This wave of “neo-liberal” constitutionalization is clearly characterized by its constitutive function, i.e. its focus on providing transnational corporations with a high degree of autonomy. It is fixated on the problem that the worldwide extension of corporate activities is hampered by the segmentary differentiation of the world into nation states. Constitutive rules of this kind serve for releasing the dynamic of commercial enterprises at the global level.
Thesis # 2: Externally Enforced Constitutional Self-Restraint
In the long run, however, it is not sustainable that a corporate constitutionalism restricts itself to its constitutive function in such an one-sidedly “neo-liberal” fashion. It is only a matter of time before the systemic energies released trigger disastrous consequences — alongside their indubitably productive effects. Now a fundamental readjustment of constitutional politics will be required to deal with the outburst of social conflicts. Globalized markets and corporations put — without being significantly hampered by nation state counter programs — a strain on society and the environment through the “negative effects of their own differentiation, specialization and high-performance orientation”. This is the moment when Polanyi’s “dual movement” makes its presence felt, which, as Streeck argues, identifies
“… the not just plural but inherently contradictory forces responsible for the specific dynamism of capitalist development, making it move, not linearly, but in its fits and spurts, and in cyclical waves of institutionalization and de-institutionalization”.32
In such processes of “dynamic disequilibrium”, which alternate between liberation and limitation of systemic energies, the tipping point has now been reached. After a long constitutive phase, combating the risks of unrestrained liberalisation has now become indispensable. Limitative constitutional norms are now needed rather than constitutive ones.
This is the situation after dismantling nation state regulations at a transnational level. While global function-specific communication is no longer hindered by nation-state production regimes, the constitutive constitutional politics of the Washington consensus has overriden many of the limitations that nation-states placed on the dynamics of the function systems. Unburdened by nation-state restrictions, the systems are now placed to follow, globally, a programme of maximising their partial rationality. Despite they differ in their theory assumptions, sociological analyses in the tradition of Karl Marx, Max Weber, and Niklas Luhmann all agree on the consequences of this diagnosis. Whether the laws of motion of capital, or the rationalisation of spheres of social action, or the dynamics of functional differentiation — all identify the destructive energies created by the one-sided function-orientation of a social sector. Globalisation has an accelerating effect. The dismantling of national production regimes releases destructive dynamics in the global systems; destructive dynamics in which the one-sided rationality-maximisation of one social sector collides with other social dynamics.
Now, it is imperative to readjust constitutional policy. In the second wave of constitutionalization, instead of the constitutive, the limitative function of constitutional norms is in demand. As one among many reactions to the crisis, the codes of corporate networks partake in this second wave when they restrict corporate activities in the name of public responsibility. They try to overcome the primacy of shareholder value in favour of a stakeholder-orientation as well as to realize self-restraint in the areas of labour, product quality, environment and human rights.33
This is the message of societal constitutionalism. Not only measures of public regulation, but also the “private” constitutions of corporate networks are faced with the task: How can a sufficiently large degree of external pressure be generated on the corporate networks to push them into self-limitations on their options?
Why self-limitation and not outside limitation, though? Does not experience show that self-limitation merely serves to set the fox to keep the geese and that excesses can only be prevented through outside influence? Equally, though, does not experience also show that attempts at trying to control internal processes through external interventions regularly end in failure? At this point societal constitutionalism does a difficult balancing act between external intervention and self-direction. A “hybrid constitutionalisation” is required in the sense that in addition to state power, external societal forces — that is, formal legal norms and “civil society” counter-power from other contexts (media, public discussion, spontaneous protest, intellectuals, protest movements, NGOs, trade unions) — exert such massive pressure on the expansionist corporatist networks so that they will be constrained to build up internal self-limitations that actually work.
However, workable limitations can take effect only within the system’s own logic, not outside it.
“Every function system determines its own identity … elaborating semantics of self-interpretation, reflexion, and autonomy. The mutual dependencies of the subsystems can no longer be normed in general. Indeed they can no longer be legitimised at all as a condition for order at the overall social level.”34
The difficult task of co-ordinating the function of a social system and its environmental tasks at a sufficiently high level can be tackled only through system-internal reflexion, which can certainly be prompted from the outside but cannot be replaced. This is why there can be no external political definition of transnational corporate constitutions, but only indirect political impulses or constitutional irritations. The knowledge regarding which kind of self-limitation can be selected does not even exist as such. It cannot simply be accessed, but rather has to be generated internally first. Endogenous growth imperatives can be combated only with endogenous growth inhibitors. The knowledge required to do so cannot be built up by an external observer as centrally available experiential knowledge, but only out of the combined effect of external pressures and internal discovery processes.
No one knows how such a capillary constitutionalisation might work in practice. Ex-ante prognoses are by definition impossible. And, for that reason, there is no alternative but to experiment with constitutionalisation. The application of external pressure means that the self-steering of politics, or law, or other subsystems, creates such irritations of the corporate networks, that ultimately the external and internal programmes play out together along the desired course. And that cannot be planned for, but only experimented with. The desired course for corporate network constitutions is limitations of the endogenous tendencies towards self-destruction and environmental damage. This is the core of the constitutional problematic, this difficult handling of the corporate networks’ self-transformation.
Thesis # 3: Constitutional Structures: Double Reflexivity and Binary Meta-Coding
1. Structural Coupling of Reflexive Mechanisms
The codes would not establish constitutional structures, if they only introduced primary rules governing corporate activities in the fields of labour, environment and human rights. The critical threshold is reached, when the codes lay down secondary rules concerning the identification, interpretation, amendment, competences for the enactment and delegation of primary rules. Typically, codes of corporate networks show a three-tiered hierarchy, in which the interplay between primary and secondary rules is discernable indeed. The top level consists of the general principles of the corporate constitution; the middle level regulates enforcement and monitoring; while the lowest level includes concrete instructions for conduct.35 At the top and middle level, a plethora of such secondary rules can be found. They come close to constitutional norms in the strict sense, since they produce as higher-ranking meta-norms a sort of reflexivity of intra-company law. But secondary norms as such do not constitute yet a constitution.
Only the peculiar double character of corporate codes, which I call the double reflexivity of legal norms and social structures, turns them into constitutional norms. If law plays a supportive role in the self-constituting of a social order beyond its function of conduct control, dispute settlement, regulation and frame setting, it creates constitutional law. A corporate constitution