Sarah Staszak’s Privatizing Justice: Arbitration and the Decline of Public Governance in the U.S. is worthy successor to her award-winning No Day in Court: Access to Justice and the Politics of Retrenchment. Both books capture how seemingly obscure aspects of the law are integral to understanding the scope of the modern American state and political economy. In No Day in Court, Staszak shows how fights over the federal rules of civil procedure were central to conservative efforts to retrench access to the courts. In Privatizing Justice, she demonstrates how a complex bi-partisan process culminated in conservatives and powerful business interests rewriting arbitration agreements to exit regulatory regimes, replace litigation and limit statutory and constitutional rights of workers and consumers.
Staszak’s argument is rooted in the concept of “intercurrence”: the idea that the American state consists of multiple layers of institutional orders, each with their own origins, politics and operational logics. Intercurrence can be unwieldy to apply but Staszak expertly uses it to show how modern arbitration emerges from two distinct institutional orders: labor and commercial arbitration. Labor arbitration dates to the 1800s and rises in prominence as labor relations deteriorated in the U.S. through the Great Depression. In the 1930s and 1940s, Congress stepped in and created a system of collective bargaining and grievance arbitration through the Wagner and Taft-Hartley Acts.
Commercial arbitration proceeded on a separate track, tracing its origins to Congress’ passage of the Federal Arbitration Act in 1925 and securities regulations in the 1930s. Like labor arbitration, the focus was on voluntary arbitration agreements among relatively well-matched interests as opposed to mandatory arbitration between individuals and businesses. Indeed, at the outset of these regimes, mandatory arbitration provisions tucked into the fine print of standardized contracts were largely seen as unenforceable contracts of adhesion.
APD stresses how elites work along the edges of different institutional orders, which co-exist and often interact. In Staszak’s account, the Supreme Court was instrumental in this mediating role, setting the stage for the makeover of arbitration beginning in the 1950s on two fronts. First, the Court began treating labor and commercial arbitration interchangeably. The result was to unmoor them from their historical foundations as voluntary mechanisms devised by repeat players to address specific problems within specific contexts. Second, in its famous trilogy of steelworker cases in 1960, the Supreme Court established the principle of deferring to labor arbitration agreements, thereby giving its imprimatur to arbitration as an alternative to litigation.
The effect was to clear space for broadening the reach of arbitration. Initially, this was a bi-partisan project, as members of both political parties agreed to promote arbitration in the name of efficiency. As American politics and the courts turned to the right, however, conservative and business groups built on this consensus, leveraging its broad endorsement of arbitration while further distancing arbitration from its historical grounding in voluntary arrangements.
This process engenders what Streeck and Thelen have called gradual institutional transformation. The key word here is “transformation.” Over time, arbitration has become unrecognizable. What was once voluntary is now mandatory; what was once negotiated between organized interests is now unilaterally imposed by powerful business groups on individuals; what was once narrowly focused on streamlined dispute resolution is now used to curtail statutory and constitutional rights and access to the courts; and what was once part of regulatory regimes is now a means to avoid them and reduce business accountability.
Along the way, Staszak challenges conventional wisdom about the status quo orientation of the fragmented American policy-making system, revealing dynamic subterranean policy-making processes that percolate beneath the polarized and seemingly calcified surface of U.S. politics. She also calls into doubt assumptions that modern arbitration is the sole byproduct of relatively recent conservative Supreme Court’s decisions by detailing contributions from both sides of the political aisle and multiple branches of government to its transformation in the post-World War II period. In this way, Privatizing Justice provides a fascinating companion book to Naomi Murakawa’s The First Civil Right: How Liberals Built Prison America, which details how Democrats set the stage for the carceral state long before the rise of conservative law-and-order politics and the War on Drugs. By placing recent trends in broader historical perspective, both books show how conservatives have nurtured seeds planted by liberals—a dynamic that is being re-created in administrative law.
Privatizing Justice and Conversion
In addition to documenting the rise of private arbitration—as well as raising important questions about its policy consequences and tension with norms of democratic lawmaking—Privatizing Justice aspires to challenge how we think about policy and institutional change. In Staszak’s account, the concept of “conversion”—the repurposing of existing policies to new ends—looms large. Staszak’s reliance on conversion as the central mechanism of change in such a long and intricate process serves as a kind of engineer’s stress test, which reveals the strengths and some of the possible limitations of this concept.
From this perspective, Privatizing Justice offers at least two opportunities for rethinking the relationship of conversion to judicial decision-making. First, the signature feature of conversion is that formal policies remain in place while being deployed differently. Think of a screwdriver that is designed to tightened screws but is “converted” to a tool for opening cans of paint. The screwdriver looks the same but it has become a different tool in practice.
Staszak tells a more multi-faceted story, which complicates the role conversion in the transformation of arbitration. On one hand, the Supreme Court used its powers of interpretation to shift and redirect the underlying law, especially in its readings of federal arbitration statutes. This process seems broadly consistent with the idea of conversion. On the other hand, she makes the case that arbitration begins as one thing but ends up as something entirely different—here, the screwdriver was not just used for different purposes but it was replaced with a hammer.
One possibility for reconciling this tension without stretching the concept of conversion is to distinguish “reconstructive” and “deconstructive” conversion. Reconstructive conversion is consistent with the standard definition. So, for example, we can think of the reconstructive conversion of Chapter 11. What began as a means for distressed businesses to survive unexpected shifts in the economy has often become a tool for solvent companies to break union contracts, limit tort liability and shift litigation risks to competitors. The formal process of Chapter 11 remains unchanged but businesses have fundamentally altered it though novel applications.
In my reading, Privatizing Justice often features destructive conversion. Unlike reconstructive conversion, deconstructive conversion does not produce new regimes by itself. It engenders what Sabel and Simon have called the “destabilizing effects” of public law. Here, the main purpose of litigation and judicial decision-making is to challenge entrenched status quos, which is often necessary but not sufficient for change. Once destabilized, room opens up for contestation over the creation of new institutions and policies. The ultimate results of deconstructive conversion are contingent, reflecting underlying political and power dynamics of a given policy area. Using this notion of conversion, the Court’s re-reading of federal arbitration statutes did not redirect arbitration to new ends but afforded political actors and business interests the opportunity to replace the existing regime with something more favorable.
Second, and related, Privatizing Justice raises interesting questions about how conversion applies to common law decision-making. This may seem surprising. At first glance, common law seems a paradigmatic example of conversion because its formal principles remain the same as judges adapt them to new circumstances. Yet contract law is more than what appears in judicial decisions. It provides a framework for private interests to create binding arrangements, which are then diffused and approved by the courts. Put differently, contract law is not only a mechanism for policy conversion by judges but also a medium for piecemeal revision by businesses. When done on the scale described by Staszak, the accretion of new contracts constitutes a significant, durable shift in the American state and political economy.
These glosses on the role of conversion in Staszak’s account are wholly consistent with the book’s themes about the nature of change in American politics. One is that the fragmented U.S. system of policymaking not only creates veto points but also access points. Moreover, these access points provide different opportunity structures for institutional conversion, layering and revision. Congress with its bi-cameral structure, narrow majorities and supermajority requirements in the Senate tends towards layering, as coalitions often lack the power to completely replace existing rules and so graft new ones onto old structures. Courts working in a common law tradition have more flexibility to convert, layer and even revise the law. Meanwhile, in the shadow of the courts, contract law provides repeat players tools to build new regimes outside the constraints of the U.S. system of checks and balances at the expense of actors with less power and/or significant collective action problems. (On this score, Staszak’s account of private arbitration has important parallels to the creation of new, unregulated financial instruments by Wall Street over the objection of a few isolated federal bureaucrats, which fueled the 2008 financial crisis.) The other theme is that change often occurs at the boundary of the public and private aspects of the American state. The common law straddles these sectors and provides a significant avenue of public policy change through private action, whether it is contract law shaping the American political economy as in Privatizing Justice or tort law shaping the patchy U.S. system of social benefits.
The broader point is that, after reading Privatizing Justice, it is impossible to ignore the importance of the common law as a distinct institutional order within the American state and political economy. Further exploring its contributions to the evolution of U.S. institutions and policy as well as its relationship to standard accounts of institutional change seems a natural extension of Staszak’s commitment to taking intercurrence seriously and understanding the relationship of private civil law to the American state.
Privatizing Justice and APD
Twenty years ago, Orren and Skowronek published The Search for American Political Development, which called for the continued development of a political science research agenda centered on the study of the American state and institutional change as opposed to individual political behavior.
Staszak answers this call by bringing together a number of prominent strands in the contemporary APD, political economy and institutional change literatures. Like Teles, Staszak identifies institutional complexity as a defining feature of the American state. Like Orren and Skowronek, she views the American state as consisting of overlapping institutional orders and stresses the importance of understanding how the American “policy state” adapts. Similar to many law and public policy scholars, like Melnick and Kagan, she details the central role of courts in American politics and governing structures. And, like Hacker, Hertel-Fernandez, Pierson, and Thelen, she explores the implications of “multi-venue governance” in American political economy.
What sets Staszak’s work apart—in addition to her substantive focus on the how policymaking migrates from the public to private sector—is its seamless combining of these themes along with a determination to confront the inherent complexity of American policy-making and politics head-on. This commitment contrasts with prevailing tendencies of mainstream American public law and politics scholarship, which often seeks to sidestep complexity for (understandable) methodological reasons.
So, public law scholars tend to specialize, focusing on the determinants of judicial decision-making, especially in the Supreme Court. This has allowed them to create massive data sets for counting judicial votes and modelling them. The cost, however, has been to compartmentalize the study of the courts from the other branches, emphasizing how Justices vote as opposed to how they rule. Staszak does the opposite. Similar to Silverstein, she embeds judicial rulings in an ongoing dialogue among overlapping and diversely representative policymakers, tracking the political and policy impact of the courts’ substantive decisions.
Meanwhile, as part of the broader causal inference revolution in political science, American politics scholars have increasingly sought to use sophisticated research designs, such as survey, field and natural experiments, to cut through complexity. The goal is to isolate the immediate effects of single “treatments” while controlling for other, unobserved factors using randomization or “as if” randomization. These designs allow scholars to make strong causal claims in the absence of well-developed theory. At the same time, they significantly limit the field of inquiry to areas that lend themselves to random assignment and feature discrete causal relationships.
Staszak, by contrast, takes on big questions that defy simple causal models by painstakingly mapping the shifting landscape of multiple institutional orders and dynamic interbranch relations over long periods of time. What is lost in causal leverage by treating law and politics as endogenous is offset by insights in how law and politics are mutually constitutive and how policy emanates from interaction among multiple policymaking venues and institutional orders. As Gerring has argued, the result may be seen as “mere description” by some in the discipline, but getting the story right is the essential first step in understanding complex phenomena and makes Privatizing Justice’s illuminating account must-reading for anyone interested in law, public policy, APD and American political economy.
