arbitrage

Forms

arbitrage m (plural arbitrages)^[1] Old French and Anglo-Norman also arbitraige.^[2][3]

Etymology

It is formed from French arbitrer + -age.^[4][5][1] The verb is from Latin arbitror (“to judge, to decide”), from arbiter (“judge, umpire”).^[6][7] The FEW lists it under the Latin verb.^[8][9]

The financial sense is, according to the TLF-Étym, a calque of Italian arbitrio: medieval Italian bankers practised the operation, so named because the choice of markets and partners was left to the banker's judgement;^[4] Italian cambio arbitrio appears in the Fuggers' business letters in the early 16th century, and fare arbitri in Italian technical writing until the 18th century.^[4] Middle French faire arbitre is found in commercial documents of 1562–68, and Savary's faire l'arbitrage (1675) adapts it; the TLF-Étym therefore rejects the view that the financial sense is a narrowing of the general one.^[4] Rey explains it instead as the operator “arbitrating” between price differences to his own advantage.^[10] The sporting sense is derived from the verb in the sense “to referee”.^[4]

Earliest recorded meaning

It is first found in Beaumanoir's Coutumes de Beauvaisis (1283), in the legal sense of a judgement given by an arbitre: Si dirons liquel arbitrage valent et liquel non “so we shall say which arbitrations are valid and which are not”.^[4][3]

Semantic evolution

In Old and Middle French it also meant the power to judge or decide, discretion: from 1376 franc arbitrage is found beside franc arbitre “free will”,^[4][5] and Oresme wrote of what must not be left to “the ordinance and arbitrage or will of the judge”.^[3] The Anglo-Norman texts have both senses, arbitration and a discretionary decision, from 1313,^[2] and English took the word as arbitrage “arbitration” in the late 15th century.^[7]

In banking it named from 1675 the choice of the most profitable market for drawing or remitting bills of exchange,^[4][3] and later the trade of buying securities or currencies where they are cheap to sell them where they are dear;^[3][11] English uses this sense by 1875.^[7] The derivatives arbitragiste (1869) and arbitrager (20th century) belong to it.^[10] From 1902 it also means refereeing in sport,^[4] and in economics a trade-off between competing choices.^[1]

Timeline

• 1283 – First recorded, in Beaumanoir's Coutumes de Beauvaisis.^[4][5]
• 1313 – Anglo-Norman arbitrage “arbitration” is recorded.^[2]
• 1376 – Franc arbitrage “free judgement” is recorded.^[4]
• Late 15th century – English borrows it as arbitrage “arbitration”.^[7]
• 1562–68 – Faire arbitre, a calque of Italian fare arbitri, appears in commercial documents.^[4]
• 1675 – Savary uses faire l'arbitrage in the financial sense.^[4]
• 1771 – The Dictionnaire de Trévoux records the financial sense.^[12][11]
• 1869 – Arbitragiste is recorded.^[10]
• 1902 – L'Auto-Vélo uses it of refereeing a sports match.^[4]

Meanings

Noun

1. (law) The settling of a dispute by one or more arbitrators chosen by the parties; arbitration, also the award so given: soumettre un différend à l'arbitrage, arbitrage international.^[11][13][14]
2. The action of arbitrating between opposing interests or choices; in economics, a trade-off.^[14][1]
3. (sport) Refereeing of a match or competition.^[12][1]
4. (finance) Arbitrage: buying currencies, metals or securities on one market to sell them at the same time on another where the price is higher, or exchanging one security for another that looks more advantageous.^[11][14]
5. (dated) The power to judge or decide.^[12][4]

Word family

• arbitragiste

Related words

• arbitre
• arbitrer
• arbitraire
• arbitral
• libre arbitre
• Latin arbiter
• English arbitrage

References

1. ^ a b c d e f Wiktionary, the free dictionary, https://en.wiktionary.org
2. ^ a b c Anglo-Norman Dictionary (AND2), Aberystwyth University, anglo-norman.net (2nd ed., 2005–)
3. ^ a b c d e Littré, Émile (1873–1877), Dictionnaire de la langue française, 4 vols. and supplement, Paris: Hachette
4. ^ a b c d e f g h i j k l m n o Steinfeld, Nadine; Buchi, Éva, eds. (2005–), TLF-Étym: révision des notices étymologiques du Trésor de la langue française informatisé, Nancy: ATILF
5. ^ a b c Bloch, Oscar; Wartburg, Walther von (1989), Dictionnaire étymologique de la langue française, 8th ed., Paris: Presses universitaires de France
6. ^ Rey, Alain, ed. (2005), Le Grand Robert de la langue française, electronic version, Paris: Le Robert
7. ^ a b c d Harper, Douglas. Online Etymology Dictionary, https://www.etymonline.com
8. ^ Wartburg, Walther von, et al. (1922–2002), Französisches Etymologisches Wörterbuch, 25 vols., Bonn / Leipzig / Basel: Klopp / Teubner / Zbinden, p. 25, 86b
9. ^ Dictionnaire du Moyen Français, version 2015 (DMF 2015), ATILF – CNRS & Université de Lorraine, atilf.fr/dmf
10. ^ a b c Rey, Alain, ed. (1992), Dictionnaire historique de la langue française, Paris: Le Robert
11. ^ a b c d Rey-Debove, Josette; Rey, Alain, eds. (2007), Le Petit Robert de la langue française, Paris: Le Robert
12. ^ a b c Guilbert, Louis; Lagane, René; Niobey, Georges, eds. (1971–1978; 1989), Grand Larousse de la langue française, Paris: Larousse
13. ^ Trésor de la langue française informatisé (2004), ATILF – CNRS & Université de Lorraine, atilf.fr/tlfi; electronic version of Imbs, Paul; Quemada, Bernard, eds. (1971–1994), Trésor de la langue française, Paris: CNRS / Gallimard
14. ^ a b c Dictionnaire de français Larousse, larousse.fr/dictionnaires/francais (accessed 2024)