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Observations on the legal theory of finance

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  • Hodgson, Geoffrey M.

Abstract

This is a comment on ’Towards a legal theory of finance’ by Katharina Pistor. It notes that both law and money are complex and controversial phenomena. They have to be treated as historically specific institutions that arise in the context of fundamental uncertainty. The historical origins of both are briefly considered. It is argued that fundamental uncertainty in the Knight-Keynes sense has been marginalised in modern economics and this creates problems for the theory of money. The comment also expands on the notion of ’essential hybridity’ - which signals that money and law are a result of both private arrangements and state intervention.

Suggested Citation

  • Hodgson, Geoffrey M., 2013. "Observations on the legal theory of finance," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 331-337.
  • Handle: RePEc:eee:jcecon:v:41:y:2013:i:2:p:331-337 DOI: 10.1016/j.jce.2013.03.004
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    References listed on IDEAS

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    1. Geoffrey Hodgson, 2011. "The Eclipse of the Uncertainty Concept in Mainstream Economics," Journal of Economic Issues, Taylor & Francis Journals, vol. 45(1), pages 159-176.
    2. J. M. Keynes, 1937. "The General Theory of Employment," The Quarterly Journal of Economics, Oxford University Press, vol. 51(2), pages 209-223.
    3. Kirman, Alan, 1989. "The Intrinsic Limits of Modern Economic Theory: The Emperor Has No Clothes," Economic Journal, Royal Economic Society, vol. 99(395), pages 126-139, Supplemen.
    4. Bell, Stephanie, 2001. "The Role of the State and the Hierarchy of Money," Cambridge Journal of Economics, Oxford University Press, vol. 25(2), pages 149-163, March.
    5. Hodgson, Geoffrey M, 1997. "The Ubiquity of Habits and Rules," Cambridge Journal of Economics, Oxford University Press, vol. 21(6), pages 663-684, November.
    6. Ingham, Geoffrey, 2004. "The nature of money," economic sociology_the european electronic newsletter, Max Planck Institute for the Study of Societies, vol. 5(2), pages 18-28.
    7. Lucas, Robert E., 1977. "Understanding business cycles," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 5(1), pages 7-29, January.
    8. Geoffrey Hodgson, 2002. "The Legal Nature of the Firm and the Myth of the Firm-Market Hybrid," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(1), pages 37-60.
    9. Gindis, David, 2009. "From fictions and aggregates to real entities in the theory of the firm," Journal of Institutional Economics, Cambridge University Press, vol. 5(01), pages 25-46, April.
    10. repec:mes:jeciss:v:40:y:2006:i:1:p:1-25 is not listed on IDEAS
    11. Geoffrey Ingham, 2004. "Money," Chapters,in: The Elgar Companion To Economics and Philosophy, chapter 23 Edward Elgar Publishing.
    12. repec:mes:jeciss:v:43:y:2009:i:1:p:143-166 is not listed on IDEAS
    13. Searle, John R., 2005. "What is an institution?," Journal of Institutional Economics, Cambridge University Press, vol. 1(01), pages 1-22, June.
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    Cited by:

    1. Pistor, Katharina, 2013. "A legal theory of finance," Journal of Comparative Economics, Elsevier, pages 315-330.

    More about this item

    Keywords

    B40; G00; K10; N20; Law; Money; Finance; Uncertainty; Historical specificity; Essential hybridity;

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • G00 - Financial Economics - - General - - - General
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative

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