The roles of the State

Although the State's power in the economy grew year on year, it was the 1929 financial crisis which gave it a leading role through a new legal framework: regulation. This crash promoted the development of independent administrative authorities to monitor and control the market. The separation between deposit banks and investment banks also dates back to this time. This separation has since been challenged, the consequences of which could be seen during the recent financial crisis in 2008. 'Since the end of the 1970s, we have seen continuous deregulation coupled with the despecialisation of financial intermediaries', points out Thirion. 'Banking institutions multiplied their activities (deposits, insurance, credit, etc.) and experienced reckless expansion. With the crisis, we became aware that these establishments were giants with feet of clay which crumbled in the blink of an eye’. This put the State back at the heart of the economy, in a slightly forced and illiberal way, in order to avoid the complete collapse of the system – with the State playing a critical role in a market which would like to do without the State but which, at the end of the day, was relieved to have recourse to it in time of need.

Thirion identifies three 'ages' of liberalism since the French Revolution. Initially, from the end of the 18th century and for a large part of the 19th century, the State intervened only to guarantee the smooth operation of the market, which was in itself sufficient in the liberal doctrine. It was the police-state which should not govern the market. Then, following the wars and crises in the first half of the 20th century, the State was obliged to intervene because of market failures, particularly on the social level. This was the welfare state which, during the thirty golden post-war years (1945-1973), took precedence due to the alleged flaws in the market. Finally, at the end of the 1970s, the welfare state was in crisis and, in light of a return of a form of liberalism characterised by liberalisation (neo-liberalism) which culminated in privatisations in the 1990s, it transformed into the regulatory state. In other words, its role was now to consist of promoting and consolidating competition in the markets. This State had to govern the market. This can be seen through the role played by European institutions in this regard, which, among other things, promoted liberalisation and privatisation of entire segments of the public sector.

From economic law to undertaking law

Although 'undertaking law' has not always been known as such, this historical-philosophical overview gives us the tools to better understanding the economic system in which companies currently evolve and, by extension, their legal environment. During the thirty golden post-war years, economic law prevailed, 'particularly because the aspects to which its advocates pointed (the importance of the State in the economy, the diversity of national and international sources which guaranteed fundamental principles, the attention given to the normative practices of pressure groups) were strikingly topical issues of the time', underlines Thirion. At the end of the 1960s, business law developed which more comprehensively covered company life, incorporating most branches of law to its advantage. However 'business law is not, strictly speaking, a 'super-branch' of law; rather, it is a 'method' of applying legal rules in the particular context of business life', he clarifies.

Today, the expression 'undertaking law' is preferred, as the authors explain: 'We believe that from the point at which the legal discipline corresponds to all the norms aiming to transpose the four key concepts of liberal economic philosophy, and when the first of those - i.e. the individual (or group of individuals) analysed in terms of their own economic role, at least when they exercise this role as a professional - received its current legal form in the concept of a 'undertaking', a single denomination was needed: 'undertaking law'.