To understand the revision of British and American bankruptcy law, we highlight two kinds of rights and two types of bargaining.1 We distinguish between property rights and jurisdictional rights, on the one hand, and bargaining and meta-bargaining, on the other, and focus especially on how rights and bargaining interact in bankruptcy. We elaborate these distinctions below, but to start a simple definition will help. A legal right is a defensible claim or entitlement. Property rights pertain to things of value: land, machinery, company shares, patents, and the like. They specify who has the right to use an asset. Jurisdictional rights pertain to types of work. They designate who has the right to perform a job and how they acquire that right (through educational qualifications, experience, or state certification). Property and jurisdictional rights are commonly defined by the law. In the bankruptcy setting, these two sets of rights prove to be enormously important for the ways that the network of inter-organizational relationships is established and transformed. Property rights and jurisdictional rights are the substance of struggle and the foundation of control in the credit network.
Bargaining and meta-bargaining concern what people do with rights. In markets, for example, people exchange property rights. They bargain over price and the bundle of rights to be transferred from the seller to the buyer. The negotiation that occurs in automobile dealerships is a familiar instance of bargaining over property rights: the salesperson and customer negotiate a sale, and once consummated the property rights in the car shift to the buyer. This kind of bargaining presupposes a set of legal rules: the rules of contract, consumer law, and property. Bargaining occurs within a legal framework.
Bargaining can also occur about the legal framework itself. We term this meta-bargaining. People bargain about the rules rather than on their basis. Meta-bargaining about property involves the negotiation of the system of property rights rather than the exchange of specific property, and it occurs in the polity rather than in the market. Yet meta-bargaining____________________