Antonio Gramsci can be credited with having developed and elaborated in an original way the concept of hegemony to describe not control and domination exerted by coercive force but intellectual and moral leadership resulting in control that is anchored in consent. This insight has been extremely influential in sociology, international relations theory and political theory. This post uses Gramsci’s concept of hegemony in order to analyse a field of studies less familiar with Gramscian theory: international investment law. More specifically, I engage with Gramsci’s description of the process whereby intellectual, moral and political hegemony may be obtained by a class in its rise to power. Gramsci discusses this process in the context of the Italian Risorgimento, noting how the Moderate Party established its hegemony “in forms, and by means, which may be called ‘liberal’–in other words through individual, ‘molecular’, ‘private’ initiative”.  It is this insight into the modes of diffusion of hegemonic power that can be employed fruitfully when analysing the way in which investment law has taken hold in the international legal field. I argue that Gramsci’s conception of hegemony offers a useful tool for interpreting the development of the investment regime and tracking its trajectory.
As is well known, international investment law is based upon a network of mostly bilateral treaties, providing not only for a set of substantive standards of treatment but also, and crucially, for mixed dispute settlement, through ad hoc arbitration or the International Centre for Settlement of Investment Disputes (a World Bank-affiliated institution in Washington). It is true that the investment regime is currently undergoing a crisis of legitimacy and that some of its features, especially those involving the investor-state dispute settlement (ISDS) system, seem to be unraveling. One should not underestimate the system’s resilience and adaptability, though, not least because of its “molecular” structure.
Hegemony, for Gramsci, is the ideological control exercised by the dominant class in society; intellectual, moral and political hegemony accompanies and underpins economic control. According to Gramsci,
“the supremacy of a social group manifests itself in two ways, as ‘domination’ and as ‘intellectual and moral leadership’. A social group dominates antagonistic groups, which it tends to ‘liquidate’ or to subjugate perhaps even by armed force; it leads kindred and allied groups. A social group can, and indeed must, already exercise ‘leadership’ before winning governmental power … ; it subsequently becomes dominant when it exercises power, but even if it holds it firmly in its grasp, it must continue to ‘lead’ as well.” 
The investment regime did not develop from a non-hegemonic position, as it is a creature of the Bretton Woods system. A “molecular” initiative served to bypass the problems of agreeing upon a multilateral legal framework for investment protection (to the extent that one was seen as necessary, but this is the topic for another post!) by providing a diffuse mode of international obligations and creating a pattern of compliance beyond the reach of domestic law and multilateral regimes alike.
And so the process of “molecular” diffusion and consolidation of hegemonic power described by Gramsci can be compared to the way in which the investment regime, specifically investment arbitration, has put into motion a similar process of crystallisation of a set of bilateral rules and a system of remedies. Investment tribunals can be described as decentralised loci for the production of law, developing similar solutions to similar problems and relying on each other’s results to an extent that is greater than warranted by the mostly bilateral system of investment treaties. This model of legal development along multiple lines that tend to converge and coalesce around certain basic principles, such as the “rule of law”, or abstract clusters of substantive rules, such as the “fair and equitable” standard, eschews any openly hierarchical structure and rigidly constituted means of interaction with economic and political regimes. It would be wrong, though, to mistake this flexibility for weakness and to underestimate the hegemonic potential of the model (or its constitutionalising characteristics). This state of flux, this liquidity of the law, is arguably a new form of flexible constitutionalism, taking place without a hierarchical architecture and a rigid system of conflict rules. In other words, by means of diffuse bilateral relations, the investment regime establishes a hegemonic system of rules governing economic and other relationships.
Gramsci’s praxis conception of law, working coercively and consensually to advance the economic interests of the (globalised) ruling class, replaces the state with “public law without the state”. Thus, in a transnational, globalised system in which the state structure is skeletal (and yet crucial for the enforcement of this denationalised, deracinated system), the investment regime takes on the mantle of enforcing public law against the state.
Of course, the blurring of the distinction between private and public may constitute an entry point for a praxis conception of law à la Gramsci, and for a site of emancipatory politics. However, it is for this reason that the maintenance of the private law procedural structure is considered crucial by supporters of the current regime. Stephan Schill, for example, has long insisted on resorting to system-internal solutions to the mounting crisis of legitimacy in the investment regime, reconceptualising investment arbitration as a form of international judicial review, within a comparative public law approach, without modifying the framework of arbitrations (no appellate system, no investment court, et cetera).
The “molecular” initiative that Gramsci examined as a strategy to acquire hegemonic power can also be seen as constitutive of an iterative process of maintaining power in a situation of fragile equilibrium between state control and private economic influence. The ISDS system derives its strength precisely from its ephemerality, its being there and not there at the same time.
 Antonio Gramsci, The Gramsci Reader: Selected Writings, 1916-1935, ed. David Forgacs (New York: New York University Press, 2000), 250.
 Antonio Gramsci, Selections from the Prison Notebooks, ed. and trans. Quintin Hoare and Geoffrey Nowell Smith (New York: International Publishers, 1971), 57–58.
Alessandra Asteriti is Junior Professor of International Economic Law at the Leuphana University of Lüneberg.