Today, Exchanges or Börsen are the focal point of economic transactions. In fact, for economists they represent the perfect market. For others the world of options, futures, and other derivatives represents an elusive environment or even a gambling den (Spielhölle). There is no shortage of attempts to define an exchange or Börse, to excavate its linguistic roots, to explain its functions, or to analyze the legal definition of the different national and international regulators.
Economic legal history provides us with a powerful tool to map the aims of such trading venues. Thus, my talk is concerned with private governance of the first exchanges in the world: Antwerp (1531) and Amsterdam (1611). By scrutinizing their architectural design and the social setting in which they first appear, I will provide reasoning for the historical uniqueness of the creation of this new type of marketplace in the Low Countries.
This creation goes hand in hand with the sophistication of the legal exchange process, most notably the invention of futures contracts. These futures contracts are legally constructed by facilitating clearing mechanisms known from medieval fairs: the rescontre-system. The structure of this system provides the blue-print for the construction of modern markets and helps to unravel one of the greatest myths in economic legal history—the gambling stigma. Contrary to classic position, I argue that futures contracts are not the breeding ground for illegitimate bets but innovate contract performance. Contracts may be fulfilled by (automatized) cash settlement or specific performance. This has a staggering effect. Within the physical boundaries of the exchange building virtual exchange-chains came into existence. A new legal space within a new type of marketspace was born.