Exchange/Trade

[1840]  Alexis de Tocqueville,  De la Démocratie en Amérique, vol. II, Flammarion, Paris, 1981

-  "Le commerce est naturellement ennemi de toutes les passions violentes. Il aime les tempéraments, se plaît dans les compromis, fuit avec grand soin la colère. Il est patient, souple, insinuant, et il n'a recours aux moyens extrêmes que quand la plus absolue nécessité l'y oblige. Le commerce rend les hommes indépendants les uns des autres; il leur donne une autre idée de leur valeur individuelle; il les porte à vouloir faire leur propres affaires, et leur apprend à y réussir; il les dispose donc à la liberté, mais il les éloigne des révolutions." (p. 314)

[1911]  Gustav Landauer, For Socialism, Telos Press, St. Louis, 1978

-  "Let men exchange from community to community what neither can nor should be produced locally, as within the communities they trade from individual to individual." (p. 126)

[1912]  Piotr Kropotkin, Fields, Factories and Workshops Tomorrow, introduced and edited by Colin Ward, Harper & Row, New York, 1974

-  "The present tendency of economical development in the world is ... to induce more and more every nation, or rather every region, taken in its geographical sense, to rely chiefly upon a home production of all the chief necessaries of life. Not to reduce, I mean, the world-exchange : it may still grow in bulk; but to limit it to the exchange of what really must be exchanged, and, at the same time, immensely to increase the exchange of novelties, produce of local or national art, new discoveries and inventions, knowledge and ideas." (p. 103)

[1944]  F. A. Hayek,  The Road to Serfdom, Routledge & Kegan Paul, London, 1986

-  "The gradual transformation of a rigidly organised hierarchic system into one where men could at least attempt to shape their own life, where man gained the opportunity of knowing and choosing between different forms of life, is closely associated with the growth of commerce. From the commercial cities of Northern Italy the new view of life spread with commerce to the west and north, through France and the south-west of Germany, to the Low Countries and the British Isles, taking firm root wherever there was no despotic political power to stifle it. In the Low Countries and Britain it for a long time enjoyed its fullest development and for the first time had an opportunity to grow freely and to become the foundation of the social and political life of these countries." (p. 11)

-  "During the whole of the modern period of European history the general direction of social development was one of freeing the individual from the ties which had bound him to the customary or prescribed ways in the pursuit of his ordinary activities." (p. 11)

-  "The younger generation of to-day has grown up in a world in which in school and press the spirit of commercial enterprise has been represented as disreputable and the making of profit as immoral, where to employ a hundred people is represented as exploitation but to command the same number as honourable." (p. 97)

[1961]  Bruno Leoni,  Freedom and the Law, Liberty Fund, Indianapolis, 1991

-  "Even those economists who have most brilliantly defended the free market against the interference of the authorities have usually neglected the parallel consideration that no free market is really compatible with a law-making process centralized by the authorities. This leads some of these economists to accept an idea of the certainty of the law, that is, of precisely worded rules such as those of written law, which is compatible neither with that of a free market nor, in the last analysis, with that of freedom understood as absence of constraint exercised by other people, including the authorities, over the private life and business of each individual." (p. 89)

[1996]  Matt Ridley,  The Origins of Virtue, Softback Preview, England, 1997

-  "Take the case of trade. It is axiomatic among economists that the gains from trade are mutual: if two countries increase their trade, both are better off. Yet this is not the way the man in the street, let alone his demagogue representative, sees it. To them, trade is a competitive matter: exports good, imports bad." (p. 74)

-  "The trading system of the Yir Yoront was by no means unusual for Stone Age man. But it illustrates two things of great importance. First, trade is the expression of the division of labour. If each tribe did what it was good at and exchanged the result, both were better off. Life ... is not a zero-sum game - that is, there does not have to be a loser for every winner.
 The second lesson of the Yir Yoront story is that there is nothing modern about commerce. For all the protestation of Karl Marx and Max Weber, the simple idea of gains from trade lies at the hearth of both the modern and the ancient economy, not the power of capital." (p. 199)

-  "The Yir Yoront were, As Rousseau and Hobbes would both agree, in a 'state of nature.' Yet no despotic monarch had imposed a social contract in them, as Hobbes thought necessary; and nor did they live in asocial bliss, as Rousseau fantasized. On the contrary, trade specialization, the division of labour and sophisticated systems of barter exchange were already part of a hunter-gathering life." (p. 199)

-  "This is a startling discovery. If trade precedes law, then a whole house of philosophical cards collapses. Jeremy Bentham said : 'Before the law there was no property; take away the law and all property ceases.' Even the most rabid free-trader has been wont to argue that government must hold the ring, enforcing contracts between merchants in an industrial economy. Without recourse to the law and protection from government, commerce is fragile and will disappear. Yet this is back to front. Government, law, justice and politics are not only far more recently developed than trade, but they follow where trade leads. Indeed, just as this is true for hunter-gatherers, so it now appears to have been true for medieval merchants as well. Modern commercial law was invented and enforced not by governments, but by merchants themselves. Only later did governments try to take it over, and with mostly disastrous results." (p. 202)

-  "The lex mercatoria... had no recognition from the state. It was voluntary produced, voluntary adjudicated and voluntary enforced. It was like the customs of a club. It evolved. Good customs that worked, and good ways of settling disputes, drove out bad by natural selection."
"The only and final sanction against a transgressor was ostracism, but ... ostracism can be a powerful force. A merchant with a reputation as a cheat could not carry on his trade. Merchants formed their own courts, which were more efficient and uniform than the royal and state courts. A set of standardized customs about how bills should be settled, interest paid and disputes resolved obtained all across the continent - and all without the slightest direction from above." (pp. 202-203)

-  "Bankers had begun to emerge, together with mortgages, contracts, promissory notes and bills of exchange. All these were governed by merchant law. Governments had not even woken up to what was going on. An entirely private, voluntary and informal system of exchange had developed.
In a flurry, government then began to act. It enacted into national laws these merchant customs, allowed appeals to royal courts - and of course took the credit. Henry II of England was not a great law giver; he was a great law nationalizer. Merchants courts immediately lost their power, because of the threat of appeal to higher, royal courts, and the adaptability of the system was lost. For the law to change required more than the evolution of a new custom to replace the old; it required acts of kings and parliaments. The growing cost and gradual congestion of the official courts soon deprived the system of its speed and frugality." (p. 203)

-  "Markets, exchanges and rules can develop before government or any other monopolist has defined their rules. They define their own rules, because they have been part of human nature for many millions of years." (p. 204)