The Influence of the Economy

It is controversial how changes in the economy affect the law. Some scholars think that the need to respond to the economy explains the way the law develops. In a capitalist economy, economic efficiency is a key objective. The law, as part of the capitalist state, ought to support this objective. Others think that this is too simplistic. Promoting economic efficiency is not the only goal of the law. Fairness between individuals is also a goal, especially in private law.

Judges and lawyers do not typically use economic arguments in their decisions, so there is a question whether, in practice, economic ideas justify decisions about when one person is liable to pay compensation to another.