Introduction: Business and the Law

Abstract

What is the relation between businesses and the law? Although few would doubt that firms are acting in tightly regulated legal environments, and have done so for decades, no consensus has emerged on this question. While some scholars have assigned to the law an almost deterministic quality (Pistor 2019; Hodgson 2015; La Porta et al. 1997, 1998, 2008) others have questioned its importance, at least with regards to corporate governance (Cheffins 2001). Business historians in the Chandlerian tradition, too, had been doubtful about the importance of law for explaining structural change (Chandler and Daems 1979; Hannah 1979). They were countered, however, by historians of antitrust (Lamoreaux 1985; Dobbin and Dowd 2000) or incorporation law (Guinnane et al. 2007) who explained firm decisions in light of the regulatory context. A recent wave in business history on rethinking regulation (Balleisen 2017; John and Phillips-Fein 2017; Phillips Sawyer 2018), business crime and scandals (Hollow 2014; Berghoff, Rauh, and Welskopp 2016; Berghoff and Spiekermann 2018; Taylor 2018; van Driel 2019), or organizational dynamics (Fleming 2016; Wadhwani 2018) has highlighted the multiple dimensions at the intersection of law and economics (Dahlén and Larsson 2014; Pahlow 2014). They have helped opening up the field of interdisciplinary research in which this Special Issue positions itself. From this perspective, the meaning of law and its economic effects cannot be fully understood in a reductionist fashion that limits itself to seeing law simply as legislation or jurisdiction. It also calls for moving beyond the historical ramifications of legal doctrines, which have often obscured the view of legal reality (Edelman and Suchman 1997). Rather, the focus here is on an evolutionary understanding of the law, which analyzes the steering power of legal regimes under the conditions of their economic, also socio-economic and political challenges. The historical actors themselves often assessed the significance of legal rules in such a more differentiated way: Karl Geiler, business lawyer and founding Professor at the Mannheim Commercial College (‘Handelshochschule’), pointed out in 1927, that for example company law is being a fluid, non-static regime, of whom the one who knows only the written law would have no idea (Geiler 1927). Certainly, at a time of cartelization these wordsmight not really be surprising. But, what dowe know about lawmaking (and also rulebreaking) inside cartels, company groups or business associations? Moreover, how did conflict regulation in such organizational regimes work outside of state courts? And finally in which way did they influence the legislator or policy-making? Business historians e.g. in Germany have analyzed corporations and their business strategies with a view on specific