1. This has been a central question in welfare economics since Adam Smith's famous argument that the market would lead to the optimal allocation of resources to their highest and most efficient use. See Smith, A An Inquiry into the Nature and Causes of Wealth of Nations, eds Campbell, RH and Skinner, AS (Oxford: Clarendon Press, 1976)Google Scholar. For an overview of the debates on private ordering and legal centrism, see generally ‘Symposium: law, economics and norms’ (1996) 144 U Pa L Rev 1643–2399.

2. There are too many works written in this genre to cite exhaustively. For the foundational literature, see below, n 27.

3. C Mayer ‘Corporate governance, competition and performance’ (1997) 24 J L & Soc'y 152 at 155.

4. Moore, M Corporate Governance in the Shadow of the State (Oxford: Hart Publishing, 2013) p 247 Google Scholar, observing that the theory has ‘no innate empirical content but – rather – begins life as nothing more than a theoretical “empty vessel” that requires subsequent “filling” by scholars on an artificial and counter-factual basis’.

5. L Bernstein ‘Opting out of a legal system: extralegal contractual relations in the diamond industry’ (1992) 21 J Legal Stud 115.

6. Ellickson, RC Order without Law: How Neighbours Settle Disputes (Cambridge, MA: Harvard University Press, 1991)Google Scholar.

7. There is a range of other relevant cases that are not discussed in detail because of space constraints. See, generally, Richman, B ‘Ethnic networks, extralegal certainty, and globalisation: peering into the diamond industry’ in Gessner, V (ed) Legal Certainty beyond the State: Empirical Studies and Theories of Change (Oxford: Hart Publishing, 2009) p 31 Google Scholar; L Bernstein ‘Private commercial law in the cotton industry: creating cooperation through rules, norms, and institutions’ (2001) 99 Mich L Rev 1724; M Gomez ‘The Tower of David: social order in a vertical community’ (2014) 10 Fla Int'l U L Rev 215.

8. A number of historical cases have been used to suggest that private communities have both the incentive and the means of spontaneously evolving their own well-functioning law and order in the absence of any recognisable state involvement. However, many of these examples appear to be taken primarily from stateless or nearly stateless social orders, and this contributes very little to understandings of ‘legitimate’ private ordering within modern nation states in which an official, functioning legal system of some sort exists. Further, there a number of naïve and factually incorrect assumptions that serve to undermine some of the overall claims made. Accordingly, a discussion of pre-nation state or illegitimate private orders is beyond the scope of this paper. For some representative examples from the literature, see eg BL Benson ‘The spontaneous evolution of commercial law’ (1989) 55 S Econ J 644; TL Anderson and PJ Hill ‘An American experiment in anarcho-capitalism: the not so wild, wild West’ (1979) 3(1) J Libertarian Stud 9; Leeson, P ‘Anarchy unbound: how much order can spontaneous order create?’ in Boettke, PJ Handbook on Contemporary Austrian Economics (Cheltenham: Edward Elgar, 2010) pp 143–144 Google Scholar; Leeson, P ‘Better off stateless: Somalia before and after government collapse’ (2007) 35(4) J Comp Econ 689 CrossRefGoogle Scholar.

9. For some representative examples from the extensive literature on this subject, see Armour, J and Deakin, S ‘Norms in private insolvency: the “London approach” to the resolution of financial distress’ (2001) 1 J Corp L Stud 21 CrossRefGoogle Scholar; Benson, BL ‘Economic freedom and the evolution of law’ (1998) 18 Cato J 209 at 218Google Scholar; Beale, H and Dugdale, T ‘Contracts between businessmen: planning and the use of contractual remedies’ (1975) 2 Br J L & Soc'y 45 CrossRefGoogle Scholar; Macaulay, S ‘Non-contractual relations in business’ (1963) 28 Am Sociol Rev 45 CrossRefGoogle Scholar.

10. Armour, J ‘Publication review: an economic and jurisprudential genealogy of corporate law’ (2002) 61(2) Camb L J 467 at 468Google Scholar.

11. Feldman, D ‘The nature of legal scholarship’ (1989) 52 Mod L Rev 498 at 498CrossRefGoogle Scholar.

12. Re City Fire Equitable Fire Insurance Co [1925] Ch 407 at 426.

13. Salomon v A Salomon & Co Ltd [1897] AC 22. Of course, one should bear in mind that the Lords' unanimous ruling was simply giving effect to the doctrine of corporate personality as enshrined in s 6 of the Companies Act 1862.

14. The quote is attributed to Baron Edward Thurlow, an eighteenth-century British lawyer and politician. The quotation was given wide publicity by John Coffee Jr's influential article: ‘No soul to damn: no body to kick’: an unscandalized inquiry into the problem of corporate punishment' (1981) 79 Mich L Rev 386.

15. The most influential paper in this movement was Jensen, M and Meckling, W ‘Managerial behaviour, agency costs and ownership structure’ (1976) 3 J Fin Econ 305 CrossRefGoogle Scholar.

16. Easterbrook, F and Fischel, D The Economic Structure of Corporate Law (Cambridge, MA: Harvard University Press, 1991) pp 38, 67–68Google Scholar; Klein, W ‘The modern business organization: bargaining under constraints’ (1982) 91 Yale L J 1521 at 1538–1540CrossRefGoogle Scholar.

17. The literature on shareholder primacy is too voluminous to cite in its entirety. Some useful examples include: Macey, J ‘An economic analysis of the various rationales for making shareholders the exclusive beneficiaries of corporate fiduciary duties’ (1991) 21 Stetson L Rev 23 Google Scholar; Black, B and Kraakman, R ‘A self-enforcing model of corporate law’ (1996) 109 Harv L Rev 1911 CrossRefGoogle Scholar; Smith, D Gordon ‘The shareholder primacy norm’ (1998) 23 J Corp L 277 Google Scholar. On two very different interpretations of shareholder primacy, one based around shareholder protection and the other centred on shareholder empowerment, see Johnson, L and Millon, D ‘Misreading the Williams Act’ (1989) 87 Mich L Rev 1862 at 1899–1907CrossRefGoogle Scholar.

18. Sections 21 and 33 of the Companies Act 2006.

19. Article 20 of Model Articles for Public Companies.

20. Section 168 of the Companies Act 2006.

21. Following extensive debate about this provision, the academic or practitioner consensus narrative suggests that it encapsulates a shareholder primacy approach, while the (unenforceable) social or public element of the duty is essentially ameliorative. On this, see eg Bruner, C Corporate Governance in the Common Law World (Cambridge, UK: Cambridge University Press, 2013) pp 32–33 CrossRefGoogle Scholar; Moore, above n 4, pp 28, 192–194; D Attenborough ‘The neoliberal (il)legitimacy of the duty of loyalty’ (2014) 65(4) NI Legal Q 405 esp at 418–427.

22. Sections 260–264 of the Companies Act 2006.

23. General Principle 3 and Rule 21 of the UK's Takeover Code prevent the types of unilateral action that a listed company's board of directors may take when subject to an actual or imminent unsolicited takeover bid. On this no-frustration prohibition, see eg Kershaw, D ‘The illusion of importance: reconsidering the UK's takeover defence prohibition’ (2007) 56(2) Int'l & Comp L Q 267 CrossRefGoogle Scholar.

24. For some useful works on neoliberalism, see Plant, R The Neoliberal State (Oxford: Oxford University Press, 2010)Google Scholar; Harvey, D A Brief History of Neoliberalism (Oxford: Oxford University Press, 2007)Google Scholar; Chomsky, N Profit Over People: Neoliberalism and Global Order (London: Seven Stories Press, 1998)Google Scholar.

25. There are too many works in this genre to cite exhaustively. For an overview, see eg Whincop, M ‘Painting the corporate cathedral: the protection of entitlements in corporate law’ (1999) 19 Oxford J Legal Stud 19 at 28CrossRefGoogle Scholar; Bainbridge, S ‘Community and statism: a conservative contractarian critique of progressive corporate law scholarship’ (1997) 82 Cornell L Rev 856 at 856Google Scholar.

26. Horwitz, M ‘Santa Clara revisited: the development of corporate theory’ (1985) 88 W Va L Rev 173 esp at 184–185Google Scholar; Horwitz, M The Transformation of American Law 1870–1960: The Crisis of Legal Orthodoxy (Oxford: Oxford University Press, 1992) pp 75, 94Google Scholar. For a fascinating discussion of a purportedly more demonstrable formulation of the theory in 1934 fascist Germany, see McGaughey, E ‘Ideals of the corporation and the nexus of contracts’ (2015) 78(6) Mod L Rev 1057 at 1066–1068CrossRefGoogle Scholar.

27. See, generally, Alchian, A and Demsetz, H ‘Production, information costs and economic organizations’ (1972) 62 Am Econ Rev 777 Google Scholar; Jensen and Meckling, above n 15; Fama, E ‘Agency problems and the theory of the firm’ (1980) 88 J Pol Econ 228 CrossRefGoogle Scholar; Easterbrook, F and Fischel, D ‘The corporate contract’ (1989) 89 Colum L Rev 1416 CrossRefGoogle Scholar; and Easterbrook and Fischel, above n 16.

28. On the categorisation of legal rules, see Eisenberg, M ‘The structure of corporation law’ (1989) 89 Colum L Rev 1461 CrossRefGoogle Scholar.

29. Easterbrook and Fischel, above n 16, p 166. On the counter-intuitive claim that company law may be trivial, see Black, B ‘Is corporate law trivial? A political and economic analysis’ (1990) 84 Nw U L Rev 542 Google Scholar; Romano, R ‘Answering the wrong question: the tenuous case for mandatory corporate laws’ (1989) 89 Colum L Rev 1599 CrossRefGoogle Scholar.

30. On the limits of conventional law and regulation, see Awrey, D, Blair, W and Kershaw, D ‘Between law and markets: is there a role for culture and ethics in financial regulation?’ (2013) 38 Del J Corp L 191 at 198–205Google Scholar.

31. The classic accounts of Hayek's distinction between constructed legal rules and decentralised law are: Hayek, FA Law, Legislation and Liberty (London: Routledge, 1973) esp pp 72–91 Google Scholar; Hayek, FA The Road to Serfdom (London: Routledge, 1944) esp pp 75–90 Google Scholar.

32. This is a process of ‘bottom up’ rule making that Hayek, Schumpeter and other lesser-known members of the ‘Austrian School’ of economics refer to as giving rise to a ‘spontaneous order’. See above n 31.

33. Moore, above n 4, p 73. For a similar US perspective, see eg Thompson, R ‘Corporate law criteria: law's relation to private ordering’ (2005) 2(1) Berkeley Bus L J 97 at 98Google Scholar.

34. Easterbrook and Fischel, above n 27, at 1428. See also Posner, R and Rosenfeld, A ‘Impossibility and related doctrines in contract law: an economic analysis’ (1977) 6 J Legal Stud 83 CrossRefGoogle Scholar.

35. This is based on the view that debates about the personification of the corporate entity are preoccupied with abstract concepts rather than practical or concrete issues. On this, see eg Bratton, W ‘The new economic theory of the firm: critical perspectives from history’ (1989) 41 Stan L Rev 1471 esp at 1493CrossRefGoogle Scholar.

36. Easterbrook and Fischel, above n 27, at 1428–1429.

37. Fischel, D ‘The corporate governance movement’ (1982) 35(6) Vand L Rev 1259 at 1273Google Scholar. For a general critique of economic rationality and its implications for the analysis of law, see Duxbury, N Patterns of American Jurisprudence (Oxford: Clarendon Press, 1997) pp 364–381 CrossRefGoogle Scholar; Wiegers, W ‘Economic analysis of law and “private ordering”: a feminist critique’ (1992) 42 U Toronto L J 170 CrossRefGoogle Scholar.

38. See Easterbrook and Fischel, above n 27, at 1425. On complete and incomplete contracting generally, see Deakin, S and Hughes, A ‘Economic efficiency and the proceduralisation of company law’ [1999] Company Fin & Insolv L Rev 169 at 177Google Scholar.

39. Easterbrook and Fischel, above n 27. For criticism of the thesis that shareholders constitute residual claimants, see Stout, L ‘Bad and not-so-bad arguments for shareholder primacy’ (2002) 75 S Cal L Rev 1189 at 1193–1195Google Scholar. It is also worth noting that the changing ownership patterns of large UK and US publically traded companies over recent decades might call into question whether shareholders can be viewed as residual risk bearers, because the dominant players in financial markets are increasingly large institutional investors (such as financial institutions or sovereign wealth funds), whose clients might be said to be the ultimate risk bearers. See eg Office for National Statistics Statistical Bulletin: Ownership of UK Quoted Shares 2014 (2 September 2015), available at http://www.ons.gov.uk/economy/investmentspensionsandtrusts/bulletins/ownershipofukquotedshares/2015-09-02 (accessed 25 March 2016).

40. Easterbrook and Fischel, above n 16, p 91.

41. A point made famous by Milton Friedman ‘The social responsibility of business is to increase its profits’ (1970) The New York Times Magazine. Cf Millon, D ‘Communitarians, contractarians, and the crisis in corporate law’ (1993) 50(4) Wash & Lee L Rev 1373 at 1378Google Scholar, pointing out that, ‘[t]his view assumes that feasible … contracting strategies exist for correction of the harmful external effects of shareholder/management activity and, perhaps, that such effects are relatively uncommon’. It is also worth noting that the environment is not privy to this notional bargaining process, which means that it has traditionally been viewed as an extra-contractual externality for which environmental regulation, rather than company law, represents the only available means of protection. On this point, see D Attenborough ‘An estoppel based approach to enforcing corporate environmental responsibilities’ (2016) 28(2) J Envtl L at tbc.

42. The classic example of this approach is RH Coase ‘The nature of the firm’ (1937) 4 Economica 386.

43. Stout, LA and Blair, MM ‘A team production theory of corporate law’ (1999) 85(2) Va L Rev 247 at 278Google Scholar.

44. Jensen and Meckling, above n 15, at 307.

45. This observation chimes with Robert Solow's prescription for doing good economics, in which he asserts that ‘[t]he very complexity of real life … [is what] makes simple [economic] models so necessary’. See R Solow ‘A native informant speaks’ (2001) 8(1) J Econ Method 111 at 111.

46. The literature on this subject is too extensive to cite. In brief, Adam Smith's view is that inequality of bargaining power stems from unequal possession of property. See Smith, above n 1, esp at ss 8 and 12. Karl Marx considered this to be part of the ephemeral bourgeois ideology thrown up by any systems of private property ownership. See eg Marx, K Wage-Labor and Capital, tr Lothrop, HE (New York: New York Labor News Company, 1902)Google Scholar. Thus, Smith and Marx, or indeed John Stuart Mill, would have had similar diagnoses, but would have drawn very different conclusions about what to do about it. Various progressive critiques of company law exist, and argue in general that this legal domain and its institutions are a major site of major site of injustice in society. See eg Parkinson, J Corporate Power and Responsibility (Oxford: Clarendon Press, 1995)Google Scholar. Adolf Berle came to opine that corporate regulation could contribute to a more ‘rationalized’ system of wealth distribution by establishing a charter of social and economic rights (in effect, nullifying the effects of unequal property and bargaining power): see ‘Property, production and revolution’ (1965) 65 Colum L Rev 1.

47. Whincop, above n 25, at 28, asserting that ‘contractarian theory is inevitable because of the contractual qualities of corporations’ (emphasis added).

48. Bainbridge, SM ‘Community and statism: a conservative contractarian critique of progressive corporate law scholarship’ (1997) 82 Cornell L Rev 856 at 856Google Scholar, observing that contractariansim has ‘mounted a largely hostile takeover of the corporate legal academy’.

49. It would be a crude oversimplification to suggest that these textbooks have uniformly and unreservedly endorsed a contractarian approach in UK company law and corporate governance. However, the following examples include recognition as a historical–legal fact that the company can be viewed in contractual terms. See eg Davies, P and Worthington, S Gower & Davies Principles of Modern Company Law (London: Sweet and Maxwell, 9th edn, 2012)Google Scholar; Kershaw, D Company Law in Context: Text and materials (Oxford: Oxford University Press, 2nd edn, 2012)Google Scholar. More explicit willingness to adopt a contractrian analysis can be found in Kraakman, R et al The Anatomy of Corporate Law: A Comparative and Functional Approach (Oxford: Oxford University Press, 2nd edn, 2009)Google Scholar; Cheffins, BR Company Law: Theory, Structure and Operation (Oxford: Oxford University Press, 1997)Google Scholar.

50. See eg Whincop, above n 25, at 28; R Grantham ‘The doctrinal basis of the rights of company shareholders’ [1998] Camb L J 554 at 578–579; Parkinson, JE ‘The contractual theory of the company and the protection of non-shareholder interests’ in Feldman, D and Meisel, F (eds) Corporate and Commercial Law: Modern Developments (London: Lloyd's of London Press, 1996) p 121 Google Scholar.

51. Law Commission Consultation Paper Corporate Directors (1997 LCCP No 153); Department of Trade and Industry (now the Department for Business, Innovation & Skills) Modern Company Law for a Competitive Economy: The Strategic Framework (London: DTI, 1999) at para 2.4.

52. Section 33 of the Companies Act 2006.

53. See eg Hickman v Kent Romney Marsh Sheep-Breeders Association [1915] 1 Ch 881. On this, see Kershaw, D Company Law in Context: Text and Materials (Oxford: Oxford University Press, 2nd edn, 2012) pp 79–87 Google Scholar.

54. See McVea, H ‘Section 994 of the Companies Act 2006 and the primacy of contract’ (2012) 75(6) Mod L Rev 1123 at 1123CrossRefGoogle Scholar, discussing Fulham Football Club (1987) Ltd v Richards & Anor [2011] EWCA Civ 855. On 22 February 2012, the Supreme Court refused permission to appeal the decision. Cf the recent UK Supreme Court decisions in Prest v Petrodel Resources Ltd and others [2013] UKSC 34 and VTB Capital plc v Nutritek International Corporation and others [2013] UKCS 5, which endorse the Salomon principle, above n 13.

55. The classic critiques are P Ireland ‘Property and contract in contemporary corporate theory’ (2003) 23(3) Legal Stud 453; W Bratton ‘Nexus of contracts corporation: a critical appraisal’ (1989) 74 Cornell L Rev 407. See also BR Cheffins ‘The trajectory of (corporate law) scholarship’ (2004) 63(2) Camb L J 456 at 485–487 (and accompanying footnotes), discussing the writings that have used the contractarian theory as a point of departure so as to develop a more fully rounded conception of company law.

56. Moore, M ‘Bridging the gap between labour law and company law’ (2015) 44(3) Indust L J 425 at 425CrossRefGoogle Scholar.

57. Cohen, MR ‘The basis of contract’ (1933) 46(4) Harv L Rev 553 at 568CrossRefGoogle Scholar, remarking that ‘[a]s the result of the various forces that have thus supported the cult of contractualism there has been developed in all modern European countries (and in those which derive from them) a tendency to include within the categories of contract transactions in which there is no negotiation, bargain, or genuinely voluntary agreement’.

58. Hodgson, GM ‘On the institutional foundations of law: the insufficiency of custom and private ordering’ (2009) 43(1) J Econ Issues 143 at 157CrossRefGoogle Scholar, noting that ‘[t]he [Stanley] Milgram experiments provide … some striking empirical material. Species existing in social groups for millions of years evolve dispositions to obey those in apparent authority. In specific cultural settings, we learn to recognise individuals in social positions with authority over others.’ See also Chomsky, N ‘Community activists’ in Mitchell, PR and Schoeffel, J (eds) Understanding Power: The Indispensible Chomsky (New York: Vintage, 2003) pp 196–198 Google Scholar.

59. Yadlin, O ‘A public choice approach to private ordering: rent-seeking at the world's first futures exchange’ (2000) 98 Mich L Rev 2620 at 2625CrossRefGoogle Scholar.

60. Ibid, at 2620.

61. Moore, above n 4, at 73.

62. See eg Nourse, V and Shaffer, G ‘Varieties of new legal realism: can a new world order prompt a new legal theory?’ (2009) 95 Cornell L Rev 61 Google Scholar; Erlanger, H et al ‘Is it time for a new legal realism?’ (2005) Wis L Rev 335 Google Scholar. The observation that all law is essentially a constituent element of public interests, power and democracy might lead to the normative extension of the state's acceptable political authority in company law and corporate governance. For arguments that run along these lines, see Oliver, D Common Values and the Public–Private Divide (Cambridge, UK: Cambridge University Press, 1999) ch 11Google Scholar; Fox-Decent, E Sovereignty's Promise: The State as Fiduciary (Oxford: Oxford University Press, 2011) pt ICrossRefGoogle Scholar. For an excellent overview of the public/private distinction in law, see also the published symposium: (1982) 130(6) U Pa L Rev 1331–1588.

63. Leeson, above n 8, p 136, noting that, ‘[a]ccording to conventional wisdom, spontaneous order may be able to create some limited order in the “shadow of the state.” But it cannot create enough order to make the state unnecessary. Spontaneous order may flourish within the government-created meta-rules of social order. But it cannot create such meta-rules itself.’

64. Ireland, P ‘Law and the neoliberal vision: financial property, pension privatisation and the ownership society’ (2011) 62(1) NI Legal Q 1 at 29Google Scholar. See also Campbell, D ‘Review article: the end of Posnerian law and economics’ (2010) 73 Mod L Rev 305 at 326CrossRefGoogle Scholar.

65. Picciotto, S ‘Constitutionalizing multilevel governance?’ (2008) 6(3) Int'l J Const L 457 Google Scholar.

66. Harvey, above n 24, p 2; B Amable ‘Morals and politics in the ideology of neoliberalism’ (2011) 9 Socio-Econ Rev 3 at 10.

67. On this observation about company law, see Armour, above n 10, at 468. On the absence of empirical analysis in legal scholarship more generally, see Heise, M ‘The importance of being empirical’ (1999) 26 Pepp L Rev 807 at 834Google Scholar; Rhode, DL ‘Legal scholarship’ (2002) 115 Harv L Rev 1327 at 1357–1358CrossRefGoogle Scholar. Cf Ulen, TS ‘A Nobel Prize in legal science: theory, empirical work, and the scientific method in the study of law’ (2002) 4 U Ill L Rev 875 Google Scholar.

68. Strine, LE ‘The inescapably empirical foundation of the common law of corporations’ (2002) 27 Del J Corp L 499 at 499Google Scholar.

69. Korobkin, R ‘Empirical scholarship in contract law: possibilities and pitfalls’ (2002) 4 U Ill L Rev 1033 at 1044–1045Google Scholar.

70. Ibid, at 1048.

71. Bernstein, above n 5, at 115.

72. Ibid, at 126–127, noting that this can happen for a number of reasons, but particularly when a claim has been conciliated, mediated, arbitrated or litigated outside of the club and/or parties have sought remedies elsewhere.

73. Ibid, at 126.

74. Ibid, at 124.

75. BD Richman ‘Community enforcement of informal contracts: Jewish diamond merchants in New York’ Harvard Law School John M Olin Center for Law, Economics and Business Discussion Paper No 384 (2002) at 15, available at http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=1719&context=faculty_scholarship(accessed 25 March 2016), noting that a party can appeal an arbitration board decision to New York state court only if there is a procedural irregularity. The board's substantive decisions are not reviewed. See Rabinowitz v Olewski, 100-AD 2d 539 (1984); see also Goldfinger v Lisker, 508 NYS 2d 159 (1986).

76. Ibid, at 129.

77. Ibid, at 130.

78. Richman, above n 75 at 17, observing that, ‘nearly 85–90% of DDC members are Jewish’ and ‘[s]ince Orthodox Jews tend to live in specific, insular communities, this means that familiar business relationships are also familiar community relationships, and the members’ ties to each other do not end at the Club's door’.

79. On the extent to which economic action is embedded in structures of social relations, see M Granovetter ‘Economic action and social structure’ (1985) 91(3) Am J Sociol 481.

80. English law equally states that any third party can be agreed by two sides to arbitrate in a commercial or domestic dispute.

81. Gomez, above n 7, at 228, noting that interaction with endogenous rules ‘is conditioned by the existence of an internal social hierarchy, which in turn [facilitates] compliance with the indigenous order’.

82. Ibid, at 229, remarking that ‘compliance with indigenous norms tends to be high basically because group members view them as legitimate, and this legitimacy extends to those in position of authority within the community’.

83. Goldstein, I Jewish Justice and Conciliation: History of the Jewish Conciliation Board of American, 1930–1968 and a Review of Jewish Judicial Autonomy (Jersey City, NJ: KTAV Publishing, 1981) p 92 Google Scholar.

84. Ibid, p 89.

85. Ibid, p 4.

86. Ibid, p 112.

87. Richman, above n 75, at 29.

88. Richman, BD ‘How community institutions create economic advantage: Jewish diamond merchants in New York’ (2006) 31(2) Law & Soc Inquiry 383 at 407CrossRefGoogle Scholar.

89. Ibid, at 408.

90. Ibid, at 407.

91. Heilman, S Defenders of the Faith – Inside Ultra-Orthodox Jewry (New York: Schocken Books, 1992) pp 277–286 Google Scholar.

92. Richman, BD ‘Firms, courts, and reputation mechanisms: towards a positive theory of private ordering’ (2004) 104 Colum L Rev 2328 at 2345CrossRefGoogle Scholar.

93. Hayek, FA ‘The use of knowledge in society’ (1945) 35 Am Econ Rev 519 at 527Google Scholar.

94. McMillan, J and Woodruff, C ‘Private order under dysfunctional public order’ (2000) 98 Mich L Rev 2421 esp at 2425CrossRefGoogle Scholar.

95. Goldstein, above n 83, p 48.

96. Ibid, p 99 (emphasis added). For a discussion of the various ways the law or state can ignore, strengthen or undermine social norms, see Cooter, R ‘Normative failure theory of law’ (1997) 82 Cornell L Rev 947 Google Scholar.

97. Buchler, S “Cohen Comes First” and Other Cases: Stories of Controversies before the New York Jewish Court of Arbitration (New York: Vanguard Press, 1933) p 79 Google Scholar.

98. Goldstein, above n 83, p 98.

99. Porat, A ‘Enforcing contracts in dysfunctional legal systems: the close relationship between public and private orders: a reply to McMillan and Woodruff’ (2000) 98 Mich L Rev 2459 at 2470CrossRefGoogle Scholar, remarking that private ordering is often not strictly private, although it may well bear the marks of one.

100. Ellickson, above n 6.

101. R Coase ‘The problem of social costs’ (1960) 3 J L & Econ 1 esp at 3–8, theorising that once legal entitlements are clearly defined, market actors in a transaction cost free world can bargain for a socially efficient outcome.

102. Ellickson, above n 6, p 4.

103. Ibid, pp 20–21. Ellickson also notes that ranchette owners, whose properties are generally much smaller than those of cattlemen, ‘may keep a farm animal or two as a hobby, but few of them make significant income from agriculture’.

104. Ibid, pp 22–25.

105. Ibid, p 5.

106. Ibid, p 4.

107. Ibid, pp 116–119.

108. Yngvesson, B ‘Beastly neighbors: continuing relations in cattle country’ (1993) 102 Yale L Jl 1787 at 1790CrossRefGoogle Scholar, suggesting that Ellickson's theory of motivation ‘is still firmly in the economist camp; it can account only for a dispassionate process of calculated decision-making’.

109. Ellickson, above n 6, p 117.

110. Ibid, p 25.

111. Ibid, pp 21 and 64, commenting that the shallow roots of ranchette owners in the area are reflected in cattlemen's perceptions that they are ‘not aware of the natural working order’, while ranchette owners ‘admire both the cattlemen and the folkways traditionally associated with rural Shasta County’.

112. Ibid, p 25.

113. Ibid, p 43.

114. Yngvesson, above n 108, at 1797. See also Ellickson, above n 6, p 54.

115. Ellickson, above n 6, p 3.

116. Ibid, p 32.

117. Ibid, p 58.

118. Campbell, above n 64, at 326, opining that ‘no market … can conform to the assumption of fully contingent contracting, nor exist free of regulation’. See also Hale, RL ‘Coercion and distribution in a supposedly non-coercive state’ (1923) 38(3) Pol Sci Q 470 CrossRefGoogle Scholar.