These comments summarize exchanges with Steven Klein that accompanied the development of his work on Karl Polanyi following a presentation on “The Crisis as Polanyi’s Double Movement” in my Law and Governance course at the Hertie School back in March 2017. Our exchange echoes our shared interest in the work of Karl Polanyi. Since we are both operating in different disciplines, we had to take the disciplinary specifics of our readings of this maître penseur into account—that is, to come to terms with our substantive and methodological affinities and differences. Interdisciplinary exchanges between social theorists and jurists are, of course, anything but new. They are nevertheless still demanding. Friedrich Kratochwil has provided us with a noteworthy characterization of the pitfalls of interdisciplinary exchange, as well as its potential. In a comment on Anne-Mary Slaughter’s seminal contributions to international relations theory, he distinguishes between (a) the “Chinese menu approach,” where studies from different disciplines are pursued side by side, without taking much notice of one another; (b) the “colonization” strategy, where one discipline offers its rationality criteria as a universal tool for generating knowledge; and (c) “efforts to ‘translate’ the insights of the other field into one’s own” (Kratochwil 2010). This last-named alternative is obviously the one Kratochwil would like us to pursue. He adds a monitum: “this requires an ability to examine critically the blind spots of each discipline by looking at them from the perspective(s) of the other(s).”Our substantive affinities concern, at the most abstract level, the legitimacy of European governance. This is more than a superficial textual accordance. For both of us, the “legitimacy” notion must be substantiated with reference to its democratic credentials. Furthermore, both of us believe that Polanyi’s economic sociology can provide us not only with insights into the reasons for the erosion of the legitimacy of the European integration project but also with perspectives for its revival. However, in our analyses of the integration process and its present impasses, we operate mainly within our respective disciplinary frameworks. My emphasis is on the exhaustion of the integration through law (ITL) paradigm, which has dominated European legal studies for decades. Steven Klein, by contrast, works on the political economy of European integration in general, and on Polanyi’s three fictitious commodities of land, labor, and money in particular. The findings of distant intellectual territories nevertheless seem to deliver concurring insights (section I). The same holds true for our critiques of Europe’s inappropriate institutional constellation and our analyses of the impact of the financial crisis. In both respects, significant affinities can be discerned (section II).My analyses of the accomplishments and failures of the integration project have repeatedly focused on the doctrinal edifice of the integration through law project: the direct effect of the four freedoms, the supremacy of European law, and the prerogatives of the ECJ in its interpretative precedence (see, e.g., Joerges 2016), as well as the famous appellation of law as both “the object and the agent” of integration (Dehousse and Weiler 1990, 243). My objections to this are threefold. They concern, first, the hidden socioeconomic agenda of the integration through law project; second, neglect for the political dimension of “the economic” in European constitutionalism; and third, and interrelatedly, the insulation of law from its social and political context.Among the socioeconomic fallacies of the ITL paradigm is its disregard for “the economic” in general, and for the varieties of capitalisms in Europe in particular; that is, and more generally speaking, a lack of regard for differing cultural and political traditions. The normative premises are telling: uniformity is a good in itself because it will promote cross-border trade; diversity is bad because it is an obstacle to free trade. In the ITL orthodoxy, these simplistic equations had the strength of a straitjacket. They imposed a unity via uniformity agenda on the integration project. Its “one size fits all” assumption and policy were not as implausible in the foundational period of the ECC as they have become in the Union of 28 and now 27. However, even in the relatively homogenous orders of the former EEC, any unification at the European level had disintegrative effects within national legal orders, which European law was and is unable to cure since it cannot reach down into the sphere of social norms within which the law operates, and on which its social legitimacy and its functioning depend.But what has ensured the striking success of such a conceptually deficient agenda? My suggestion: while ITL scholarship has treated the economy of the European Economic Community with benign conceptual neglect, it has implicitly furthered a neoliberal integration agenda. Its core assumptions are revealing: harmonization of law and, even more so, legal uniformity do away with nontariff barriers to trade. Dispensing with legal diversity might therefore be justified on economic terms. An economic rationality is at work within the ITL agenda, albeit it is hidden behind and obscured by an idealizing commitment to European integration. The “constitutional charter” that the ECJ has handed down in its foundational landmark cases is deemed to have established Europe’s “economic constitutionalism.” However, this notion was as absent from the mindset of real-world European jurists as was the by now famous tradition of ordoliberalism, which was known as a defender of that notion.1 Both the ITL project and German ordoliberalism conceptualized the ordering of the European Communities as an unpolitical project beyond—yet above—national democratic constitutionalism. With the benefit of hindsight, we can understand why the by now notorious social deficit of the integration project was so rarely noticed or even invisible in the foundational era. The EEC Treaty had not conferred pertinent competences. It could be assumed in the member states that their labor law and welfare arrangements would not be significantly impacted (Giubboni 2006; cf., famously, Ruggie 1982). Germany’s ordoliberalism was distinct, in that important protagonists of this school of thought did not believe in the need to complement the “economic” with a labor and social constitution.2 Meanwhile, important protagonists of the “social market economy” were not yet aware of the tensions between their concepts of the social and the promotion of economic constitutionalism.Economic constitutionalism conceptualizes the economy as a self-regulating machine, an entity operating under a logic of its own. Ordoliberalism has cautioned against this reliance on the logic of economic rationality—with the intention of preserving it against its inherent self-destructive tendencies. This preservative task was assigned to competition law, which thereby gained a quasi-constitutional dignity. This preservative task was understood as a nonpolitical task, which was to be entrusted to independent nonmajoritarian agencies. This type of primacy was not meant to substitute for the many branches of economic law and regulation or to render them superfluous. It nevertheless required that all of them would be subjected to the preservative functions of competitive ordering; all of them would be required, as Claus Thomasberger puts it, “to simulate market conditions” (Thomasberger 2020).All of this is but a shorthand description of Steven Klein’s reconstruction of the stark market utopia in the discourses in European integration studies and the praxis of integration politics. “The ideal of economic constitutionalism was to replace the capricious power of the state with the anonymous order of competition and the market. At the heart of the ideal of the market society was a deep distrust of political power—the desire to subordinate it to constitutional rules that promised to prevent free riding and, when such rules failed, to the anonymous order of competition” (Klein 2020, 10).Polanyi’s economic sociology stands for a counterposition. “Economies are always socially embedded”—this is the short catchphrase often repeated to characterize his views. Polanyi (2001, 61) has indeed suggested that “the control of the economic system by the market…means no less than the running of society as an adjunct to the market. Instead of economy being embedded in social relations, social relations are embedded in the economic system.” The embeddedness formula, however, does not reveal the gist of his critique, underlines Klein. Marketization endeavors will provoke countermovements in particular with regard to the three false commodities: land, labor, and money. The simultaneity of moves and countermoves constitutes the political dimension of the economy. To cite Wolfgang Streeck (2010, 37), the struggle between the forces or tendencies of commodification and of the “disembedding” of market exchange, on the one hand, and those of containment of commodification, or “reembedding” and social reconstruction, on the other, characterizes the development of capitalism. Klein has refined and substantiated this analysis further. He reads the tensions between “the needs of the market” and the “spontaneous societal self-protection from market forces” as a conflict between “the market ideal of contractual equality” and “the democratic idea of political equality,” between “an ideal of the market society and democracy.” This is an important and daringly innovative conceptual move. Streeck’s reading whereby society defends itself against the commodification of land, labor, and money is in line with a widely accepted reading, according to which Polanyi stands as a great defender of societal closure against the demands of market openness—a reading that challenges the destructive impacts of European integration upon the willingness and the ability of member states to defend their welfare arrangements against the promotion of disembedding forces by the European Union. There is ample evidence for the soundness of this reading in all branches of European studies. ITL is a pertinent prominent case: in countless cases, the ECJ has sought to define the limits of the political autonomy of the member states and to subject them to the assumed functional needs of market integration.3Streeck is by no means alone when he seeks, as cited, to defend the democratic credentials of the nation-state. One particularly strong ally is political economist Dani Rodrik (2013), who reminds us that the nation-state “remains the only game in town when it comes to providing the regulatory and legitimizing arrangements on which markets rely.” In full accordance with Polanyi, Rodrik submits that the demand for policy and institutional diversity remains strong among nations, rooted in differences in their historical, cultural, or development trajectories. Streeck, in his character as political sociologist, has complemented this defense within a legally and constitutionally significant conceptualization of the “social embeddedness” formula as a democratic accomplishment: “[W]hat I would suggest to call the acquises démocratiques of the national demoi in Europe … importantly comprises a wide range of political-economic institutions that provide for democratic corrections of market outcomes—for democracy as social democracy” (Streeck 2016, 198n20). This suggestion integrates the socioeconomic context of legal arrangements within their political functions. It makes explicit what usually occurs implicitly. This is why it seems surprising, at first sight, that the statement has provoked such strong opposition from none other than Jürgen Habermas. At first sight only, however; not on closer inspection. The debate concerns nothing less than the construction of a legitimate European polity (Habermas 2013; Streeck 2014). It is of exemplary importance.Streeck questions the potential of Europe to establish, at a transnational level, an equivalent to the national “soziale Rechtsstaat.” Streeck’s understanding of this notion is informed by the constitutional theory of Hermann Heller (see Streeck 2017). Heller’s notion has been endorsed by the so-called eternity clause of Article 79 (3) of Germany’s Basic Law as an unamendable democratic essential. There is thus a positive legal background to Streeck’s defense of the German nation-state and its institutions against a deepening of economic integration.4Habermas shares a commitment to Heller; “the social” is deeply engrained in his discourse theory of law and democracy. And yet, in view of the importance and dignity of the integration project, the nation-state and its welfare accomplishments, so Habermas submits, have become a nostalgic shibboleth, a den to hide from the reality of the sovereign powerlessness of the overtaxed nation (Habermas 2013, 62). Our opponents disagree strongly about “the level of governance” at which social justice can and should be realized.Steven Klein is well aware of the controversy between the two master thinkers.5 According to Klein, Streeck’s Achilles’ heel is one that Habermas has already hinted at. If the defense of democracy depends on the preservation of the nation-state, democracy has no future or a very uncertain one. The objection against the Habermasian option for a federalist version of the European future recalls instead von Hayek’s subtle destruction of such hopes—or else, as Klein suggests, Habermas’s indebtedness to Hayek’s defense of the market mechanism. European federalism—this was von Hayek’s (1948) insightful prophecy—is bound to generate a “minimal, market-based vision of integration” (see Klein 2020, 4). Habermas will hardly be amused to read that “Despite Habermas’s endorsement of popular sovereignty as a basis for democratic legitimacy, he shares with Hayek a view of markets as context-transcending mechanisms that overcome the arbitrary bonds of national belonging. This follows from the structure of Habermas’s mature social theory, which rests on a surprisingly Hayekian view of markets as necessary information-processing mechanisms in the face of complexity” (Klein 2020, 4). We find ourselves entrapped: the nation-state can no longer credibly harbor a social democracy (Habermas); the European Union is unable to realize a transnational version of such a vision (Streeck). No way out?Steven Klein and I are both on the search for a third way. It is precisely this search that must take Kratochwil’s monita seriously. I will restrict myself to the articulation of two queries. I will then seek to respond to both of them in terms of my “conflicts-law approach.”The most innovative step in Klein’s rereading of Polanyi’s work is his suggestion to replace the marketization (disembedding) / reembedding dichotomy with a differentiating exposure of the three fictitious commodities to the “non-market modes of integration” identified by Polanyi (1957) in his conceptualization of the “economy as an instituted process.” These modes are “reciprocity, redistribution, exchange, and householding,” and they represent, Klein submits, distinct modes of “economic integration,” which “embody collective expectations regarding social justice and moral worth.” They will be generated by “spontaneous movements” (Klein 2020, 4). This is a fascinating suggestion. It allows us to analyze “in tandem” what has long since been neatly separated—namely, the social (labor) constitution, on the one hand, and the macroeconomic (monetary) constitution, on the other (Klein 2020, 4, 7). These modes of economic integration—in particular, “labor unions and central banking systems”—tend to promote reciprocity and redistribution (Klein 2020, 5).My first concern: how might all of this work within a socially, economically, and politically heterogeneous union? In recent years we have certainly experienced Europe-wide spontaneous movements with democratic ambitions and, correspondingly, an intensification of intra-European communication and will formation. It is difficult to see, however, whether and how these movements will generate institutional forms stable enough to sustain the formation of social and political power. For the time being and likewise for the foreseeable future, the institutional infrastructures of Europe’s democracies will not converge. What Streeck characterizes as “aquis democratique” (Streeck 2016, 198n20) exists in a plurality of versions—and this should remain so for stringent political and good normative reasons. Klein and I have repeatedly cited the passage of the concluding chapter of The Great Transformation, where Polanyi (2001, p. 262) praises the newly gained freedom of states “to organise national life at will” and envisions the readiness of governments to cooperate among themselves. How does this impact democratization? Since free democratic will-formation will generate a variety of institutional configurations and Europe will continue to exist in a state of socioeconomic variety for the foreseeable future, “economic coordination” can unfold only within cooperative forms. This presents massive difficulties for the European Union. Europe will have to live with asymmetries between North and South, East and West. The promotion of justice will have to deal with and distinguish between justice “within” and justice “between” consolidated democracies (see Joerges 2017). My conclusion: “conflicts law” is Europe’s only possible constitutional form—and this for so long as Europe’s pronounced socioeconomic, political, and cultural variety persists.Klein has provided us with another fascinating theorem in his discussion of the financial crisis. “At the heart of Polanyi’s theory of money,” he submits, “is the tension between the two political facets of money”—namely, “of money as a ‘means of exchange’ and money as a ‘means of payment’” (Klein 2020, 10). Money as a means of exchange designates an economic category, “a commodity used for the purpose of indirect exchange,” whereas “money as a means of payment” refers to the role of money as the means “to secure the flow of credit that ensures viable enterprises are sustainable in the long run” (Klein 2020, 9). The dilemma that the design of EMU has brought with it flows from the institutionalization of the two functions of money at different levels of governance. Money as a means of exchange was institutionalized through the euro, whereas “money as a means of payment remained a national obligation” (Klein 2020, 9). This is how the eurozone was split up into “creditor” and “debtor” states with the imposition of austerity conditions for the supply of money that resulted in gross social hardship in Europe’s “southern periphery.” Klein’s analysis is certainly not identical but nevertheless compatible with my characterization of EMU as an irresolvable “diagonal” conflict constellation. These conflicts have an institutional form; they stem from the assignment of monetary policy to the European level, on the one hand, and the reservation of national powers in the fiscal and economic spheres, on the other. They are “irresolvable” in the absence of a political authority legitimated to resolve conflicts between these fields (Joerges 2015). It seems to me that both of us diagnose the same dilemma: “[T]he crisis brought to the fore the redistributive dimension of money as a means of payment, a dimension that resists constitutional regulation insofar as it requires the discretionary actions of central banks to sustain financial intermediaries in the face of crises”—this is Klein’s résumé (Klein 2020, 10). We seem to be exposed to conflict constellations that are undecidable in a court of law, or so I have concluded (Joerges 2019). What, then, is my “second query”? It is the search for a “solution,” the solution that lawyers are required to supply within legal controversies. What if such a “solution,” which would respect the normative proprium of law, is unavailable? The political theorist finds himself in a like embarrassment. We must concede that three spectacular recent judgments have seemingly given a legal solution to these diagonal conflicts.6 Both Klein and myself nevertheless find these judgments deeply unsatisfactory. Instead of repeating our objections here, I add the queries of the Princeton economist Ashoka Mody (2014, 4). The economist wonders:Mody (2014, 6, 4) continues: “Can such a fiscal union be implicitly located in the ECB without the political willingness to transparently achieve that elusive goal?” Mody acknowledges the constraints under which law and politics operate. This economist warns us, however, to subject fundamental constitutional principles to a purely functionalist logic of problem-solving strategies that remain subject to highest uncertainties. This economist is, I submit, what Kant called a “true teacher of law.”More than two decades ago, in a co-authored essay, Jürgen Neyer and I developed the notion of a “deliberative” as opposed to a dominant understanding of European “supranationalism” (Joerges and Neyer 1997). “Conflicts law constitutionalism” is perhaps a slightly better appellation for our original intention. To restate briefly the core ideas of what I have written (too) often (e.g., Joerges 2014; Hien and Joerges 2020): (1) European conflicts law should require the EU member states to take their neighbors’ concerns seriously; in this respect, it aims at compensating for the structural democratic deficits of nation-statehood, namely the failure of nation-states to take the concerns of those affected by unilateral decision-making into account. Here we may locate an inherently democratic potential to EU law, which is categorically different from that of national states. (2) European law has to determine the legitimacy of restrictions placed upon national political autonomy and to substantiate principles and mechanisms of mutual consideration. As European societies learn, in many areas, that they are not—or are no longer—in a position autonomously to provide effective responses to their concerns (“to take back control”) and instead depend upon transnational cooperation, European conflicts law has a vocation to structure cooperative problem-solving in such fields. The core problem here is the quality of such cooperative modes. Cooperation cannot be equated with democracy but should be organized so as to “deserve recognition.”“Democracy enhancing conflicts law” is a further development of these intuitions. The two master thinkers on whom I draw here are Karl Polanyi and Dani Rodrik. Their works are separated by eight decades but akin to each other, as Rodrik (2019) himself has underlined.To start with Polanyi: in the concluding chapter of the Great Transformation, he considers that:Political autonomy coupled with the commitment to cooperate—this reads like a blueprint of the conflicts law approach. It is less idiosyncratic as it may seem to mainstream legal scholarship. To cite just one approving comment: Only through transnational cooperation “can under conditions of interdependency the domination of others be transformed into legitimated rule. In that understanding the integration project, if properly institutionalised, is not democratically deficient but a necessary precondition of democratic rule within constitutional democracies” (Preuß 2013).This is a point that Rodrik has defended and developed further. Rodrik questions the viability of widely shared expectations of the problem-solving potential of transnational governance; he advances instead a model of “democracy-enhancing global governance.” This suggestion did not come out of the blue. Rodrik has been inspired by recent defenses of the democratic merits of multilateralism by political scientists (Keohane, Macedo, and Moravcsik 2009). His own version of this argument can best be understood against the background of his famous trilemma, developed back in 2011 in his book The Globalization Paradox (Rodrik 2011). Here Rodrik asserted the impossibility of simultaneous pursuit of economic globalization, democratic politics, and national determination (autonomy), highlighting a trilemma in which only two goals can be paired: economic globalization and democratic politics, or democracy and national autonomy. For Rodrik, the European Union furnishes dramatic illustration of this thesis.7 On the one hand, the European Union could “transnationalize” democracy through federalization and thus defend the advantages of the common market; at the same time, however, it would be forced to establish a common European politics to legitimize its necessary assumption of fiscal and social policy, with negative consequences for national sovereignty. In the absence of such a denationalizing will, the European Union must give up the common currency and accept economic disintegration (Rodrik 2014). This is not simply a pessimistic scenario. It can be better understood as a case for the toleration of diversity. In the passage already cited, Rodrik submits that “the policy failures that exist arise not from weaknesses of global governance, but from distortions of domestic governance.” He adds: “As a general rule, these domestic failures cannot be fixed through international agreements or multilateral cooperation.” This twofold reserve is an innovative move. Governance failures must be corrected where they occur. In view of their manifold causes and forms, they cannot simply be expunged by transnational fiat. What the supranational level should do instead is to encourage self-corrections at the national level “with global oversight restricted to procedural safeguards—such as transparency, accountability, use of scientific/economic evidence—intended to reinforce democratic deliberation.” Transnational cooperation is a precondition for democratic rule, Ulrich K. Preuß (2013) has argued. Supranationalism must become deliberative, Jürgen Neyer and I have submitted in our praise of the seemingly opaque comitology system. There is certainly idealism in these suggestions. Nevertheless, they also share a merit in their refusal to become bogged down in undemocratic transnational technocracy.Christian Joerges is Emeritus Professor of Law and Society at the Hertie School of Governance and Co-Director of the Centre of European Law and Politics at the University of Bremen. His research focuses on economic ordering through law at the national level and in the processes of European integration and globalization. The focus of current projects is on the European crisis, the history of economic law traditions and economic cultures, and a reconstruction of “Dissenting Voices: European Thought between Traditions and Rupture” (with Agustín J. Menéndez, Michelle Everson, John Erik Fossum, and Jiří Přibáň). His most noted book, edited with Navraj S. Ghaleigh, deals with The Darker Legacies of Law in Europe (Oxford-Portland: Hart Publishing, 2003). Until 2007, he held the chair for European Economic Law at the European University Institute, Florence. He has been a fellow at the Institutes for Advanced Study in Berlin and in Wassenaar, NL. In 2009, he was awarded an honorary doctorate from the University Freiburg i.Ue., Switzerland.