The Past, The Future, and Stateless Property Rights

Yesterday’s Wall Street Journal contained a charming  mention of the birth of the credit report. What does this have to do with space law? It provides another example—albeit in the context of extending credit—of private information exchange and its effects on a commercial actor’s reputation to bolster Alex Salter’s proposal for a purely private legal system for space commerce. Such a system could make up for any lack of government enforcement of private property rights arising out of a popular but probably incorrect interpretation of Article II of the Outer Space Treaty.

Salter, as described here last October, focused on the fact that, while it might behoove a barbarian to take another person’s stuff, for those engaged in commerce, and particularly for those who have self-selected for the patience to engage in space commerce, the “discipline of continuous dealings” will lead to more civilized behavior. The barbarian scenario is limited in that it assumes a one-time interaction between the two parties, which is not realistic. In real life, there should be multiple interactions over a lifetime, making vital the need for cooperation and dealing with other players properly. He points to the reputational effects of dealing badly and describes private medieval merchant courts as an example of voluntary private law.

The WSJ outtake reminded me of his thoughts on reputation when it quoted from A Culture of Credit, by Rowena Olegario:

In the late eighteenth century, attempts to improve the flow of information led English mercantile and retail creditors to band together into trade protection societies. …

[T]he Society of Mutual Communication for the Protection of Trade . . . proved longer lasting. . . . The society’s constitution expounded two principles that lay at the heart of all trade protection societies: “Every member is bound to communicate to the Society without delay, the Name and Description of any Person who may be unfit to trust, for the security and satisfaction of the other Members; and shall, on all occasions, impart, without reserve, any information that may be solicited by any of the members.”

Talk about ensuring reputational effects for poor behavior.