Harmonization, Preferences, and the Calculus of Consent in Commercial and Other Law

All harmonization is not equal. When it comes to child labor, members of an economic or political union, and even their external critics and competitors, generally agree that constituent states should harmonize their laws. Mere trading partners agree to harmonize their copyright laws. There is less agreement about securities law, and much less about other subjects of domestic regulation, including school curricula, statesupported religions, health care delivery, tort law, subsidy and taxation of the arts, and approval processes for pharmaceuticals. For these subjects, we find variety with respect to policies, statutory frameworks, rules, and enforcement even within “unified” legal systems, which is to say those harmonized in the extreme. Across jurisdictions, only some of these laws seem to converge over time, though there is more harmonization within an economic union than among simple trading partners. Can we explain these intuitions, or developments? And how might such an explanation illuminate the optimal level of harmonization when it comes to consumer protection and commercial law in the European Union and other evolving alliances? For the most part, harmonization opportunities come at the expense of variety, in the form of respecting local preferences, or political outcomes. There are many potential gains from harmonization but proponents of harmonization with respect to commercial law across the European Union are likely to stress the potential reduction in transaction costs. Skeptics are likely to be anxious about the process of choosing the focal points around which to harmonize and then also to favor the ongoing competition among jurisdictions that harmonization suppresses. One form of compromise is not to harmonize but to offer an attractive alternative that might appeal to jurisdictions, or even to businesses and individuals, that can then opt in to this alternative set of legal rules. The alternative might be more attractive, or even available, only for cross-border transactions. The Draft Common European Sales Law (CESL) fits this description, and it offers an opportunity to think specifically and generally about harmonization. Part II begins quite generally with the relationship between local preferences and harmonization—or its opposite. Part III takes a brief detour to include the role of