Abstract: Before Law and Economics: What the Natural Law Tradition Had to Say about Commercial Affairs

Colin Wilder

Abstract

This paper is a contribution to an emergent strain of scholarship about the history of the economic analysis of law known as Law and Economics (L&E). Substantively, the L&E approach is a reactivation of thinking in the mold of early modern Protestant natural rights theory (e.g., Hugo Grotius). Adam Smith welded this and other new elements to the existing political economy of his day to create the synthesis later called classical economics. L&E itself is mostly the work of modern legal academics and economists, but increasingly historians have illuminated a variety of different ways in which analysis of law or government regulation was concerned with its consequences on individual getting and spending. I will add to that by examining work by an influential German professor, Johann Nikolaus Hertius, whose work can be thought of as contributing to what Smith later called "the system of natural liberty." In particular, I argue that work in this vein of the natural law tradition distinctly exhibits characteristics that economists would later call methodological individualism and marginal analysis. My contribution also does the service of putting L&E into the historiographical traditions of pre-Smithian economics, especially the ideas of household management, national political economy, and both Catholic and Protestant natural law.