In What is a Safe Asset?, I wrote,
Not to be underrated is the role of law in defining and nurturing safe assets. […] The law not only upholds rights, but also ensures that the value creating activities of the asset continue to be legal and valid. A long list of other instances where without the backbone of the law, the safety of assets become a pointless study. The law, and hence, the institution that upholds the law, is important for the existence of safe assets.
This LSE public lecture discusses the issue between four experts, which I highly recommend listening for retail investors and professionals alike.
The law plays a crucial part in the creation, proliferation, and distribution of wealth. Through private law institutions such as contract and property, but also through the criminal law (consider the numerous offences pertaining to wealth, such theft, fraud, money laundering) the law creates and regulates the categories making possible the exclusive relations between us and the world. In doing so the law also, at least indirectly, shapes social relations.
Questions of wealth creation and distribution have become particularly urgent since the beginning of the ongoing financial crisis. This also puts to the question the way in which law regulates wealth. Are corporations and financial markets sufficiently regulated? Is it even possible to regulate them by law? What protection does the law offer to the worse-off and especially those who financially depend on creditors? What role can the criminal law play in hindering aggressive corporate conduct especially in conditions of globalisation?