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The study by Professor Mestmäcker, one of the leading European experts in Economic Law, refers to the nature and characteristics of the legal order in a system of economic freedoms.
He therefore analyzes Adam Smith’s theory of the law and contests the mistaken, but widely disseminated, theory that the market was, to this author, a strictly economic process not subject to rules or normative principles. Mestmäcker shows that the correlation of the classic liberal economic theory is a theory of law that asserts that the rules must be supported on the immediate perception of what is fair. Those rules are not derived from a concept of general utility, which is typical of planning, but rather are based on the experience of concrete conflicts. There are some examples of Adam Smith’s sensitivity to regulatory aspects of the system of natural freedoms, such as his theory on Labor Law, Public Education and the monopolistic trends of mercantilism.
The study ultimately shows that to Adam Smith, an appropriate set of rules of private law and of an efficient judicial organization (legal institutions) are requirements for the invisible hand of the market (a strictly economic phenomenon) to work positively, in harmony with general interests.