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The common methodological background of law, economics, and organizational theory as they exist in the late 20th century can be seen in historical perspective. Looking at economics, it is well to focus on rationality and process. Jurisprudential and economic concepts can be examined side by side for a functional overview and parallelisms. Modern economics is appealing for its supposed value-free nature. Looking at law and economics together, justice can be seen as a legal goal corresponding to maximization of economic welfare, given some values implicit in the economic process.

The economic market has developed over history, and its distributive and allocative functions may be less relevant in modern times. The concept of higgling has been taken from the bargaining process of personal buying and selling in ancient marketplaces, and adopted into theory as a function of modern markets. Ancient Greeks, Romans, and 18th and 17th century English had legal and ethical standards of higgling. However, higgling may not have broader market importance today.

Most economists are aware that the name for their discipline dates back to a 4th century B.C. Greek text by Xenophon, but few have bothered to read it. It has [...]

It had been some years since the author had taught the introductory economics course, and so, as the author went to sleep at night, when he first awoke in the morning, at breakfast, and while shaving, he would mull over in his mind how to present the elements of microeconomic theory in a simple clear way. It seemed quite easy when, starting out with a bright and attentive class, he pontificated: "Now, in monopolistic competition, the optimum profit, that is, the profit-maximizing position for a firm, will be at the quantity indicated by the intersection of the marginal cost and marginal revenue curves." With sweeping strokes, he drew the conventional graph on the blackboard, turned to the class, and said benignly: "Remember, last meeting, I explained how the marginal revenue line is derived from the differences in total revenue between successive points on the average revenue or demand schedule, and, in simple terms, this principle merely states the obvious, namely, that when the marginal cost, that is, the cost of an additional unit, exceeds the increase in returns from an additional unit of product, or sales, you are beginning to lose ground financially." He swept the class with a self-satisfied smile at having so succinctly joined the obvious and the complex.

The purpose of this article is to examine the definitions and premises underlying the concept of bargain, upon which theories of transaction costs such as researcher R.H. Coase's are predicated. The article also examines the concept of contract, the economic implications of which deserve more specific attention. In general terms, the Coase theorem states that individual bargaining will result in similar allocations of resources regardless of the presence or absence of legally enforced rights or liabilities if there are no transaction costs. The theorem holds that, in the absence of liability, optimum social efficiency will not be altered when a more remunerative economic activity is being damaged by a less remunerative activity because a rational decision maker will pay or bribe the operator of the less remunerative activity to have the activity discontinued. economic efficiency. The Coase theorem accepts the rational two-party bargain as the basic unit of social welfare and treats this plateau of two-party bargaining as the potential measure, or definition, of social cost.

The eighteenth century discovery of the apparently rational resource-allocating capacities of the serf-regulating market system obscured the older administrative approach of the ancient Greek science of oikonomia from which the discipline of economics derives. That oikonomia was not based on a concept of a serf-regulating market is not is dispute. Whether the administrative theory of oikonomia may be useful for modern economists, especially those concerned with market externalities and welfare premises and those in fields, both in government and in the private sector, where management science has become increasingly important and increasingly removed from market analysis, is another question. The fact that the two approaches have been assumed to be fundamentally different even though they both have been employed in the efficient allocation of resources should draw attention to the basically ideological nature of scholarly perspective. The administrative orientation of oikonomia forces us to face the fact that, ultimately, it is human beings who are the decision-makers who must make choices with goal and value implications, a responsibility easier to avoid if decision-making is viewed simply as better or worse adjustments to some inexorable process controlled by the market. The separation of the discipline of economics from its humanistic origins in oikonomia made it more similar to mechanistic disciplines like engineering and empirical science. It did not lessen the magnitude of the choices to be made. [ABSTRACT FROM AUTHOR]

William Murray, also referred to as Lord Mansfield, was the first to gain distinction in the profession of law in England. Mansfield was born in 1705 at Perthshire, Scotland and received education at Westminster School and at Christ Church College, Oxford. He played a leading role in partisan politics. It is opined that by eighteenth century England had grown into the greatest manufacturing and commercial country in the world. However, her jurisprudence by no means had expanded or developed in the same proportion and the Parliament did not responded to the needs of a growing merchant class. Hence, when disputes arose about the buying and selling of goods, or marine insurance, or bills of exchange and promissory notes, no one knew how they were to be determined. The development of rules and practices for enforcing contracts and negotiable notes as a foundation upon which the men of business could build increasingly complex and long-term patterns of commitment with government guarantees of enforceability was entirely consistent with the "Law Merchant." Mansfield incorporated the "Law Merchant" as an integral part of the common law so as to make it an effective and available recourse for mercantile justice.