Freedom, Society, and State - Ludwig von Mises Institute

mer c han t I a w • Mer c han t sin bothEng I and and Arne rica
developed a system of private and voluntary law that
wen t a cons i derable way in replacing government law in
this area. These private courts were highly successful
and their decisions were nearly always complied with.
not e s Wool d rid g e. des pit e the fa c t t hat they we r e
unenforceable in the government courts prior to 1920.
Like their medieval forerunners. merchants in
the Americas did not have to rely on any
sanctions other than those they could collectively
impose on each other. One who refused
to pay up might find access to his association's
arbitral tribunal cut off in the
future. or his name released to the membership
of his trade association; these penalties
were far more fearsome than the cost of
the award with which he disagreed. Voluntary
and private adjudications were voluntarily
and privately adhered to. if not out of
honor. out of sel f- interest of businessmen
who know that the arbitral mode of dispute
settlement would cease to be available to
them very quickly if they ignored an
award.(55)
And Rot h bar d bel i eve s t hat sin c e "moder n t e c hno logy
makes even more feas i ble the collection and dissemination
of information about people's credit ratings and
records of keeping or violating their contracts or
arbitration agreement." the system of voluntary justice
would be even more effective today.(56)
Moreover, argue the anarchists, if one still refused
to abide by a decision the victim would "have the
right to make whatever arrangements [he] could with
other individuals or companies who had financial dealings"
with the aggressor.
P rae ticall y s pea kin g, m0 s t ban k s wo u I d no
doubt have a pol icy of cooperating••• in
such matters, since a policy of protecting
ban k a c co un t s from jus t cIa i ms wo u I d tend to
attract customers who were undependable. thus
increasing the cost of banking and forcing
the bank to raise its charges. The same
would tend to be true of employers only more
so. Most employers would hesitate to attract
un d e pen dab leI abo r by ins e r tin g a cIa use in
the i r employment contracts guaranteeing pro-
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