LAW 494: Business, Law and Society

Week 1: The Reach of Law (in Business)LAW 480: Business, Law and SocietyOur question for the week: How much law is good for Business?Notice that Im assuming some role for law in business relations.Think about try sorting out your property rights and contract rights without law. Now, view Why cant Chuck get his business off the ground?We need certainty, stability, and protection of our property and contract rights, but Chuck shows us the sobering tale of too much legality

So, how do we figure out How much law is good for Business?Who has business interests that deserve legal protection? Who counts in business law?Entrepreneurs, i.e. Job Creators, Captains of IndustrySmall business owners, Franchise ownersCorporate shareholdersEmployees full time, part time, day laborers (legal and/or illegal)ConsumersThe working poor, public welfare recipients.

BLS textbook ch 1: Central policy debate in American SocietyFinding the proper balance between free market and government regulation Capitalisms foundation is based on the principles of personal freedom and private property rights In a pure free market, there would be no role for law no contract law, no property law, no criminal law the wisdom of the market would regulate American life

How much law is good for Business?Read chapter 1 in the LJS textOur goal this week is to deepen our understanding of the role law plays in structuring capitalist relationships.

Make sure you understand the difference between different types of economic systems Communism, Socialism, Capitalism.

Why do the text book authors describe our system as a Mixed market economy?

In the next few slides, well compare the 3 major approaches to politico-economic thinking that frames US business law:Classical LiberalismLibertarianismModern (Welfare) Liberalism

Classical Liberalismlimited government, limited ROLPolitical TheoryEconomic TheoryIndivids have basic inalienable rts: equality, freedom of person, thought, conscience, occupation AND freedom of liberty of contract, private propertyEconomic Rights are NOT absolute: limited only by special case of State police powers (10th amendment re Health, Welfare, Safety)Laissez Faire, Capitalist market economyCompetitive, free, efficient markets required to determine just wealth distributionGovt intervention (rules) permissible where wealth concentrations causes market breakdown, negative externalitiesLibertarianismminiscule Govt, ROL = private property rts Political TheoryEconomic TheoryIndivids have basic inalienable rts: equality, freedom of person, thought, conscience, occupation, freedom of liberty of contract, private propertyEconomic Rights ARE absolute: limited only by small core of criminal law

Laissez Faire, Capitalist market economyCompetitive, free, efficient markets determine just wealth distributionGovt intervention (rules) NOT permissible where wealth concentrations causes market breakdown, negative externalities; market self-correcting

Modern LiberalismBigger Govt, broader reach of ROLPolitical TheoryEconomic TheoryIndivids have basic inalienable rts: equality, freedom of person, thought, conscience, occupation, AND Democratic Governance w/Universal Franchise.Favor qualified property regime greater regulation of economic contracts than Laissez faire system of CL

Mixed Capitalist market economyCompetitive, free, efficient markets required to determine just wealth distribution for equality of social and economic opportunitiesGovt intervention (rules) permissible where wealth concentrations causes market breakdown in economic and political spheres. Liberal visions of the role of law in our livesLibertarian inspiredModern liberal post FDRThe Nightwatchman State minimal govt and laws to insure individuals personal and property security. Distributive and social justice problems not issue for collective political action.

The Welfare State social justice requires provision of health, food, shelter for those who cannot provide for themselves. Law plays role in defining these new property rights (entitlements) and imposing financial obligations on members of society to provide these goods & services. Duty replaces charity.How much law is good for Business?Read chapter 3 of the LBS text.What is Corporate Social Responsibility?What is the triple bottom line approach to corporate citizenship?From the perspective of Corporate Social Responsibility, who has business interests that deserve legal protection? Who counts in business law? Entrepreneurs, i.e. Job Creators, Captains of IndustrySmall business owners, Franchise ownersCorporate ShareholdersEmployees full time, part time, day laborers (legal and/or illegal)ConsumersThe working poor, public welfare recipients

The reach of LAW in our modern economy Traditional categories of business lawProperty lawContract lawCriminal lawThe modern expansion of business lawTort lawBusiness Organizations law (Partnerships, Corporations etc)Banking lawBankruptcy lawInsurance lawAdministrative/Regulatory lawEmployment lawConsumer Protection lawInternational public/private law (including Human Rights and multinational business)Arbitration and Alternative Dispute ResolutionWhy has business law grown? your turn to think

Why has business law grown? Tech Innovation changes in attitudes toward Risk Taking Great Depression and creation of the social safety net as a necessary support structure for Capitalism changes in social attitudes and political power of Women and Minorities Environment and Sustainable Development movement Globalization