A Guide to the ‘Legal Fictions’ That Create Wealth, Inequality and Economic Crises
About this episode
Guest host Rogé Karma and Columbia law professor Katharina Pistor discuss her argument in 'The Code of Capital': that law, not markets alone, creates wealth. Pistor explains how legal modules — property, trust, corporate, contract, collateral, and bankruptcy law — 'code' ordinary assets into capital through priority, durability, convertibility, and universality, concentrating gains among those with access to elite legal engineering. They trace how this coding produced financialization, the 2008 crisis, and today's shadow banking, as lawyers arbitrage jurisdictions to maximize private advantage. Karma and Pistor debate whether law is inherently a tool of the powerful or can be recoded toward broader prosperity, concluding that because capital is a legal artifact, democratic politics could rewrite the code — though the global, decentralized nature of legal arbitrage makes reform extraordinarily difficult.