There's an old saying that all of economics is either footnotes to Adam Smith or wrong.
Like most old sayings, it's not wholly and exactly correct but there is still a great deal of truth in it.
For one of the reasons that old sayings survive is that people note there's a lot of truth in there and so keep repeating it.
That we've still got the saying can thus be a proof that there's a useful amount of truth in it.
With that in mind, we can discuss the disaster that is this news: “Bangladesh ranked 123rd among 143 countries and jurisdictions in the World Justice Project (WJP) index” and justice here is referring to things like corruption, regulatory enforcement, and so on, eight areas in total.
The one that concerns us here is “civil justice was the second-weakest area, with Bangladesh ranking 132nd and scoring 0.36.”
We know about corruption, about the ineffectiveness of regulatory enforcement, and so on. But thieves and incompetence we also don't want. The effectiveness -- or not -- of civil justice is one of those things not enough people think about enough of the time.
Adam Smith did point out that “little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: All the rest being brought about by the natural course of things.”
Peace we're all doing pretty well on in this corner of the world. Easy taxes could be easier but the Bangladeshi state does not swallow an inordinate amount of everyone's production or work.
Which leaves us that administration of justice.
Given that we are talking about the economy here, it's that part of justice associated with the economy that matters to us.
The ability to go to court and get as the contract enforced -- say. Which is, as we know, a wholly laughable proposition in the Bangladeshi courts of today. Which is, therefore, the thing that needs to be fixed.
We can also borrow something from our other ideas about the economy. That, in business at least, it is often better to make a fast decision than delay and then, perhaps, make the right one.
Borrowing that idea means that the law, about contracts and commerce, needs to be fast. It's better that it be fast than it be wholly just or near perfect.
A decision -- even, sometimes the wrong one -- given now is better than grinding through the process for another five years.
Something that will be anathema to the lawyers of course, they get paid by the hour, but still true all the same.
It would be even better if we always got the right decisions -- but let's do this step by step. We need commercial law -- that part of civil justice which works with business and the economy -- to be swift.
We also need it to be certain. If the contract says something, it must be definitive. The same is true for the law -- that's what the decision will be.
Those decisions need to come quickly. These two conditions are more important than grinding through to a decision in a decade.
It's not wholly true that Adam Smith was correct about everything he discussed but it's still a remarkably good basis to start our reasoning from. As he points out, there are things that governments really do have to do in order to ensure that the economy grows.
One of these is a commercial legal system that actually works. And by works, we mean swift and certain decisions more than necessarily wholly fair or even correct ones.
As the World Justice Project's index points out, this is something Bangladesh is failing upon and failing badly. We should correct that error.
We all know that it's going to take years, if not decades, to recover the money from those who looted the banks last decade. If nothing else about efficient justice, it would be nice to bankrupt the thieves before they die, no? You know, the tolerable administration of justice.
Tim Worstall is a senior fellow at the Adam Smith Institute in London.
