Autopoetic social systems theory: the co-evolution of law and the economy

This paper explores the relationship between regulation and contracts from the point of view of autopoietic social systems theory. Building on the notions of contract as a structure of governance, and of regulation as a system of rules intended to govern the behaviour of its subjects that involves standard setting, monitoring and enforcement, the paper discusses the contributions of Teubner (1993), Collins (1999) and Deakin (2002) for understanding the relationship between the legal and the economic subsystems in society. The paper argues that regulation and contracts coevolve:the influence of regulation upon contracts is mediated by the system of shared meanings that the contract develops and, reciprocally, the influence of contracts on regulation depends on each regulatory element’s own network of communications. The paper concludes that reflexive regulatory strategies, by facilitating the emergence of shared meanings, may be more successful in governing the behaviour of economic actors. However, given the disturbances involved in the process of co-evolution, this is not straightforward.N/