In the Maxims of Adam Smith, extracted in Chapter 4, the requirement of certainty (Maxim II) was considered by Smith to be the most important, even more important than equity. In eighteenth-century Britain, Smith was concerned about preventing arbitrariness and limiting the coercive power of the sovereign. Smith was also much concerned about the convenience of taxation. He strongly criticised the taxes of his time for exposing taxpayers to ‘much unnecessary trouble, vexation and oppression’ and being ‘so much more burdensome to the people than they are beneficial to the sovereign’. He said some taxes were payable at an ‘inconvenient’ time, while applauding other taxes levied when the taxpayer would have the funds to pay.1 Finally, Smith expressed concern about abuse of power by tax inspectors, bemoaning the ‘frequent visits and the odious examination of the tax-gatherers’, with their expensive ‘perquisites’ and the temptation through their office to ‘insolence’ and corruption.

Although transnational law is often characterized as ‘non-state law’, states actually play a significant role in the construction and operation of much transnational regulation. Chapter 6 examines the most common ways that states do this. These include: by giving transnational effect to their own domestic laws – what is known as ‘extraterritoriality’; by imposing economic sanctions against regimes that are not comporting with transnational legal norms; by adjudicating transnational regulatory disputes in their domestic courts – i.e., ‘transnational litigation’; and by collaborating in the formation of intergovernmental networks that shape and sometimes even create transnational regulatory regimes. Each of these techniques has its own set of comparative advantages and disadvantages insofar as both their efficacy and their legitimacy implications.

Today, the opposite applies in most successful tax states. Progressive tax rates apply to labour income but capital income and gains are often taxed at lower rates, while a variety of exemptions, concessions and reduced tax rates apply to some kinds of saving. This lower tax on capital income and gains is combined with a corporate tax rate that is almost always lower than the top marginal income tax rate (see further Chapter 7). Wealth and inheritance taxes have been repealed or significantly reduced in many countries since the 1980s.

This book has explored the history and development of the tax state in achieving success in the twentieth century, through supporting and harnessing the returns to economic growth and delivering public goods and redistribution to its population.

Chapter 8 explores how transnationalization is affecting legal practice. First, it is creating new kinds of commercial law firm, called ‘global law firms’. Global firms are comprised of a geographically and culturally disperse collection of local branch offices, which results in distinctive organizational issues. It is also results in a more complex form of commercial practice, demanding ever greater forms of specialization: this is particularly evident in the revival of the role of in-house counsel, and in new, emerging kinds of legal practice found in the Global South. Globalization is also producing new, global forms of legal advocacy, which pose their own distinct sets of practical and normative issues and challenges depending on the nature of the issue being advanced (such as whether the advocacy is in response to a particular condition or to a particular event; or whether it is seeking to address primarily local injustices or more globally prevalent injustices). Transnational legal practice also gives rise to new issues regarding professional ethics, with different domestic legal regimes addressing these issues in sometimes contradictory ways.

Budgeting is a political process constrained by legal rules and institutions for legislating and financing policy, combined with an annual accounting and allocation of resources to expenditures, functions and agencies in government. Aaron Wildavsky explained in 1974 that the ‘traditional’, annual line-item cash budget ‘is a product of history, not logic. It was not so much created as evolved. Its procedures and its purposes represent accretions over time rather than propositions postulated at a moment in time’.1

Bentham aspired to be the ‘legislator of the world’. At first, his aim was for the Pannomion to serve as a complete code of laws, consisting of the constitutional code, civil code, penal code, and procedural code. He tried to convince many countries to adopt his system. There have been many criticisms of Bentham’s theory of codification, some of which can be answered by examining his constitutional code. In this chapter, I will discuss two categories of criticism.

Whether or not ‘the love of money is the root of all evil’, access to money is the root of much enterprise. Ideally, banks should channel savings into investment. Banks make loans, and so have huge influence on economic activity. If banks give more credit, people spend more money. If everyone spends money wisely, if more people are productively employed and the supply of goods and services expands proportionally, this creates beneficial economic development. But if more people spend (without improving productivity) and the supply of goods and services does not expand, the increased competition for limited resources will result in inflation: price rises, relative to people’s income or wealth.