Mercantile Law

AS WITH FEUDAL and manorial law, so with mercantile law the crucial period of change was the late eleventh and twelfth centuries. It was then that the basic concepts and institutions of modern Western mercantile law -- lex mercatoria ("the law merchant") -were formed, and, even more important, it was then that mercantile law in the West first came to be viewed as an integrated, developing system, a body of law.

The changes in mercantile law were even more striking than the changes in feudal and manorial law: informal, customary feudal and manorial relations had been widespread in the ninth and tenth centuries, although they had not then been given systematic legal expression, whereas, since the decline of the western Roman Empire, commercial relations had existed only on a very limited scale. To be sure, trade had never entirely died out. Some agricultural products continued to be sold by traveling merchants, who also bought and sold small luxuries and local handicrafts. Fairs and markets also existed, though they were not widespread, and some towns, especially seaports, survived from Roman times. Nevertheless, the Frankish Empire, in contrast to the Roman Empire, was not a Mediterranean civilization with abundant maritime trade, but a land-centered economy, hemmed in-in Henri Pirenne's phrase, "bottled up" -- on all sides by Norsemen, Arabs, Magyars, and Slavs. Also, unlike the Roman Empire, the Western economy between the sixth and the tenth centuries was based not on thousands of cities but on perhaps a hundred thousand agrarian villages and manors. In the year 1000 only about two dozen towns of western Europe had more than a few thousand inhabitants, and probably only Venice and London had more than ten thousand. (Constantinople, in contrast, had a population of hundreds of thousands, possibly even a million.)

Then in the eleventh and twelfth centuries there occurred a rapid expansion of agricultural production and a dramatic increase in the size

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and number of cities.

Although the flourishing of commerce and the development of mercantile law were closely connected with the rise of cities and the development of urban law, they also had an important nonurban aspect. Expanded trade in the countryside was initially a result of the "agricultural revolution" rather than of the "urban revolution"; indeed, the growth of agriculture was itself a precondition for the growth of the cities. This fact has importance for social and economic theory, because it refutes that school of thought which postulates that agricultural relations are, in themselves, inevitably static and that commercial development can only be introduced into an agricultural society from the outside. It also has importance for social and economic historiography, because it refutes that school of thought which postulates that in the West a "capitalist age" succeeded a "feudal age" in time. In fact, in the eleventh and twelfth centuries extensive commerce coexisted with the manorial mode of production and with feudal social and political relations. The newly emerging system of mercantile law -- which was capitalist law par excellence -- was contemporaneous with the Western systems of feudal and manorial law.

Even apart from these theoretical and historiographical implications, the development of Western commercial law in the eleventh and twelfth centuries should be seen in the context of trade in the countryside, and not only in the context of trade in the cities. English merchants, for example, living in the countryside, bought wool from the manors and sold it to Flemish merchants, who distributed it to spinners and weavers in the countryside of Flanders to be worked up in their households; the Flemish merchants, in turn, sold cloth from Flanders at international fairs in England.

The rise of a merchant class was a necessary precondition for the development of the new mercantile law. Prior to the eleventh century, the merchant had been a relatively isolated figure in western Europe. There had been occasional Jewish, Syrian, and Greek merchants travel- 334-

ing by land and sea between East and West. The native western European merchants had been largely itinerant peddlers ("foot-men"), who went from town to town, village to village, manor to manor. Trade had also been carried on by nonprofessionals: manors or monasteries or villages (for example, fishing villages) would send out representatives to various parts of Europe to sell their goods.

The transformation of agriculture in the eleventh and twelfth centuries created both the opportunity and the need for the rapid expansion of the merchant class. There were large agricultural surpluses to be traded. At the same time there was a large increase in population from which traders could be drawn. However, the development of feudal and manorial law made it illegal for feudal lords or members of the manor to engage in part-time trade; being a lord or a peasant -- or a steward or other manorial official -- had become a full-time, permanent calling, a status. Yet there also existed the legal or illegal possibility of large-scale exodus of peasants from the manors.

It is difficult to determine the exact scale of the migration from the countryside to the cities of Europe. It is even more difficult to determine the exact scale of the growth of the merchant class, both in and outside of cities. One may estimate, however, that whereas in the year 1050, out of a total population of about twenty million, some hundreds of thousands of people in western Europe lived in some hundreds of towns (few of which had more than a few thousand inhabitants), by the year 1200, out of a total population of about forty million, some millions of people lived in some thousands of towns and cities (many of which had populations of over twenty thousand, and some had populations of over one hundred thousand). In short, the total population doubled, roughly, and the urban population increased from perhaps 1 percent to perhaps 10 percent of the total. With respect to the numbers of merchants, it may be estimated that whereas in the year 1050 the merchant class of western Europe was numbered in the thousands, by the year 1200 it was numbered in the hundreds of thousands. 2_

In speaking of the social and economic background of the development of the new system of mercantile law, there is a danger of concentrating on technological and demographic factors and of neglecting the political and religious factors which also played an important part in what has been called "the commercial revolution." 3The political and religious factors were, of course, closely interrelated with the

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technological and demographic factors as well as with one another.

There is also a danger of viewing the law always as a consequence of social and economic change and never as a constituent part of such change, and in that sense a cause of it. In fact, the new jurisprudence of the late eleventh and twelfth centuries provided a framework for institutionalizing and systematizing commercial relations in accordance with new concepts of order and justice. Without such new legal devices as negotiable bills of exchange and limited liability partnerships, without the reform of the antiquated commercial customs of the past, without mercantile courts and mercantile legislation, other social and economic pressures for change would have found no outlet. Thus the commercial revolution helped to produce commercial law, but commercial law also helped to produce the commercial revolution. Indeed, what occurred was a revolutionary transformation not only of commerce but of the whole society; in that total transformation commercial law, like feudal law and manorial law, had its origins and from it, like them, it took its character.