The Evolution of Business. April 2012. Presented By Josie Boss
Today’s discussion regarding the Evolution of Business will begin with Feudalism proceed to Mercantilism introduce us to Capitalism then Commerce explain Property Rights and final we will learn about The Industrial Revolution. Slide 3:
The Concept of Feudalism at its heart involved a system of fair exchange. The King Granted Land, protection & title to Lords. In return, the Lords took an oath to the King promising Loyalty, military support and the sharing of any profits generated by the land.
The lords divided their land grants amongst Vassals (Knights) also promising protection and honoring the right for Vassals to pass down title & land to heirs. Vassals committed to loyalty, military service when called upon and the sharing of profits from the land.
Vassals were allowed to not only work their land on their own but they could sublet the land to tenants (Serfs) providing protection and the ability to earn a living. Tenants provided the Vassals loyalty, military services and profits from the land.
Conflicts between Lord & Vassals were settled in the Kings Court while bigger crisis which affected the kingdom were decided in council which included the King and all his Vassals. Slide 4:
Mercantilism was the next step in business evolution. As the populations increased and the demand for more good and land grew it was only natural that countries expanded beyond their borders and began interacting with foreign kingdoms.
This uncontrolled International interacting or trading began to take a toll on local economies as it drained areas of natural resources and affected the balance of produced goods. In some cases too much gold & silver was being used to purchase foreign trade items and in other cases not enough of actual food items were being produced for local consumption and trading.
As a result of this dilemma, two new classes of business participants were created. Merchants who controlled the importing and exporting of goods and Bankers who saw to it that good & silver exchange was uniformed and exchanged fairly for goods based on value.
Mercantilism was also very tied to the protection of nationalism. Trading of goods was priorities first to colonies of the nation. This assured the continued grown of the kingdom and it kept gold & silver flowing in the local economy. Surplus of good were then allowed to be traded to outside countries however, the value was still overseen by local Bankers. It is at this time that we are also introduced to Tariffs (Taxes) which assure the ruling class funds for oversight and enforcement of regulations Slide 5:
Capitalism. With Countries now trading among themselves and with each other there arose a need for understanding your trading partner’s economic structure.
Capitalism takes many forms in the global market. For example there are State controlled economies where all social & economic demands are provided by the ruling entity. There is Social Capitalism where most of the good are traded by individuals but social needs are provided by the state. A free market Economy has Laissez-Faire or hands off attitude by government and all is provided by the citizens. A mixed economy is what we generally associate true Capitalism to be here in the United States.
Regardless of which type of Capitalism you create its biggest influence has to be in the redefinition of classes. Capitalism creates a self-sustaining economy. As more good are needed more labor is required to produce them. As more people are employed more funds are available to purchase more goods. Thus money management allows individuals to obtain social status and cross over to a higher class.
As this demand for labor got greater labor found the need to organize and assure that proper wages and benefits were being provided.
As more products were demanded Private Ownership was encouraged to...