After reading this letter of mine (in which I do my best to debunk the notion that free trade is advisable only if there is one system of state governance covering all trading parties), the great economic historian – and my dear friend – Bob Higgs sent to me the following note, which I share here with Bob’s kind permission:
Except for the individuals immediately involved in its operation, few people are aware of the vast, highly developed system of arbitration contracts that cover much if not the entirety of international trade. This system, as you surely know, remains very much privately constituted and operated and enforced, despite increasing – and unnecessary – insertion over the past few decades of state oversight. These private arrangements work like a charm to facilitate unimaginably huge volumes of trade.
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