Is this association a natural one?  We tell students that are pre-law that a degree in economics will advance them well on the way to success in law school.  One of the principle pieces of evidence for this is the break-down on the LSAT results where Economics consistently scores highest of any other undergraduate major.  OK, so I am an economics instructor, and I am completing a Doctorate in the subject as well, so I have come across the intersection of economics and law before.  So, economists have a way of simplifying issues that is infuriating to most normal people.  Let us start the discussion of law with a simple story.  In a world of plenty a group of people exist, these people can roam the land and take whatever they want from trees, bushes, and other places.  There is abundance.  This primitive state is what Marx referred to as primitive communism.  At this point there was more than enough for everyone around and everyone was happy.  See in this state there is no reason for violence, anything you want you could just take, without diminishing someone else’s quantity by any real amount.  Well, there are some caveats to this story.  According to Hans Herman-Hoppe there are two principles:  The fact that everyone has the right to exclude people from their physical person (no one can touch me without my permission) and the right to exclude people from the place where they are standing (the physical area which one occupies).  Now Hoppe uses these simple assumptions to show that people have the right to their own person and that by extension people begin to mix their person with other things.  I am persuaded that this gives us property rights.  Property rights in turn give us the basis of all other rights it seems.  My right not to be raped results from the fact that I own my own body; this is the 1^st order violation of property rights.  My right to exclude people from my home however is some lower order of property rights. 

Now I want to contrast this view of the origins of law in property rights by the origin of law in violence.  A creditable threat of violence can lend someone strong negotiation rights.  The mafia, nations, and school yard bullies know this too well.  But even the most committed school yard bully cannot persist in an environment where he has to beat everyone up every day, just to get lunch money.  This is achieved at the margin through a creditable threat.  A bully in turn has to reconcile his threat from other more powerful bullies like the principle and his father.  The threat of violence from these people gives the primary victim a response to the threat of violence from the bully.  The primary victim can suggest that they will appeal to a higher authority.  The basis of these rules will be experience.  In our case the basis of our laws is the legal tradition of Anglo-Saxon Britain.   This country was able to take a king at sword point and make him sign a document of rights forming something known afterwards as Magna Carta.  In the school bulie’s case these rules are created at the school board level, in recognition of the community’s principles. 

An important aspect of rules is that they are stated before the game is played.  A bully is first confronted in a lower grade and told that his actions are wrong.  The subsequent actions of this bully are now acknowledged as deviant.  To hold someone to a principle that is unclear is basically unjust, however there are limitations to this concept, however in many cases ambiguity on the part of the law provides a loophole for criminals.   This shows how much we value the a priori aspect of legal institutions.

So how did these institutions get formed?  Well at some point people were fighting one another.  As is often the case more than one side exists in an argument.  However as Sun Tzu stated the enemy of my enemy is my friend.  In order to share certain goals two otherwise disassociated persons may come together to fight the common adversary.  Contracts are written, and the persons who establish a history of keeping their contracts are more likely to gain additional ones.  These people have now got an edge over the outsiders.  The group makes rules that seem fair to them, another group may form somewhere else, and with free association the ones left out of both groups can choose the one they like.  This creates a process whereby one side can prosper without the process of war.  In really productive groups, war is no seen only as defense.  Where war was earlier a form of gaining what other people have, war now exists to maintain order and allow economic activity.  This fundamental change in the status of war was created through the emergence of law.  

Now at the micro level every law causes a problem.  The initial state which was ambiguous allowed partial claims of property and other rights to various people.  In the presence of a law rights have now been clarified.  Even when this is fair, there may be a feeling of loss, or the actual transfer of certain rights from one person to another.  If a law is passed protecting the right to exclude someone from a tract of land, the person that wanted to use that land now has lost something.  The person with the best claim to title in this case of change becomes the permanent owner of that property.  In any case of ambiguity there are potential rents to be gained from establishing the ownership of something.  This is not entirely a bad thing.  The right of Microsoft to own its software inspired them to make great software which improves millions of people’s daily lives.  However there are those that claim loss from the ownership of a large corporation. 

Law is principally conservative in that it benefits those already in power.  When a law is formed it has to be formed by a recognized body, even if this is a king or if it is a parliament.  For example, Douglas McArthur was occupying Japan after WWII.  His staff set Japan’s new constitution up in English and it was adopted by the Japanese.  Currently no change has been made to this, the law of the land is written in a foreign tongue.  This clearly does not benefit the Japanese.  But the violence that caused the Japanese to come under a more lawful society was something that reduced violence in the long-run.  In the current state, violence is curbed by a law regardless of the method in which it was founded.  Stability is no respecter of nation or creed, it benefits everyone.  If you and I disagree over something, say there is a windfall gain of jolly ranchers.  We both like red and blue jolly ranchers and we both insist that all the red and blue jolly ranchers come to each of us individually, there seems like no solution but violence.  If however we divide up the bad equally, at random, we can then trade among the two assortments to get precisely the outcome we would like.  My initial allotment of the desired ranchers may be greater than yours, but there is no way that you are going to end up with no blue or red jolly ranchers at the end of the day. 

I hope I have established a link between Economics and Law, primarily however I read this exercise as little more than a stream-of-conscience on the subject at hand.