Designing the Perfect Business Legal System

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Is it possible for government to decree an ideal business climate, or must that business  climate be generated organically, by business itself, and with the least possible governmental interference?  A penchant for strong liberal government “interference” is attractive; however, experience in the business sphere indicates that centralized government control comes with costs: lack of direct knowledge, tendency to question innovation, and limitations driven by the quality (or lack of quality) of the government bureaucracy itself.

Addressing these questions with students in a society that has traditionally had a managed economy is going to be very interesting.

In any event, for good or ill here is an outline of some initial thoughts on creating a perfect business law environment:

*abolish any federal system and thereby create a single “government” at least for business matters; it is hard enough to comply with requirements of one government, having differing state laws and state court systems is expensive and counter-productive

*require alternate dispute resolution; going to court takes forever, costs a fortune under the US system, and strongly favors the deep-pocket litigant

*establish a single “entity” of entity for all businesses; the founder of a business simply selects tax treatment and automatically enjoys insulation from liability as if a corporate form were adopted

*each industry should be called upon to generate “standard” documents or contractual provisions

*a new regulatory system should be created to regulate capital formation; the current almost universal use of unregistered “brokers” in the sale of smaller businesses criminalizes an important business service

*reduce  much of the reporting burden on public companies; over-regulation drives business away, and limits economic exits for investors thereby limiting investment itself.

I hope to blog regularly during my teaching in Russia.  It is not yet clear to me what sort of computer access I will have.  My predecessor had to borrow the office of another faculty member and utilize hard-wired computers.  The degree to which WiFi and blackberry will be available to me is something I am just beginning to explore (once I have straightened out my housing, visas, how to get rubles and a whole bunch of other mundane but necessary arrangements).  More on all of that in a subsequent blog.


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