Thursday, September 17, 2015

What: Lawrence M. Friedman, Law in America: A Short History (Modern Library, 2004)

Why: A short lesson for entrepreneurs about how and why the law governing their enterprises developed as a function of the economic landscape.

I didn’t see the inside of many lecture halls during my third year of law school. Instead of attending class, I spent most of my time in the law review office, attending to editing work (and quite often not). My fellow editors and I would draw straws as to who would attend a class, do the required reading, and take notes. At the end of the term, combining our notes produced a tailor-made outline of the course that told us everything we needed to know for the exam. Some might see this as gaming the system, but I’m convinced this was actually a lesson that the school wished us to learn, particularly those of us who would be going on to private practice—how to work in teams, and to achieve the desired results through efficient collaborations.

That said, there was one professor whose lectures I would always attend, if only for their entertainment value. Lawrence Friedman, an expert in American legal history, was a genuinely nice guy, very approachable, with a knack for illuminating his lectures with telling and often humorous anecdotes. You might think that my undergraduate history major predisposed me to enjoy his lectures, but that would be to underestimate both Friedman’s appeal and the capacity of other faculty members to take otherwise interesting topics and make them tedious.

Friedman also was—and, now at age 85, still continues to be—a prolific author, and over the years I’ve read many of his books. Perhaps the quickest read of them all is his Law in America: A Short History, which offers much of interest not just to law geeks but to others who have a healthy interest in the world around them.

Of particular interest to entrepreneurs is the third chapter, which traces the relationship between law and the economy during the developmental years of the industrial revolution. Those who refer to government’s attitude toward economic matters during these years as laissez faire are simply mistaken—not because government was regulating business, but because it was actually actively promoting business. The law supported economic growth by providing a functioning court system to protect private property rights. In addition, the government—which “had very little in the way of money, but it had land to burn”—used land grants to stimulate education as well as entrepreneurial ventures like railroads.

Economic development, of course, had a dark underside. As Friedman notes, “nothing does a better job of mangling human bodies than machines.” Everyone stood to benefit from the developing railroad system, so the law initially placed the risk of any personal injury arising in the course of building the system on the injured party rather than hamper railroads and other entrepreneurs. But “once the investments were made, and there was a fully functioning railroad net, the situation altered,” with tort law shifting toward compensating victims.

This book is, in short, an illuminating read for the entrepreneurially inclined. While you may not learn to love the law (while still loving your lawyers, at least if they work at our favorite law firm), at least you’ll begin to understand how it got to be the way it is.

1 comment :

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