By Invitation

What has economics got to do with the law?

Applying economic analysis to the law, such as in determining amount of traffic fines, can yield interesting insights

The father of modern economics, Adam Smith, was conscious of the relationship between law and economics as evident in his writings on mercantile law. While his manuscripts were destroyed upon his death, historians speculate that he was following up on his magnum opus, The Wealth of Nations, with another book on the history and theory of law. One might wonder how law and economics would have developed if he had finished his work.

The two disciplines continued separately centred on two personae, "the rational man" in economics, and the "the reasonable man" in law. While the yardstick of reasonableness is the norms and shared values of society, rationality is a matter of finding the most efficient means to an end - of maximising value.

Please or to continue reading the full article. Learn more about ST PREMIUM.

Enjoy unlimited access to ST's best work

  • Exclusive stories and features on multiple devices
  • In-depth analyses and opinion pieces
  • ePaper and award-winning multimedia content
A version of this article appeared in the print edition of The Straits Times on August 03, 2019, with the headline 'What has economics got to do with the law?'. Print Edition | Subscribe