My today’s editorial on You Tube

I feel like giving a bit of rest to all that stuff about innovation and production function. Just for a short while. During that short while I am returning to one of my favourite interlocutors, Jacques Savary. In 1675, he published his book, entitled ‘The Perfect Merchant or General Instructions as Regards Commerce’, with Louis Billaine’s publishing house (Second Pillar of the Grand Salle of the Palace, at Grand Cesar), and with the privilege of the King. In his book, Master Savary discusses at length a recent law: the Ordinance of 1673 or Edict of the King Serving as Regulation For The Business of Negociants And Merchants In Retail as well As In Wholesale. This is my own, English translation of the original title in French, namely “ORDONNANCE DE 1673 Édit du roi servant de règlement pour le commerce des négociants et marchands tant en gros qu’en détail”. You can have the full original text of that law at this link: https://drive.google.com/file/d/0B1QaBZlwGxxAanpBSVlPNW9LeFE/view?usp=sharing

I am discussing this ordinance in connection with Jacques Savary’s writings because he was reputed to be its co-author. In his book, he boasts about having been asked by the King (Louis the XIV Bourbon) to participate in a panel of experts in charge of preparing a reform of business law.

I like understanding how things work. By education, I am both a lawyer and an economist, so I like understanding how does the business work, as well as the law. I have discovered that looking at things in the opposite order, i.e. opposite to the officially presented one, helps my understanding and my ability to find hidden levers and catches in the officially presented logic. When applied to a legal act, this approach of mine sumps up, quite simply, to reading the document in the opposite order: I start with the last section and I advance, progressively, towards the beginning. I found out that things left for being discussed at the end of a legal act are usually the most pivotal patterns of social action in the whole legal structure under discussion. It looks almost as if most legislators were leaving the best bits for the dessert.

In this precise case, the dessert consists in Section XII, or ‘Of The Jurisdiction of Consuls’. In this section, the prerogatives of Judges and Consuls are discussed. The interesting thing here is that the title of the section refers to Consults, but each particular provision uses exactly this expression: ‘Judges and Consuls’. It looks as if there were two distinct categories of officers, and as if the ordinance in question attempted to bring their actions and jurisdictions over a common denominator. Interestingly, in some provisions of section XII, those Judges and Consuls are opposed to a category called ‘ordinary judges’. A quick glance at the contents of the section informs me that those guys, Judges and Consuls, were already in office at the moment of enacting the ordinance. The law I am discussing attempts to put order in their activity, without creating the institution as such.

Now, I am reviewing the list of prerogatives those Judges and Consuls were supposed to have. As I started with the last section of the legal act, I am starting from the last disposition of the last section. This is article 18, which refers to subpoena and summonses issued by Judges and Consuls. That means those guys were entitled to force people to come to court. This is not modern business arbitrage: we are talking about regular judicial power. That ordinance of 23^rd of March, 1673, puts order in much more than commercial activities: it makes part of a larger attempt to put order in adjudication. I can only guess, by that categorization into ‘Judges’, ‘Consuls’, and ‘ordinary judges’ that at the time, many parallel structures of adjudication were coexisting, maybe even competing against each other as for their prerogatives. Judges and Consuls seem to have been victorious in at least some of this general competition for judicial power. Article 15, in the same section XII, says ‘We declare null all ordinances, commissions, mandates for summoning, and summonses issued by consequence in front of our judges and those of lords, which would revoke those issued in front of Judges and Consuls. We forbid, under the sanction of nullity, to overrule or suspend procedures and prosecutions undertaken in the execution of their verdicts, as well as to bar the way to proceeding in front of them. We want that, on the grounds of the present ordinance, they are executed, and that parties who will have presented their requests to overrule, revoke, suspend or defend the execution of their judgments, the prosecutors who will have signed such requests, the bailiffs or sergeants who will have notify about such requests, be sentenced each to fifty livres of penalty, half to the benefit of the party, half to the benefit of the poor, and those penalties will not be subject to markdown nor rebate; regarding the payment of which the party, the prosecutors and the sergeants are constrained in solidarity’.

That article 15 is a real treat, for institutional analysis. Following my upside down way of thinking, once again, I can see that at the moment of issuing this ordinance, the legal system in France must have been like tons of fun. If anyone was fined, they could argue for marking down the penalty or at least for having a rebate on it. They could claim they are liable to pay just a part of the fine (I did not do it as such; I was just watching them doing!). If a fine was adjudicated, the adjudicating body had to precise, whose benefit will this money contribute to. You could talk and cheat your way through the legal system by playing various categories of officers – bailiffs, sergeants, prosecutors, lord’s judges, royal judges, Judges and Consuls – against each other. At least some of them had the capacity to overrule, revoke, or suspend the decisions of others. This is why we, the King of France, had to put some order in that mess.

Francois Braudel, in his wonderful book entitled ‘Civilisation and Capitalism’, stated that the end of the 17^th century – so the grand theatre where this ordinance happens – was precisely the moment when the judicial branch of government, in the more or less modern sense of the term, started to emerge. A whole class of professional lawyers was already established, at the time. An interesting mechanism of inverted entropy put itself in motion. The large class of professional lawyers emerged in dynamic loop with the creation of various tribunals, arbiters, sheriffs and whatnot. At the time, the concept of ‘jurisdiction’ apparently meant something like ‘as much adjudicating power you can grab and get away with it’. The more fun in the system, the greater need for professionals to handle it. The more professionals in the game, the greater market for their services they need etc. Overlapping jurisdictions were far from being as embarrassing as they are seen today: overlapping my judicial power with someone else’s was all the juice and all the fun of doing justice.

That was a general trait of the social order, which today we call ‘feudal’: lots of fun as various hierarchies overlapped and competed against each other. Right, those lots of fun could mean, quite frequently, paid assassins disguised in regular soldiers and pretending to fend off the King’s mousquetaires disguised in paid assassins. This is why that strange chaos, emerging out of a frantic push towards creating rivalling orders, had to be simplified. Absolute monarchy came as such a simplification. This is interesting to study how that absolute monarchy, so vilified in the propaganda by early revolutionaries, laid the actual foundations of what we know as modern constitutional state. Constitutional states work because constitutional orders work, and constitutional orders are based, in turn, on a very rigorously observed, institutional hierarchy, monopolistic in its prerogatives. If we put democratic institutions, like parliamentary vote, in the context of overlapping hierarchies and jurisdictions practiced in the feudal world, it would simply not work. Parliamentary votes have power because, and just as long as there is a monopolistic hierarchy of enforcement, created under absolute monarchies.

Anyway, the Sun King (yes, it was Louis the XIV) seems to have had great trust in the institution of Judges and Consuls. He seems to have been willing to give them a lot of powers regarding business law, and thus to forward his plan of putting some order in the chaos of the judicial system. Articles 13 and 14, in the same section XII, give an interesting picture of that royal will. Article 13 says that Judges and Consuls, on the request from the office of the King or from its palace, have the power to adjudicate on any request or procedure contesting the jurisdiction of other officers, ordinary judges included, even if said request regards an earlier privilege from the King. It seems that those Judges and Consuls are being promoted to the position of super-arbiters in the legal system.

Still, Article 14 is even more interesting, and it is so intriguing in its phrasing that I am copying here its original wording in French, for you to judge if I grasped well the meaning: ‘Seront tenus néanmoins, si la connaissance ne leur appartient pas de déférer au déclinatoire, à l’appel d’incompétence, à la prise à partie et au renvoi’. I tried to interpret this article with the help of modern legal doctrine in French, and I can tell you, it is bloody hard. It looks like a 17^th century version of Catch 22. As far as I can understand it, the meaning of article 14 is the following: if a Judge or Consul does not have the jurisdiction to overrule a procedure against their jurisdiction, they will be subject to judgment on their competence to adjudicate. More questions than answers, really. Who decides whether the given Judge or Consul has the power to overrule a procedure against their authority? How this power is being evaluated? What we have here is an interesting piece of nothingness, right where we could expect granite-hard rules of competence. Obviously, the Sun King wanted to put some order in the judicial system, but he left some security valves in the new structure, just to allow the releasing of extra pressure, inevitably created by that new order.

Other interesting limitations to the powers of Judges and Consuls come in articles 3 and 6 of the same section XII. Article 3, in connection with article 2, states the jurisdiction of Judges and Consuls over the bills of exchange. Before I go further, a bit of commentary. Bills of exchange, at the time, made a monetary system equivalent to what today we know as account money, together with a big part of the stock market, as well as the market of futures contracts. At the end of the 17^th century, bills of exchange were a universal instrument for transferring capital and settling the accounts. Circulation in bills of exchange was commonly made through recognition and endorsement, which, in practice, amounted to signing your name on the bill that passed through your hands (your business), and, subsequently, admitting (or not) that said signature is legitimate and valid. The practical problem with endorsement was that with many signatures on the same bill, together with accompanying remarks in the lines of ‘recognise up to the amount of…’, it was bloody complicated to reconstruct the chain of claims. For example, if you wanted to kind of sneak through the system, it came quite handy to endorse by signature, whilst writing the date of your signature kind of a few inches away, so as it looks signed before someone else. This detail alone provoked disputes about the timeline of endorsement.

Now, in that general context, article 2 of section XII, in the royal ordinance of March 23^rd, 1673, states that Judges and Consuls have jurisdiction over bills of exchange between merchants and negociants, or those, in which merchants or negociants are the obliged party, as well as the letters of exchange and transfers of money between places. Article 3, in this general context, comes with an interesting limitation: ‘We forbid them, nevertheless, to adjudicate on bills of exchange between private individuals, other than merchants or negociants, or where a merchant or negociant is not obliged whatsoever. We want the parties to refer to ordinary judges, just as regarding simple promises’.

We, the King of France, want those Judges and Consuls to be busy just with the type of matters they are entitled to meddle with, and we don’t want their schedules to be filled with other types of cases. This is clear and sensible. Still, one tiny little Catch 22 pokes its head out of that wording. There visibly was a whole class of bills of exchange, where merchants or negociants were just the obliged party, the passive one, without having any corresponding claims on other classes of people. Bills of exchange with obliged merchants and negociants involved entered into the jurisdiction of Judges and Consuls, and, in the absence of such involvement, Judges and Consuls were basically off the case. Still, I saw examples of those bills of exchange, and I can tell you one thing: in all that jungle of endorsements, remarks and clauses to endorsements and whatnot written on those bills, there was a whole investigation to carry out just in order to establish the persons involved as obligators. Question: who assessed, whether a merchant or negociant is involved in the chain of endorsement regarding a specific bill? How was it being assessed?

One final remark. As for the term ‘negociant’, if it sounds strange, you can refer to one of my earlier posts, the one you can find at http://researchsocialsci.blogspot.com/2017/06/comes-time-comes-calm-duke.html .