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Economics and Law: Ms. Shiva Jain

This document discusses the relationship between economics and law. It notes that economics examines how individuals and societies attain and use resources for well-being, while law establishes rules to regulate human behavior in communities. A market economy allows private ownership but the government still establishes rules and regulations to control activities. The government also passes legislation to address issues like unemployment, inflation, and social costs of production that private enterprises ignore. Overall, economics and law influence each other - the type of economy shapes the nature of laws, and new legislation can bring changes to the economy.

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0% found this document useful (0 votes)
975 views8 pages

Economics and Law: Ms. Shiva Jain

This document discusses the relationship between economics and law. It notes that economics examines how individuals and societies attain and use resources for well-being, while law establishes rules to regulate human behavior in communities. A market economy allows private ownership but the government still establishes rules and regulations to control activities. The government also passes legislation to address issues like unemployment, inflation, and social costs of production that private enterprises ignore. Overall, economics and law influence each other - the type of economy shapes the nature of laws, and new legislation can bring changes to the economy.

Uploaded by

Anonymous
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We take content rights seriously. If you suspect this is your content, claim it here.
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Economics and Law

Ms. Shiva Jain


Relevance of Economics to law
Law consists of rules made by the authority(govt) for proper
regulation of the community or society. It refers to those rules
which are led by the state for determining the relationship of
men in the organized society. The purpose of laws to regulate and
control human actions in the society.
Economics is the study of mankind in The ordinary business to
life. It examines that part of individual and social action, which
are most likely to be connected with the attainment and with use
of material requisites of well-being.
In a market based economy based on private enterprise as in
India, people can privately owned all the property. There are also
free to use their time and means as they like. But in reality there
are rules and regulations to control activities let down by the
government.
Role of government
Government steps in to protect the consumer and see that
producer does not exploit the consumer. There is an
increasing production of luxury items, which would be
detrimental to the production of consumer items.
Private Enterprises close their eyes on social cost of
production. They are only concerned with the private cost
of production. Government is required to pass legislation
related to control in this social cost.
The state list down the economic framework, laws and
rules for controlling economic activities. It helps to tackle
the problem of unemployment, inflation etc and stabilizes
the pace of economic growth.
Relationship between law and
economics
• The relationship between law and economics is a mutual. Both influence each other.
• It has been shown by Dais that the mode of economy determines the nature of laws
and the status of the adducting bodies and legal professional.
• This shows as to how the economy can influence law. On the other hand, various
legislations passed by the government bring new dimensions in the economy. For
instance: the social cost etc.

• A good law always encourages economic development and a bad law and inhibits it.
• Law imparts trust in actual government procedure and provides security to the
society.
• This is done through the appropriate system of property right contracts and extra
contractual liability which can generate efficient use of resources.
Relationship between law and
economics
•Well conceived labour laws were laid down to protect the rights of child labours, bonded
labourers, women labours etc. All are dealt with regard to specific social context in mind.

• In past years the incidence of black marketing, tax avoidance and evasion have increased so
much that it has become essential for government to pass certain rules and regulation to
check the development of these economic as well as social evils. The taxation law contains a
number of incentives and disincentives to achieve the planned objective.
Relationship between law and
economics
•Contract is another important feature of market economy. We know that
contact is written agreement between two parties and it is binding on both the
parties, no third party is allowed to interfere. Initially the court did not allow the
state to interfere into contract. But there were many development, which
forced the law courts to take action in these contracts.

•Consumer Protection Act has been passed to protect the interest of the
consumers. This is also example of law of contract making in roads in the
sanctity of contract. Because of the consumer protection act now it has become
essential for the company to maintain quality control. The marginal cost of
resources put to quality control is less than marginal cost of legal action. So, its
better that they devote their resources to quality control.

•Considering the social evils associated with agrarian system land Reform Act
had to be passed the presence of a country form a large chunk of the
population in post independent India their condition was really pathetic it took
a lot of effort on the part of Indian state and government to take action against
the class of intermediaries which had group between the government and the
pigeons many organizational changes were made in the land tenure system to
bring about Land Reforms and tenancy reforms.
Economic Law and Government
Law
Economic offences
Economic offences form a separate category of crimes and the criminal offences. These
are often referred as White or Blue Collar crimes. Indulgence by technocrats, highly
qualified person, Businessman etc. in various scams facilitated by the technological
advancement is often seen. In economic offences, not only individual get victimized with
pecuniary loss. Such offences often damage the national economy and defense.
Recently, increase in economic offences is more than increase in conventional crime due
to increase in globalization, internet banking etc.
•Ex: import export frauds
•Banking frauds
•Insurance frauds
•Foreign exchange frauds
•Smuggling of narcotics and psychotropic substances
•Forgery of travel documents identity papers and Overseas job rackets.
•Counterfeit currency and fake government stamp paper
•Smuggling of antiques arts and Treasures cybercrimes
•Wildlife and environmental crimes
•Violation of intellectual property rights, audio and video privacy, Software Privacy etc.
•Frauds through manipulation of prices of shares listed on stock exchanges, insider
trading etc.

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