Economic Rationalism and the Law
University of New South Wales Law Journal, Vol. 24, p. 200, 2001
37 Pages Posted: 14 Apr 2011
Date Written: October 26, 2000
Abstract
Over recent decades, market ideology has become a major determinant of public policy. Commercial values are seen as applying to virtually all spheres of conduct, including in some respects, to the law. This paper explores the relationship between the law and a market economy, arguing that not only does the law rightly privilege values that are not commercial in character, but that the preservation of those values in the law is central to the continued existence of a functioning capitalist economy. This paper discusses in detail the treatment of courts as a service, the importance of historical continuity as a form of social capital, the problematic character of competition between courts, and the limitations of the law and economics literature, which too often assumes a narrow self-interest as a reliable predictor of behaviour. Also discussed are the economic dimensions of the lawyer client relationship, particularly, the institutional structures which have emerged to ameliorate the information asymmetry between lawyers and clients, including the imposition of fiduciary obligations on lawyers, the role of professional licensing, ethical standards and structural features designed to establish professional reputation as an assurance of quality.
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