Introduction

1. It is almost impossible to translate the notion of “Wirtschaftsrecht”. Similar to the terms “Zeitgeist” or “Leitmotiv”, it grew out of a particular continental European academic surrounding. The term is even used ambiguously for the description of university chairs – usually in conjunction with private and commercial law. A literal translation would coin it as the “law of the economy”. Unfortunately, I must say that, even in Europe, it is not clear what “Wirtschaftsrecht” exactly encompasses. Why then all this fuss about “Wirtschaftsrecht”?

It is said that its emergence is in a direct relationship with the economic development (Baudenbacher). In modern times, the liberal separation between society and state has lost much of its importance; a “mixed economy” is one that draws from both sources.

2. Modern authors use “Wirtschaftsrecht” for describing the whole evolution of the law around economic actors, from property rights to corporate law and regulation.

Scholars also employ the term of “Wirtschaftsrecht” to describe the relationship between the state and the economy on the one hand and society and economy on the other hand; finally, they use it to discuss the tension field between the enterprise and its stakeholders (Forstmoser).[1]

Druey describes “Wirtschaftsrecht” as a tool to optimize the desirable economic processes. He views “Wirtschaftsrecht” as a pragmatic term, encompassing all law with a relation to the economy. It is however clear that private law in a market economy must be preserved (Stoffel).

Most of what is thus far described could also be categorized as commercial law (Handelsrecht), which is very much centered around the “enterprise” or the “firm” and its inside organization and outside actions, as well as legal necessities to allow its functioning (e.g., protection of intellectual property). Even though commercial law is to a large extent private law, the commercial sphere is customarily assembled under commercial law. Also competition law is very often seen as a part of commercial law, limiting the freedom of market participants to stall free market openness. In such vaguely chartered waters, what remains for “Wirtschaftsrecht”?

Methodologically speaking, it is interesting to study the thoughts around the different approaches to reality of economics and law (Kleinewefers).

I do not think that “Wirtschaftsrecht” is mainly a methodological approach; however, it appears to encompass the actualization of the old problem of the economic organization (Stoffel).

3. “Wirtschaftsrecht” obtained true meaning in the efforts of the intellectual and real reconstruction of the German economy after World War II. The desire was to see a market economy emerge that was replenished with social goals. The word for it was “ordo liberalism”, “liberal economy” or “mixed economy” with a certain state guidance and intervention. In this context, antitrust law became a major issue; it had to prevent the economic actors from the self-destruction of their system and also to increase the efficiency of the economy. There was, in addition, an intention that even the design and the organization of private law institutions, such as the corporation, should contribute to public welfare. The German discussion about co-determination by the workers is a fruit of this early line of thinking.

In Switzerland, mainly at the University of St. Gallen, this general approach was also adopted and refined (Hug, Schluep, Meier-Schatz, Baudenbacher), albeit with a great deal of care. The war had, however, also brought Switzerland an important degree of state intervention; and, therefore, the constitutional situation and the so-called mixed economy enterprises (Cantonal Banks, Electricity, Infrastructure) became an important issue (Schürmann).

4. On a theoretical level, it was mainly Walter R. Schluep who developed what “Wirtschaftsrecht” meant. He concluded that one had to distinguish between functional, institutional and technical aspects. Functional indicates a reflection on the economic system; institutional is oriented towards organization and legitimation; and, technical involves a discussion of the legal instruments available. A further main point is that the distinction (essential for European law) between private and public law is blurred. It is the system that is looked at.

It was, however, more the fruit of the elaboration of Schluep’s disciples (Baudenbacher, Meier-Schatz) to see that “Wirtschaftsrecht” tried to integrate into “economic policy“. The private law institutions thus acquired the formation of becoming orientated towards public interest in a modern sense. They became part of “economic policy” – striving for efficiency while, at the same time, preserving the law-intrinsic values of justice. The former strict distinction between private and public law became much less meaningful and private organizational law (such as corporate law) and regulation had to coexist for a mutual benefit.

It was later Marc Amstutz who, in his work about “Evolutionary Wirtschaftsrecht”, directly discussed a new methodological approach leading to a more socially conscious organization of the economy.

       “It embodies the search for meta rules, which concern the mutual relationship of those rules making the social market economy a sustainable strategy for society”.

All in all, it must regretfully be said that all these endeavors did not result in a consistent framework. One of the reasons may be that the big project of a European unification via an economic integration occupied minds to an extent that did not allow for further elaborations. It is only now, with the increased public demand for more ethical behavior, that such endeavors emerge anew.

5. It is obvious that all this thinking is, to a large extent, thinking about the relationship between Law and Economics. The American development of a broad and important school of Law and Economics, mainly shaped by Richard Posner, has introduced empirical thinking to legal analysis; it concentrates on consequences of law making and studies the behavior and attitudes of not always rationally behaving economic actors. Law and Economics has continuously expanded into all fields of law, especially tort law, and it has become the most important line of modern legal thought in American law. 

Surprisingly, this thinking has not had great resonance in the European mainstream law academia. A number of professors took up this line of thinking, also in Switzerland (Mathis), but the results for economic system design did not become significant. The value of “justice” does not coincide, in the view of many, with the value of “efficiency”, proposed by economics. To some extent, the situation might nowadays also be due to the impression that the economists themselves are not mastering the relationship between their models and reality anymore, mainly in monetary and macroeconomic matters.

6. In Swiss legislation, the efforts to quantify the effects of legislation are a direct result of the Law and Economics movement. This is a minor step, but it is something. Also noticeable are growing complaints about overregulation. People think that their economic efforts are suffocated by too many tiny bits of regulation.

I do think that also the movement of Corporate Governance, by including more ethical standards, is an emanation of “Wirtschaftsrecht” (Böckli, Nobel); this hold true in particular on the international level with regard to issues such as human rights and environmental protection (Weber).

7. In its functional role, with a view to economic systems and societal goals, “Wirtschaftsrecht” deals with the evolution of the institutions. Here, globalization, which encompasses, to an extent, a departure from national and local laws, plays a decisive role. Such a discussion is therefore an international one arising from the globalization of the economy. Switzerland is only a tiny part of it. But, it is also the case that each country has its specificities and particular national laws that must be adapted. This is why we include pieces of such international topics here.

In the economic sphere, we realize an increasing change of legislation in the sense that “International Standards” play an ever more important role (Nobel). The most prominent examples might be the accounting standards, such as International Financial Reporting Standards (IFRS) and US-Generally Accepted Accounting Principles (US-GAAP); although, there are also many other examples, mainly in the field of finance, such as standards set by, e.g., the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision (BCBS). Such standards reflect a new form of international law; they are predominantly based on “good” or even “best” practice, principles and codes of conduct. They do not travel in the same direction as the older international law treaties, which went through interstate negotiations; rather, experts participate in their formation (as well as people from the trade and international organizations). These standards comprise “soft law” on the basis of their appearance; however, via the danger arising from international sanctions against non-participating countries, they may become very hard law. Usually, however, a transformation into national positive law takes place. The standards therefore also serve as an instrument of international harmonization of regulation.

As private law, from the angle of “Wirtschaftsrecht”, is also looked at as a source of achieving societal goals, we have to observe changing demands in relation to the most powerful invention of capitalism, which is the business corporation. Therefore, discussions about corporate governance – the system of how corporations are run and directed, for the shareholders and also increasingly also for the stakeholders – belong to our field (Böckli and others).

There is, however, not only national adaptation, but also a growing demand for a proper international behavior of corporations. We exclude the field of taxes here (such as base erosion and profit shifting, BEPS); but, we point to developments like the Global Compact or the OECD Guidelines for multinational corporations. All this leads to new guidelines for the international behavior of corporations wanting to be “good citizens”. This might also lead to the enactment of new responsibilities in the national laws, such as for human rights and the environment, applicable to corporate enterprises as a whole, including subsidiaries abroad (Kaufmann).

Wirtschaftsrecht is an evolving subject.

All this might lead back to the basic question of “Wirtschaftsrecht”: What economic system do we want and how do we create incentives for active economic growth and a somewhat fair distribution?