The Legal and Regulatory Environment of Business

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Chapter 01 - Law as the Foundation of Business CHAPTER 1 LAW AS THE FOUNDATION OF BUSINESS I. LEARNING OBJECTIVES The purpose of this chapter is to introduce the students to the subject of law and to some classifications of its subject matter. In addition, it is designed to instill in them respect for the role of the "rule of law" in our society and that the judicial system is the most important stabilizing force in society. It should create an awareness that law is a foundation for the private market and “property” as a legal concept underpins that market and contributes to the maximum wealth of nations through productivity. This chapter also describes stare decisis, basic sources of our law, and sanctions that can be imposed when the law is not followed. II. REFERENCES Bethell, Tom, The Noblest Triumph (1999). Bernstein, William J., The First of Plenty . McGraw-Hill (2004). Driegel, Blandine, The State and the Rule of Law . Princeton U. Press (1995). Friedman, Lawrence M., American Law , 2d ed. Norton (1998). Harnett, Bertram, Law, Lawyers and Laymen: Making Sense of the American Legal System . San Diego: Harcourt Brace Jovanovich (1984). Helpman, Elhanan, The Mystery of Economic Growth . Belknap Press (2004). Holmes, The Common Law . Little, Brown and Company (1922). Kelman, M., A Guide to Critical Legal Studies . Harvard (1988). Pound, An Introduction to the Philosophy of Law . Yale University Press (1922); Reed, O. Lee, “Law, the Rule of Law, and Property,” American Business Law Journal , Vol. 38 (2001). Reed, O. Lee, “Nationbuilding 101: Reductionism in Property, Liberty, and Corporate Governance,” 36 Vanderbilt Journal of Transitional Law 673 (2003). The Spirit of the Common Law . Marshall Jones Co. (1921). 1-1
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Chapter 01 - Law as the Foundation of Business lll. TEACHING OUTLINE LAW, THE RULE OF LAW, AND PROPERTY 1. Why Nations Are Economically Weak or Strong A. Emphasize : (1) The per capita income contrasts among nations in the world today. (2) Theories about prosperity and poverty, including dependency theory, disparate natural resources, education and technology differences, and the functioning of the private market. (3) The increasingly recognized belief that only a property-based legal system under the rule of law provides the basis for maximum prosperity, and the absence of such a system materially accounts for poverty. 2. Law A. Emphasize : (1) The simple definition of law. You can elaborate by observing that law is a rule- based, state-enforced formal ordering system with moral elements. (2) That adequate law and legal institutes promote the certainty and trust necessary for complex, long-term business arrangements. In an economic sense, they lower the costs of transacting business. B. Additional Matter for Discussion
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Chap001 - Chapter 01 Law as the Foundation of Business...

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