"Friedrich A. Hayek"

May, 2019

Law and Economics deals with the economic analysis of legal relations, legal provisions, laws and regulations and is a research field which has a long tradition in economics. It was lost after the expulsion of some of the leading economists from Germany during 1933 to 1938, but then revived in Chicago.  Both the subject of Law of Economics and the need for a concise Encyclopedia is particularly relevant in Europe today.  Currently in the European Union there are several different legal cultures: the Anglo-Saxon legal framework, the German legal framework, which for example also includes Greece, and the Roman legal family—three jurisdictions which have to be covered with one and the same theory. In the EU, the task of the European Commission to interact with the various European jurisdictions means different legal cultures collaborating and some degree of harmonization is necessary. The result is an immediate need, if only for the science, to show how a given problem is solved in each legal tradition and jurisdiction. This Encyclopedia provides both a common language and precise definitions in the field, which will be useful in the future to avoid misunderstandings during harmonization of EU Law.

Private Governance Book Panel

Are all of the rules and regulations governing economic activity a product of central planning or legislation? To what extent does privately produced and enforced governance play a role? On this throwback episode of the Hayek Program Podcast, Edward Stringham argues in a panel discussion of his book Private Governance that much of what is orderly in the economy can actually be attributed to governing mechanisms devised and enforced by private groups and individuals. Hayek Program director Peter Boettke moderates the discussion as Edward Stringham is joined on the panel by Jason Brennan and Bruce Benson.

Peter J. Boettke
Calendar Date: 
Feb 27, 2019
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Brokers, Bureaucrats, and the Emergence of Financial Markets

December, 2004

This article provides a critical analysis of Frye (2000) and existing theories of self-governance. Following up on the recent studies by Stringham (2002, 2003), this paper focuses attention on the emergence of financial markets for several reasons. The common perception is that complicated financial instruments require state sanction to emerge. It is widely argued that in the absence of state regulation of of financial markets, cheating will be common. This paper shows, in contrast, that the evidence does not support this pessimistic view. In fact, markets are capable of endogenously generating the rules that govern their operation and these rules discipline cheating severely. Finally, if we can persuasively make the case that self-governance in financial markets is effective - with the complicated nature of transactions that take place - then the argument for self- governance in economic life, we contend, is much stronger than even classical liberalism has led us to believe.