“It Takes Two Invisible Hands to Make a Market: Lex Mercatoria (Law Merchant) Always Emerges to Facilitate Emerging Market Activity“
Studies in Emergent Order, Vol. 3 (2010)
The privately produced, adjudicated and enforced body of customary law that governed commerce in medieval Europe is called the “Law Merchant”. Allegedly, this system was displaced by the end 1600, but since the 1950s, the term also has been applied to international commercial law. “Law Merchant” has considerable more relevance, however: a Law Merchant evolves whenever commerce emerges. Practices that facilitated emergence of commerce in medieval Europe were replayed in colonial America, and they are being replayed in Eastern Europe, Eastern Asia, Latin America, and cyberspace. Law Merchant arrangements also support “underground” economic activity when states constrain above-ground market development.