Stateless Exchange


How can an industry prosper when its underlying transactions are beyond the reach of public institutions? This lecture examines cooperative exchange in the diamond industry, which rests wholly on extralegal enforcement to secure transactions and support a $30b global industry.


Bernstein, L. (1992). Opting Out of the Legal System: Extralegal Contractual Relations in the Diamond Industry. Journal of Legal Studies 21, 115.

Richman, B. D. (2004). Firms, Courts, and Reputation Mechanisms: Towards a Positive Theory of Private Ordering. Columbia Law Review, 104, 2328.

Richman, B. D. (2006). How Community Institutions Create Economic Advantage: Jewish Diamond Merchants in New York.  Law and Social Inquiry, 31, 383.