David D. Friedman, Law's Order: What Economics Has to Do with Law and Why It Matters.

• Position: Book Review

Princeton: Princeton University Press, 2000. Pp. 329.

In this easy-to-read book, Friedman presents a dynamic and entertaining discussion on the relationship between law and economics. He engages complex legal and economic ideas in simple language, making this book appealing to legal experts and lay people alike. The main purpose of his book is to understand rules in legal systems by evaluating their influence on the choices made by rational individuals. This is hot a book about quantifying the law in dollar values; it is a philosophical book that draws a connection between the basic dynamics that underlie economic behaviour and other human activities, such as law-making. His analysis draws upon the past two centuries of Anglo-American law; he claims, however, that it is universally applicable. The nineteen chapters of the book are grouped into two principal parts. Chapters in the first part discuss basic economic concepts such as rationality, economic efficiency, externalities, and risk allocation. Next there is a brief middle section that, for the benefit of individuals without a legal background, outlines how the American legal system works. The last major part of the book applies the basic concepts to more popular areas of the law. In the epilogue, Friedman acknowledges some of the theoretical gaps in his work. He admits, for exampie, that he has made no serious effort to investigate the interaction between private law enforcement via reputation and norms and public law enforcement.

Experimenting with modern technology, Friedman posts his footnotes online instead of supplying them in the text. Unfortunately, this approach has more disadvantages than advantages. Although online footnotes permit readers to engage actively with references with the aid of hyperlinks, they also lose the reader in two ways. First, they make reading disjointed, as readers are forced to divide their attention between two media, and second, readers are over-whelmed with vast amounts of information, distracting them from the author's main discussion. In addition, the use of online references is impractical because it makes effective reading of this book possible only with Internet access.

As a basic premise, Friedman presumes that individuals make rational choices that lead, in turn, to the...