Chapter 1

1. Explain why the law is a necessary background institution for the efficient operation of markets.

2. Discuss the following definition of law: “If you want to know the law and nothing else, you must look at is as a bad man, who cares only for the material consequences which such knowledge enables him to predict, not as a good one, who finds his reasons for conduct, whether inside the law or outside of it, in the vaguer sanctions of conscience.” (Holmes, “The Path of the Law,” Harvard Law Review 10 (1897), p. 459.)