IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

The Emergence of the London Stock Exchange as a Self- Policing Club

  • Stringham, Edward

In the early stock market in London there were substantial risks of non-payment and fraud. (Mortimer, 1801) According to Hobbesian theory, we would expect stock markets to develop only after government has implemented rules and regulations to eliminate these problems. The historical account, however, provides evidence that solutions to these problems did not come from the state. This article outlines the emergence of the London Stock Exchange, which was created by eighteenth century brokers who transformed coffeehouses into private clubs that created and enforced rules. Rather than relying on public regulation to enforce contracts and reduce fraud, brokers consciously found a way to solve their dilemmas by forming a self-policing club.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://mpra.ub.uni-muenchen.de/25415/1/MPRA_paper_25415.pdf
File Function: original version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 25415.

as
in new window

Length:
Date of creation: 2002
Date of revision:
Handle: RePEc:pra:mprapa:25415
Contact details of provider: Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Edward Glaeser & Simon Johnson & Andrei Shleifer, 2001. "Coase Versus The Coasians," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 853-899, August.
  2. Bryan Caplan & Edward Stringham, 2003. "Networks, Law, and the Paradox of Cooperation," The Review of Austrian Economics, Springer, vol. 16(4), pages 309-326, December.
  3. Jan Allen Kregel, 1994. "The Evolution of Securities Market Organisation," Working Papers 189, Dipartimento Scienze Economiche, Universita' di Bologna.
  4. Daniel R. Fischel & Sanford J. Grossman, 1984. "Customer protection in futures and securities markets," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 4(3), pages 273-295, 09.
  5. Dennis W. Carlton, 1984. "Futures markets: Their purpose, their history, their growth, their successes and failures," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 4(3), pages 237-271, 09.
  6. William L. Silber, 1981. "Innovation, competition, and new contract design in futures markets," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 1(2), pages 123-155, 06.
  7. Cowen, Tyler & Sutter, Daniel, 1999. " The Costs of Cooperation," The Review of Austrian Economics, Springer, vol. 12(2), pages 161-73, November.
  8. Macey, Jonathan R & O'Hara, Maureen, 1999. "Regulating Exchanges and Alternative Trading Systems: A Law and Economics Perspective," The Journal of Legal Studies, University of Chicago Press, vol. 28(1), pages 17-54, January.
  9. Stringham, Edward, 2003. "The extralegal development of securities trading in seventeenth-century Amsterdam," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(2), pages 321-344.
  10. Boot, Arnoud W A & Greenbaum, Stuart I & Thakor, Anjan V, 1993. "Reputation and Discretion in Financial Contracting," American Economic Review, American Economic Association, vol. 83(5), pages 1165-83, December.
  11. Cowen, Tyler, 1992. "Law as a Public Good: The Economics of Anarchy," Economics and Philosophy, Cambridge University Press, vol. 8(02), pages 249-267, October.
  12. Banner, Stuart, 1998. "The Origin of the New York Stock Exchange, 1791-1860," The Journal of Legal Studies, University of Chicago Press, vol. 27(1), pages 113-40, January.
  13. Kregel, J A, 1995. "Neoclassical Price Theory, Institutions, and the Evolution of Securities Market Organisation," Economic Journal, Royal Economic Society, vol. 105(429), pages 459-70, March.
  14. Scott Chambers & Colin Carter, 1990. "U.S. futures exchanges as nonprofit entities," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 10(1), pages 79-88, 02.
  15. Neal, Larry, 1987. "The Integration and Efficiency of the London and Amsterdam Stock Markets in the Eighteenth Century," The Journal of Economic History, Cambridge University Press, vol. 47(01), pages 97-115, March.
  16. Benson, Bruce L, 1993. " The Impetus for Recognizing Private Property and Adopting Ethical Behavior in a Market Economy: Natural Law, Government Law, or Evolving Self-Interest," The Review of Austrian Economics, Springer, vol. 6(2), pages 43-80.
  17. Telser, L G, 1980. "A Theory of Self-enforcing Agreements," The Journal of Business, University of Chicago Press, vol. 53(1), pages 27-44, January.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:25415. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.