Reforming the Law of Capitalism with Katharina Pistor

Capitalism functions as a legal regime rather than a purely economic system, relying on specific legal infrastructure to concentrate wealth and power. This architecture rests on three pillars: private legal empowerment, access to state-enforced coercion, and legal arbitrage, which allows actors to circumvent public regulations. Because public law reforms are frequently undermined by private law engineering, systemic transformation requires resetting the normative foundations of private law. Katharina Pistor, Professor of Comparative Law at Columbia Law School, proposes utilizing the "capabilities approach"—ensuring individuals have the conditions to live lives they value—to hold corporations accountable. By applying doctrines like "clean hands" to limit the enforceability of predatory contracts and extending the precautionary principle to corporate torts, society can challenge the current legal status quo. These decentralized, bottom-up reforms offer a path toward making private power accountable within a more equitable legal framework.