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School of jurisprudence in the nineteenth century.) Not only relevant to private
relationships, we shall also see that the ˜private law™ of contract has encroached
into the province of the ˜public law™ of government. Commercial law trends and
concerns therefore extend beyond the account of merchants and economics.


12.1 The lex mercatoria

12.1.1 Definition
The lex mercatoria derives from its customary and spontaneous nature. It is a
merchant-driven, historically developed body of law, independent of national
law1 (or at least relegating domestic laws to the bottom of the list of sources),
governing the ˜international, commercial and ¬nancial legal order™.2

111
See Berthold Goldman, ˜The Applicable Law: General Principles of Law “ the lex mercatoria™ in
Julian D. M. Lew (ed.), Contemporary Problems in International Arbitration (London: Centre
for Commercial Law Studies, Queen Mary College, University of London, 1986), pp. 114“16.
112
J. H. Dalhuisen, ˜Legal Orders and their Manifestation: The Operation of the International
Commercial and Financial Legal Order and its Lex Mercatoria™ (2006) 24 Berkeley Journal of
275 International commercial law and private governance


Substantive tenets of this law can be extracted from a short list expressed by
Lord Justice Mustill.
• Contracts should prima facie be enforced according to their terms (pacta sunt
servanda).
• A contract should be performed in good faith.
• A state entity cannot be permitted to evade the enforcement of its obligations.
• If unforeseen di¬culties intervene in the performance of a contract, the
parties should negotiate in good faith to overcome them, even if the contract
contains no revision clause.
• One party is entitled to treat itself as discharged from its obligations if the
other party has committed a breach, but only if the breach is substantial.
• No party can be allowed by its own act to bring about a non-performance of
a condition precedent to its own obligation.
• A party that has su¬ered a breach of contract must take reasonable steps to
mitigate its loss.
• A party must act promptly to enforce its rights, on pain of losing them by
waiver.
• Failure by one party to respond to a letter written to it by the other is regarded
as evidence of assent to its terms.3
Jan Dalhuisen expands his de¬nition of the lex mercatoria to more universalis-
tic principles of wider application, including procedural fairness, protections
against fraud, bribery, market manipulation, money laundering and also fun-
damental principles of environmental protection.4 Capitalist if not Western
though these notions are, the term ˜universal™ may be used of them if it is
accepted that there can be a ˜universe™ signi¬ed by a particular industrial com-
munity, unconstrained by territory.5
The modern lex mercatoria ˜provides a nearly complete potential for the res-
olution of international con¬‚icts™, although national enforcement may be
required6 in the event that customary or peer-based recognition is not accorded

International Law 129“91, 132, and his Dalhuisen on International Commercial, Financial and
Trade Law (Oxford: Hart Publishing, 2nd edn 2004), esp. pp. 193“4, and more generally
section 1, part III.
113
For his 20 principles, see Michael J. Mustill, ˜The New Lex Mercatoria: The First Twenty-¬ve
Years™ (1988) 4 Arbitration International 86“119, 91. Klaus Peter Berger proposes 78 rules in
The Creeping Codi¬cation of the Lex Mercatoria (The Hague: Kluwer Law International, 1999),
114
pp. 278“311. Dalhuisen, Trade Law, p. 194.
115
See Michael Douglas, ˜The Lex Mercatoria and the Culture of Transnational Industry™ (2006)
13 University of Miami International and Comparative Law Review 367“401, 380“1. On the
narrowness of these interests serving the ˜mercatocracy™, see A. Claire Cutler, ˜Globalization,
the Rule of Law, and the Modern Law Merchant: Medieval or Late Capitalist Associations?™
(2001) 8 Constellations 480“502, further illustrated in Ronald Charles Wolf, Trade, Aid, and
Arbitrate: The Globalization of Western Law (Aldershot: Ashgate, 2004) with imperialist
momentum. Cf. section 12.4, p. 292 below.
116
Hans-Joachim Mertens, ˜Lex Mercatoria: A Self-applying System Beyond National Law?™ in
Gunther Teubner (ed.), Global Law Without a State (Brook¬eld: Dartmouth Publishing
Company Limited, 1997), p. 36.
276 Competing Jurisdictions Case Studies


the determination by a party. Typically, domestic concepts of property, security,
equity and trusts are relied upon.7 The qualities of the lex mercatoria are said to
be its ˜universal character™, ˜informality and speed™, ˜reliance on commercial
custom and practice™8 (although cost bene¬t and speed may sometimes be ques-
tionable)9 and ˜¬‚exibility and dynamic ability to grow™ (if not change quickly).10
Privacy may also be maintained.
Ideologically, the lex mercatoria embodied before its time, and continues to
embody, the major modern ethos of free trade, ˜[e]volving out of the economic
theory of perfect competition and philosophical conceptions of free will . . .™11
This law exists at a relatively interior point on the Space Axis of our Space“Time
Matrix, closer to the participants™ allegiances rather than further away and
imposed. The customary nature of this law profoundly grounds it in a relatively
common history and future vision. A brief history of the lex mercatoria and the
private international law of trade will demonstrate the deeply ingrained and
historically evolving and surviving nature of this ¬eld of law, even though its
continuity and quality of being a system as such is questionable for di¬erent
periods. The aim is to see how a functioning legal system can evolve and survive
with minimal state dependence. This occurs in a system featuring the interior
cultural generation of norms which are for the most part successfully objecti-
¬ed, if need be, with political enforcement on the exterior end of the Space Axis.


12.1.2 History
What would now be considered ˜transnational™ commercial law in the Western
tradition can be uncovered in ancient Athens and classical Rome. Those laws
were both emporial and customary.12 The medieval lex mercatoria varied in
content in di¬erent locations, which is to be expected of any customary laws. Of
chief importance to the medieval lex mercatoria was its reliance upon ˜the
merchants themselves, who organized international fairs and markets, formed
mercantile courts, and established mercantile o¬ces in the new urban commu-
nities that were springing up throughout western Europe™.13 Even outside the
117
Dalhuisen, ˜Legal Orders™, 189“90.
118
Bruce L. Benson, quoted in Berger, Creeping Codi¬cation, p. 231.
119
Clive M. Schmittho¬, ˜Finality of Arbitral Awards and Judicial Review™ in Julian D. M. Lew
(ed.), Contemporary Problems in International Arbitration (London: Centre for Commercial
Law Studies, Queen Mary College, University of London, 1986), p. 230.
110
Dalhuisen, ˜Legal Orders™, 167“8.
111
Leon E. Trakman, The Law Merchant: The Evolution of Commercial Law (Littleton: Fred B.
Rothman & Co., 1983), p. ix.
112
See C. M. Reed, Maritime Traders in the Ancient Greek World (Cambridge: Cambridge
University Press, 2003); Dalhuisen, Trade Law, pp. 38“47.
113
Harold J. Berman, Law and Revolution: The Formation of the Western Legal Tradition
(Cambridge, MA: Harvard University Press, 1983) p. 340. See too Susan Reynolds, Kingdoms
and Communities in Western Europe, 900“1300 (Oxford: Clarendon Press, 2nd edn 1997),
pp. 57“8; T. F. T. Plucknett, A Concise History of the Common Law (London: Butterworths,
1956), p. 23; Albrecht Cordes, ˜The Search for a Medieval Lex Mercatoria™ (2003) Oxford
University Comparative Law Forum 5 at ouclf.iuscomp.org (viewed 6 January 2007); Mary
277 International commercial law and private governance


independent merchant courts, the English common law of the King™s Bench of
Edward II sought evidence of customs from merchants. In England, courts of
Piepowder (from pieds poudr©s, referring to the dusty feet of the merchants)14
were held in fairs and market towns in the thirteenth and fourteenth centuries.
They comprised judges who were themselves merchants, who aimed to dispense
˜speedy justice to travellers™,15 although subject to review in King™s Bench.16
Reinforcing the centrality of God to all aspects of social life at this time and
the authority of law, the mercantile law was supposed to re¬‚ect the canon law.
Regardless of the agreement of the merchants, they believed that ˜the salvation
of their souls depended on the conformity of their practices to a system of law
based on the will of God as manifested in reason and conscience™.17 The reli-
gious dimension of the medieval lex mercatoria demonstrated the law™s highly
allied relationship with the belief of the merchants and their capacity to be
autonomous generators of their own law. It is an illustration of how central a
lived law can be to a society (or at least a subculture) concerned with virtue and
reputation,18 as opposed to the anomie of distantly imposed state law. Despite
the interior, cultural allegiance on the Space Axis inspired by the lex mercatoria,
it also possessed an exterior, political quality. It became increasingly reduced to
writing and subject to impartial adjudication with emerging forms of mercan-
tile courts.19 There was a European universality to this law amidst its diversity,
akin to the ius commune. Medieval legislation re¬‚ected the local customs. ˜Each
country, it may almost be said each town, had its own variety of Law Merchant,
yet all were but varieties of the same species. Everywhere the leading principles
and the most important rules were the same, or tended to become the same.™20
Merchants spoke di¬erent languages and hailed from di¬erent cultures. Trust
did not, of course, follow automatically. The legal rules of the lex mercatoria
helped to overcome these di¬erences “ to reconcile yet maintain the plurality “
by entrenching mercantile custom in uniform codes, seeking those customs
which were constant and able to sustain high-level commerce. With the inter-
nationalisation of seaborne trade and commerce in the ¬fteenth and sixteenth
centuries, and the opening up of the New World from the Atlantic, there was
increased demand for uniform commercial and maritime laws. The prototypi-
cal state sovereignty manifesting around that time, we have already seen, had
the e¬ect of consolidating the political commonalities amongst provinces into

Elizabeth Basile et al., Lex Mercatoria and Legal Pluralism: A Late Thirteenth-century Treatise
and its Afterlife (Cambridge, MA: The Ames Foundation, 1998).
114
O. F. Robinson, T. D. Fergus and W. M. Gordon, European Legal History (London:
Butterworths, 1994), [6.5.2] (on maritime and guild law sources in Europe in addition, see
generally ch. 6).
115
W. J. V. Windeyer, Lectures on Legal History (Sydney: Law Book Co, 1957), p. 176.
116
J. H. Baker, ˜The Law Merchant and the Common Law Before 1700™ (1979) 38 Cambridge Law
17
Journal 295“322, 306. Berman, Law and Revolution, p. 339.
118
See Avner Greif, ˜On the Political Foundations of the Late Medieval Commercial Revolution:
Genoa during the Twelfth and Thirteenth Centuries™ (1994) 54 Journal of Economic History
19
271“87. Berman, Law and Revolution, p. 341.
120
William Mitchell, quoted in Berman, Law and Revolution, p. 343.
278 Competing Jurisdictions Case Studies


large, territorial spheres of containable disruption. The relative uniformity of
the lex mercatoria was undermined by this style of state sovereignty.21 This was
an incident of the monopoly on law and authoritative norms sought by the
emerging nation-state.
Debate exists as to the nature of the lex mercatoria as a legal system, if indeed
it was (or is) a legal system,22 and there is at least some con¬‚icting evidence.23
Was it actually a separate system of positive law which was incorporated, for
example, into the common law of England? Was it simply a creature of custom
which developed within the common law? Was it part of the ius gentium (law of
nations) which recognised a universal lex mercatoria?24
It is not so important for our purposes whether, for example, the English
common law received the mercantile law principles from an outside system
into its own system or whether those norms emanated from its society. Either
is allowed by the broad de¬nition of ˜law™ adopted in this book, being
norms which, for one reason or another, achieve authority or receive allegiance.
Day-to-day authority is what is vital. Signi¬cantly, the authority of the lex mer-
catoria was ¬rmly grounded in the community it served. A cosmopolitan com-
mercial tradition in Europe had given rise to similar issues which were dealt
with in similarly principled manners across territorial jurisdictions.25
Transactional documents re¬‚ected uniformity in character and design. Pro-
ceedings before lex mercatoria tribunals commonly featured oral adjudica-
tion, informal testimonies, judicial notice of trade custom together with speedy
resolution of the dispute.


12.1.3 The nature of the ˜new™ lex mercatoria
Whilst the lex mercatoria has been around for at least 900 years or even longer,
back to classical Greek and Roman times, it has undergone, as is to be expected,
substantial transformations. It is problematical whether the perceived continu-
ity has survived the disjunctures over time. Clive M. Schmittho¬ considered

121
Trakman, Law Merchant, pp. 11, 21.
122
See Stephen E. Sachs, ˜From St Ives to Cyberspace: The Modern Distortion of the Medieval
“Law Merchant” ™ (2006) 21 American University International Law Review 685“812 and Emily
Kadens, ˜Order within Law, Variety within Custom: The Character of the Medieval Merchant
Law™ (2004) 5 Chicago Journal of International Law 39“65, suggesting the need for revising the
traditional belief in the extent of the systemic and autonomous nature of the lex mercatoria.
123
Charles Donahue Jr, ˜Medieval and Early Modern Lex Mercatoria: An Attempt at the Probatio
Diabolica™ (2004) 5 Chicago Journal of International Law 21“37, 34“6.
124
In the seventeenth century, Serjeant Davies, Sir Edward Coke and Sir Matthew Hale thought
the lex mercatoria part of the English common law: Baker, ˜Law Merchant™, 314“16. Lord
Mans¬eld in the eighteenth century acknowledged the transnational, ius gentium-like
dimensions of mercatorial maritime law: Trakman, Law Merchant, pp. 27“8. Blackstone
suggested a separate system: Sir William Blackstone, Commentaries on the Laws of England,
4 vols. [1783] (New York: Garland Publishing Inc., 1978), vol. I, p. 273.
125
See Harold J. Berman and Colin Kaufman, ˜The Law of International Commercial
Transactions (Lex Mercatoria)™ (1978) 19 Harvard International Law Journal 221“77, 224“9.
279 International commercial law and private governance


the new law merchant di¬erent, taking its binding force only from being incor-
porated into national legal systems.26 The di¬erences between the old and new
types include the choices of jurisdiction and law which can govern parties and
arbitrators; and modern arbitration can be expensive and time-consuming.27 It
is possible, though, to see ˜that the old law merchant of the eleventh to the six-
teenth centuries never died but continued to develop, even in the heyday of
nationalism, as part of the jus gentium™28 “ in the sense of a common legal
science with similar principles. Continuing to develop today, such an approach
to the lex mercatoria is to emphasise general principles of norm generation by,
and application of the norms in, industrialised communities of importers and
exporters. In these communities, there is a universality to the lex mercatoria,
generally conceived, although not grounded in dogmatic rules. Whilst many
principles of state commercial laws can be found in lex mercatoria principles,
many of those state laws originate in merchant custom.29 Therefore national
legal systems are not as crucial to the modern lex mercatoria as might otherwise
be thought.
Further to our earlier introduction of the concept of lex mercatoria in
section 12.1.1 above, the modern lex mercatoria has been described as a body
of international legal practice with a system of norms which is open to judi-
cial decisions. These principles exist relatively independently from national
laws30 and public international law, in party autonomy and usage.31 None-
theless, there may be elements of lex mercatoria in public international law,
uniform laws and general principles, rules of international organisations,
standard form contracts and arbitral awards.32 The lex mercatoria may refer to
the laws of individual states simply ˜as a quarry from which to draw the
raw materials for generalised rules™, within the ˜strong family resemblance
between laws of developed trading states™.33 Similar quarries for the lex mer-
catoria exist in scholarly discourse, arbitral awards, and international har-
monisation initiatives. As such, the modern lex mercatoria bears the quality of
being a somewhat loosely organised legal system with practical, local
variations, with the internal resources to adapt to change over time whilst

126
Clive M. Schmittho¬, ˜Finality™, p. 232.
127
Leon E. Trakman, ˜From the Medieval Law Merchant to E-Merchant Law™ (2003) 53 University
of Toronto Law Journal 265“304, 267. At 284“93, other variances such as the di¬erent training
of judges, regulations created not by custom, and procedural formality can be found between
the medieval lex mercatoria and its cyberspace variant (for example, in the resolution of
domain name disputes).
128
Berman and Kaufman, ˜International Commercial Transactions™, 273“4; see too Harold J.
Berman and Felix J. Dasser, ˜The “New” Law Merchant and the “Old”: Sources, Content and
Legitimacy™ in Thomas E. Carbonneau (ed.), Lex Mercatoria and Arbitration: A Discussion of
the New Law Merchant (Juris Publishing/Kluwer Law International, rev. edn 1998), p. 64.
129
See Eugen Ehrlich, Fundamental Principles of the Sociology of Law, trans. Walter L. Moll [1913]
(Cambridge, MA: Harvard University Press, 1936), p. 366.
130 31
Mertens, ˜Lex Mercatoria™, p. 32. See Berger, Creeping Codi¬cation, pp. 39“41.
132
Roy Goode, ˜Usage and Custom in Transnational Commercial Law™ (1997) 46 International &
33
Comparative Law Quarterly 1“36, 3. Mustill, ˜New Lex Mercatoria™, 44.
280 Competing Jurisdictions Case Studies


maintaining its general identity borne of the origins of its norms in custom
and interior allegiance.
For a general, globalist jurisprudence, concerned to develop concepts which,
to use William Twining™s concept, ˜travel well™ across jurisdictions,34 the exem-
plary and precedent value of the lex mercatoria should be obvious within the
universality of the industrialised community it serves.


12.1.4 Codification
The lex mercatoria has been subjected to codi¬cation initiatives. Codi¬cation
represents an attempt to simplify laws into a readily understandable and usable
form. It is an aid to capitalist relations which seek certainty. Uniformity is also
a leveller. With greater uniformity across jurisdictions, ¬nding a way to do
something across borders becomes less the preserve of the rich who can a¬ord
specialist multi-jurisdictional lawyers.35 Mystery and uncertainty, which the
evolution and interpretation of uncodi¬ed norms might otherwise seem to
possess in the hands of the legally educated or experienced, are sought to be
removed through the normative deforestation of codi¬cation. The utility of
codi¬cation is not without danger to the legal ecosystem. The German histori-
cal school of jurisprudence has taught that codi¬cation poses threats to a ¬‚exi-
ble and organic system of norms,36 with lessons for the lex mercatoria. Such
initiatives need to avoid the temptation to state in absolutist terms what consti-
tutes the doctrines of the lex mercatoria, which evolves like all social systems
with references to the past, drawing upon experiences.
Two major codi¬cation initiatives are now explored. These initiatives con-
tinue the aim of the United Nations Commission on International Trade Law
(UNCITRAL) originating in the 1960s. First, lex mercatoria developments are
being advanced by the International Institute for the Uni¬cation of Private
Law (Institut International Pour L™Uni¬cation Du Droit Priv©, UNIDROIT),
founded in 1926, under the aegis of the League of Nations. It received a more
recent impetus in the 1970s, culminating in the Principles of International
Contracts 1994 (the UNIDROIT Principles). Secondly, at a European level, the
˜Commission on European Contract Law™ has been led by Danish law professor
Ole Lando (the Lando Commission), to be discussed in the next section. The
aim of both of these commissions was, and is, to produce a modern kind of ius
commune and lex mercatoria in code form. Like the historical forms of ius
commune which developed on the Continent, the initiative is being led by aca-
demics, many of whom have practical experience in the ¬eld of international
commercial arbitration.37

134
See William Twining, ˜The Province of Jurisprudence Re-examined™ in Catherine Dauvergne
(ed.), Jurisprudence for an Interconnected Globe (Aldershot: Ashgate, 2003), p. 33.
135
See D. McBarnet, ˜Transnational Transactions: Legal Work, Cross-border Commerce and
Global Regulation™ in Likosky (ed.), Transnational Legal Processes, p. 101.
136 37
See ch. 8, section 8.4.5, pp. 188“90 above. Berger, Creeping Codi¬cation, p. 211.
281 International commercial law and private governance


The UNIDROIT Preamble introduces the purpose of the Principles:
These Principles set forth general rules for international commercial contracts.
They shall be applied when the parties have agreed that their contract be
governed by general principles of law, the lex mercatoria or the like.
They may provide a solution to an issue raised when it proves impossible to
establish the relevant rule of the applicable law.
They may be used to interpret or supplement international uniform law
instruments.
They may serve as a model for national and international legislators.38

These principles apply to ˜all contracts which are concluded with a view towards
the direct or indirect making of pro¬ts and which are related to the cross-border
movement of goods, currencies, services, technologies or other ¬nancial or eco-
nomic assets, provided that no “typical element of consumer transactions” can
be ascertained™.39
The UNIDROIT Principles embody the modern lex mercatoria, without the
hubris of believing law to be only what is written in the code.40 Rather than being
regarded as a ¬eld of law ripe for codi¬cation in the orthodox sense, Klaus Peter
Berger has described these international economic law developments under the
rubric of a ˜creeping codi¬cation™ of the lex mercatoria. A middle way is sought
through the dichotomy of ¬xed, certain doctrines and the ¬‚exible openness of
equitable processes41 “ abandoning the now largely discredited Napoleonic ideal
of a self-contained code. The UNIDROIT Principles have been applied by the
International Chamber of Commerce as governing law and as a supplement or
interpretive aid to domestic law and international conventions.42
This follows a trend for contracts to refer to common principles of law from
a multiplicity of jurisdictions, re¬‚ecting the home jurisdictions of the parties to
the contract. For example, an article of a contract between Iran and the National
Iranian Oil Company of one part, and nine other nations of the other part, has
referred to ˜the principles of law common to Iran and the several nations in
which the other parties to this Agreement are incorporated, and, in the absence
of such common principles, by . . . the principles of law recognized by civilized
nations in general™. Similarly, for the construction of the English Channel
tunnel, principles common to both English and French law were speci¬ed,
failing which relations were to be governed ˜by such general principles of

138
UNIDROIT (ed.), Principles of International Commercial Contracts (Rome, 1994).
139
Berger, Creeping Codi¬cation, p. 161.
140
See Gesa Baron, ˜Do the UNIDROIT Principles of International Commercial Contracts Form
a New Lex Mercatoria?™ (1999) 15 Arbitration International 115“30, 122. Accepting this notion
of the lex mercatoria as norms which can be gathered, focused upon and subjected to
discourse, the indeterminacy otherwise believed by some to inhere in the lex mercatoria
erodes: cf. Roy Goode, ˜Rule, Practice and Pragmatism in Transnational Commercial Law™
(2005) 54 International & Comparative Law Quarterly 539“62, 552.
141
See Berger, Creeping Codi¬cation, pp. 3“6, 228.
142
See Michael Pryles, ˜Application of the Lex Mercatoria in International Commercial
Arbitration™ (2004) 78 Australian Law Journal 396“416, 408.
282 Competing Jurisdictions Case Studies


international trade law as have been applied by national and international
tribunals™.43
In this process, lists of general principles and rules of transnational law are
drafted, unifying as well as creating law in the process, just as we have observed
of the French Enlightenment codi¬cation initiatives.44 The compilation of these
common principles themselves forms the lex mercatoria. So the lex mercatoria,
even with the evolution of ˜creeping codi¬cation™, may be considered a legal
system in the historical, Savignian sense because it is ˜an unwritten framework
of values and convictions providing and enriching it with the necessary logical
consistency and internal unity™, in a pluralistic framework which recognises the
role of competing jurisdictions and systems in the Western legal tradition.45


12.2 European contract law and codification
The Lando Commission on European Contract Law has been mentioned in the
context of the lex mercatoria, as part of a codifying initiative. The Lando
Principles are intended to be ˜a modern European lex mercatoria™.46 The devel-
opment of the Lando Principles further illustrates the di¬culties associated
with codi¬cation, in the attempt to impose, in the long term, a consolidated,
single set of laws over jurisdictions where functionally equivalent laws are
already established. A more moderate approach to the induction of European
contract law is to be found in the Trento Common Core project.47 Reliable
information is the aim of this project, not the forcing of a uniform contract law
or convergence of contract law. Both styles of codi¬cation initiative temper the
aspirations of a general, globalist jurisprudence by illuminating the di¬culties
and dangers of attempting to create normative unity from diversity.


12.2.1 Synthetic aspects
The intention behind the Lando Commission has been to contribute to the
formation of a new system of European ius commune, drawing, like
UNIDROIT, upon comparative materials from domestic and international
sources such as the American Restatement of the Law of Contracts and the
Vienna Sales Conventions. The Lando principles ˜constitute a collection of rules

143 44
See Berger, Creeping Codi¬cation, pp. 34“5. See ch. 8, section 8.4.6, pp. 191“2 above.
145
See Berger, Creeping Codi¬cation, pp. 28, 38, 91“2; Mark D. Rosen, ˜Do Codi¬cation and
Private International Law Leave Room for a New Law Merchant?™ (2004) 5 Chicago Journal of
International Law 83“90; contra Celia Wasserstein Fassberg, ˜Lex Mercatoria “ Hoist with its
Own Petard™ (2004) 5 Chicago Journal of International Law 67“82.
146
Ole Lando and Hugh Beale (eds.), Principles of European Contract Law “ Part I: Performance,
Non-performance and Remedies (Dordrecht: Martinus Nijho¬ Publishers, 1995), p. xviii.
147
See Mauro Bussani and Ugo Mattei (eds.), The Common Core of European Private Law (The
Hague: Kluwer Law International, 2003). On other European initiatives in context, see the
˜Introduction™ to Hector L. MacQueen et al. (eds.), Regional Private Laws and Codi¬cation in
Europe (Cambridge: Cambridge University Press, 2003).
283 International commercial law and private governance


which are considered by the drafters to form parts of the contract laws of the
EU-member states™, in the quest for a European Civil Code and the more ambi-
tious project of a European Code of Obligations.48 This may con¬‚ict with the
EU constitutional principle of subsidiarity49 “ that is, the notion that smaller
networks can better do some things, rather than everything being done at the
highest level of organisation. To the extent that the Lando Commission intends
to rely upon EU power to reach into domestic European jurisdictions, the prin-
ciples are more potent than the lex mercatoria. Furthermore, if enacted as EU
law, not only could the Lando Principles have direct e¬ect upon Member States™
domestic jurisdictions, they could also in¬‚uence the commercial law of non-EU
Member States, through the European Free Trade Association (EFTA).50 In
comparison to the lex mercatoria, this initiative is therefore an endeavour more
rational and exterior than cultural and interior on the Space Axis of the
Space“Time Matrix.
Common law systems are closely related, as are civil law systems, and there
are examples of cross-system similarities such as between England and
Scotland.51 A common linguistic heritage (for example, of the Nordic coun-
tries) or common language (for example, England, Wales and Ireland) will
conduce towards similarities.52 Nevertheless, a European civil code appears
unlikely in any present lifetime. ˜Because doctrinal and other interests encrust
themselves on the competing forms of national, codi¬ed rationality, the
national codes remain today perhaps the greatest obstacles to further European
codi¬cation.™53 The prospect of a European contract code has been compared
to renouncing European culinary variety in favour of a McDonald™s eating
culture.54 Di¬culties in harmonising Continental and English contract law are
demonstrable in the English emphasis on individual responsibility as opposed
to the French duty to disclose essential information.55 For example, common
law mistake and misrepresentation, duress and undue in¬‚uence are not treated
as defects of consent as in civil law. The common law is more concerned with

148
Berger, Creeping Codi¬cation, pp. 203“6.
149
Ewoud Hondius, ˜Towards a European Civil Code. General Introduction™ in A. S. Hartkamp et
al. (eds.), Towards a European Civil Code (Dordrecht: Martinus Nijho¬ Publishers, 2nd edn
1998), p. 12. On subsidiarity, see ch. 11, section 11.2.5, pp. 263“4 above.
150
Carlos Bollen and Gerard-Ren© De Groot, ˜The Sources and Backgrounds of European Legal
Systems™ in A. S. Hartkamp et al. (eds.), Towards a European Civil Code (Dordrecht: Martinus
Nijho¬ Publishers, 1st edn 1994), p. 98.
151
e.g. the paradigm English common law case of negligence, Donohue v Stevenson (1932) AC
52
562, is common to both jurisdictions. Hondius, ˜European Civil Code™, pp. 8“9.
153
H. Patrick Glenn, ˜The Grounding of Codi¬cation™ (1998) 31 U.C. Davis Law Review 765“82,
768.
154
Ana M. López-Rodriguez, ˜Towards a European Civil Code Without a Common European
Legal Culture? The Link Between Law, Language and Culture™ (2004) 29 Brooklyn Journal of
International Law 1195“220, 1211 (citing Andre Tunc). The harmonisation issues are well
canvassed generally in Mark Van Hoecke and Fran§ois Ost (eds.), The Harmonisation of
European Private Law (Oxford: Hart Publishing, 2000).
155
See Sjef van Erp, ˜The Formation of Contracts™ in Hartkamp et al. (eds.), European Civil Code
(2nd edn), p. 216.
284 Competing Jurisdictions Case Studies


the unlawful behaviour of the other party.56 Furthermore, for example, English
restitution is limited to the transferor recovering an unfair gain from the trans-
feree, whereas French law ventures more widely and permits recovery by the
transferor from a third person who may have received the bene¬t from the
transferee.57 Considerable doctrinal di¬erences exist amongst di¬erent state
systems, particularly between common law and civil law traditions.
Moving towards codes, numerous directives have been issued by the
European Parliament acting jointly with the Council, the powerful Council on
its own and the Commission. Directives have ranged across private law in
general, laws against unfair competition, protection of industrial and commer-
cial property, company law, stock-market law, banking law, insurance law and
labour law.58 The fact that the implementation (˜form and methods™ under
article 249) of the directives is left to individual Member States means that the
directives cannot be said to form codes.
The obstacles facing a European code are greater than those which were over-
come, for example, by conventions such as the 1988 Convention on the
International Sale of Goods, or the UNIDROIT Principles. Europe is not a com-
munity of like-minded individuals such as merchants, who share a common
purpose, namely pro¬t and exchange. Europe comprises, of course, nation-
states with all the internal political complexities of modern industrial societies.
The necessary Member State parliamentary accessions to international contract
principles seem unlikely for some time. European linguistic diversity brings its
own di¬culties of translation and legal interpretation.59 So is a codi¬ed, uni-
versalist European private law possible? Despite the substantial obstacles, legal
historian R. C. van Caenegem opines that stranger things have happened.60
Conjecture aside, it is vital for legal ideas to circulate, particularly across
languages,61 so that there can be cross-fertilisation of law wherever possible
and enhanced discourse about norms, upon which better law depends.
Harmonisation of law should perhaps be thought about in musical terms, sug-
gests Patrick Glenn. That is, just as some simultaneously di¬erent tones and
pitches can produce aesthetic satisfaction, the (commensurable)62 di¬erences
156
See Madeleine van Rossum, ˜Defects of Consent and Capacity in Contract Law™ in Hartkamp
et al. (eds.), European Civil Code (1st edn), p. 151.
157
See William John Swadling, ˜Restitution and Unjust Enrichment™ in Hartkamp et al. (eds.),
European Civil Code (1st edn), p. 271. For other doctrinal di¬erences, see Reinhard
Zimmermann, ˜The Civil Law in European Codes™ in MacQueen et al. (eds.), Regional
Private Laws.
158
For a summary, see Peter-Christian Müller-Gra¬, ˜Private Law Uni¬cation by Means other
than of Codi¬cation™ in Hartkamp et al. (eds.), European Civil Code (2nd edn), pp. 83“9.
159
See López-Rodriguez, ˜European Civil Code™.
160
R. C. van Caenegem, European Law in the Past and the Future: Unity and Diversity over Two
Millennia (Cambridge: Cambridge University Press, 2002), pp. 33“7; see too his ˜The
Uni¬cation of European Law: A Pipedream?™ (2006) 14 European Review 33“48.
161
See Hondius, ˜European Civil Code™, p. 18.
162
˜Understanding di¬erent legal concepts means recognition of their underlying
commensurability. The concepts are di¬erent, but capable of explanation in terms of one
another™: H. Patrick Glenn, ˜Con¬‚icting Laws in a Common Market? The NAFTA Experiment™
285 International commercial law and private governance


should rightly be made the focus of understanding and learning63 in an orches-
trated attempt to comprehend legal orders across jurisdictions.


12.2.2 Organic aspects
On the Space“Time Matrix, what are the implications of attempts at uniform
codes brought about through legislative re-engineering (as opposed to a more
philosophical, discourse-based approach to harmonisation just advocated)?
Present state laws on a topic, and their historical evolution, would tend towards
redundancy. State laws, which have evolved through cases, legislation and in
learned treatises, re¬‚ect the culture of the people, even if mainly through their
lawyers. In our time, more abstract and exterior (on the Space Axis) implants
of legislation, for example, giving domestic e¬ect to EU directives, have been
˜fragmented™ and ˜inserted rather unorganically™, sometimes creating ˜confu-
sion and uncertainty™.64 Legislation in the nation-state often seems to operate in
this way too, when e¬ecting wholesale innovation.
Against this criticism, it might be argued that participants in routine con-
tracts and exchanges do not pay regard to their position according to black
letter law. Indeed, Hein Kötz suggests that a European private law need simply
be taught to the lawyers of the future.65 Laws of restitution, or whether there is
a material di¬erence in conduct as a result of a circumstance being analysed
either as a defect in consent or as a party™s fraud or misrepresentation, are largely
matters for framing litigation which is generally avoided by most people.
Many people, in commerce at least, are probably guided by their own senses of
decency.66 Jan Smits even suggests that consumer choice of particular commer-
cial laws over others will lead to the convergence of such laws.67 As with all law
and norms throughout the history surveyed in this book, how law is thought
about is crucial. If law is felt to represent the revelation of a local wisdom, even
if delivered by lawyers, maybe this is a good thing. For example, in one local tra-
dition of contract the emphasis on the importance of giving e¬ect to contracts
compared with awarding damages for their breach may represent a local moral
belief in the sanctity of the promise. For laws and norms to be impelling,
humans (if they pause to think about their normative authority) will probably

(2001) 76 Chicago-Kent Law Review 1789“1819. See too that author™s Legal Traditions of the
World: Sustainable Diversity in Law (Oxford: Oxford University Press, 2nd edn 2004), pp. 44“8;
and his ˜Are Legal Traditions Incommensurable? (2001) 49 American Journal of Comparative
63
Law 133“45. Glenn, ˜Con¬‚icting Laws™, 1794.
164
See Reinhard Zimmermann, ˜Roman Law and European Legal Unity™ in Hartkamp et al.
(eds.), European Civil Code (2nd edn), pp. 25“6.
165
See Hein Kötz, European Contract Law Volume One: Formation, Validity, and Content of
Contracts; Contract and Third Parties, trans. Tony Weir (Oxford: Clarendon Press, 1997), p. vi.
166
See e.g. Stewart Macaulay, ˜Non-Contractual Relations in Business: A Preliminary Study™
(1963) 28 American Sociological Review 55“67, 61. ˜One doesn™t run to lawyers if he wants to
stay in business because one must behave decently.™
167
See Jan Smits, The Making of European Private Law: Towards a Ius Commune Europaeum as a
Mixed Legal System (Antwerp: Intersentia, 2002).
286 Competing Jurisdictions Case Studies


want to feel called by a mixture of history, vision, morality and political objec-
tivity to obey the norms. Imposition does not inspire the conscience. Technical
genius calculating the codi¬cations is unlikely to fare better as a matter of
allegiance.
Where might the gaze venture for cultural input into the rationalist enter-
prise of codi¬cation? Can the common European experience of Roman law,
renaissance humanism, Enlightenment rationalism, Romanticism and democ-
racy be tapped into? There may be a way of attuning European law to an ani-
mating force which is of some cultural attraction for the European populace.
Reinhard Zimmermann suggests the solution is in the notion of Western legal
science, in a process of ˜re-Europeanization™, not simply ˜Europeanization™.68
We have already seen in some detail in parts 2 and 3 of this book that
Continental Europe featured an academic tradition of law which was supra-
national and recognisable throughout Europe, despite regional variations
which did not, though, undermine the common legal grammar. ˜Moving with
the same cultural tides running through Europe, and moored to an educational
and scienti¬c tradition, as well as to a common language [Latin], European legal
science, in spite of many di¬erences in detail, remained a uni¬ed intellectual
world; and the international communis opinio doctorum was authoritative for its
application and development.™69 For example, some major features of the devel-
opment of modern contract occurred by adaptation from the Roman law.
Justinian™s Corpus confused form-bound oral promises and informal consen-
sual contracts in limited circumstances. This was modi¬ed by a combination of
canon law, international commercial practice and Germanic notions of good
faith. Even in the modern German Civil Code (the Bürgerliches Gesetzbuch or
BGB), many codi¬ed rules of ancient Roman law prevail.70
The common misconception that English law is isolated from the Romanist
method has already been identi¬ed.71 Numerous English authors adopted the
systematisation methodology characteristic of Roman law. Zimmermann™s plan
is ˜to design a ius commune Europeaum around the core of the general private
law™ through reviving Roman law and legal history and integrating it with com-
parative law and doctrinal scholarship. His aim is to avoid a bureaucratic
Europe ˜which merely reacts to speci¬c needs and aims at implementing eco-
nomic policies . . .™ as opposed to a law with a spirit which has sprung from the
people and their history.72 The varieties of the ius commune, having adopted an
admixture of Roman law at the end of the ¬fteenth century, now have an indige-
nous quality. Zimmermann™s view has been interpreted as an anti-globalisation
168 69
See Zimmermann, ˜Roman Law™, pp. 26“7. Ibid., p. 28.
170 71
Ibid., pp. 32“4. See ch. 6, section 6.2.2, pp. 122“6 above.
172
Zimmermann, ˜Roman Law™, p. 39. Zimmermann has been criticised for isolating the
uniquely Roman contribution to the origins of Western law: see P. G. Monateri, ˜Black Gaius:
A Quest for the Multicultural Origins of the “Western Legal Tradition” ™ (2000) 51 Hastings
Law Journal 479“555, 507, 551. Regardless of whether Justinian™s Roman law was exclusively
Roman or more cosmopolitan in composition, what Zimmermann has described is the
possibility for a legal culture grounded in a common, historically practised legal science.
287 International commercial law and private governance


measure which seeks to thwart the growing American domination of jurispru-
dential techniques.73 Rather than being anti-globalisation per se, it would seem
that Zimmermann is more simply calling for self-consciousness and considered
re¬‚ection in the face of the rush to codify and use law as a crude tool for getting
things done,74 devoid of meaningful authority.


12.3 Contract and private governance
Adjudication of the sorts of commercial laws evaluated above gives rise to some
complex issues concerning the institutional authority of those adjudicating
bodies, and, more generally, the nature of legal authority in competing juris-
dictions outside the nation-state. Of less signi¬cance to the present enquiry is
the conventional authority exercised by judiciaries in the nation-state or even
the European Court of Justice.75 Of most interest is the nature of the con-
tractual mechanism for triggering arbitration and the institutionalisation of
authoritative adjudication outside the state.


12.3.1 Arbitration
A number of arbitration institutions exists, with their own procedural rules.
The International Chamber of Commerce in Paris is perhaps the most presti-
gious. Others include the American Arbitration Association, the London Court
of International Arbitration and the World Bank™s International Center for the
Settlement of Investment Disputes. Typically, three arbitrators sit as a panel,
one appointed by each party and a third appointed by the parties jointly.76
Commercial arbitration of the lex mercatoria has been institutionalised under
the Rules of the International Chamber of Commerce, resorting to lex mercato-
ria concepts and doctrines with expert judges dispensing settlement through
¬‚exible procedures of conciliation or arbitration.77 Conceptually, modern arbi-
tration centres are reminiscent of the medieval merchant courts. Arbitrators
may be appointed with experience in business, rather than being drawn from
narrow, doctrinal legal backgrounds.78

173
See Ugo Mattei, ˜The Issue of European Civil Codi¬cation and Legal Scholarship: Biases,
Strategies and Developments™ (1998) 21 Hastings International & Comparative Law Review
883“902, 890.
174
Contra e.g. Wayne R. Barnes, ˜Contemplating a Civil Law Paradigm for a Future International
Commercial Code™ (2005) 65 Louisiana Law Review 677“774, advocating the ˜most politically
expedient, and most pragmatic solution™ in the presumed expectation of ˜increasing the
standards of living of all peoples™ through ˜reducing obstacles to global trade and commerce™
(773“4).
175
It is of passing interest to note, though, that state jurisdictions can be ˜marketed™ and
expressed in contracts as governing law, entitling a party to bring traditional proceedings in
that jurisdiction.
176
Yves Dezalay and Bryant G. Garth, Dealing in Virtue: International Commercial Arbitration and
the Construction of a Transnational Legal Order (Chicago: University of Chicago Press, 1996),
77 78
pp. 5“6. Trakman, Law Merchant, p. 42. See section 12.1.2, p. 277 above.
288 Competing Jurisdictions Case Studies


Criticisms have been levelled at commercial arbitrators for not giving rea-
soned grounds for awards, for not following rules of evidence and procedure
and for lengthiness of proceedings.79 At least there remains the prospect of
nominating, through the contract, an appropriate arbitration association. In
addition, the increased publicity accorded arbitral decisions is contributing to
the stabilisation of this form of law. Although not binding, arbitral awards can
be persuasive precedents.80 German legal doctrine suggests that courts should
refer to these awards when interpreting some international contracts. The
German Federal Supreme Court has even held that in some cases where a con-
tract is silent, the dispute must ¬rst be sent for arbitration, for so prevalent has
arbitration become in trade usage.81
There has been a tendency for arbitrators to be appointed increasingly from
the US multinational law ¬rms, away from the ˜grand old men™ who set arbitra-
tion precedents on the Continent. Many of them were professors, participating
in a process reminiscent of the centuries old German tradition of consulting
universities for legal opinions (Aktendversendung).82 This academic input, both
through practitioners drawing on MBA educations and also practitioners from
within university law schools, has injected outside norms, such as economics
and management insights, into juridical and arbitral processes, contributing to
the possibilities for self-impelled norms. This legal order displays autonomy
and a tendency for a useful universalism in its particular universe of cross-
border transactions (although the club atmosphere has drawn scepticism).83
Re¬‚ecting this type of universalism, high-level arbitration has proved popular
where nation-states have had disputes against transnational corporations and
large private organisations. Libyan (1971) and Iranian (1950s) nationalisation
of oil production created disputes under state contracts. Western arbitration
processes proved preferable to formal international legal processes. The perceived
neutrality of the adversarial process and an apparent belief in the bona ¬des of
the arbitrators were relied upon to balance the sensitive problem of the public
right of sovereignty over national resources with the private rights of a foreign
corporation. Promoters of Islamic arbitration have even argued that the lex mer-
catoria is consistent with Islamic law84 (although others would disagree).85


12.3.2 Contractual authority as private government
Contractual arbitration mechanisms conjure a problem of logic: a paradox of
self-reference. If a contract creates its own law, and if the validity of the contract

179
Trakman, Law Merchant, pp. 57“9.
180
Abdul F. M. Maniruzzaman, ˜The Lex Mercatoria and International Contracts: A Challenge for
International Commercial Arbitration?™ (1999) 14 American University International Law
81
Review 657“734, 730. Berger, Creeping Codi¬cation, pp. 64, 70.
182
See ch. 6, section 6.2.1, p. 121 above.
183 84
See Dezalay and Garth, Dealing in Virtue, pp. 10, 175“9. Ibid., pp. 68, 85, 90.
185
See n. 104 below and surrounding text.
289 International commercial law and private governance


is challenged, the contract can be said to be without law (contrat sans loi). How
may such a contract be binding when it relies for resolution and enforcement
upon a mechanism of its own creation? The contract may not refer to a state
jurisdiction but only to its own arbitration procedure. That resolution and
enforcement mechanism, it follows, might be impugnable. Is the contract there-
fore invalid? Can it be enforceable outside the state jurisdiction, if the state juris-
diction would deny the contract™s existence? This puzzle bears comparison to
the liar™s paradox, known to the philosophy of logic: if I say I am a liar, not only
does anything I say thereafter become dubious, but my very statement that I am
a liar may also be a lie.86
In order to ground the contractual rules outside the contractual relationship,
for example in some third-party adjudication process, there may be reliance
upon peer pressure to abide the resolution process and to preserve livelihood.
The widespread legal validity of the contractual arbitration process is demon-
strated by Berger™s statistic that over 90 percent of international arbitral awards
receive voluntary compliance, and almost 90 percent of international contracts
contain an arbitration clause. This overcomes the paradox of self-reference or
˜contracts without law™. In e¬ect, the societal context of the international com-
mercial contract can become a substitute authority by creation of the parties,
tending to exclude domestic law, as the parties ˜autonomise™ their legal rela-
tionship.87 Such privately created law may be enforceable by government
although not necessarily requiring that level of coercion.88
Vast areas of the law may in fact be ˜privatisable™, not limited to contract. For
example, the International Organization for Standardization™s ˜ISO 14000™
environmental management programme may be expected to in¬‚uence, in time,
not only environmental law but other laws including tort (duties and stan-
dards), property (conservation requirements), tax (charitable deductions),
information (rights to know), ¬nancial (reporting compliance) and trade
(GATT recognition).89 Norms may be embodied in widely adopted contractual
terms prepared by industry associations, resulting in what has been called ˜com-
petitive lawmaking™ or ˜molecular federalism™.90
186
See Gunther Teubner, ˜ “Global Bukowina”: Legal Pluralism in the World Society™ in Teubner
(ed.), Global Law, p. 17. The notion that contracts could have ˜no governing law™ or be contrat
sans lois is foreign to US law: see Symeon C. Symeonides, ˜Contracts Subject to Non-State
Norms™ (2006) 54 American Journal of Comparative Law 209“31. Goode believes that contracts
cannot constitute a source of law without state law, in ˜Rule, Practice and Pragmatism™, 547“8.
Again, this depends upon the de¬nition of law adopted. If law is thought to obtain its
character from state paraphernalia, it is di¬cult to admit non-state legal possibilities.
187
Berger, Creeping Codi¬cation, pp. 111, 162. Nonetheless, domestic legal concepts are still
relied upon: see p. 276 above.
188
See Stephen J. Ware, ˜Default Rules from Mandatory Rules: Privatizing Law through
Arbitration™ (1999) 83 Minnesota Law Review 703“54; Gillian K. Had¬eld, ˜Privatizing
Commercial Law: Lessons from ICANN™ (2002) 6 Journal of Small and Emerging Business Law
257“88.
189
See Errol E. Meidinger, ˜Environmental Certi¬cation Systems and US Law: Closer than You
May Think™ (2001) 31 Environmental Law Reporter 10162“79.
190
David V. Snyder, ˜Private Lawmaking™ (2003) 64 Ohio State Law Journal 371“449, 437“48.
290 Competing Jurisdictions Case Studies


On the Time Axis of the Space“Time Matrix involving disputes between these
merchants, we ¬nd that the transactional community creates allegiance from
the shared history and prospective reward of future deals. On the Space Axis,
the externalisation of the resolution and enforcement process in an indepen-
dent arbitration institution (with prestigious adjudicators) adds perceived
political objectivity to the process. These factors combine to ground the con-
tract in the interior, moral consciousness of individuals, by virtue of the per-
sonal, contracted creation of the process. Contracting itself can then become for
this community a source of law with validity at a global level.91 (Disputes may
though arise, which if taken to court rather than arbitrated independently, may
result in the state court asserting a politically superior claim to sovereignty over
the contract.)92 Arbitration bodies create an all-important legal discourse which
gives meaning to the principles of the lex mercatoria, granting ˜a true “opinio
juris” to the practices regularly used in the business world™.93
Historically, a rich constitutional lineage underlies contractual authority.
Celebrating liberal society, article 1134 of the Napoleonic Code exalts contracts
thus: ˜contracts legally created have the legal value of statutes for those who
entered into them™.94 Later in the nineteenth century, in the context of the
erosion of the doctrine of freedom of contract caused by government inter-
vention, the Scottish philosopher W. G. Miller thought the law should retreat
to allow humans ˜the power of self-legislation™ by ˜freedom of contract™.95
Contracts may be considered a form of private legislation for private govern-
ment. Regulation by civil society (businesses and individual entrepreneurs) can
be distinct from the state, adding to an international commercial law and prac-
tice which does not require the state for legitimacy. This is in keeping with the
historically demonstrated resilience of the lex mercatoria to strict state control
(whilst acknowledging the normative mutuality of the state and the lex merca-
toria as we saw earlier). This law has been described as ˜paralegal law™ and ˜extra-
state law™, raising understandable concerns (especially in France, somewhat
paradoxically given the Napoleonic exaltation of contracts) about the circum-
vention of the safeguards of domestic legislative and judicial processes.96 Such

191
See Teubner, ˜Global Bukowina™, pp. 16“18. See too Rodney Bruce Hall and Thomas
J. Biersteker (eds.), The Emergence of Private Authority in Global Governance (Cambridge:
Cambridge University Press, 2004); Christian Joerges et al. (eds.), Transnational Governance
and Constitutionalism (Oxford: Hart Publishing, 2004); Karl-Heinz Ladeur (ed.), Public
Governance in the Age of Globalization (Aldershot: Ashgate, 2004).
192
See Berger, Creeping Codi¬cation, p. 43.
193
Bernardo M. Cremades, ˜The Impact of International Arbitration on the Development of
Business Law™ (1983) 31 American Journal of Comparative Law 526“34, 526.
194
Cited in Jean-Philippe Rob©, ˜Multinational Enterprises: The Constitution of a Pluralistic
Legal Order™ in Teubner (ed.), Global Law, p. 58. Roman law also considered the lex contractus
to be a source of law creation: see Niklas Luhmann, Law as a Social System, trans. K. A. Ziegert
(Oxford: Oxford University Press, 2004), p. 124 although its Romantic exponent Savigny did
not agree.
195
Julius Stone, Human Law and Human Justice (Sydney: Maitland Publications Pty Ltd, 1965),
96
p. 87. See Berger, Creeping Codi¬cation, p. 28.
291 International commercial law and private governance


concerns assume that national domestic legislation and judging comprise the
only valid normative model in these commercial circumstances. Assuming a
community of roughly equal merchants, it would appear to be more appropri-
ate and in the interests of their self-determination to allow merchants to for-
mulate and apply norms in their own mutually perceived interests.
Private government can be constituted within corporations, especially
multinational enterprises. (A literature also considers the state in terms of a
¬rm or corporation ˜that specialises in violence and providing protection to a
given population™.)97 Internal legal norms of corporations may be demon-
strated by managerial hierarchies overseeing those more junior in the hierar-
chy carrying out ¬rm policy under threat of sanction, and regularity may be
developed across o¬ces for international ¬rms. International codes of prac-
tice for a ¬rm may qualify for internal proto-laws. The di¬culty with calling
these examples ˜law™ is that mechanisms for compliance are not strenuous and
there may be an inability to characterise action as simply ˜legal™ or ˜illegal™.
Perhaps the strongest available proof for internal law assuming proto-legal
proportions is where di¬erent o¬ces contractualise their relationships. For
example, the gigantic Union Carbide Corporation contracted with its Indian
subsidiary to establish a pesticides plant in Bhopal, e¬ectively making public
and international the private legal order.98 Such proto-law is still reliant, to
some extent, upon the external legal system in the event that enforcement
might be required. Whether internal or external law, these are authoritative
norms being wielded with legal function in a discourse which satis¬es historic
notions of law.
Private government is as unlikely to exist in isolation as state government is
as unlikely to be a normative order unto itself. Regulation has always occurred,
although to varying degrees throughout time, by way of competing jurisdic-
tions and normative systems. Globalisation, represented by the accelerating
interconnections amongst things that happen in the world, is stimulating this
facet of jurisprudence. Arguably this is re¬‚ected in a semantic shift from the
word government to governance (suggesting government is not necessarily a
public function), and in the new emphasis on civil society as distinct from plain
society (recognising politically determining social units). The rise in the use of
the word ˜governance™ is directly correlated to the rise of the word ˜globalisa-
tion™.99 Referring to similarities between the OECD Principles of Corporate

197
Jean-Jacques Rosa, ˜The Competitive State and the Industrial Organization of Nations™ in
Ladeur (ed.), Public Governance, p. 220.
198
Peter T. Muchlinski, ˜ “Global Bukowina” Examined: Viewing the Multinational Enterprise as
a Transnational Law-making Community™ in Teubner (ed.), Global Law, pp. 81“4. Diverse
national laws may be in operation to the ¬rm™s satisfaction in di¬erent states, o¬ering
di¬erent degrees of protection to capital and workers.
199
Boaventura de Sousa Santos, ˜Beyond Neoliberal Governance: The World Social Forum as
Subaltern Cosmopolitan Politics and Legality™ in Boaventura de Sousa Santos and C©sar
A. Rodríguez-Garavito (eds.), Law and Globalization from Below: Towards a Cosmopolitan
Legality (Cambridge: Cambridge University Press, 2005), p. 31.
292 Competing Jurisdictions Case Studies


Governance and the European Commission™s White Paper on Corporate
Governance, Philip Allott notes the convergence of ˜the governmentalising of
the corporation and the corporatising of government™.100 Not necessarily unde-
mocratic, this phenomenon may represent a move towards ˜polycentric net-
works™101 or, as earlier mentioned, ˜molecular federalism™. Controversies about
the ˜democratic de¬cit™ agitated in our discussion of EU constitutionalism in
chapter 11 still, however, seethe in this context.


12.4 Private authority and globalist jurisprudence
Returning to the international commercial law represented by the lex mercato-
ria, its virtue is in the mutuality of the norms which regulate the internal rela-
tionships of its merchant community. This occurs in relative freedom from state
coercion. Particularly appropriate in its area, the merchants themselves largely
construct their communal law. Concerns of modern consumer law are not rele-
vant, because of the in principle equal bargaining position and professional
competence of lex mercatoria participants. Theoretically, at least, this relatively
autonomous, market law is fair enough to avoid the need for the redistributive
e¬ect of state law.102
An important quali¬cation should be issued when thinking of international
commercial law and arbitration in the context of globalisation and universality.
These practices are not universal in the sense that they are everywhere found.
In that respect, we earlier con¬ned our notion of ˜universality™ to a ˜universe™ of
a particular community, unconstrained by territory.103 Whilst there are for the
most part common forms and terms encountered in cross-border trade agree-
ments, there are trade cultures and arbitration systems which are not instantly
translatable into the Western style discussed in this chapter.104 This is a reminder
that a general, globalist jurisprudence will need to be sensitive about the extent
of its generalisations. Whilst these generalisations can be across territorial
borders, they will likely be constrained by other borders “ borders, for example,
of culture, language and enforceability.

100
Philip Allott, The Health of Nations: Society and Law Beyond the State (Cambridge: Cambridge
University Press, 2002), [6.2]“[6.4]; see too David Held and Anthony McGrew,
Globalization/Anti-Globalization (Cambridge: Polity Press, 2002), p. 120.
101
Karl-Heinz Ladeur, ˜Globalization and the Conversion of Democracy to Polycentric Networks:
Can Democracy Survive the End of the Nation State™ in Ladeur (ed.), Public Governance.
102
See Ehrlich, Fundamental Principles, p. 379; Berger, Creeping Codi¬cation, p. 107.
103
See section 12.1.1, p. 275 above.
104
See e.g. Sampson L. Sempasa, ˜Obstacles to International Commercial Arbitration in African
Countries™ (1992) 41 International & Comparative Law Quarterly 387“413; M. Sornarajah,
˜The UNCITRAL Model Law: A Third World Viewpoint™ (1989) 6 Journal of International
Arbitration 7“20; Maniruzzaman, ˜Lex Mercatoria™; Amr A. Shalakany, ˜Arbitration and the
Third World: A Plea for Reassessing Bias Under the Specter of Neoliberalism™ (2000) 41
Harvard International Law Journal 419“68; Charles N. Brower and Jeremy K. Sharpe,
˜International Arbitration and the Islamic World: The Third Phase™ (2003) 97 American
Journal of International Law 643“56.
293 International commercial law and private governance


As a strategy for accommodating the current momentum for diverse laws to
be centralised, codi¬cation is problematic. For a globalist jurisprudence, we
must again conclude, with reference to Europe, that if codi¬cation is problem-
atic at that level with its comparatively common culture, how much more
problematic should codi¬cation be ˜globally™. Perhaps codi¬cation in our time
is even more problematic than that in nineteenth-century European states,
given the de¬ciencies of the current method and critique, and the linguistic
obstacles (as with the EU project). Zimmermann has, however, argued that the
diversity within the territories uni¬ed in the nineteenth-century codi¬cations
may have been no less di¬cult to reconcile into a single code than might be
the case in Europe today.105 What can be asserted more con¬dently is that, with
some exceptions, the contemporary European codi¬cation debate too infre-
quently considers the historical commonalities of Western legal science and
the cautions of the historical school of jurisprudence. Those cautions, which
can be expressed without need for fraught ˜national spirit™ (Volksgeist) termi-
nology,106 may be more readily understood today as concerns about the ˜lived™
or cultural, interior dimension to the law, which cannot be imposed by unsym-
pathetic legislation. Economic and e¬ciency considerations by themselves
cannot be expected to deliver the right norms at the right time to preserve
social stability and accommodate change in the face of accelerating inter-
connections.
Meaningful law requires engagement with its people. On the Space Axis, it
requires an interior-dimension relationship with the conscience and the
culture. As well, meaningful law requires the requisite objectivity in the exterior
dimension, with the political power and accountability to ensure that whim
does not triumph over principle. On the Time Axis, law requires enough conti-
nuity with the past to maintain a character capable of inspiring allegiance, with
¬‚exibility to adapt to the challenges of the future pursued in the present. These
things the lex mercatoria (loosely conceived) possesses.
The lex mercatoria demonstrates again that the state is not the only source of
law and authoritative norms. Parties to contracts can choose the law they wish
to bind their agreements at least some of the time. That law need not be the law
of a state exclusively. The parties may never need the norm-generation, adjudi-
cation or enforcement of the legislature, judiciary or executive of state govern-
ment. Such non-state authority is nowadays considered to be ˜private™ or
consensual “ a matter of ˜governance™ instead of ˜government™. Such a purported
dichotomy between private and public authority appears problematic, if only
because Western sovereignty as a matter of theory is based upon a ¬ction, if not
fantasy, of private contracting and associational choice. Classical republican
theory in Aristotle premisses the state upon the formation of an association of
105
Reinhard Zimmermann, ˜Civil Law™, p. 59. The Germanic and Roman ingredients of that
intellectual battle suggest the analogy with the quest for a modern European private law is not
˜too far-fetched™: van Caenegem, European Law, pp. 92“4.
106
See ch. 8, section 8.4.5, p. 189 above.
294 Competing Jurisdictions Case Studies


peoples for some good purpose.107 Liberal political theory broadly derives from
the covenant amongst people for social order by the ˜social contract™.108
Napoleon took Rousseau™s Contrat Social seriously enough to apply it to the
o¬cers of his regiment in the expectation of a commitment to the whole; which
was not an individualistic, characteristically liberal notion of the social con-
tract.109 Private authority so created need not be considered intrinsically indi-
vidualistic.
This is not to suggest that personal contractual choices are appropriate for
certain relationships in society which would unfairly favour the desires or priv-
ileges of the few over the many. Societies which transcend the old spheres of
state containable disruption call for creative responses not only to traditionally
private needs but also public needs, requiring the exploration of all normative
options. ˜Contractual™ or (more neutrally expressed) ˜voluntary™ assumptions of
social responsibility and rights may harbour potential as legal orders which rely
less upon coercion and more upon shared values in areas of transnational
criminal, human rights, environmental, sport and labour laws. Common goals
could include, for example, contractual requirements to submit to a jurisdic-
tion, benchmark standards for indigenous healthcare or lower greenhouse-gas
emissions. More radically, this approach lends itself to considerations of lib-
eration and self-government discourses. Whatever potential that private gov-
ernance as a concept does harbour, the most energetic contemplations and
critiques are demanded by the inequality, su¬ering, unhappiness and hostility
in the world.
The inversion of economy and spiritual belief identi¬ed by Eugen
Rosenstock-Huessy will be recalled.110 In the West, at the end of the second mil-
lennium and beginning of the third, the market vies to be the legitimating
authority which God used to occupy in discourse. The life and times of the lex
mercatoria support this contention. The lex mercatoria, for the medieval mer-
chants of the early second millennium, was entwined with their salvation and
belief in ultimate reality and meaning.111 Indeed, a prototypical transnational
corporation in the form of the trading empire of the late medieval Italian
Messer Francesco Datini carried the personal trading motto ˜In the Name of
God and of Pro¬t™.112 Belief in the redemptive potential of commerce may be


107
Aristotle, The Politics, trans. T. A. Sinclair (Harmondsworth: Penguin, reprinted 1992), Iii,
1252a1, p. 54.
108
For variations upon the theme, see Thomas Hobbes, Leviathan [1651] (London: Penguin,
reprinted 1985), chs. 13, 14; John Locke, Two Treatises of Government [1689] (London:
Everyman, 1993 reprinted 1998), chs. 8, 9; Jean-Jacques Rousseau, ˜The Social Contract™ in
The Social Contract and Discourses, trans. G. H. Cole [1762] (London: Everyman, reprinted
1998), ch. 6.
109
C. J. Friedrich, ˜The Ideological and Philosophical Background™ in Bernard Schwartz (ed.),
The Code Napoleon and the Common-Law World (New York: New York University Press,
110
1956), p. 8. See generally ch. 10, section 10.6, pp. 247“51 above.
111
See section 12.1.2, p. 277 above.
112
Norman Davies, Europe: A History (London: Pimlico, 1997), pp. 442“3.
295 International commercial law and private governance


gaining momentum today. Its authority is now more terrestrial than celestial.
Although there is no longer any intrinsic worth assigned to legal texts, such as
was accorded to the canon or royal law, a commitment to a process of arbi-
tration and private, ˜gentlemanly™ resolution of disputes can be observed. In
capitalist communities, arbitration salutes time and cost e¬ciency and the
maintenance of a community of good credit and honour. This takes place
within a mindset of industrial progress which, according to at least one promi-
nent legal practitioner in the ¬eld, espouses a belief in its own redemptive
potential for ˜peace and of stability™ and the ˜development of a more harmo-
nious and peaceful world order™, through a ˜singular sect™ of ˜international busi-
ness lawyers™ ensconced in a ˜family likeness™ with ˜briefcase™, ˜laptop computer™
and ˜the warmth of encounters™ amongst ˜inseparable travelling companions™
aboard ˜¬‚ights all over the world™.113
Whilst the troubles of the world are not solved by the international commer-
cial law used by merchants, as a model for alternative authority their legal
norms and systems inspire contemplation of the limits and potential of a
general, globalist jurisprudence.

113
See Robert Badinter, ˜Role of the International Lawyer™ (1995) 23 International Business
Lawyer 505“6.
13

Conclusion: what is to be done?




A human being is part of the whole called by us ˜universe™, a part limited in time
and space. We experience ourselves, our thoughts and feelings as something sep-
arate from the rest. A kind of optical delusion of consciousness. This delusion is
a kind of prison for us, restricting us to our personal desires and to a¬ection for
a few persons nearest to us. Our task must be to free ourselves from the prison by
widening our circle of compassion to embrace all living creatures and the whole
of nature in its beauty. . . . We shall require a substantially new manner of think-
ing if mankind is to survive.
Albert Einstein1

Albert Einstein discovered the relativity of time and space in the midst of the
World Revolution. History may one day show that these scienti¬c symbols were
necessary for the emergence of human consciousness of globalisation as we
know it (just as Newtonian science accompanied the displacement of divine
monarchical government by parliamentary government in seventeenth-century
England).2 Globalisation in a novel way demonstrates the universalist dimen-
sions of the local and the particular, and the diverse particular, local impacts of
universalist norms. Natural manifestations of space (such as continent or hemi-
sphere) and time (such as day and night) for the ¬rst time in human history can
no longer stop events in one part of the world from having almost instantaneous
implications in another part. Single events may give rise to a variety of inter-
pretations and rami¬cations across a multiplicity of communities.
˜September 11™ is a highly relevant demonstration of this global interconnec-
tion, as we have already noted. An act directed against two cities of the one
nation-state was widely declared to be a terrorist act against the world (at least
in the West). Sensibilities across the globe were aroused in a moment of time
witnessed almost contemporaneously in the whole of the industrialised world.
People varied in their characterisations of this event. For some, the US received
its just deserts for interfering in the Middle East. For others, it was an unwar-
ranted act of war against America in which innocent civilians died. There are

11
Quoted in Kim Zetter, Simple Kabbalah (Berkeley: Conari Press, 1999), p. 151.
12
See ch. 2, section 2.1.1, p. 26 above, referring to Michael Walzer.
297 Conclusion: what is to be done?


many other opinions too. My own impression is that this event can be charac-
terised as one of many rebounding transfers of human misery symptomatic of
the failed communication of norms and authority which ricochet between East
and West.3 In this respect, Einstein appears correct to have noticed that we
experience ˜our thoughts and feelings as something separate from the rest™,
whilst still being part of the universe. This deluded separation is a prison. In
Einstein™s century, a new manner of thinking was required. The fruits of that
thinking are required in the twenty-¬rst century.
To appreciate the con¬‚icting loyalties and allegiances which di¬erent societies
can inspire and demand, and have done in the past, I have suggested in part 1 a
model. The ˜Space“Time Matrix™ may inform the pursuit of a globalist jurispru-
dence aiming to understand and construct law and social order meaningfully
today. On the Space Axis, humans tend to feel moral, cultural allegiance to the
requirements of their closer spheres of involvement such as family, community
group, tribe; whilst at the other extreme, typically at the level of state government,
those responses and calls tend to be political, rational and often abstracted from
personal relevance. On the Time Axis, humans will adopt a position for the future
in response to what history means for them. There will be reasons of some his-
torical signi¬cance for why someone is perceived to be radical or conservative. To
acknowledge only one or two of these four orientations (interior, exterior, history,
future) on a particular issue is to be imprisoned in a type of ignorance identi¬ed
by Einstein. Social harmony requires breaking out of ˜personal desires and
a¬ection for a few persons nearest to us™ as Einstein has suggested. Social harmony
also requires us to break out of visions of the future which cannot be subjected to
dialogue and formulation by reference to interpretations of history. There is a
need to embrace these four orientations of the Space“Time Matrix all at once “
learning about other versions of the past and future and other people™s notions of
personal morality and expectations of political organisations. Meaningful law
and norms at all social levels will need to be sensitive to these commitments.
At all times, I have endeavoured to emphasise the historical circumstances in
which law has attracted allegiance by maintaining rich normative references to
these orientations, and how these allegiances have been dissipated and recon-
stituted. Understanding this experience will be important if law is to live to its
potential today. Not only will law be more e¬ective when it is believed in rather
than just coerced4 but it will also be more meaningful. This can be contemplated
by reviewing the recurring patterns of authority which we saw characterise the
second millennium in Europe, before reconsidering the idea of ˜globalisation™
with some recommendations for thinking about law now and in the future.

13
On initiatives for intercultural dialogue, see ch. 10, section 10.4.4 pp. 235“40 above.
14
See Iredell Jenkins, Social Order and the Limits of Law (A Theoretical Essay) (Princeton:
Princeton University Press, 1980), ch. 9. According to H. L. A. Hart, The Concept of Law
(Oxford: Clarendon Press, 2nd edn 1994), pp. 231“2: ˜It may well be that any form of legal
order is at its healthiest when there is a generally di¬used sense that it is morally obligatory to
conform to it.™
298 Globalisation and the Western Legal Tradition


13.1 Lions and dragons: revisiting celestial and terrestrial patterns of
authority
Laws are often thought to be like a rod with which to beat an errant donkey.
Psalmist and pope think otherwise. More precious than gold and sweeter than
honey, laws can bring joy and confer reward in their keeping.5 They can be used
to create a social order in which faith, grace and charisma may develop organ-
ically.6 In greater and lesser measure, all of these optimistic and pessimistic ideas
of law have received expression in the Western legal tradition considered in this
book.
A happy society is one where people live the law gladly, not under threat of
punishment but out of a sense of virtue. Self-propulsion7 or self-direction is a
foremost human social ideal. An individual should ideally follow or live the law
because the individual feels it appropriate to do so. According to Nietzsche,
humans are like lions. The state or lawmaker is something of a dragon which
regulates the lions. The lion says ˜I will™, whilst the dragon has ˜thou shalt™
written on every scale, sparkling like gold.8 Something or someone like the
dragon saying ˜thou shalt™ or ˜you must do this™ does not sit comfortably with a
creature like the lion which seeks to be free. Yet laws or dragons of some sort
there must be. If self-propelling lions or humans are to be free (although com-
pelled by nature to associate with their species), then the existence of a dragon
or regulator of some sort is inherent, whether that dragon be a state, a custom-
ary community or the dictatorship of the proletariat.
Globalisation, thought about as the accelerated interconnections amongst
things that happen in the world, enlivens old possibilities in some plains for
lions to become more self-propelling in the face of less ¬ery dragons. If global-
isation does not make the dragons less ¬ery, globalisation at least gives the lions
some means for sheltering from the dragons™ ¬res in competing jurisdictions.
Globalisation should pose fewer challenges for legal theory than for other disci-
plines, not least because the associated normative transformation of the state™s
normative power (or sphere of containable disruption)9 evokes strong prece-
dents from Western legal history.

15
Psalm 19.
16
Pope John Paul II, Sacrae Disciplinae Legis: Code of Canon Law, Latin“English Edition
(Washington, DC: Canon Law Society of America, 1983), p. xiv.
17
The expression ˜self-propulsion™ is used rather than the word ˜autonomy™ in this context.
Autonomy literally conjures independent norm-making at the interior extreme of the Space
Axis, which, if it were occurring to a high degree in anyone but a child, would suggest insanity:
see Rita L. Atkinson et al., Hilgard™s Introduction to Psychology (Fort Worth: Harcourt Brace,
12th edn 1996), p. 510. The self-propelling individual of my reckoning does not require the
threat of punishment or coercion to behave ethically, but is inspired from a personal
philosophical engagement with authoritative norms.
18
Friedrich Nietzsche, Thus Spoke Zarathustra: A Book for None and All, trans. Walter Kaufman
(Harmondsworth: Penguin Books, 1978), pp. 26“7. This dragon is symbolically and
functionally akin to Thomas Hobbes™s state, which he called ˜Leviathan™ (or Satan™s snake, in
9
Isaiah 27: 1). See ch. 2, section 2.4, pp. 42“8 above.
299 Conclusion: what is to be done?


13.1.1 The original European community
In medieval Western Europe, there was a dispersal of coercion. In part 2 of this
book, we saw that the medieval Catholic church was, particularly from the
twelfth century, an autonomous institution, along with other competing insti-
tutions such as the manor, crown, feudal demesne and town. Systems of law
with modern characteristics, such as feudal law, manorial law, mercatorial law
and urban law all comprised viable legal systems which existed alongside,
although increasingly subordinate to, royal law and canon law. There was
neither need nor place for an across-the-board executive (because authority was
not unitary). Neither was there need for such a legislature (law was anyway
thought to be uncovered, not created). Matters could sometimes fall before two
or more jurisdictions. Con¬‚ict between those jurisdictions was generally
resolved according to the changing political fortunes of territorial sovereigns
and the papacy, in a ˜Two Swords™ constitutionalism of the spiritual church and
secular territorial powers. Oral customs, old Roman law texts and treatises, and
emerging indigenous writings from the various systems provided the material
for uncovering the law.
Many types of people, including peasants and women, were ignored by the
political process. By modern standards, this was a considerable shortcoming.
The richness of the society may still be appreciated. Modern state authority
commands everybody without much moral impulsion, like computers attached
to a central network. Feudal government, on the other hand, radiated moral
authority along branches of a tree generally to lesser and lesser lords who kept
the smaller branches and leaves to their reciprocal duties “ all within a reason-
ably common cosmology and sense of life™s meaning. Moral and political
allegiance were inspired by a Christian view of the universe which ritually per-
meated daily life and social institutions, with a common history and vision for
the future preached from the pulpit. To obey law probably came quite naturally
to most. Lions they probably were not, but social order at least depended less
upon the ¬re of the dragon™s breath.


13.1.2 The rise of the state
Globalisation as a concept is usually opposed to the state. In fact, the state was
essential to the interconnection of the second millennium world, at least in
Europe. The territorial focal point of the state was inevitably necessary in the
process of globalisation, to gather the particularities of so much social diversity
and feudal parochialism. Social desire and eventually bureaucratic compulsion
to step outside the con¬nes of the everyday life of the individual caught up in
the a¬airs of the local manor, town or church were created. Only then could
social distance be more popularly traversed, with parcels of sovereignty in one
territory becoming relevant to other territories great distances away. We saw
that the broadly de¬ned holy Roman empire had a universalist legal science
300 Globalisation and the Western Legal Tradition


which could cope with this diversity, facilitating interconnection and the
exchange of cultural information. Politically, though, papal universalism was
undermined by the sixteenth-century Protestant Reformations, which expelled
papal universalism. State sovereignties ¬lled this absence, within their territor-
ial boundaries, arguably without the same moral allegiance.
Following the end of the Thirty Years War in 1648, we saw in part 3 that the
Peace of Westphalia was symbolic of the entrenchment of the state system in
Europe and the decline of supranational papal power. Final executive power was
being established in states, a¬‚oat in a functional international order with diplo-
matic representation and treaties. Contrary to most impressions, this was a
direct development in the evolution of globalisation. About 900 parcels of sov-
ereignty in the Habsburg Empire were rationalised into about 300. Generally,
this represented the disintegration of religious order in Europe (which was a
fragmenting tendency), alongside the movement towards a reduced number of
absolutist centres of normative authority (an integrating tendency).
The style of this emerging authority was more political and exterior than
moral and interior; more abstract and rational than culturally and spiritually
compelling. It was entwined with legislation and the discovered ability of
humans to invent authoritative propositions for imposition on a population.
The chief mechanism for this was innovative legislation, which openly made law
rather than just declared law, from about the sixteenth century. The ¬ery breath
of the dragon was rising in temperature to maintain order, at the very time
people became more leonine and individualistic, with emerging freedoms for
capital owners which were to explode with the Industrial Revolution.


13.1.3 The economic particularity of the nation-state
Whilst commerce-led cultural interconnection has been a characteristic of
world and not just Western history since the most ancient of times, in the eigh-
teenth century it received a boost with the Industrial Revolution and laissez-
faire economic policies. The emerging separation at that time of the economic
and political spheres, leaving the market more to its own devices, in e¬ect
de-moralised production, and gave rise to the tendencies of a secular and
Mammon-in¬‚uenced universalism in part 4. The e¬ect on productivity was
tremendous, illustrated by the hegemonic success of England in the following
century as the premier exemplar of this approach to political economy. The
profounder sources of what is today termed ˜globalisation™ are to be found in
this era.
At the level of law and social control, the nation-state of the eighteenth
century onwards pioneered. A bourgeois phenomenon, it was captured in the
French Declaration of the Rights of Man and Citizen. That document contains
the codi¬ed articulation of the equality of humans, the inviolability of property,
national sovereignty as the expression of the general will, the liberal freedom to
do whatever does not harm another and basic rule of law principles. It was
301 Conclusion: what is to be done?


directed towards economically productive persons everywhere, although prac-
tically constricted to France. Nation-state authority was more terrestrial than
celestial.
The parliamentary democracies which were to emerge in Western Europe
generally attracted allegiance to their centralised, sovereign, nation-states, the
lions winning an actual and symbolic in¬‚uence over the dragon with setbacks
on the way. The parliamentary dragon still, though, required brimstone and
¬ery breath. Parliamentary authority is several times abstracted from the
individual in community. First, the individual™s authority is abstracted to a par-
liamentary representative; and secondly, the vote of that representative is
abstracted to the decisions and corporate personality of the parliament. Further
abstractions occur in executive implementation and judicial interpretation.
Political allegiance, if any, often comes at a high cost of moral allegiance.
The state of the eighteenth and nineteenth centuries wore the more obvious
guise of a dragon in all realms but that of commerce. In this realm, the civil
society of lions has been able to maintain a sense of autonomy, loosely con-
ceived, for almost a millennium through its very own international commercial
law, as we saw in chapter 12. The wider world was not so fortunate.


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