Designing the Perfect Business Legal System

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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