Responsive Adjudication and the ‘Social Legitimacy’ of the Internal Market

• Date: 01 September 2016
• Author: Jotte Mulder
• DOI: http://doi.org/10.1111/eulj.12205
• Published date: 01 September 2016

Responsive Adjudication and the ‘Social

Legitimacy’of the Internal Market

Jotte Mulder*

Abstract: This article is concerned with the social legitimacy of EU free movement

adjudication. What does sociallegitimacy entail within themulti-level ‘embedded liberalism’

constructionof the internal market?How can the objective of free movement(market access)

and a commitment to social diversity both be pursued without one necessarily trumping the

other? This article seeks to contribute to these questions on the basis of a discussion of what

has come to be known as the argument from transnational effects and the development of an

adjudicative model that can be termed ‘socially responsive’. On the basis of an ‘ideal types’

analysis of the case law of the Court, it is concluded that responsiveness to Member State

social context is lacking in any coherent form in the case law of the Court of Justice of the

European Union. However, a responsive model of adjudication can be (re)constructed by

streamlining the identified ideal type adjudicative rationales. In the midst of this process of

discovery, an operational rationale to establish the substantive (social) scope and reach of

the internal market shall be submitted.

I Introduction

The EU Treaties set out a joint commitment to intra-European free trade within open mar-

kets that ensure the free movement of goods, capital, services and workers whilst Member

States retain control over domestically shaped interests that may override market integra-

tion objectives. The challenge that results from these two fundamental choices is how to rec-

oncile freedom of (economic) movement with the social protection and regul ation

structures of Member States. This dual commitment has been aptly described as the EU

law’score nucleus of shared values, where uniformity must be ensured amongst all Mem-

ber States, while at the same time accommodating the value diversity that stems from the

variegated cultural, historical and social heritage of the Member States.

1

A—if not the—

main point of contention within EU law is where exactly the dividing line between shared

nucleus and value diversity falls. This remains the subject of much controversial case

law.

2

This article unveils the adjudicative approaches governing the conflict constellations

generated by the dual commitment of EU law. After showing that the rationales put

* Assistant professor at the Europa Instituteof Utrecht University (PhD, EuropeanUniversity Institute). This

paper was presented in thecontext of the annual EUI, EU law workshop and benefited from the comments

received then. I am particularly grate ful to Loïc Azoulai, Gareth Davies, Christ ian Joerges, Claire

Kilpatrick, Giorgio Monti and the two anonymous revie wers for penetrating comments on earlier drafts.

The commentsof Agustín José Menéndez have been invaluable. All remainingflaws remai n for the author.

1

K. Lenaerts, ‘The Court’s Outer and Inner Selv es: Exploring the External and Internal Legitimacy of the

European Court of Justice’, in H. Clemens (ed.), Judging Europe’s Judges: The Legitimacy of the Case Law

of the EuropeanCourt of Justice (Hart Publishing,2013), 13–60, at 15.

2

S. Weatherhill, ‘The Court’s Case Law on the InternalMarket: A CircumloquaciousStatement of the Result,

Ratherthan a Reason for Arriving at It?’,inH.Clemens(ed.),Judging Europe’sJudges:TheLegitimacyofthe

Case Law of the European Court of Justice (Hart Publishing, 2013),87–108, at 104.

European LawJournal, Vol. 22, No. 5, September 2016,pp. 597–620.

© 2017 John Wiley& Sons Ltd. 9600 Garsington Road,Oxford, OX4 2DQ, UK

and 350 Main Street,Malden, MA 02148, USA

forward by the supranational judges are far from satisfactory, an alternative argumentative

approach is put forward.

The more controversial case law of the Court of Justice is often criticised on account of

its ignoring the fundamental social commitmentsof the Member States. On this basis, EU

law is frequentlyconsidered not to stand to its dual commitmentto market integration and

social protection and c onsequently to risk lo sing social legitimacy.

3

In order to

contextualisethe notion of social legitimacybriefly, it is helpful to take a step back in time

and look at the post-1945 world economy, which has been described and is generally un-

derstood as embodying a particularsocial bargain.

4

Policymakerswere looking to reinvig-

orate the world economyon the basis of increased internationaltrade within and between

open markets. Thiswas, however, to be accompanied by the establishment of institutional

structuresthat would explicitly allowfor the mitigation of the potentialadverse social con-

sequences of increased international trade and competition.

5

It was a widely shared belief

that the absenceof such a compromise had led to thecollapse of international cooperation

in trade and macroeconomic policy duringthe 1920s and 1930s.

6

It was assumedthat mar-

kets became unsustainable if populationscame to regard them as illegitimate.It would ap-

pear that the post-1945 U.S. and European policymakers agreed to some extent with this

basic concern.

7

It was considered a necessity to reconcile the need for open markets and

vigorous trade with the prevailing values of the social-economic systems that such increased

3

With regardto the multilevelcontext, EU legitimacydiscourses canoften be traced backto three core concepts:

‘inputlegitimacy, ‘throughputlegitimacy’and ‘outputlegitimacy’. Theconventional meaningof these concepts

is to see ‘input’asthe potential opennessof the decision-makingprocess for citizens, ‘throughput’as the quality

of the processesthat subsequentlyprocess the input and‘output’as the quality of the resultof the decision mak-

ing process. See for a discussionand overview of the conventional concepts V.A. Schmidt, ‘Democracyand

Legitimacy in the European Union Revisited: Input,Output and “Throughput ”’,(2013)61Political Studies,

2–22.As will become apparentin this discussion,‘social legitimacy’isconcerned, specifically,with the ‘original’

multilevel governance context of the EU and the constraints and legitimate reach of the supranationalwith

regard to the national governance orders.See for other takes on the meaning of social legitimacy within the

internal market G. Davies,‘Democracy and Legitimacy in the Shadow ofPurposive Competence’,(2015)21

European Law Journal,2–22 and G. Davies,‘Internal market adjudication and thequality of life in Europe’,

EUI Working Paper 2014/07. A polit ical theory outlook in F.W. Scharpf , ‘Legitimacy in the Multilevel

European Polity’,(2009)1European PoliticalScience Review,173–204. See for othertakes on legitimacy for

exampleG. De Búrca, ‘The Quest for Legitimacyin the European Union’,(1996) 59 The Modern Law Review,

349–376. On the more general democratic deficit discussion of the Union, see A. Menon and S. Weatherill,

‘Transnational Legitimacyin a GlobalisingWorld: How the European Union Rescues Its States’, (2008) 31

West European Politics,397–416; S. Hix and A. Follesdal, ‘Why There Is a DemocraticDeficit in the EU: A

Response toMajone and Moravscik’, (2006)44 Common Market Studies,533

–562.

4

J.G. Ruggie, ‘International Regi mes, Transactions and Change: Embe dded Liberalism in the Postwar

EconomicOrder, InternationalOrganization’, (1982)36 International Regimes,379–415, at 392: ‘[To] sayany-

thing sensibleabout the content of international economicorders and about the regimes that serve them,it is

necessaryto look at how power and legitimatesocial purpose become fused toproject political authorityinto

the international–system.Applied to the post-World War II context, this argument leads me to characterise

the international economicorder by the term ‘embedded liberalism’.

5

Ibid., at 388.See also R. Nurkse, League of Nations Report: InternationalCurrency Experience:Lessons of the

Inter-WarPeriod (Report of the Leagueof Nations, Economic, Financial and TransitDepartment, 1944)

6

Ibid.,at 392; also S. Marglin and J. Schor,The Golden Age of Capitalism:Reinterpretingthe Postwar Experience

(Oxford UniversityPress, 1990). One of the proponents of this idea was KarlPolanyi. In his 1944 book, The

Great Transformation,heintroducedtheideaof‘embedded’versus ‘disembedded’socio-economic orders,K.

Polanyi, The Great Transformation: The Politi cal and Economic Origins of our Time (The Beacon Press,

1944, 2nd edn.reprinted in 2001).

7

J. Ruggie, ‘TakingEmbedded Liberalism Global:The Corporate Connection’,Institute for International Law

and Justice WorkingPaper (New York University Schoolof Law, 2003) and J. Ruggie, ‘Multilateralism: The

Anatomy of anInstitution’,(1992)46International Organization,561–598.

Social Legitimacy of EU Free Movement AdjudicationSeptember 2016

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