Key Concepts in David Friedman's Law and Economics:

1. Efficiency and Wealth Maximization: Friedman's work is grounded in the idea that economic analysis can be used to evaluate the efficiency of legal rules. In his influential book Law's Order: What Economics Has to Do with Law and Why It Matters, he argues that legal rules should be evaluated based on their ability to maximize wealth or overall economic welfare. This approach mirrors the economic philosophy of the Coase Theorem, which suggests that, under certain conditions, private parties can negotiate efficient outcomes in the absence of government intervention.
2. Private Law and Anarchism: Friedman is also known for his contributions to the theory of anarcho-capitalism, where he suggests that private individuals, rather than the state, should provide the services typically associated with government, such as law enforcement and adjudication. He argues that a system of private law, enforced by voluntary agreements and private courts, could be more efficient and just than the state-imposed legal system.
3. Contract Law and Property Rights: In Friedman's framework, property rights and contract law play crucial roles in creating incentives for individuals to engage in productive activities and resolve disputes efficiently. He argues that laws governing property and contracts should be designed to minimize transaction costs and allow for voluntary agreements to flourish.
4. Cost-Benefit Analysis in Legal Rules: A key aspect of Friedman's law and economics approach is his reliance on cost-benefit analysis to assess legal rules. He believes that laws should be designed to maximize social benefits while minimizing costs. For example, laws against fraud or theft should be evaluated not just on moral grounds but on the practical benefits they provide in terms of reducing harm and fostering economic transactions.
5. Critique of Traditional Legal Analysis: Friedman critiques traditional legal scholarship, which often focuses on moral, philosophical, or doctrinal considerations. Instead, he advocates for a more empirical and pragmatic approach, using economic tools to determine the most efficient and just legal outcomes. He is critical of the idea that legal systems should enforce moral or redistributive goals without considering the economic consequences.
6. Punishment and Deterrence: In line with economic reasoning, Friedman also analyzes criminal law through the lens of deterrence theory. He emphasizes that the effectiveness of punishment should be evaluated based on its ability to deter crime at the lowest possible cost, rather than on retributive or corrective justice principles.

Important Works by David Friedman:

1. "The Machinery of Freedom" (1973): This book is a seminal work in the anarcho-capitalist tradition, where Friedman discusses how a stateless society could function, relying on voluntary exchanges, private law enforcement, and competitive dispute resolution mechanisms.
2. "Law's Order: What Economics Has to Do with Law and Why It Matters" (2000): This is perhaps his most well-known work on law and economics. In this book, Friedman provides a comprehensive overview of how economic principles can be applied to various branches of law, such as property law, tort law, and contract law.
3. "Hidden Order: The Economics of Everyday Life" (1996): While not exclusively focused on law, this book explores how economic reasoning can be applied to everyday activities and decisions, and touches upon legal concepts indirectly through discussions of incentives and behavior.

Contributions to the Law and Economics Movement: