I. Constitutionalizing Polycontexturality in the Globalization Context

Before delving into the model of polycontextural law, let us briefly revisit the systems-theoretical account of modern constitutionalism. Luhmann’s sociology of law centers on the analysis of modern complex society which admits of multiple dimensions of description and can be rendered intelligible through a variety of observational frameworks. It stands in sharp contrast to stratified societies, in which the individual was usually assigned to one subsystem and defined entirely by that placement. Therefore, to make meaningful communications in this infinitely complex society, different social subsystems have to establish a specific difference between themselves and their environment so that social complexity can be reduced to a manageable extent. Such kind of boundary-drawing relies on the “coding” of social subsystems: every subsystem is endowed with a specific binary code that distinguishes between a positive value and a negative value, which enables the selection of system-related information and prevents other “noises” from entering and overburdening the system. Besides “coding” that defines the identity of the system, “programming” specifies the conditions and criteria for the appropriateness of selections within a given coded framework—namely, whether a given communication should be assigned to one side or the other of the system’s specific binary code.Footnote ⁹

With coding and programming, each subsystem constitutes an island of reduced complexity within a world of infinite complexityFootnote ¹⁰ and operates in an autopoietic manner. The concept of “autopoiesis” was originally coined by the biologists Humberto Maturana and Francisco Varela to describe the self-reproductive logic of living organisms, and was subsequently introduced by Luhmann into social theory as an analytical instrument for understanding social systems. Just as living systems produce their constituent elements from within their own processes, social systems are autopoietic in that they reproduce their elements exclusively from their own existing elements, which are communications. A social system exists as a continuous linkage of new communicative acts to antecedent ones, thereby sustaining its own reproduction.

Based on the autopoiesis theory, Luhmann defines the relationship between social subsystems as operationally closed yet cognitively open, meaning that each system reproduces itself exclusively through its own operations and cannot directly communicate with another system, though it can register perturbations from its environment. The autopoiesis thesis also fundamentally shapes Luhmann’s constitutional account. Unlike other constitutional theories that are built on the unity of law and politics, Luhmann suggests that the legal and political systems are “operatively closed and non-congruent”: the legal system operates in accordance with the legal/illegal code, while the binary distinction for the political system is government/opposition. It is only by means of a structural coupling that the legal system and the political system are linked in the Rechtsstaat—that is, a schema which “defines two reverse perspectives as a unity.”Footnote ¹¹ Structural coupling allows each system to operate according to its own internal logic while registering the other as part of its environment and selectively processing perturbations from it. It is thus an important concept for Luhmann to address how operationally closed systems can nonetheless exert lasting mutual influence on one another.

In Luhmann’s constitutional argument, the structural couplings among law, politics, and economy were formed in the second half of the eighteenth century. Economic interests were first abstracted from their specific contexts and “homogenized” by legal operations as legally protected/unprotected interests.Footnote ¹² After that, these structural couplings were further extended to the political system due to the concept of “representation” springing forth from property rights and freedom of contract. However, globalization considerably destabilized these couplings pertaining to national constitutions and broke the frame of “the traditional differentiation in line with the political principle of territoriality.”Footnote ¹³ The structural coupling between the reflexive mechanisms of law and politics is increasingly replaced by sectoral differentiation. These self-contained regimes are not simply defined by highly specialized primary rules but also produce their own procedural norms on lawmaking, recognition, and legal sanctions—so called “secondary rules.” The heterarchical forms of law fundamentally change the questions of legal validity and the unity and identity of law away from normative consistency towards operative “interlegality.”Footnote ¹⁴ In this respect, Teubner claims that “constitutionalism moves into the transnational context and into the private sector.”Footnote ¹⁵

Globalization also demystifies the scheme of “attribution” of political constitutionalism. With the term “attribution,” Teubner refers to the Kantian social mechanism that imputes “communicative events to these social constructs called ‘persons’.”Footnote ¹⁶ Classical constitutionalism relies on such attributions and the strategy of “subjectivization” to solve the collision of “the struggle of the gods,” as Max Weber defines it.Footnote ¹⁷ Nevertheless, as long as fundamental rights refer to individual human rights against the intervention of the state and demarcate from politics areas of autonomy, only by means of “horizontal effects” can the constitution protect individual autonomy in other nonpolitical contexts. Such a compensatory resolution always conceals, rather than reveals, that there is in fact “no transfer from the state guarantees of individual freedoms into ‘horizontal’ relations between private actors.” In fact, when we are forced to apply concrete, state-oriented, fundamental rights wholesale to the most varied interpersonal relations,Footnote ¹⁸ “[t]he re-entry [of outside discourses] to the internal side of law has the effect of making incomparable universalities appear all of a sudden as comparable entities inside law by reproducing the external world internally.”Footnote ¹⁹ However, if each discourse is legitimately institutionalized in social practice and demonstrates a universal rationality, then how can the law decide between them? ^{Footnote 20} The incommensurability of discourses and the lack of any meta-discourse fundamentally question the process of “transubstantiation” and call for redefining the new polytheism as a collision of different “grammars” instead of different sources of law.Footnote ²¹

For these two reasons, Teubner asserts that “[t]here is no hope for social regulation through law!”Footnote ²² While every autonomous social subsystem has intrinsic universalizing tendencies, neither politics nor law can be a regulatory mechanism across systems. In this context, Teubner uses the idea of polycontexturality to describe a situation in which different “meaning worlds”—the economy, science, politics, law—each operate according to their own distinct rationality, with no single center capable of coordinating them or synthesizing them into a unified meta-theory. This finding casts legal pluralism and conflicts of law in a new light: every regulatory intervention of law that goes beyond the intrinsic boundaries between social subsystems is either irrelevant or produces disintegrating effects on the social area of life or disintegrating effects on regulatory law itself.Footnote ²³ Legal regulation over these self-organizing systems leads to stability only on the condition that the recursive application of an operation to the system builds a stable “eigenvalue” that can be synchronized with the law.

II. From “Structural Coupling” to “Linkage Institutions”

Confronting the regulatory trilemma, Alberto Febbrajo suggests that “autopoiesis is not so much a static theory concerned with system closure as a dynamic theory concerned with the way a system changes and opens up to other systems.”Footnote ²⁴ Teubner also critiques structural coupling for being “inherently static, nondynamic, nonprocessual,”Footnote ²⁵ and not complex enough to cope with the special problems of law and society. In contrast, he steers a middle course between random linkages and comprehensive structural drift and suggests that law can be bound to a multitude of functional subsystems and formal organizations through “linkage institutions.” Linkage institutions are institutionalized interfaces that connect and mediate between autonomous social subsystems without subordinating one to another. They are usually hybrid organizational forms sitting at the intersection of two or more functionally differentiated social systems, such as internal corporate compliance organs that mediate between corporate norms and external social expectations.Footnote ²⁶

Teubner borrowed the idea of linkage institutions from the “third-order autopoiesis” thesis developed by Bob Jessop. Jessop argues that the limits of Luhmann’s autopoietic theory lie in the fact that it remains unclear “how a ‘society effect’ arises from several autonomous subsystems.”Footnote ²⁷ Consequently, he suggests that systems theory must take into account two sets of questions: first, how the autopoietic social system relates to society as a whole and secures “the performance of all the necessary societal functions,” and second, how “the relations among autopoietic subsystems and/or neighboring allopoietic systems” are handled. In other words, if “rejection values” exist in each subsystem, how can social subsystems be rendered mutually compatible?Footnote ²⁸

Thereby, Jessop turns our attention to how different social subsystems are articulated, and develops a more detailed analysis within autopoietic theory by proposing a distinction between first-order, second-order, and third-order autopoietics. As he puts it, “[i]f first-order autopoietics is concerned with the general structure of communication in society and second-order autopoietics is concerned with the differentiation of autopoietic subsystems, we should develop a third-order analysis concerned with the contingent articulation among differentiated subsystems in a social formation.”Footnote ²⁹ Moreover, he elucidates that third-order articulation can occur in two forms, either as interdiscursivity at the level of first-order autopoiesis, or at the level of second-order autopoiesis—namely, within individual subsystems to establish direct links and/or to further structural coupling with other subsystems. In this respect, strategic analysis is preferred by Jessop to the declaration that “a system is either autopoietic or it is not.”Footnote ³⁰

Inspired by Jessop, Teubner’s approach is not only exemplary of the third-order articulation but also suggests a distinction between structural coupling and linkage institutions. As he argues, while “structural coupling” leads to transitory structural changes, “linkage institutions” are responsible for the duration, intensity, and quality of structural coupling.Footnote ³¹ In other words, linkage institutions that bind the law to diverse social discourses much more closely than politics would suggest a “resonance” of law with civil society and an increase in ecological responsiveness. In the global context, large areas of law are only in loose, non-systematic contact with social processes; nevertheless, where legal and social processes are tightly coupled, new legal rules can be generated in ultracyclical processes.Footnote ³² Different from a hypercycle, which refers to communicative operations within a closed network that are interlinked in a circular way, an ultracycle indicates mutual perturbations between closed networks.Footnote ³³ In this respect, “ultracyclic” linkages can inspire a micro-level articulation to form “autopoiesis within autopoiesis.”Footnote ³⁴ As Teubner elaborates, if parallel processes of social self-reproduction are linked permanently by such institutions to each other and cyclically act on each other, the number of possible viable eigenvalues will decrease because they are exposed to and must endure under increased perturbation.Footnote ³⁵ Teubner thus asks,

The strategic construction of linkage institutions thus brings about the reentry of an institutionalized distinction into what it distinguishes, which is expected to stimulate an internal shift between center and periphery: the dominant distinction between law and politics can be decentered and replaced by distinctions between law and other social fields.Footnote ³⁷ Subsequently, an inversion of the legal order will occur: legislation loses its centrality at the top of the hierarchy, while lex mercatoria, as an example of a social norm operating in direct coupling with global economic organizations and transactions, gains momentum. In other words, an alternative semantics of law based on the needs of polycontexturality emerges in the shadow of positivism.

Thereby, Teubner found an organized yet transformative trajectory without resorting to the political system. However, we might ask: is this internal shift between center and periphery adequate for addressing the deficiency of social responsiveness? Teubner does recognize that differences between loose and tight coupling will affect the global convergence of law because, compared with lex mercatoria, such synchronized coupling is largely underdeveloped in other social sectors. To this extent, he admits, “the ecologization of the economic discourse … is a burning political issue.”Footnote ³⁸ However, this shortfall does not stop Teubner from claiming that “[t]he current task of law cannot be to reconstitute the lost unity of society but to designate borders of plural identities, protect them against domination by other discourses and limit damage from the fallout of discourse collisions.”Footnote ³⁹ In the next section, we shall explore whether the asymmetrical relationship between the center and periphery of the social system can be converted to produce genuine polycontexturality.

III. The Function–Performance–Reflection Mechanism within Private Law Regimes

“[A]fter privatization, what now?” Teubner asks.Footnote ⁴⁰ With third-order autopoiesis as a means of “articulation,” Teubner observes that under the prevailing economic rationality, genuine polycontexturality should be developed within private law regimes, employing the trichotomic operations of function–performance–reflection. For example, specific to the field of corporate governance, while “function” and “performance” refer respectively to the enterprise’s relationship to the economy and its various environments, the “reflexive” structures within the enterprise mediate the main social task of the enterprise and its various contributions to different sectors of social life, creating potential dialectics between code-compatible and code-adverse values.

However, we might ask, which code is it exactly that Teubner refers to here? The economic code or the code of other social subsystems? The answer concerns whose “acceptance/rejection” the third-order autopoiesis is evaluated against. Can “reflection” sufficiently orient the functional imperatives of social subsystems towards multifunctional performance, and if so, under what conditions? Teubner does not give a definitive answer to this inquiry but is satisfied with setting up tentative contact points. For him, it is possible that without reference to public law or political constitution, the individual markets or the economy as a whole will be compelled to develop a political system of their own that protects and facilitates noneconomic activities. In other words, unlike Emilios Christodoulidis, who is concerned with the question of “irritation capacity,”Footnote ⁴¹ namely, how strongly one social system can affect and unsettle another system to force the latter to respond, the key for Teubner is less about the intensity of irritation than about the establishment of connections first. For example, insofar as codetermination shifts decisions and conflict resolutions to intra-organizational boards with labor representation, industrial conflict becomes internalized into the economic organization, “with the result that works council and management become subsystems of an integrated, internally differentiated system of industrial government which increasingly supersedes the traditionally dualistic class-based system of industrial relations.”Footnote ⁴² Corporate social responsibility (CSR) serves as another decentralized integrative device between the autonomous economic organization and its environmental systems.Footnote ⁴³ “Responsible” corporate behavior is characterized by contradictory demands of corporate performance and function, which may be resolved by externally stimulated internal reflection and “organizational conscience.”Footnote ⁴⁴ As Teubner quotes from Luhmann:

To conclude, for Teubner, structural coupling is as destructible—between law and politics—as to be re-established between law and other social subsystems. Building up solid social responsiveness relies on effective linkage institutions that can deliver “compatibility” value to clashing social subsystems and decrease the number of separate “eigenvalues” while increasing perturbations that lead to social responsiveness and coevolution. Based on this argument, it is clear that connectivity becomes central to Teubner’s proposal of transnational societal constitutionalism.Footnote ⁴⁶ Among the several points of connectivity, lex mercatoria is one of the closest and most effective couplings between the legal system and the economic system, in place of the one between law and nation-state politics. As long as enterprises can develop their own “eigendynamics” and reinforce their responsiveness to the wider civil society by means of internal politicization, the vicious circle of economic expansion can probably be turned into a virtuous one. However, what is lacking from this proposition is an answer to the question of whether these contact points are naturally constructive for polycontexturality and capable of resisting co-optation. With Teubner’s insightful accounts on linkage institutions and “autopoiesis within autopoiesis,” in the next section, we move to the application of the polycontextural law model to China. Based on Chinese “Reform” history, I will explore possible inadequacies of this model from three aspects.

I. An Empirical Study of Functional Differentiation in the Early “Reform” Period of China

In the law and political economy literature, China’s reform trajectory poses a “great puzzle” that challenges conventional assumptions about the sequencing of law, marketization, and political change—namely, how substantial economic growth could be achieved irrespective of the quality of the country’s legal institutions.Footnote ⁴⁷ Existing studies have questioned whether Chinese legal development should not be read at the formal level but reconfigured along with political dynamics such as the bargaining power between the central and the local governments.Footnote ⁴⁸ This approach coincides with the systemic-theoretical approach to embedding the legal evolution into the whole social system.

In many aspects, Teubner’s diagnosis of Chinese legal modernization is acute and precise. Before 1978, private autonomy and the social division of labor were lacking in China due to the total fusion between private law and public law. The “work units” in urban areas and the “people’s communes” in rural areas served multiple functions in people’s economic and social lives and hence were the chief mechanism of social organization and integration. China’s economic liberalization and social differentiation started with the contractualization of land use rights in the countryside. While according to the socialist constitution, land in rural places was owned by the rural community, the “rural household contract responsibility system” (jiating lianchan chengbao zerenzhi) separated land ownership from land use rights, which made it possible for peasants to sign a formal contract with their collective economic organizations and enjoy the rights to share in the income or benefits derived from the use of the collectively owned land. By doing so, peasants could return to “household farming” and work on the plots assigned to them. After that, urban reform started in approximately 1986, when state enterprises adopted the “factory director responsibility system” (changzhang jingli fuzezhi). In lieu of the direct leadership of the state, a factory director was selected to manage the factory and was entrusted with powers to implement the labor contract system and probation period to dismiss workers. The ownership and operation of state-owned enterprises (SOEs) were thus separated. Moreover, as the factory director responsibility system changed the model of “state-monopolized revenue and expenditure” and allowed factories to retain benefits, it gave factories the impetus to compete in the marketplace and smash the “iron rice bowl” of the workers. In other words, the lifetime employment system and the equalitarian distribution of benefits that disregarded the contributions of the individual worker began to collapse.

However, at that time, China was still managing a dual-track price system—namely, a system containing a fixed price and a market price for the same kind of products. For key agricultural products and important goods, only the excess to state plans could be sold at market price. The manipulation of exchanges by government officials between the two prices triggered dissatisfaction among the people and resulted in the 1989 political movement, initially in the name of anti-corruption. From 1988 and especially after 1989, the “Reform and Opening-Up” policy was suspended. “Centralization” was re-emphasized in the three-year overhaul in response to the economic blockade by foreign countries. A debate concerning the “Socialist Road” or the “Capitalist Road” that China should take was heating up.

In 1992, Deng Xiaoping gave his “Southern Tour Speech” when visiting Shenzhen, Wuchang, Zhuhai, and Shanghai, which put an end to criticisms against him and restarted the Reform agenda. Some argued that such a turning point was attributable to China already having “market-preserving federalism,” the durability of which kept political conservatives, who were rejecting the “third path,” from enforcing a reversal.Footnote ⁴⁹ Nevertheless, following 1989, some significant deviations from a normal marketization process should be noted. First, China’s SOE reforms continued as in the 1980s, but adopted a selective strategy. After the 1988 Law on Industrial Enterprise Owned by the Whole People stressed the “operational spheres of autonomy of SOEs,” the Company Law came into effect on July 1, 1994, and promoted modern “corporate governance” in China. However, Iain MacNeil carefully used the term “corporatization” instead of “privatization” to define the Chinese SOE reform, as the assets of SOEs still belong to the state.Footnote ⁵⁰ MacNeil thus limited the effects of “corporatization” to “formalizing the separation of state from SOEs, as the state became a shareholder rather than the direct owner of productive assets.”Footnote ⁵¹

Another significant characteristic that MacNeil observed concerning Chinese corporate governance lay in the limited marketability of shares. In the 1990s, Chinese stock exchanges fell far short of Western “outsider”-control models, as they allowed for only a small proportion of shares to be traded on the exchange.Footnote ⁵² Foreign investors “cannot own A shares, which represent the majority of the marketable shares of listed companies.”Footnote ⁵³ The state as the controlling shareholder thus limited the emergence of institutional investors and the possibility of takeovers. In this sense, “raising funds through issuing shares to the public” has both absorbed “the huge amount of unused money in civil society” and advanced “mainly the interest of the state as a shareholder—the biggest private interest in China.”Footnote ⁵⁴

This selective strategy was more obvious in the insolvency of SOEs. In addition to the 1986 Enterprise Bankruptcy Law, the State Council issued a “notice” in 1994 which gave preferential treatment to fourteen pilot cities for them to “optimize the capital structure.”Footnote ⁵⁵ However, in fact, only small and medium-sized SOEs were encouraged to be leased or sold to collective organizations or individuals.Footnote ⁵⁶ If an enterprise was deemed improper to go bankrupt, the local government would subsidize it. These enterprises were mainly concentrated in China’s “strategically important industries,” which played the leading role in the state-owned economy. In 1999, this strategy was officially named “grasping the large and releasing the small” (zhuada fangxiao).Footnote ⁵⁷

This logic of “corporatization instead of privatization” was also replicated in Chinese banking reform. Since 1983, a two-tier banking system has established the framework of China’s banking sector:Footnote ⁵⁸ the People’s Bank of China (PBC) was reorganized as the central bank of China to lead four specialized banks—Agricultural Bank of China, Industrial and Commercial Bank of China, Bank of China, and China Construction Bank—that were set up in 1984. Following that, in 1994, three “policy banks”—China Development Bank, Agricultural Development Bank of China, Export-Import Bank of China—were founded to take over policy functions from the four specialized banks which transformed them into national commercial banks so that commercialization could go along with the policy functions of the banking system. Between 1992 and 1997, the SOE reform resulted in a large amount of nonperforming loans (NPLs); hence, in 1999, the Ministry of Finance set up four asset management companies to purchase 1.4 trillion yuan of NPLs so that SOEs and state-owned commercial banks could be listed in the market.Footnote ⁵⁹ Having carefully observed China’s restructuring of commercial banks, Nicholas Howson has suggested that they can hardly get rid of China’s nomenclature as they are “too big to fail.”Footnote ⁶⁰

In the meanwhile, the 1994 tax reform was considered by many Chinese scholars to be a key reform during the 1990s. Before that, China was practicing a fiscal contracting scheme between two adjacent levels of government. “[A] lower-level regional government contracts with the upper-level regional government on the total amount (or share) of tax and profit revenue … to be remitted for the next several years, and the lower-level government keeps the rest.”Footnote ⁶¹ It thus had given more incentives for local governments to protect local enterprises. However, from 1994, a tax-sharing reform was implemented. The national tax system and local tax system were separately established, and taxes were divided into national, local, and joint types. Taxes on banking, insurance, telecommunication, and railway industries, etc. belonged exclusively to the national tax system, and the national government relied on the mechanism of “transfer payment” to compensate local governments and hence could selectively implement its policies. According to An Chen’s research, among the different types of local taxes, the largest one was the business tax levied against tertiary industries.Footnote ⁶² Consequently, the taxation reform significantly shifted the focus of Chinese local governments from “industrialization” to “urbanization” of land and gave rise to the phenomenon of “land financing” in China.Footnote ⁶³

While land was state-owned and collective-owned, the right to use land could be lawfully transferred—namely, a dual land tenure system was established in China. The Land Administration Law enacted in 1986 split the right to use land into non-profit use and profit-oriented use, regulated as “assignment” (churang) and “transference” (zhuanrang) separately. However, to deal with “jurisdictional conflicts” in the system of land use rights caused by separate implementing rules enacted by local governments since the 1990s, and “to tighten state control over perceived abuse,”Footnote ⁶⁴ the Regulation on the Implementation of Land Administration Law was promulgated in 1998: an administrative registration procedure was implemented to unify the two types of land use rights, as they both have to be registered and regulated by the county-level or above-county-level governments. Moreover, as the Land Administration Department of the State Council manages overall planning of land use and has power to convert non-agricultural use of land under collective ownership, the state monopolizes the first-tier land market both in urban and rural areas in effect and can transact land use rights in the second-tier land market. To summarize, the taxation and land registration reforms and the SOE reform notably indicate a policy transition in the 1990s from “opening” to “managing openness,” in which the function of law also shifted from decentralization to recentralization.

While reforms in land, finance, and taxation were undertaken almost at the same time, they could not be all successful without any loss—but who bore that loss? To answer this question, it is worth shedding light on the transformation and legalization of welfare services in China. The social welfare issue in pre-Reform China was part of the country’s economic institutions and relied on the distribution of separate work units. However, after the introduction of bankruptcy risks, it was no longer possible for SOEs to handle this function. First, in the 1980s, work units began to distribute welfare benefits in wage form, which changed the nationally standardized wage grid practice and caused inequality across industries and factories. In addition, it transferred the categorization of welfare services from supply to consumption. The national social insurance system, comprising six basic types of insurance, was established thereafter, and its coverage was extended from SOEs to enterprises under different ownership types: private, collective, or foreign. Nevertheless, for the majority of SOE workers, this extension meant that they were deprived of their status as “masters of the factories” and compelled to purchase marketized social welfare, and by this means they were “socialized.” In this process, enterprise autonomy, social security demands, and the market to supply welfare services were produced at the same time; however, underneath it were substantive losses among the Chinese working class, not to mention the effects of inflation and corruption. In 2000, Premier Rongji Zhu publicly acknowledged in a speech that there was an enormous deficit in the social pooling of pension insurance, which added up to 37.6 billion yuan in 1999.Footnote ⁶⁵

The housing reform reflected both the consequences of the land reform and those of the social security reform. It was initiated in 1988, and its immediate objective was to raise the rent, with the long-term objective of “allocating houses or apartments through the market.” In 1994, the State Council issued the Decision on Deepening the Reform of the Urban Housing System, the gist of which was to “incorporate housing benefits into the salary of employees so that high-income families could buy commercial houses (shangpinfang), while middle-and low-income families could purchase subsidized suitable economy houses (jingji shiyongfang) or lease low-rent apartments (lianzufang).”Footnote ⁶⁶ While it was intended to be a system allowing the coexistence of policy housing and commercial housing, from 1998, China’s public housing project decreased in size so as not to “interrupt the market order,” and real estate transactions became a high-profit industry in China.

In sum, China’s economic and social transition was mediated through a series of reforms, which Fan Gang and Wing Thye Woo named the “parallel partial progression” (PPP) approach. Compared to a sequencing model, reforms that were undertaken under the PPP approach were too comprehensive to resist,Footnote ⁶⁷ which might explain the secret of its success. However, it is worth noting that Chinese Reform trajectory embodies deep complexity beyond privatization and a transition “from status to contract.” First, there was a two-tier market structure established in China’s economic system, which is crucial for us to interpret the meaning of the “socialist market economy.” We can observe this structure in reforms to SOEs in China’s strategic industries, the corporatization and non-marketability of shares in financial markets, the state monopoly of the first-tier land market and the divide between land ownership and the right to use, the tax sharing system and transfer payment mechanism, etc. Through these practices, China produced a model that could be called “state capitalism”: market reforms were controlled and the strategically important industries were strengthened, while liquidating small and medium-sized SOEs was encouraged. Nevertheless, such hierarchy and priority were apparently not market-driven, but, concededly, a state-programmed art of government.

Second, China’s socialization from the state was an enforced process guided by the state’s policies. Therefore, the delivery of individual freedom from the economic reform was a dubious thesis. There were no equal parties before the contract, and there was no alternative of not contracting. This “contract without freedom” indicates an imposition of the effects of contractualization on SOE workers, where the market mechanism becomes a new means of control that is added to and blended with state administrative control. If we apply the Durkheimian thesis of “social division of labor,” we would find that, because the commodification of labor, land, and other social welfare was enforced by the state, the organic solidarity derived from the process of functional differentiation turned pathological: an anomic type of social solidarity was combined with a type of forced social solidarity, which exerted a different but more ruthless control over the Chinese working class in particular.Footnote ⁶⁸ As a result, the coupling between the legal system and the economic system through contractualization only increased workers’ flexibility in the marketplace instead of their political autonomy and liberty.

Through this empirical study, it is clear that the Chinese legal system has operated not in an autopoietic manner but in one which is interwoven with political and economic policy priorities. It evolved as a flexible, selectively enforced, and politically embedded mechanism to facilitate decentralization, incentivize local actors, and stabilize reform outcomes without fundamentally altering the structure of party-state authority. From this perspective, Groswald Ozery has categorized the Chinese Reform process in three stages: an early stage of localized experimentation, a “legal modernization” stage featuring national-level legal reforms and recentralization, and a legalized politicization stage in which the regulatory state gained direct market governance roles through legal means.Footnote ⁶⁹ This comment demonstrates that, dominated by the media of power and money, the Chinese legal system is far from operationally closed, which will affect the applicability of the polycontextural law model in China.

II. Private Law as the Point of Connection for Polycontexturality

Based on Chinese reform history, my first contention with Teubner lies in his position of taking private law as the point of connection for polycontexturality. While Teubner does oppose the monotheism of the economic logic, his “attractor-legislator” thesis nevertheless privileges private law as the point of connection for polycontextuality. Teubner brought up this thesis to deal with the “regulatory trilemma”: the key lies in building “elective affinity” between law and other social systems beyond the structural coupling between law and politics. He argues that through general norms or specific legal acts, the law can try to produce external interference, irritating the system in such a way that it moves from its attractor state to one which is at least compatible with the aims of the legislator.Footnote ⁷⁰ In accordance with this thesis, private law attending to the nature of the marketplace (attractor) builds strategic linkage institutions between the economic system and the legal system, and in this way, private law development can gradually effectuate an inversion of the positive legal order—namely, state norms are not only subordinated to private norms but are also banished from the interior of norm-setting into the corporate environment.Footnote ⁷¹ In other words, private law development contributes to deconstructing the “[k]ing’s two bodies” and the founding myth of national constitutionalism.

However, does this imply there is a natural connection between private law and the spontaneously organized civil society? The Chinese experience apparently proves the opposite. For example, the case study of SOE reform in China problematizes whether such spontaneity exists: Chinese corporate governance demonstrates that the Chinese corporate governance model cannot constitute an “autopoiesis within autopoiesis,” as it was not derived from the recursive operations of the law and the market but from the political selections of what state ownership should be privatized and what social welfare should be dismantled. Consequently, in promulgating the Law on Property (LP), Chinese civil law scholars confronted a significant dilemma due to the entanglement between socialism and the market economy—namely, how to deal with the orthodoxy of public ownership while recognizing private property relations. A strategic approach had to be adopted to confine the LP to making provisions “for ownership of property rather than systems of ownership which concern the ‘economic base’ of society (according to Marxist theory) and which belong to the province of constitutional law rather than civil law.”Footnote ⁷² In other words, only by suspending the discussion regarding the political concerns of equal distribution of state assets and social welfare and by reducing them to specific operations of civil law can the unique combination of socialist and private property rights be rendered possible.

While it can be contended that Chinese private law regimes did not meet the ideal function of private law in Teubner’s thesis precisely because they were politicized, we could at least argue that the thesis that privatization can decenter the overdetermination of the political system and reveal the eigenvalues of social sectors lacks proof in China’s Reform context. To the contrary, building hybrid, strategic linkages between the economic and legal systems only enabled Chinese political and economic elites to superimpose their interests on the evolution of the Chinese legal system while hindering generalization of these interests to the whole society. This brings us to the insights of Marcelo Neves, who is a key expert in examining Luhmann’s systems theory in peripheral modernity. Neves has critically pointed out that a self-referential legal system did not arise spontaneously with the dissolving of the conventional moral consciousness in countries of peripheral modernity. Rather, under the enduring influence of the stratification principle, “[l]aw remained overdetermined by politics” and “did not have its own specific code difference between ‘yes’ and ‘no’ exclusively.”Footnote ⁷³

What is more worrying, as Neves explores, is a significant shortfall in social differentiation in countries of peripheral modernity—that is, “social exclusion.” This is a type of “primary exclusion” which creates under-integrated and over-integrated segments of the population. “The over-integration pole has access to the products and benefits of the social systems without being simultaneously dependent on their constraints and rules, while the under-integrated pole is dependent on the rules and constraints without having access to the products and benefits.”Footnote ⁷⁴ Therefore, “social exclusion” is opposed to “citizenship” as an egalitarian legal integration and implies an absence of the impartiality of the constitutional state and the non-identification of the constitution.Footnote ⁷⁵

Neves thus names the functional differentiation in peripheral countries “allopoiesis” instead of “autopoiesis,”Footnote ⁷⁶ indicating the reproduction of a system through the criteria, programs, and codes of its environment. And due to the fact that “the very distinction between legal and illegal becomes socially blurred,”Footnote ⁷⁷ allopoietic law runs the risk of “dejuridification” instead of “juridification.” As we have examined above, law in the Chinese context refers to retrospective legalization, bargaining tools between decentralization and recentralization, and regulatory norms instead of judicial independence or constitutional constraints. In contrast with welfare states where juridification “excludes the possibility of an adequate future-oriented, socially rewarding resolution,”Footnote ⁷⁸ the legal system in countries of peripheral modernity has not achieved its operational closure. Neves thus argues that “constitutionalization” in countries of peripheral modernity demands a “public space construction of legality”Footnote ⁷⁹ rather than the natural unfolding of the “intrinsic” orders of social sectors. Constitutionalization for them cannot be “just another and, therefore, redundant name for the self-description and self-reference of functionally differentiated systems”;Footnote ⁸⁰ it must be capable of promoting the equalitarian legal integration of the entire population.

In other words, when Teubner puts forward the “constitutive moment” of global societal constitutionalism, he refers, in fact, to a strategy of hybridization to incrementally transform the legal framework for social regulation from political law-making to private law-making. However, the “constitutive” dimension refers to the unleashing of the connective potentials of what has already been autonomous and does not exactly grasp the prevailing dilemmas in a transitional society, where the autopoiesis of law has not been entrenched as in European jurisprudence. Proposing private law-making in this case would put the cart before the horse, neglecting that the “private” cannot represent the “social” without first being generalized to be “public” interests. In the following section, I will discuss the second critical question concerning the “limitative movement” of Teubner’s societal constitutionalism: can self-constraints be triggered without genuinely “social” pressures imposed on the subsystems to reverse their disaggregating and expansive tendency?

III. Constitutionalization Without Society-Wide Integration

With the whole society dissolved into separate self-contained regimes, can an equitable unity of society be guaranteed despite society’s self-destructive fragmentation? Before answering this question, two more arise: do we truly need a social unity that is equivalent to organized nation-states, and “to what extent must we generalize the principles of political constitutions”?Footnote ⁸¹ The answer to the first of these two subsequent questions is “no” for Teubner, because the current constitutional crisis is not caused by globalization but is “aggravated” by it to the extent that the “equilibrium” of the state ensemble is barely maintained. Deep down in jurisdictional shifts, it is the essence of political constitutionalism that calls for reconsideration. Therefore, instead of translating global constitutional fragments into a state-like integrated form, Teubner asserts that “the specific mission of legal theory would be to reflect upon the infinite game of references played out between a plurality of observation posts and upon its translation into a ‘constitutional’ form.”Footnote ⁸² And this constitutional reconfiguration will depend on the interplay of a variety of “reflection centers” within functional systems apart from national politics, such as “civil society’s counterpower from other contexts (media, public discussion, spontaneous protest, intellectuals, protest movements, NGOs, trade unions, professions and their organizations).”Footnote ⁸³ In short, societal constitutionalism will be motivated by social peripheries in the shadow of politics.

While sharing the sociological approach to constitutionalism with Teubner, Chris Thornhill nevertheless believes that politics is essential for the “constitution of constitutionalism,” as constitutionalism is “a revolutionary form of modern power applying itself throughout society at an unprecedented level of generalization, autonomy, and inclusion.”Footnote ⁸⁴ Unequal “irritation capacity” between different social sectors towards law will definitely result in asymmetrical coevolution, leave certain subsystems under-regulated or unregulated, and may finally lead to the collapse of systems coupling. However, towards such a need for social integration, Teubner responds: “Do not eliminate the divisions, but equilibrate them through suum cuique!”Footnote ⁸⁵ Fragmentation does not necessarily entail the re-establishment of a centralized mechanism of integration; rather, it can be incrementally moderated through a horizontal distinction between reciprocity and impartiality.Footnote ⁸⁶ Along this trajectory, numerous network phenomena will come into play in addition to legislative actions, overlaying if not replacing the integrative effects of institutionalized politics.Footnote ⁸⁷ Instead of replicating political constitutionalism, Teubner claims, such a new fashion of integration can go in the direction of greater dissociation between law and politics and cut back the leading role of politics in integrating the whole society.Footnote ⁸⁸

Let us assume that the mechanism of integration can be reformulated devoid of politics. If the meta-code of reciprocity and impartiality must guide the process without being absorbed by the social subsystems, can Teubner refrain from declaring this integration mechanism society-wide? Can we merely rely on those frontier posts, contingent articulations, or “autopoiesis within autopoiesis” to contain the “spiral of growth” of social subsystems? On this point, Christodoulidis reminds us that in addition to the separate subsystemic reflection centers, “reciprocity” and “impartiality” must refer to a layer of “additional reflection” according to the public interest and public responsibility.Footnote ⁸⁹ However, this additional layer is not manifested in Teubner’s arguments. Instead of elaborating what distinguishes the meta-code from the social subsystems that are guided by it, Teubner immediately fuses “publicness” with its various “reentries” into the receiving subsystems and denies the existence of such a meta-constitution. Specific to the legal system, Teubner channels the meta-juridical requirement of public interest through a rearticulation of the legal system with peripheral social sectors other than politics, so that the centrality of political law-making will be pushed to the periphery and private law-making will be raised to the center—the overruling of political “heterovalidation” by private “autovalidation.”Footnote ⁹⁰ However, it is worth pausing to ask: can the “meta-level” constitutionalization be equivalently translated into a “system-internal” conversion between “center” and “periphery” for the law? Or rather, is it the case that “re-specification overdetermines what might be generalizable in the first instance”?Footnote ⁹¹

Here, we find that as long as Teubner positions the process of constitutionalization as one of hybridization, societal constitutionalism does not separate subsystem integration from social integration. For Teubner, radical diversity itself provides de facto guarantees for self-constraints and checks towards other expansive social subsystems; hence, he does not explain how reciprocity and impartiality are capable of coordinating social subsystems towards greater responsiveness. For Christodoulidis, however, “the problem is that with the ‘reentry’ into the other system’s rationality, the political ceases to impact, underdetermined to the point at which it is in all cases productive to the receiving system and realigned to its functional imperatives,”Footnote ⁹² while being detrimental to the system’s “performance” in world society.Footnote ⁹³

The ramifications that Christodoulidis predicts can be clearly found in Chinese constitutional reform. In 1993, the key notion of the “socialist market economy” was introduced into the Constitutional Amendment of China, which officially confirmed the role of marketization in the process of constitutionalization. What is striking, however, is that there has been no official clarification for such an extremely vague notion. Rather, its interpretation has in fact been subject to the process of market liberalization and a series of private laws that were enacted in the 1990s. On the one hand, this paradigm of legal modernization certainly coincides with Teubner’s idea about “autovalidation” and the private forms of law-making. However, on the other hand, it implies that the market has been taken as the generative mechanism for China’s constitutionalization and determines the potential extent of constitutional interpretations rather than the other way around. This is thus a pronounced example of how respecification through the private law autovalidation sacrificed what is generalizable in the first place—namely, the constitutional values of solidarity and equality. It has also resulted in a unique phenomenon of “legalization without constitutionalization” in contemporary China because the juridification of private rights must seek a way to bypass the doctrines of the socialist Constitution and inject market-enabling interpretations of it instead, which thus renders obsolete the reviewing function of the Constitution over Chinese private law reforms and prevents the “limitative” movement from taking hold.

From the Chinese experience, we can see that exchanging the “eigenvalue” of democracy for built-in perturbations and social responsiveness within the economic system can bring about social costs. Among them, the most significant one may be that the Chinese legal system has been prevented from developing congruently generalized normative expectations that can entrench the rule of law in Chinese society, because the “over-integrated” segment of the Chinese population privileged by the privatization strategy shares increasingly divergent expectations from the “under-integrated” masses. To this extent, I argue that the constitutional values of reciprocity and impartiality cannot be redressed merely through subsystem integration and equilibration. Rather, Neves reminds us that “[t]he constitution of constitutionalism requires a certain system disintegration (less dependence on functional systems), so that social integration, especially in the form of political and legal inclusion, can be increased.”Footnote ⁹⁴

IV. Recursive Operations and Contestations of the “Non-Places”

In Love as Passion, Luhmann states that what his theoretical model does have in common with Michel Foucault’s work is a clearly post-humanistic perspective. However, systems theory goes one step further to create a complex theoretical apparatus that can describe the nonrandom character of variations in social relations and to establish what restrictions were imposed by the social structure on possible discourse.Footnote ⁹⁵ Likewise, Teubner asserts that “[r]ecursive operations cannot begin ex nihilo; they can only refer to something that does already exist…. And if this ‘something’ does not exist they have to invent it! … The solution again is an ‘as if’.”Footnote ⁹⁶ Accordingly, Teubner suggests that “the experience that an energy released in society is bringing about destructive consequences” can only be overcome “by a process of self-critical reflection and a decision to engage in self-restraint.”Footnote ⁹⁷ The experience of the dark side of “catastrophe” will be the constitutional moment for capillary constitutions to initiate their collective learning at several “as-if” frontier posts, such as homo politicus, oeconomicus, juridicus, organisatoricus, retalis, etc.Footnote ⁹⁸

However, concerning these experimental linkage institutions and their cognitive values, systems theory differs greatly from Foucault’s “power” discourses. While Teubner finds those as-if articulations productive for enhancing social responsiveness, Foucault reads them as the dispositif of knowledge-power. He examined, in particular, a new sort of governmental rationality based on the frontier post of homo oeconomicus that appeared in the mid-eighteenth century, which governs according to the evidence of economic analysis and to “a precise, continuous, clear and distinct knowledge of what is taking place in society, in the market, and in the economic circuits.”Footnote ⁹⁹ From its birth, the political constitution must cease to exert its framing function due to the inevitable lack of regulatory knowledge and the cognitively demanding requirements of governance. This conversion indicates that the binding arrangements of the constitution no longer stem from the authority or the collective will of the people but instead from the governmental truth. In Christodoulidis’s revealing analysis, it indicates a tendency that environmental overcomplexity overwhelms normative undercomplexity.Footnote ¹⁰⁰

Nevertheless, autovalidation based on such a “truth” regime is neither the self-constitution of social sectors nor power-free for Foucault. Rather, the truth regimes, as he examined the pansexual term “sexuality,” become new instruments for the people to orient their behaviors and foreclose other potentialities for change. In other words, recursive operations, even without institutionalized politics, can exclude those “non-places” from the system’s operative logic and prevent them from changing the continuation of its rationality. Right at those frontier points of homo politicus, oeconomicus, and juridicus, Foucault found the domestication of one sectoral rationality by another occurs, whether in a traditional form of political repression or discipline, or by the “truth” regimes. This especially occurs when the asymmetrical “irritation capacity” between social subsystems affects the cognitive values of those as-if frontier posts, leaving uneven connectivity and preventing dissensus from staging contestations.

The prospective redress lies precisely in those “non-places” that can disrupt and dehomogenize the recursive operations and set up “any set of ‘rationalities’ as oppositional.”Footnote ¹⁰¹ In 2021, after forty years of market-oriented reforms, the Chinese Civil Code finally came into effect following the decades-long struggle for private rights. However, this phenomenal achievement should not prevent us from attending to the adverse impacts that the market-oriented Reform paradigm left on the development of other laws and the Chinese legal system in general. On this point, labor law reform in China is a particularly revealing indicator. After China’s socialist “iron rice bowl” system was dissolved in the mid-1980s, the labor contract system was officially introduced by the 1994 Labor Law to guarantee the supply of human resources for China’s economic reforms. Accordingly, in this law, the labor dispute resolution process is, overwhelmingly, individualized by design, containing “no constitutive laws that enable workers to assert themselves as a collective power capable of effecting labor relations.”Footnote ¹⁰² The tight coupling between China’s labor system and the socialist political system was thus decoupled and instead harnessed to the logic of marketization. Borrowing Teubner’s words, a change in the “medium” of communication occurred: the political implications of labor mobilization were traded for the juridification of individual labor rights, which, in alignment with market imperatives, seriously diffused the collective engagement of the working class in China’s political reform after 1978. Foucault’s critical theory can perfectly capture the paradox of China’s post-socialist protection of labor: the subjectivation of workers in labor law was accompanied by their degradation from a master status in the factories and their subjugation to market distribution. In rearticulating the subsystems of labor, law, and economy, the eigenvalue of “labor” has been reduced to one element of the commercial transactions and one party of the labor contract, which results in a remarkable co-optation of the legislative aim of labor law in service of the opposite purpose of market expansion.

This contradiction was manifest when the Labor Contract Law was promulgated in 2008. Chinese labor law scholars had an intense debate about the guiding principle of this law,Footnote ¹⁰³ with some insisting that this law should protect both parties to the labor contract rather than merely the employees. Considering the dual aim of both ending the entitlements of socialism and ensuring the increased protection of labor rights under the market economy, it is not surprising that Chinese labor law was more effective in playing the former role than the latter, and that the “regulatory” aim of the Labor Contract Law became confused with that of the Contract Law. Following that, on July 16, 2021, several departments of the State Council jointly issued the Guiding Opinions on Protecting Labor Rights and Interests of Workers Employed in New Forms, which prescribe a trichotomic mode of regulation for platform employment in the context of the gig economy.Footnote ¹⁰⁴ By defining platform employment as a “new form,” the Opinions can either regulate platform employment with labor law or apply civil law if individuals rely on platforms to engage in freelance work, or between these two circumstances, a written agreement is required to be concluded between the worker and the enterprise to reasonably determine the rights and obligations of both parties. By listing these options, the Opinions can further reduce the ambit of labor law jurisdiction. Here, it is clear that the “media” for communication are also a form of power: while the growing trend of algorithmization can be perceived positively as a type of linkage institution with immensely constructive cognitive values, it can also be utilized as a strategy to evade mandatory labor protection in China.

Therefore, decisions over the normative implications and legislative orientation of labor protection must be politicized. By “politicized,” I do not refer to the binary code of government and opposition of the political system but to the need for countervailing power when one subsystem has extended beyond its boundary or when a number of society’s systems enter a state of real or possible dedifferentiation.Footnote ¹⁰⁵ Thornhill asserts that the political system may not “evolve to the level of differentiation which characterizes other systems,” because the medium of power must play the role of “structural knots” whenever communications occurring at the intersection of two or more social systems become diffusively problematic and generate disabling perturbations for communications across society.Footnote ¹⁰⁶ In other words, to redifferentiate subsystems, the political system must have the capacity to dedifferentiate subsystems. This notion of politics demands, in China, a rupture from the prevailing Reform mentality, which places the task of freeing workers from the socialist state’s control as the primary concern but leaves the individual workers totally defenseless in the face of policy changes,Footnote ¹⁰⁷ and which legally confirmed the All-China Federation of Trade Unions (ACFTU) as “the sole state-sanctioned union body” and discouraged independent trade unionism despite the spectacular commodification of labor forces. These gaps all call for a strengthening of the irritation capacity of the political system and a critical review of the autologics of recursive operations, where market competition is utilized to undercut the institutional basis for social solidarity that is essential for organizing atomized individuals and paving the way for democratization.

To conclude, although Teubner attributes the need for integration to the transitional, post-socialist context where the CPC continues to play a role in China’s political life, this Article contends that this situation is not derived from cultural–historical uniqueness but largely from the unequal irritation capacity that results in the phenomenon of “economics overwhelm, politics underwhelm.”Footnote ¹⁰⁸ I take as a case study the decollectivization of the Chinese working class, which has weakened the irritation of the labor system, particularly as compared with that of the economic system, to the constitutional—legal—system, and has therefore further undermined the prospects for associational pluralism within the political system.