On Fri, 20 Jun 1997 07:26:06 -0400 DDeBar wrote:
> From: DDeBar <[log in to unmask]>
> Date: Fri, 20 Jun 1997 07:26:06 -0400
> Subject: Re: Demand?
> To: [log in to unmask]
>
> Robert -
> I don't want to beat this to death, but...
>
>
> > > .
> > > snip>
> > > > Corporations are logical consequences..of monoploy
capitalism, which
> > > > engulfs and devours small enterprise, no matter how strongly
those
> > > > enterprises products may be demanded.
> > >
> > > Point of fact - corporations existed as legal entities long
before
> monoply
> > > capitalism did.
> > >
> > Well, not necessarily. Many early corporations (e.g. British East
India
> > Company, Hudson Bay Company) exercised monopoly power, well before
the
> > well-documented rise of monopoloy capital in the 1870's.
>
> True. In fact, I had these two, and Dutch West Indies, in mind as
> eceptions when I posted. However, the earlier thread seemd to
suggest that
> the corporation as a legal construct was strictly derivative of
monopoly
> capitalism. This is just not true; corporate forms predate monopoly
> capitalism. This does not contradict the relationship that, as this
string
> has argued correctly, exists between the corporation and monopoly
> capitalism; I grant also that the PRESENT corporate form(s) ARE
largely
> derived from the economic fact of monopoly.
>
Glyn Davies (my father) in his _History of Money from Ancient Times to
the Present Day_ attributes the development of the joint-stock company
partly to the effects of the voyages of exploration of Columbus and
Vasco da Gama and their successors. These voyages stimulated the
development of capital and foreign exchange markets, and the use of
bills of exchange. The pooling of resources to reduce the risks of
trade with far-away destinations lead to the development of new
experimental forms of equity capital from which the joint-stock
company eventually evolved.
The first English joint-stock company was the Russia Company
founded in 1553 in connection with the search for the North-East
passage to Asia. Several years later, in 1568 the first two inland
joint stock companies in England were founded. These were the Mines
Royal and the Mineral and Battery. German metalworkers were prominent
in the development of both.
As far as monopolies are concerned the (London) East India Company was
founded in 1600 as a response to the attempt the previous year by the
Dutch to corner the market in pepper. Therefore, the company was
formed to _break_ a monopoly. Similarly, over a hundred years later,
Pepper was briefly the subject of a royal monopoly in England in 1640
when Charles I who was short of money and in dispute with parliament
over taxation (leading ultimately to the English Civil War) compelled
the East India Company to sell him its entire stock of pepper on two
years' credit and immediately sold it at a loss for ready cash,
solving his short-term by adding much more to his medium-term debts.
Moving on to the early 18th century, the South Sea Company was founded
to break a monopoly - in this case the Spanish monopoly of trade with
South America. Later it got involved in a scheme to take over
Britain's national debt which sent its shares soaring but after the
speculative bubble burst the British parliament tightened up company
law and this affected the development of banking for a long time to
come, not only in Britain but also in the US for a long time after it
gained its independence.
Jefferson was suspicious of banks because of what he had read about
the South Sea Bubble and consequently did not renew the charter of the
(second) Bank of the United States with the result that for the rest
of the 19th century the US was without a system of central banking and
was particularly prone to banking crises - far more so than Britain
was. Not until 1913 did the US set up the Federal Reserve System. Even
today central banking is still a more controversial subject in the US
than it is in Britain and other European countries. The far-right is
probably much more strongly opposed to it than the US left!
(Admittedly the Fed was partly responsible for the Depression of the
1930s so it did not distinguish itself then).
The is more about these topics in my web site
http://www.ex.ac.uk/~RDavies/arian/llyfr.html
See in particular the "Comparative Chronology of Money"
http://www.ex.ac.uk/~RDavies/arian/amser/chrono.html
Alternatively you can consult the book on which my web site is based -
Davies, Glyn. A History of money from ancient times to the present
day. rev. ed. Cardiff: University of Wales Press, 1996. 716 pages.
ISBN 0 7083 1351 5 (paperback).
_____________________________________________________________________
Roy Davies | e-mail [log in to unmask] |
University Library | History of Money URL |
University of Exeter | http://www.ex.ac.uk/~RDavies/arian/llyfr.html |
Stocker Road | |
Exeter EX4 4PT | Financial Thrillers URL |
UK | http://www.ex.ac.uk/~RDavies/arian/linda.html |
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