Customary commercial law, credibility, contracting, and credit in the high Middle Ages (original) (raw)
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Generalizing the Law Merchant Story
DergiPark (Istanbul University), 2007
L ex Mercatoria, or the "Law Merchant," provides classical liberals and libertarians with an important example of effective law without coercive state authority. Within the legal and classical liberal literaturse, Lex Mercatoria usually refers to the privately produced, privately adjudicated and privately enforced body of customary law that governed virtually every aspect of commercial transactions in Europe and the Middle East by the end of the eleventh century. Many writers suggest that this system of law was largely displaced in Europe by the end of the seventeenth century, but beginning in the mid-1950s, Lex Mercatoria also began to be applied to certain aspects of modern international commercial law (De Ly 1992: 1). The argument presented below, however, is that the historical Law-Merchant story has considerable more relevance today than its implications for international commercial activity.. The fact is that a law merchant arises any time that a commercial system begins to evolve, so many of the events underlying the emergence of commerce after the "dark ages" of medieval Europe are being replayed as Eastern Europe emerges from the dark ages of communist rule. The same is true in parts of Asia as a commercial sector attempts to emerge in the face of ongoing totalitarian political control, and in various parts of Latin American where economies are attempting to escape the effects of long periods of political turmoil and totalitarian governments. Furthermore, the emergence of a law merchant is likely to be necessary for the successful evolution of a commercial society into a strong and healthy market economy.
The materials analysed in this chapter provide a glimpse into the instructional and normative purposes of merchant manuals. It is evident that some of their contents were stricter than the framework of official law and even went against merchants’ practices and common dealings. Ympyn’s treatise and others contain prescriptive parts that were advice, however, rather than a reflection of rules set forth by legislation or custom. Merchant guidebooks must be considered for the individual thoughts and choices of their authors, as a consequence, and are not always paraphrasing ideas of a merchant community. This chapter, then, provides a clear warning against viewing this ars mercatoria-literature as a historical source of conduct and of normative ideas concerning trade. In fact, the limited value of mercantile guidebooks in this respect adds to other evidence pointing in the direction of limited juridification of commerce, even in the sixteenth century. Not only was official law rather minimal, it seems that even normative practices of merchants were not abundant. Antwerp records dating from the 1500s demonstrate that customs of merchants were seldom mentioned in court-related documents and inquiries into customs; also academic literature does not mention them very often. Both the nature of commerce as well as a mercantile culture that carefully administered business provide arguments for this legal situation. An overarching academic and local law, which were imposed through judgments and by legal professionals, offers a possible explanation for the low amount of customs found in official documents; however, the latter were not brought forward, not even by merchants, in a setting that was generally custom-friendly. One can speculate that the historiography concerning trade norms in the later Middle Ages and early modern period will benefit from a more modest approach towards normative practices of merchants, which have often been inflated to transnational legal levels. In this regard, pursuing a broad perspective on the features of interactions in commerce clearly seems to be a prescription for modesty.
2006
The emergence of medieval markets has commonly been seen in the literature as hampered by lack of contract enforcement and archaic institutions like merchants' communal responsibility. Merchants traveling to a different marketplace to trade there could be arrested and held liable for any debts incurred by any merchant from their hometown. We revisit a traditional literature in legal history, which argued that market making and market privileges arose precisely in the context of communal responsibility and its regulation through trade treaties between cities. Communal responsibility was effective in enforcing credit contracts and enabled merchants to use bills of exchange in long distance trade even if reputation effects were absent. We implement communal responsibility in the Lagos and Wright (2005) matching model of money demand, assuming that preference shocks follow a two-state Markov chain. We derive conditions under which cash and credit in the anonymous matching market coexist. For fixed but sufficiently low cost of credit, agents will pay with cash in low-quality matches, and use cash and credit in high-quality matches. The use of credit in the communal responsibility equilibrium reduces the money holdup in the matching market and thus leads to Pareto improvements. We argue that historically, financial market making using communal responsibility was effective in overcoming the cash constraints in cross-city trade, while locking traders into a de-facto firm with their own merchant guild's members.
2022
The instabilities that have characterized the international economic settings of the last decades and the effort to synchronize the judiciary systems across continents, to allow for a smoother exchange pattern in spite of nationalistic tendencies, invite us to reflect more on the development of the commercial judiciary systems of the past. Legal and institutional resources are today, as were then, used by actors to manage commercial conflicts, in order to achieve better terms – or enforce – contracts and business relationships. The panel aims at investigating the judiciary Western European context in the Late Medieval period (13th-16thcenturies), with a focus on new approaches, methods, and sources. Being Europe an intersection of local customs and ius comune, characterized by diverse economic policies and political framework with dozens of competing jurisdictions, economic and financial activities, and lifestyle, it is the perfect case study to analyze the way commercial conflicts were managed. The papers will focus on the legal culture, the arguments, and the strategies deployed by the actors (merchants, craftsmen, ordinary people) in order to defend their reasons in court and get out of (but not necessarily resolving) a conflict: Which evidence were deemed admissible, or useful, and what knowledge of written norms did the actors have? Did trust and good behavior play an important role in a moral economy? Were actors able to deploy different strategies, using, for example, other courts or institutions (royal court, nations, etc.), extrajudicial negotiation, or political pressure (retaliation, economic diplomacy, etc.)?
Medieval Merchants and Money: Essays in Honour of James L. Bolton
The London Journal, 2017
Preface ix List of contributors xiii List of figures and tables xvii List of abbreviations xix I. London merchants: companies, identities and culture 1. Negotiating merchant identities: the Stockfishmongers and London's companies merging and dividing, c.1450-1550 3 Justin Colson 2. 'Writying, making and engrocyng': clerks, guilds and identity in late medieval London Matthew Davies 3. What did medieval London merchants read? Caroline M. Barron 4. 'For quicke and deade memorie masses': merchant piety in late medieval London Christian Steer II. Warfare, trade and mobility 5. Fighting merchants Sam Gibbs and Adrian R. Bell 6. London and its merchants in the Italian archives, 1380-1530 113 F. Guidi-Bruscoli 7. Settled or fleeting? London's medieval immigrant community revisited 137 Jessica Lutkin III. Merchants and the English crown 8. East coast ports and the Iceland trade, 1483-5 (1489): protection and compensation 159 Anne F. Sutton Medieval merchants and money viii 9. Royal servants and city fathers: the double lives of London goldsmiths at the court of Henry VII S. P. Harper IV. Money and mints 10. Medieval merchants and the English mints and exchanges, 973-1489 Martin Allen 11. The prosecution of counterfeiting in Lancastrian England Hannes Kleineke V. Markets, credit and the rural economy 12. The economic impact of clothmaking on rural society, 1300-1550 John Oldland 13. Dealing in crisis: external credit and the early fourteenth-century English village Phillipp R. Schofield xi Preface negotiability) played in keeping the wheels of the economy turning. This largely (in his view) negated the effects of the two main periods of bullion shortage from c.1370-1420 and c.1440-80 which continue to be emphasized by the so-called 'monetarist' historians. These debates remain very much alive, and Jim's contribution to them has been pivotal, connecting as it does with other enduring questions about urban prosperity/decline, wage labour, and the role of royal governments in managing economic affairs. The publication of Money in the Medieval English Economy drew together many of these strands in a book described by one reviewer (himself one of the 'monetarists') as 'one of the most important books published in English medieval economic history during the past two decades'. 1 The essays in this volume are a small cross-section of the research in progress that, to one degree or another, connects with Jim's work and shows its diversity and influence. The contributors include former students, collaborators and long-standing academic colleagues and friends. The editors would like to express their gratitude to them, first of all for their participation in the original conference, for agreeing to contribute to this volume, and for their responsiveness to suggestions from reviewers. They are also grateful to the IHR for agreeing to publish this volume in its conference series: a fitting way to celebrate Jim's contribution to the life of the Institute as well as the wider world of economic history.
The Twenty-First-Century Law Merchant
American Business Law Journal, 2011
nities within their realms. 5 Opposing these views is the proposition that the Law Merchant and merchant justice never was, nor is, distinct, uniform, cosmopolitan, or transregional in nature or operation. Nor is it grounded in the spontaneous practices of merchants, but instead it derives from territorial measures, which local princes invoked to regulate itinerant merchants within their territorial regimes. 6 The tale of the Law Merchant's autonomy, or independence, is simply that: a tale to disguise the extent to which local rulers exerted territorial control over the local activities of transregional merchants for economic and political benefit. 7 However romantic the portrayal of the Law Merchant may be, it falls short of reality. Far from being developed consciously to serve as a uniform system of law, it is little more than the uneven convergence of local customs into a body of merchant practices referred to loosely as the Law Merchant. The result, at best, is a variable institution that reflects the disparate social, cultural, and political values of local authorities, courts, communities, and merchants at distinct moments in time, place, and space. 8 5 It is arguable that political and economic interests in promoting transregional trade were also significant drivers behind the conception of a universal Law Merchant. See, e.g., AMALIA D. KESSLER, A REVOLUTION IN COMMERCE: THE PARISIAN MERCHANT COURT AND THE RISE OF COMMERCIAL SOCIETY IN EIGHTEENTH-CENTURY FRANCE 73, 86 (2007) (providing a critique of the procedural virtues associated with the eighteenth-century Law Merchant based on the limited and nonarchival writings of a merchant, Toubeau). 6 For an excellent account of the operation of and deficiencies in the eighteenth-century Law Merchant in France, see KESSLER, supra note 5 (demonstrating how merchants associated with the Parisian Court helped to reconceptualize commerce and ultimately accounted for the demise of corporatism culminating in the revolution of 1789).
Contract Enforceability and Economic Institutions in Early Trade The Maghribi Traders' Coalition
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. This paper presents an economic institution which enabled 11th-century traders to benefit from employing overseas agents despite the commitment problem inherent in these relations. Agency relations were governed by a coalition -an economic institution in which expectations, implicit contractual relations, and a specific information-transmission mechanism supported the operation of a reputation mechanism. Historical records and a simple game-theoretical model are used to examine this institution. The study highlights the interaction between social and economic institutions, the determinants of business practices, the nature of the merchants' law, and the interrelations between market and nonmarket institutions. (JEL N75, D23, J41) Without the ability to exchange, the potential for growth is rather limited. Indeed, the historical process of European economic growth is marked by ever-expanding exchange relations. The contribution of an enhanced ability to exchange went beyond its direct economic impacts as, for example, the late-medieval European commercial revolution from the 11th to the 14th centuries led to fundamental social and political changes (see e.g., Robert S. Lopez, 1976;). Yet not much is