LAW 480: Business, Law and

Society
Week 1: The Reach of Law (in
Business)

Our 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 Industry
Small business owners, Franchise owners
Corporate shareholders
Employees full time, part time, day laborers (legal and/or illegal)
Consumers
The working poor, public welfare recipients.

BLS

textbook ch 1: Central policy debate in American Society

Finding 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 text
Our 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

Liberalism
Libertarianism
Modern (Welfare) Liberalism

Classical Liberalism
limited government, limited ROL
Political Theory

Individs have basic inalienable rts:

equality, freedom of person,
thought, conscience, occupation
AND freedom of liberty of contract,
private property
Economic Rights are NOT absolute:
limited only by special case of
State police powers (10th
amendment re Health, Welfare,
Safety)

Economic Theory

Laissez Faire, Capitalist market

economy

Competitive, free, efficient markets

required to determine just wealth
distribution

Govt intervention (rules) permissible

where wealth concentrations causes
market breakdown, negative
externalities

Libertarianism
miniscule Govt, ROL = private property rts
Political Theory

Individs have basic inalienable rts:

equality, freedom of person,
thought, conscience, occupation,
freedom of liberty of contract,
private property
Economic Rights ARE absolute:
limited only by small core of
criminal law

Economic Theory

Laissez Faire, Capitalist market

economy
Competitive, free, efficient markets

determine just wealth distribution

Govt intervention (rules) NOT

permissible where wealth

concentrations causes market
breakdown, negative externalities;
market self-correcting

Modern Liberalism
Bigger Govt, broader reach of ROL
Political Theory

Individs 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

Economic Theory

Mixed Capitalist market economy

Competitive, free, efficient markets

required to determine just wealth
distribution for equality of social and
economic opportunities

Govt intervention (rules) permissible

where wealth concentrations causes
market breakdown in economic and
political spheres.

Liberal visions of the role of law in

our lives
Libertarian inspired

The Nightwatchman State

minimal govt and laws to insure

individuals personal and property
security. Distributive and social
justice problems not issue for
collective political action.

Modern liberal
post FDR

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 Industry
Small business owners, Franchise owners
Corporate Shareholders
Employees full time, part time, day laborers (legal and/or

illegal)
Consumers
The working poor, public welfare recipients

The reach of LAW in our modern economy

Traditional categories of business law
Property law
Contract law
Criminal law

The modern expansion of business law

Tort law
Business Organizations law (Partnerships, Corporations etc)
Banking law
Bankruptcy law
Insurance law
Administrative/Regulatory law
Employment law
Consumer Protection law
International public/private law (including Human Rights and

multinational business)
Arbitration and Alternative Dispute Resolution
Why has business law grown? your turn to think

Why has Tech

business
Innovation law
changes in attitudes
grown? 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