None of the developments of the last millennium work without certainty of contract, property law, and clear redress to back any partnership, loan or enterprise.
In Sapiens, Yuval Noah Harari’s recent book about the development of humankind, a major chapter is devoted to capitalism and the transformation of society by the invention of modern forms of credit, and so on.
Any Gazette reader who practises English commercial law in any city in the world will find echoes of our legal system on every page.
Indeed I would recommend anyone flying to the Global Law Summit 2015 - which runs in London from 23 February - to download a copy of Harari’s book on to their e-reader for their flight to Heathrow (bearing in mind that the hardback version weighs a couple of kilos).
Attendees at the summit will doubtless want to leaven their three days of speech-listening and networking with some challenging conversation, and for me, the issue of commercial and property law’s part in the modern age is about as fascinating as it gets. Not because of what it tells us about our history, but what it suggests about our future.
For while the summit marks, of course, the 800th anniversary since the barons (including my predecessor Lord Mayor of London) manoeuvred King John into endorsing Magna Carta, the key element about 2015 is not the history of the last 800 years, but the promise of the next 800 years.
Magna Carta, as every 12-year-old should know, contains one of the West’s most famous legal foundations: the right of everyone to equality under the law.
What will make the Magna Carta as important in 2815 is the role that equally accessible commercial law plays in what might be called the modern socio-economic adventure. As well as, of course, its role in founding key elements of non-commercial law (an important area I will leave, in this piece, to others).
As Harari delightfully illustrates, in the pre-modern era, there was little trust in the future – credit, if it existed, was very limited. The modern invention of the idea of progress (and other things) helped to unlock the expectations of the future at the service of the present, fuelling pretty well every advance that followed. In a nutshell, before credit, growth was slow because few could accept that things might get better, that promises would be fulfilled (or exceeded) and their ship would come home.
There is a very powerful example of the power of the fulfilled promise in the book’s account of why the puny Dutch were able to defeat the enormously well-resourced Spanish empire. In effect, although the Spanish had the treasures of the new Americas at their back, the Dutch developed financial instruments and, vitally, an unequalled reputation across Europe for paying their debts.
This credit-rating - backed by enforceable law - meant the Dutch were able to access readily the bankable funds of all of Europe, and so could hire mercenaries and acquire arms when needed. Anyone lending to a monarch was asking for trouble; anyone lending to the Dutch was assured of a good, reliable, deal.
In all of this, the rise of money and the market as mechanisms for transmitting information and distributing risk and reward are often acknowledged. In the heart of the City of London, for example, on the former Royal Exchange, swings the grasshopper weathervane of Sir Thomas Gresham (another Lord Mayor), who founded our first exchange, on the back of what he had learned - and earned - in the Low Countries. (Dutch influence can also be found in Wall St, built, literally, on the wall of the original ‘New Amsterdam’ settlement.)
But less widely acknowledged is the omnipresence of good commercial and property law, and especially English commercial law, in the mechanisms of modernity. For none of the developments of the last millennium work without certainty of contract, property law, and clear redress to back any partnership, loan or enterprise. And I would suggest that anyone in commerce using English law, also has the two further advantages of, first, the incremental adaptability of case-based law, and second, the speedy, reliable (and incorruptible) machinery of British justice, including dispute resolution and arbitration.
So when we look back to Magna Carta, as the Global Law Summit and other events will do, let us recognise that much of the achievements of the last centuries of enterprise, endeavour and enlightenment - have been backed at every stage by a man (and now increasingly a woman) with a pen (now a computer), a contract, and a full round of drafts.
Business, science, invention - even creative activity - is immeasurably amplified in their achievements by the enabling effect of good, speedy, reliable, commercial law. That’s why one of the City’s most essential communities is the one whose heart lies between Embankment and Holborn.
Talking about this to a young engineer now at an investment bank, her eyes lit up: ‘Oh, you mean good commercial law is like WD-40: it makes everything else easier!’
Exactly. See you on the 23 of February.
Sir David Wootton is a partner at Allen & Overy and was Lord Mayor of London from 2011-12