Special Issue Democracy and Financial Order —Legal Perspectives Rational Choice and Its Limits By Emanuel V. Towfigh *,† Abstract This Article asks the fundamental question of whether the concept of a market-oriented (economic) order can be reconciled with the idea of democracy from the perspective of rational choice approaches to the law. Europe has been facing great economic challenges for the past years—sovereign debt; fiscal and monetary policy; financial market regulation; trade and investment agreements. Some observers argue that prioritizing an economic rationale in the policy response to these challenges comes at the expense of democracy by undermining its most vital preconditions (such as equality and solidarity), while their antagonists state that in fact democratic decision-making is undermining financial stability and long-term welfare of societies. 1 This Article will establish that both positions contribute important insights and yet display too narrow a field of vision. Combining the arguments puts the cart before the horse: Democratic decision-making undermines, among other things, financial stability—and thus long-term welfare of societies—because it follows a logic that is primarily economic. * Emanuel V. Towfigh holds a Chair in Public Law, Empirical Legal Research, and Law & Economics at the Law School and is Professor of Law & Economics at the Department of Management and Economics of the Business School at EBS University, Wiesbaden, Germany. He is also a Research Affiliate at the Max Planck Institute for Research on Collective Goods in Bonn, Germany. † I gratefully acknowledge valuable contributions by Svenja Huemer and fruitful comments by the editors of this special issue; earlier drafts of this manuscript have profited from feedback by Rebekka Herberg and Katharina Towfigh, as well as from my commentator, Agnieszka Janczuk-Gorywoda, and other participants at the workshop Democracy and Financial Order at the University of Frankfurt. Parts of this manuscript are based on my book, DAS PARTEIEN-PARADOX: EIN BEITRAG ZUR BESTIMMUNG DES VERHÄLTNISSES VON DEMOKRATIE UND PARTEIEN (2015). As always, any and all remaining misconceptions in this text are attributable to my own limited understanding only. 1 In some sense, this can be understood as a variant of the question whether a market economy is helpful (if not a precondition) for a democratic order; for a recent example of such an argument see Carl Christian von Weizsäcker, Die normative Ko-Evolution von Marktwirtschaft und Demokratie, 65 ORDO 13 (2014).