5 - Spread oflegal innovations defining private and public domains

Summary

This chapter first examines the literature on law and the rise and spread of capitalism, and shows that much of it pays substantial attention to the unique features of each of the two European traditions, and to the different role played by each in enhancing capitalism. Max Weber was among the first to attribute a significant role to the law in the rise of capitalism. Next, the chapter surveys the development of the law in the core capitalist countries, in four fields of law that are postulated by economic theory as crucial for economic growth: the concept of freedom of contract, the establishment of land registries, patent law, and the formation of business corporations. Before the rise of capitalism, Western European states encouraged technological innovations in two ways, monetary payments and grants of monopoly. Finally, the chapter traces the spread of European capitalist law in these four fields to the rest of the world.