Law and economics analysis has gained increased acceptance over the last century. It is well known that the application of economic concepts and quantitative methods to the investigation of legal thought dates back to the seminal works by Ronald Coase, Judges Richard Posner, Frank Easterbrook and Guido Calabresi, to mention the most prominent scholars, and was limited to contract law, tort law and property law.
Today we cannot even count the number of academics and professionals that advocate and apply economic analysis to their reasoning in almost the entire field of legal research (from environmental law to criminal law, from tax law to constitutional law, from civil procedure to criminal procedure, from administrative law to corporate, securities and banking law, etc).
In this book ‘some of the world's leading figures in the field of law and economics’,Footnote 19 answer questions about how the free market economy operates.
The book contains an introductory chapter and nine substantive chapters where the authors respond to questions concerning whether or not the market needs to be regulated, whether the rule-making process can be made consistent with free markets and, finally, what particular types of law contribute to a free market. Actually, the authors, mostly practitioners, seem to go beyond the scope of the book and broaden their research on some of the topics listed above.
The opinions given by the contributors express a number of views. For instance, the chapter ‘Natural Law, Scholasticism and Free Markets’ by Samuel Gregg, provides a historical analysis and references are made to Aristotle's thoughts on the alleged superiority of private property versus communal property, Thomas Aquinas's thoughts on which commercial exchanges are fair and which are unjust, and on usury. Reference is also made to the contribution of scholastic thinkers, such as Hayek, and the Spanish scholars writing on State intervention, price and value. However, given that the author of this chapter starts by asking the significance of natural law, it is a pity that neither the Antigone myth, nor Fyodor Dostoyevsky or Hannah Arendt are mentioned, especially the latter as the author refers to the Nuremberg trials.
The answers proffered by the authors are in some cases a comprehensive reconstruction of the underlying problems, as in the chapter ‘Limited Liability and Freedom’ by Stephen Copp, where the description of all the arguments in favour or against the limited liability of a company are spelt out, starting with the analysis of the Bills enacted in the Victorian era, when limited liability was first introduced. Conversely, sometimes the answers contain non-conventional thoughts as in the case of the chapter ‘Do Markets need Government?’ by Peter T Leeson, where the author presents two episodes from the past to suggest that the possibility of self-enforcing law might bring an efficient order to commercial markets as well as in criminal contexts. Nonetheless, although it is true that ‘rules emerge endogenously without central directions to regulate the violent dispositions of some members of the society’,Footnote 20 it would have been worth mentioning that those rules might be as violent as the behaviour that they are designed to repress, as currently happens in many African or Balkan regions.
In other contributions, such as in ‘Economics and the Design of Regulatory Law’ by Anthony Ogus, the reader might appreciate the explanation that it is not only economic analysis which has an impact on regulation. Public interest analysis and behavioural economics can support the best outcomes of social and economic regulation. In some cases, the reader may be left with the feeling that something is missed. To give an example, the chapter related to ‘Economic Rights’ by Norman Berry, presents a historical overview of the degree of judicial protection of those rights in America, while considering that Britain ‘provides the least formal protection of economic rights of any advanced country’Footnote 21 and concluding that ‘these days there is very little protection of economic rights against government oppression’.Footnote 22 No reference is made to those States, mostly civil law countries, where such rights benefit from Constitutional protection. Eventually, the author seems to prefer a more liberal market approach when asserting that ‘to restore economic rights would not require much in the way of government activity. It mainly requires the removal of all the statutory restraints on free contract and a promise by government that all future interventions should be abandoned’.Footnote 23 Unfortunately, the answer provided by authors—clearly specialists in their field—at times ends up being a survey of their previous works.
Finally, many times the writers do not take a position, or bring fresh ideas to the debate: they simply report, explain and summarize. As a consequence, the main value of the book is that it can be considered a compendium of tenets achieved in the field of economic regulation thus far. Further, the findings described are well discussed and, where possible, pros and cons are highlighted.
