Ending Poverty by Legalizing Freedom
Religion & Liberty Online

Ending Poverty by Legalizing Freedom

Robert D. Cooter, a law professor at the University of California, Berkeley, explains how law can end the poverty of nations:

Nick Schulz: Your book offers a framework for thinking about how it is that some nations are rich, some are poor, and others are in between. You stress the importance of changes in laws and legal structure as the catalyst for growth. Why are legal institutions so important?

Robert Cooter: Ineffective law inhibits growth by forcing too much dealing with relatives. Effective law gives unrelated people enough trust to launch innovative business ventures. The law of property, contracts, and business organizations is most fundamental for business dealings among strangers. State authorities cannot create these laws merely by declaring them. Instead, the law must evolve into institutions that keep hands off venture profits.

[. . .]

NS: You conclude by saying that we need to “legalize freedom.” What exactly do you mean?

RC: Freedom is the presence of good law, not the absence of all law. Innovative business ventures need effective laws of property, contracts, and business organizations. Legalizing business freedom allows innovation to carry us on an unpredictable journey to a richer world.

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Joe Carter

Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).