Private governance and the shadow of the state

posted by
June 5, 2011
Adam Smith Institute
by Sam Bowman  
Posted in Commentary

"In the 18th century, the government refused to enforce stock exchange contracts, seeing them as a form of gambling. Nevertheless, the Coffeehouse became a centre of commerce and contracts were usually upheld voluntarily. If you were a trader, you could rip somebody off once, but would be barred from the club. For people whose livelihoods were based on stock trading, it wasn't worth it. The same phenomenon exists today in a whole range of exchanges." (06/03/11)  

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