ABSTRACT
Key to the development of law in the modern period is its relationship with the modern economy and the rise of capitalism. The chapter first looks at how Adam Smith described the rise of the market in The Wealth of Nations, and the “market mentality” that accompanied his theory of the invisible hand as both maximising individual utility and contributing to collective welfare. We compare it to Max Weber's discussion in The Protestant Ethic and the Spirit of Capitalism of the laborious processes though which the market mentality displaced earlier social imaginaries to install itself as a central feature of economic thinking. Then we contrast both to Marx's famous account in Capital of the processes of emergence of new classes of capitalist modernity, organised according to the economic logic of a market in rents and wages, polarised around those who owned the means of production and therefore controlled agricultural and manufacturing industry and those who had no other means to stay alive except their ability to work, but nowhere to commit it except to the owners of capital in exchange for the means of subsistence. The final author we explore in this chapter is Karl Polanyi in his description of the emergence of the market system and his account of The Great Transformation. The chapter explores the key role that the law plays in the processes of the emergence and consolidation of the market system both in terms of structuring and regulating the domestic economy but also in organising the extraction of wealth from the colonies, a combination that allowed an extraordinary flourishing of capitalism in the metropolis.
