Business and the Law
IN economics, laissez faire is the term for business competition unhampered by government regulation or side-taking. It's an economic vision favored by many (and rhetorically by most) businesspeople.
A lot of businesspeople will tell you they want a more laissez faire legal system, too. Many executives and small-business owners can deliver Shakespeare's ``Let's kill all the lawyers'' barb with Gielgudian passion.
In fact, however, business's involvement with the legal system is more complex than facile lawyer-bashing suggests, as shown by ``Business Goes to Court,'' the five-part Monitor series that ends today. How businesspeople regard lawyers and courts depends on circumstances and what interests are at stake.
True, some companies have been driven to, and even over, the financial brink by the legal costs and payouts stemming from litigation, especially product-liability lawsuits. And it's true that government regulation of the environment, health and safety, employment practices, and competition adds to the costs of doing business, affecting the bottom line.
The series has pointed to some abuses and injustices in business's legal environment that require legislative or administrative remedies.
But it's equally true that law benefits business. An effective legal system is the underpinning for free enterprise. ``If there is no rule of law and no lawyering in a society, that society will not have the property rights and contract enforcement needed for a thriving market economy,'' writes Mancur Olson, an economist at the University of Maryland.
Enforcement of antitrust laws, which is gathering renewed energy under the Clinton administration, can be another benefit to business: Competitors, along with consumers, benefit from restrictions on unfair and predatory commercial practices.
It should be noted, too, that business isn't just forced into court as a defendant. The real ``litigation explosion,'' according to some studies, is in lawsuits between companies.
There is no doubt that some tort-reform proposals in Congress and state legislatures have merit in cutting down dubious litigation, and costly and burdensome regulations always have to be weighed carefully. But society must bear in mind that people have important rights and interests in the economic sphere that need to be protected through the legal system.
For that matter, so do companies.