Foundation Myth as Legal Formant: The Medieval Law Merchant and the New Lex Mercatoria

Foundation Myth as Legal Formant: The Medieval Law Merchant and the New Lex Mercatoria

By Nicholas Foster

Forum Historiae Juris (2005)

Introduction: ‘Once upon a time, in the days before the misguided nation-state had become all-powerful, there was a Golden Age. In that blessed era, people traded with each other using an international, harmonious system of commercial law, the law merchant, a product of necessity and free will, formed by traders independently of any political authority. But as the nation-state grew and grew, this system was slowly stifled. Its rules were absorbed by municipal legal systems. Its spirit was quashed. Now, after centuries of darkness, a new dawn is breaking. The lex mercatoria is being reborn in a new guise through the heroic efforts of arbitral tribunals, intergovernmental organisations, private international associations, commercial custom and the pressures associated with free trade and the free movement of capital. In this brave new world, people will live together in harmony and peace. International commercial transactions will be governed by one regime, built up outside the constricting barriers of the nation-state.’

It should go without saying that the preceding paragraph is an exaggeration and a parody. However, like most parodies, it contains a grain of truth. And, it is submitted, the thinking and emotions underlying the motivations of some people concerned with the new lex mercatoria are not too far removed from those evoked. They are just concealed in more moderate and measured prose, or even more effectively concealed in silence and assumptions.

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