Imperial Politics, Open Markets and Private Ordering: The Global Grain Trade (1875-1914)

From the 1870s onwards, global commodity markets were all governed by self-standing private bodies, typically controlled by elite merchants. The London Corn Trade Association thus standardized supply from across the world, turning grain into a fungible commodity; it arbitrated disputes; and it offered to traders a range of standard contracts that integrated the value chains, from the various export harbors till destination. Enforcement rested on market power and the threat of blacklisting, which were inherently extra-territorial: few merchant houses in the world could afford being expelled from the London market. On the other hand, governments, whether sovereign or colonial, played a very limited direct role in how transactions were conducted. Ultimately, however, this private trading platform worked under English law exclusively and it was upheld by both the London courts and the Bank of England. It was both global and local, and hence a full part of Britain's imperial project. It policed a global network of private commercial routes while mediating the demands for market integration and the sheer instability of the global political geography. Rule-based market power should thus be seen as a specific factor in Britain's economic supremacy, together with relative productivity levels or capital exports.