Solomon's Knot

by Cooter, Robert D.; Schafer, Hans-Bernd

• ISBN13: 9780691147925
• ISBN10: 0691147922
• Format: Hardcover
• Copyright: 2011-12-27
• Publisher: Princeton Univ Pr

Summary

Sustained growth depends on innovation, whether it's cutting-edge software from Silicon Valley, an improved assembly line in Sichuan, or a new export market for Swaziland's leather. Developing a new idea requires money, which poses a problem of trust. The innovator must trust the investor with his idea and the investor must trust the innovator with her money. Robert Cooter and Hans-Bernd Schäfer call this the "double trust dilemma of development." Nowhere is this problem more acute than in poorer nations, where the failure to solve it results in stagnant economies. In Solomon's Knot, Cooter and Schäfer propose a legal theory of economic growth that details how effective property, contract, and business laws help to unite capital and ideas. They also demonstrate why ineffective private and business laws are the root cause of the poverty of nations in today's world. Without the legal institutions that allow innovation and entrepreneurship to thrive, other attempts to spur economic growth are destined to fail.

Table of Contents

Preface	p. ix
Acknowledgments	p. xiii
It's about the Economy	p. 1
The Economic Future of the World	p. 13
The Double Trust Dilemma of Development	p. 27
Make or Take	p. 39
The Property Principle for Innovation	p. 50
Keeping What You MakeùProperty Law	p. 64
	p. 82
Giving Credit to CreditùFinance and Banking	p. 101
Financing SecretsùCorporations	p. 123
Hold or FoldùFinancial Distress	p. 142
Termites in the FoundationùCorruption	p. 159
Poverty Is DangerousùAccidents and Liability	p. 179
Academic Scribblers and Defunct Economists	p. 193
How the Many Overcome the Few	p. 211
Legalize FreedomùConclusion	p. 223
Notes	p. 229
Bibliography	p. 299
Index	p. 313
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