Empirical Insight and some Thoughts on Future(s) Investigation: Comments on Mark West's 'Private Ordering at the World's First Futures Exchange'

Some considerable number of years ago, when I was in Chicago, I had a plan to undertake a general study of the origins of futures markets. They fascinated me for a variety of reasons, one being their bizarre nature: traders meeting together, usually in some form of ring, in order to sell, on a huge scale, quantities of commodities which they neither possess, nor intend to possess, to other traders, who have not the least wish to receive such commodities, and nowhere to put them if they did. At first sight it appears a weird perversion of the institution of the contract of sale. So I wondered: How did such markets ever come into existence?

In any event, I did some work on the records of the Chicago Exchange and on the Liverpool cotton market. Though I published a piece on the latter, the general study was never completed. This explains why I was especially interested in two of the articles in this symposium, one by Lisa Bernstein and the other by my colleague, Mark West. I shall confine my comments to Mark West's article.