In an era defined by rapid globalisation and the erosion of traditional state authority, the landscape of legal regulation is undergoing a profound transformation. The welfare state, once a cornerstone of 20th-century governance, is fading, giving way to a globalised "knowledge society" where law's role is increasingly precarious. A recent academic paper, part of the Sfb 597 "Transformations of the State" series by Peer Zumbansen, "Law After the Welfare State: Formalism, Functionalism and the Ironic Turn of Reflexive Law" (2009):
https://www.sfb597.uni-bremen.de/pages/download.php%3FID=97&SPRACHE=DE&TABLE=AP&TYPE=PDF
discusses into this shift, examining the resurgence of neo-formalist and neo-functionalist approaches to law-making. These approaches, the paper argues, mark a departure from the socially responsive legal theories of the 1970s and 1980s, favouring market-driven deregulation and private autonomy over state intervention. However this shift raises serious concerns about the erosion of national sovereignty, cultural cohesion, and the state's role in safeguarding its citizens.
The Decline of the Welfare State and the Rise of the Global Knowledge Society
The welfare state, with its ambitious programs of social regulation and redistribution, has long been a defining feature of Western governance. Yet, as globalisation accelerates, the state's ability to regulate societal actors, particularly corporations engaging in jurisdictional forum-shopping and decentralised business practices, has weakened. The paper describes this as a shift from hierarchical "government' to a fragmented, heterarchical "governance" model, where law struggles to maintain its relevance. The rise of the global knowledge society, characterised by interdisciplinary discourses and the diffusion of regulatory authority, further complicates law's role. Scholars across law, economics, and social sciences now grapple with a world where national boundaries blur, and global actors challenge state control.
This transformation has sparked a revival of neo-formalist and neo-functionalist legal theories. Neo-formalism champions rigid, rule-based legal frameworks, sceptical of law's capacity for social engineering, while neo-functionalism sees law's primary role as facilitating individual autonomy and market efficiency. Both approaches reject the welfare state's interventionist legacy, valuing private ordering over public regulation. The Zumbansen paper argues that this shift depoliticises law, treating markets as self-regulating entities and ignoring their historical embedding in political and legal frameworks.
A Historical Perspective: From Formalism to Reflexive Law
To understand this shift, the Zumbansen paper traces the evolution of legal thought through the 20th century. Early formalism, rooted in the rule of law, promised certainty and predictability, shielding law from political contestation. Legal Realism in the U.S. and progressive movements in Europe, challenged this, advocating for functionalism, law as a tool for social change. By the 1970s and 1980s, disillusionment with the welfare state's overreach led to new theories: responsive law in the U.S., which sought to align law with societal needs through participation, and reflexive law in Germany, which saw law's adaptability to a complex, functionally differentiated society.
Responsive law, as articulated by Nonet and Selznick, aimed to foster civility and participation, acknowledging law's limitations in a divided society. Reflexive law, proposed by scholars like Teubner and Wiethölter, went further, viewing law as a self-referential system that must navigate competing societal rationalities without dictating outcomes. These theories sought to balance state intervention with societal self-regulation, but the paper argues that neo-formalism and neo-functionalism abandon this balance, embracing a market-driven agenda that sidelines political debate.
Contract Law: A Case Study in Neo-Formalist and Neo-Functionalist Triumph
The paper uses contract law to illustrate this shift. Neo-formalists criticise contract adjudication as paternalistic and inefficient, advocating for social norms as a more effective regulatory tool, especially in transnational contexts. Neo-functionalists, meanwhile, favour market demands, viewing state intervention as an impediment to private autonomy. This approach, the paper contends, ignores the historical interplay between law and social norms, as well as the political nature of contract law, which has long balanced individual freedom with societal protections. By framing markets as naturally self-regulating, these theories obscure the state's role in structuring contractual governance.
The paper introduces autopoietic law as a counterpoint, portraying law as a self-referential, yet socially embedded system. Unlike neo-formalism's rigid rules or neo-functionalism's market-driven instrumentalism, autopoietic law focusses on law's unique communicative role in a differentiated society. It neither dictates outcomes nor retreats into isolation but engages with societal conflicts through its own legal code. This perspective, the paper argues, offers a more nuanced understanding of law's place in a post-welfare state world, challenging the depoliticised vision of neo-formalism and neo-functionalism.
The paper's analysis, while insightful, raises troubling questions about the erosion of national sovereignty and cultural identity. The shift from government to governance, driven by globalisation, undermines the nation-state's authority to enforce a unified legal order rooted in national values. The paper's focus on legal pluralism and reflexive law risks fragmenting this order, valuing transient societal trends over enduring cultural principles. A strong state, nationalists argue, is essential to preserve national cohesion and protect citizens from the destabilising forces of global markets.
Neo-formalism, despite its flaws, aligns more closely with conservative values by accepting clear rules and the rule of law, which provide stability and respect for tradition. The paper's critique of neo-formalism as ahistorical overlooks its potential to safeguard national legal systems against globalisation's homogenising effects. Conversely, neo-functionalism's reliance on market-driven norms exposes nations to exploitation by global corporations, which rank profit over national welfare. The welfare state, for all its imperfections, served as a bulwark against such pressures, ensuring that citizens' needs were valued. The paper's failure to propose a robust alternative to the declining welfare state leaves nations vulnerable to external economic forces.
The concept of autopoietic law, while intellectually compelling, is rejected as an elitist abstraction that detaches law from the nation's moral and cultural fabric. Law, from a conservative and nationalist view, should reflect the nation's identity and values, not operate as a neutral communicative system. The paper's emphasis on transnational regulatory patterns marginalises the importance of national legal systems, risking cultural relativism and the erosion of sovereignty. Moreover, the focus on regulatory complexity ignores the moral decay associated with globalisation, which a strong, centralised state must counter to maintain national unity.
Conclusion
The Zumbansen paper offers a compelling analysis of the resurgence of neo-formalist and neo-functionalist legal theories, highlighting their depoliticisation of law and retreat from the welfare state's ambitions. By tracing the historical evolution of legal thought and using contract law as a case study, it underscores the risks of valuing market efficiency over political contestation. Yet, from a conservative and nationalist perspective, the paper falls short in defending the nation-state's role as the guardian of legal and cultural authority. The embrace of globalisation, legal pluralism, and autopoietic law threatens to erode national sovereignty and traditional values, leaving nations exposed to the whims of global markets. A robust legal framework, rooted in national identity and enforced by a strong state, is essential to navigate the challenges of the 21st century while preserving the nation's moral and cultural core.