Law 798: Markets, Morals and the Law

The rise of modern markets, along with the Industrial Revolution, are two of the most consequential events that have given distinctive shape to our modern Western lives. In one form or another, this shape appears to be expanding globally, into many developing nations. It is thus a question of central importance when, and under what circumstances, modern markets might be legitimate as a matter of political theory. Indeed, we are all familiar with ordinary (and heated!) debates about when, if ever, markets should be regulated. We are also familiar with views-such as those of John Rawls-according to which modern markets are only legitimate in the context of a larger social welfare state. Views like these commonly arise not only in contemporary theoretical discussions but also in everyday political debate.

Unfortunately, many debates about the legitimacy of modern markets have proceeded without any detailed understanding of the rules that make modern markets possible: those, primarily, of contract and property. In this short course, we will examine some of the competing rationales for these specialized bodies of rules, and discuss the light that this understanding can cast on larger issues in political theory. We will discuss whether-if some efficiency theorists have suggested-these areas of private law are best understood in terms of efficiency-maximization; whether they are better understood as reflecting so-called natural (or moral) law; or whether they ineliminably blend considerations of welfare and fairness in ways that render modern markets ultimately inseparable from other seemingly distant areas of public law. Our answers to these questions will, in turn, be used to help probe the legitimacy of market regulation and various social welfare programs.