PROMOTING AN AUSTRIAN-SCHOOL VERSION OF LAW AND ECONOMICS
For an MP3 audio version of Professor Sima's speech click here
Josef Sima, Editorial Director of Prague's Liberalni Institute (host for the ISIL conference) spoke on the importance of property rights and why they are a vital element in the study of economics.
He stated that what is lacking in today's chapter of free-market scholarship is the link between property and economics. He said that in the 20th century, law and economics had become fragmented and isolated with a general lack of integration.
He quoted Dr. Murray Rothbard in his economic treatise Man Economy and State: "Economics has become tellingly fragmented, disassociated to such a degree that there hardly is an economics anymore. Instead we find myriad bits of theses and uncoordinated analysis."
Harold Berman, a famous legal theorist and historian, expressed the same point in his monumental book, Law and Revolution. He said, "Law in the 20th century – both in theory and practice has been treated less and less like a coherent whole – a body of corpus juris and more and more like a hodge-podge – a fragmented mass of ad-hoc decisions and conflicting rules united only by common techniques."
20th century establishment economists like Paul Samuelson promoted the idea that economics must be property-less rather than property-based.
Dr. Sima gave many examples of the abandonment of property rights among the current statist apologists in the profession.
He countered the establishment position as follows: "The Austrian approach towards law and economics must therefore be considered a powerful alternative to the prevailing mainstream views. Its emphasis on the need to base social theory on actual human choice, as opposed to someone's guess as to possible future choices, is a useful source of guidelines for judges. Instead of looking forward and trying to calculate an optimal outcome, the Austrian approach urges judges to look backward and to find a resolution to conflict in contractual relations between the parties."
He went on to say that the existence and respect for property is a prerequisite for peace and social life. The concept of property enables the union of law and economics – and the respect for property is a key indicator of the quality of the social system that people live in. If property is respected, there can be no law allowing the confiscation of any property of a peaceful man.
"Then we can justly speak about property-based social order – or capitalism. The link between law and economics cannot be ignored. The more we understand it, the better our lives will be, and the more peace and prosperity can be achieved."
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