flows might involve a lone petro-station in the rocky mountains that provides fuel for man camps full of workers driving ice trucks to mine uranium. A “man camp” full of various objects, rules, tech, and build spaces is a matrix for certain relations and behaviors, not to be found elsewhere. The onto-specificity of such situations is in exactly ‘what does what, and where’; it is the explicit “recognition of the heterogeneities at play.”

          Without understanding how “context” works as a matrix (ecology) to generate behavior in both direct and indirect, conscious and subconscious ways our analytics remain reductive and ideologically laden viz exactly what we choose to pay attention to in our descriptions. Understanding the who and the where, is only that beginning. We also need to know ‘how’ and ‘when. Thinking of any emergent or manifest assemblage or event as being an expression of a matrix of causation can open our attention to the significant more-than-human happenings going on – and perhaps allow some intervention.

          This is a matrix of causality in needing of some onto-specificity:

          Thinking in terms of causal matrices allows a particular kind of cognitive mapping – one where strategy is raised to the level of complexity inherent in the goal.

          “The issue with cognitive mapping is ultimately one of generating a strategy for a collective historical agent. A strategy, by definition, requires a mapping of the terrain of the struggle, along with an understanding of the various forces in play. This is a systemic– and therefore, rational – approach.” (Nick Srnicek)

          Do we need more pragmatic discourses focusing on onto-specificity (rather than abstract ontology)? Absolutely. But we need people keen enough to be translators of theory into praxis, and bridges between academics and policy/strategy.

          Can you recommend any people who you think are doing this?


          There are libraries full of ethnography that details the onto-specificity of life and politics, Dirk. Structuralism has been dead for years. As you know, Geertz suggested a thicker reading of the contexts (matrices) in which social life is produced.

          • here Quinn Slobodian (an ally of Pistor and fan of the work you reference in the post) tries to bring “down to earth” the scifi mythologizing of “trippy” Hayek (who spun together epic tales of global evolution, cybernetics, signal-exchanges, info-flows, neural networks, unknowable Knowing wholes, etc) by giving detailed accounts of people reacting with/in their environs, there are no complete/totalizing accounts of said environs to be had (no matter how people try and repackage structures in terms of flows or networks or the like) the test of our accounts isn’t have we captured/mapped the Whole (how would we know, where would it end, etc?) but what do our assemblages afford us.
            Proto-types not arche-types is the last plea I have to offer tho as I noted above I know to even say it is to crank up the whole hurdy-gurdy of cognitive biases which I apologize for getting going, cheers.

            • “the test of our accounts isn’t have we captured/mapped the Whole (how would we know, where would it end, etc?) but what do our assemblages afford us.” Exactly this; the thing is, we have different kinds of accounts that afford different kinds of stuff. It’s the age old map/territory debate. Different kinds of maps assist us in navigating/relating/exploring different territories. A more comprehensive map of a given causal matrix allows us to track and understand specific assemblages in more detail.

              Something I like about Adam Robbert project re: defining concepts is how he speaks about different neuro-conceptual couplings open up different horizons of awareness and sense-making possibilities.

              Without reflexive abstraction we fall prey to folk ideology and habitual framings, but without application and adjustment via details we get lost in those fantasies. We can’t just naively talk about things without the requisite critical distanciation that follows from talking about how we talk about things.

              Maybe it’s a matter of finding the right combo/ration of concept creation to application that keeps us grounded in the details? I would argue that the radical deflationary attitude towards concepts taken by postnihilists is the place to start.

  2. In the preface to ‘A Contribution to the Critique of Political Economy’, Marx writes:

    “The sum total of these relations of production constitutes the economic structure of society, the real basis (Basis) on which rises a legal and political superstructure and to which correspond definite form of social consciousness”.

    This base determinism was given much nuance in Marx’s later writings, but what we can draw from this is just how much he underestimated how both legal and policy “coders”, and their private interested masters, actually guided the conditions of production *from above*, so to speak. The reciprocal processes of economic adjustment to wider politics have always been directed in large part, and at specific times, by particular people and networks seeking profit and control.

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