solely on reputational mechanisms and private judges receives no support from the
institutional arrangements at the Champagne fairs.
5. The Champagne Fairs and the ‘Community Responsibility System’
The medieval Champagne fairs have also been mobilized in support of a second lesson
for developing economies - the idea, advanced by Greif, that collective reprisals
between corporative groups of businessmen can support impersonal exchange.132 In
this portrayal, courts with coercive powers did exist in medieval Europe, but were
controlled by local interests which prevented them from protecting foreign merchants’
property rights or enforcing contracts impartially. According to Greif, the ‘community
responsibility system’ stepped into the breach by providing incentives for local courts
to supply impartial justice. If a member of one community defaulted on a contract with
a member of another, and the defaulter’s local court did not provide compensation, the
injured party’s local court would impose collective reprisals on all members of the
defaulter’s community, incarcerating them and seizing their property to secure
compensation. The defaulter’s community could only avoid such sanctions by ceasing
to trade with the injured party’s community. If this prospect was too costly, the
defaulter’s community had an incentive to provide impartial justice.
Greif claims that this combination of corporative justice and collective reprisals
provided the institutional basis for international exchange in the early centuries of the
Commercial Revolution, and that the Champagne fairs provide a prime example of the
‘community responsibility system’ in operation. He makes two main arguments
concerning this second claim. The first is that the Champagne fairs did not have a
legal system with jurisdiction over visiting merchants. The fair authorities, he claims,
‘relinquished legal rights over the merchants once they were there. An individual was
subject to the laws of his community - represented by a consul - not the laws of the
locality in which a fair was held.’133 His second argument is that the fair-wardens
enforced merchant contracts by excluding defaulting debtors and all their compatriots
132 Greif (2002), Greif (2006a), Greif (2006b).
133 Greif (2006a), 227
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