Stateless Commerce: The Diamond Network and the Persistence of Relational Exchange

Barak D. Richman

ISBN 10: 0674972171 / ISBN 13: 9780674972179

Published by Harvard University Press, 2017

About this Item

How does Manhattan's 47th Street diamond district thrive as an ethnic marketplace without lawyers, courts, and state coercion? Barak Richman draws on insider interviews to show why relational exchange based on familiarity, trust, and community enforcement succeeds and what it reveals about the modern state's limitations in governing the economy. Num Pages: 192 pages. BIC Classification: KC. Category: (P) Professional & Vocational. Dimension: 23 x 15. . . 2017. 1st Edition. Hardcover. . . . .

Seller Inventory # V9780674972179

Bibliographic Details

• Title: Stateless Commerce: The Diamond Network and the Persistence of Relational Exchange
• Publisher: Harvard University Press
• Publication Date: 2017
• Language: English
• ISBN 10: 0674972171
• ISBN 13: 9780674972179
• Binding: Hardcover
• Edition: 1st Edition
• Condition: New

About this title

Synopsis

In Stateless Commerce, Barak Richman uses the colorful case study of the diamond industry to explore how ethnic trading networks operate and why they persist in the twenty-first century. How, for example, does the 47th Street diamond district in midtown Manhattan―surrounded by skyscrapers and sophisticated financial institutions―continue to thrive as an ethnic marketplace that operates like a traditional bazaar? Conventional models of economic and technological progress suggest that such primitive commercial networks would be displaced by new trading paradigms, yet in the heart of New York City the old world persists. Richman’s explanation is deceptively simple. Far from being an anachronism, 47th Street’s ethnic enclave is an adaptive response to the unique pressures of the diamond industry.

Ethnic trading networks survive because they better fulfill many functions usually performed by state institutions. While the modern world rests heavily on lawyers, courts, and state coercion, ethnic merchants regularly sell goods and services by relying solely on familiarity, trust, and community enforcement―what economists call “relational exchange.” These commercial networks insulate themselves from the outside world because the outside world cannot provide those assurances.

Extending the framework of transactional cost and organizational economics, Stateless Commerce draws on rare insider interviews to explain why personal exchange succeeds, even as most global trade succumbs to the forces of modernization, and what it reveals about the limitations of the modern state in governing the economy.

About the Author

Barak D. Richman is Edgar P. and Elizabeth C. Bartlett Professor of Law and Business Administration at Duke University School of Law.