ABSTRACT
This article examines the changing nature of authority in the generation and enforcement of international commercial norms. It argues that these norms, known as the law merchant (lex mercatoria) or private international trade law, are essential to the historical constitution of the global political economy, although their role is obscure and little understood by students of international relations. This obscurity is argued to be significant for at least two reasons. First, the article posits that the law merchant is so foundational that it is both a constitutive element of global capitalism and an attribute of the capitalist order (Wood, 1981; Cutler, 1995). Indeed, the law merchant is a crucial mediator of domestic and global political/legal orders. It establishes the fundamental rules goveruing private property and contractual rights and obligations operative across the full range of international commercial activity, including international trade, investment, finance, transportation, and insurance. 1 It also functions distributionally in determining the allocation of risks of international commercial transactions, in regulating the terms of commercial competition and market access, and in enforcing bargains. It provides a common language and normative framework, enabling merchants from diverse
legal and political systems to speak to one another and to transact in a relatively stable, predictable, and secure environment. The law merchant thus forms part of the juridical foundations of global capitalism.
