Aug 16, 2006
International Trade & International Commercial Law: The Historian’s Version
I do not believe that the new joint blog, The Austrian Economists, (http://austrianeconomists.typepad.com) has been mentioned yet, here on L&P. The bloggers consist of Peter Boettke, an illustrious contributing editor to L&P, & two of his former students, Christopher Coyne & Peter Leeson, both now academics themselves, of course.
In the blog, the last-named asks, “Who Enforces International Trade?” In the course of his answer, the following points are made:
"Where there are sizable gains from trade, individuals find inventive ways of overcoming obstacles that stand in the way of realizing them. Out of this, in the international arena, emerged private arbitration, private international commercial law, and customs for dealing with disreputable traders. These spontaneously emerged private institutions are ultimately responsible for the boom in international trade--not government. Many economists I've discussed this with are surprised that state enforcement is so unimportant for trade."
Some historical observations:
1. Long-distance trade dates back to the Early Upper Palaeolithic, if not earlier. On the European continent:- shells; flint & other stone materials; ivory, coral, & other materials for beads -- were all traded long distances from their points of origin. In Australia: inland aboriginal tribes survived only because they obtained grinding stones from those tribes with suitable quarries on their land. The stones were necessary to grind the hard seeds that formed a significant part of their diet in the inland. --- Since the later Palaeolithic, long-distance trade has grown alongside other commercial activity, accelerating especially from the latter part of the 19th century onwards.
2. For the 20th century onwards: There are numerous textbooks of international commercial law, as well as international commercial arbitration. International contracts generally specify the law of the contract. In common law countries, it is usually English common law. It is also stated whether any dispute goes to a court (specified), or to arbitration. If there is a dispute, but the law of the contract is not stated, courts _&_ arbitrators apply the law most closely linked to the contract. Courts will not touch a dispute where there is an arbitration clause;& arbitration awards are routinely enforced (if necessary) through the courts. Because of their expertise, judges of the commercial division of the High Court in London are often asked to arbitrate disputes between parties with no connexion otherwise with Britain. ETC.
3. ‘Private’ international law deals with private individuals & other private entities, as distinct from ‘public’ law which tries (tries) to tame govt brigands.
4. Common law -- including, latterly, international commercial law -- has grown over a period of some 800 years or more, through the actions of individuals. The role of justices has been to settle disputes & in doing so, to clarify the rules _already_ being acted upon. Legislation intruded only from the late 19th century, accelerating in the 20th (of course.) Regular police forces appeared only from the mid-19th century onwards. So for the bulk of the time, common law was never enforced. Justices lived from their lands & from court fees. Anything the sovereign paid them was a minor part of the total -- & _always_ long in arrears.
5. Historians have to inquire into what actually goes on.
In the blog, the last-named asks, “Who Enforces International Trade?” In the course of his answer, the following points are made:
"Where there are sizable gains from trade, individuals find inventive ways of overcoming obstacles that stand in the way of realizing them. Out of this, in the international arena, emerged private arbitration, private international commercial law, and customs for dealing with disreputable traders. These spontaneously emerged private institutions are ultimately responsible for the boom in international trade--not government. Many economists I've discussed this with are surprised that state enforcement is so unimportant for trade."
Some historical observations:
1. Long-distance trade dates back to the Early Upper Palaeolithic, if not earlier. On the European continent:- shells; flint & other stone materials; ivory, coral, & other materials for beads -- were all traded long distances from their points of origin. In Australia: inland aboriginal tribes survived only because they obtained grinding stones from those tribes with suitable quarries on their land. The stones were necessary to grind the hard seeds that formed a significant part of their diet in the inland. --- Since the later Palaeolithic, long-distance trade has grown alongside other commercial activity, accelerating especially from the latter part of the 19th century onwards.
2. For the 20th century onwards: There are numerous textbooks of international commercial law, as well as international commercial arbitration. International contracts generally specify the law of the contract. In common law countries, it is usually English common law. It is also stated whether any dispute goes to a court (specified), or to arbitration. If there is a dispute, but the law of the contract is not stated, courts _&_ arbitrators apply the law most closely linked to the contract. Courts will not touch a dispute where there is an arbitration clause;& arbitration awards are routinely enforced (if necessary) through the courts. Because of their expertise, judges of the commercial division of the High Court in London are often asked to arbitrate disputes between parties with no connexion otherwise with Britain. ETC.
3. ‘Private’ international law deals with private individuals & other private entities, as distinct from ‘public’ law which tries (tries) to tame govt brigands.
4. Common law -- including, latterly, international commercial law -- has grown over a period of some 800 years or more, through the actions of individuals. The role of justices has been to settle disputes & in doing so, to clarify the rules _already_ being acted upon. Legislation intruded only from the late 19th century, accelerating in the 20th (of course.) Regular police forces appeared only from the mid-19th century onwards. So for the bulk of the time, common law was never enforced. Justices lived from their lands & from court fees. Anything the sovereign paid them was a minor part of the total -- & _always_ long in arrears.
5. Historians have to inquire into what actually goes on.