Community | June 28, 2011 | 39 comments

A Brief History of the Corporation: 1600 to 2100

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Schnookums
I've had several conversations with people over the years that assume either corporations are a unique American gift to the world, or are as old as Jesus and part of the human fabric. As it turns out, neither of those are true.

I often discuss here, and in my daily life, how out-of-control the modern corporation has become and that doing away with it is in the best interest of humanity (to which I am frequently referred to as a pinko communist). If it isn't black it has to be white, right? If you don't like the current iteration of capitalism, you must be a Marxist or at the very least unAmerican!

When I explain that private business ownership and investing in businesses by individuals existed well before the corporation (and I think it would be a good idea to return to the partnership model) I lose most people and the conversation effectively ends. The movie "The Corporation" is a wonderful watch if you've never done it, but anyone that's made it through to the end knows it tends to get a little long in the tooth, if you know what I mean. When I set out to steer someone in the direction of corporate history that isn't a book or a 2 1/2 hour droning documentary to help people understand how and where they started and how we got to where we are currently, few choices remain....until now.

This is a very well done article by a writer that, up until this piece, I've never read before. It's long, as anything about this subject tends to be (including recommendations it turns out), but I believe well worth it. This promises to be the first of several posts on the subject, and as follow-ups become available I will link them.

I look forward to our conversation on the subject.

-Schnookums

*************************************************************************************************************

On 8 June, a Scottish banker named Alexander Fordyce shorted the collapsing Company’s shares in the London markets. But a momentary bounce-back in the stock ruined his plans, and he skipped town leaving £550,000 in debt. Much of this was owed to the Ayr Bank, which imploded. In less than three weeks, another 30 banks collapsed across Europe, bringing trade to a standstill. On July 15, the directors of the Company applied to the Bank of England for a £400,000 loan. Two weeks later, they wanted another £300,000. By August, the directors wanted a £1 million bailout. The news began leaking out and seemingly contrite executives, running from angry shareholders, faced furious Parliament members. By January, the terms of a comprehensive bailout were worked out, and the British government inserted its czars into the Company’s management to ensure compliance with its terms.

If this sounds eerily familiar, it shouldn’t. The year was 1772, exactly 239 years ago today, the apogee of power for the corporation as a business construct. The company was the British East India company (EIC). The bubble that burst was the East India Bubble. Between the founding of the EIC in 1600 and the post-subprime world of 2011, the idea of the corporation was born, matured, over-extended, reined-in, refined, patched, updated, over-extended again, propped-up and finally widely declared to be obsolete. Between 2011 and 2100, it will decline — hopefully gracefully — into a well-behaved retiree on the economic scene.

In its 400+ year history, the corporation has achieved extraordinary things, cutting around-the-world travel time from years to less than a day, putting a computer on every desk, a toilet in every home (nearly) and a cellphone within reach of every human. It even put a man on the Moon and kinda-sorta cured AIDS.

So it is a sort of grim privilege for the generations living today to watch the slow demise of such a spectacularly effective intellectual construct. The Age of Corporations is coming to an end. The traditional corporation won’t vanish, but it will cease to be the center of gravity of economic life in another generation or two. They will live on as religious institutions do today, as weakened ghosts of more vital institutions from centuries ago.

It is not yet time for the obituary (and that time may never come), but the sun is certainly setting on the Golden Age of corporations. It is time to review the memoirs of the corporation as an idea, and contemplate a post-corporate future framed by its gradual withdrawal from the center stage of the world’s economic affairs......

Please continue at:
http://www.ribbonfarm.com/2011/06/08/a-brief-history-of-the-corporation-1600-to-...
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39 comments // A Brief History of the Corporation: 1600 to 2100

  • remanns
  • COMMONSENSEFORCOMMONGOOD_COM
  • remanns
  • CalgarC
  • Kelly_Balthrop
    • +1
      Kelly_Balthrop  
    • Interesting article. Though I was remiss to not get an explanation for why he feels the corporation is in decline, or even why corporate employment has declined by 60% by his chart. The opposite feels more true as mega corporations gobble up smaller companies.

      He also states that the corporate form has shaped economic life. I feel that economic theory, going from Mercantilism to Capitalism has had a more profound impact.

      Also, I couldn't get a good read on how he fell about the rise of corruption in corporations, and of Fascism in America.

    • 11 months ago
  • Schnookums
    • +1
      Schnookums  
    • Kelly_Balthrop:

      I would have liked him to spell out a little more clearly how he thinks the corporation is going to shrink in influence by 2100 too, but perhaps that will be in those future posts.

      I can see them killing themselves by overextending their influence leading to a people's revolt that regulates them to obscurity......but that will take another few decades at the very very least. We have a lot more rights and wealth to lose before the people realize that only a revolt will stop them.

      I think I speak for everyone here; that cannot come soon enough.

    • 11 months ago
  • Kelly_Balthrop
  • COMMONSENSEFORCOMMONGOOD_COM
  • TheChameleon
    • 0
      TheChameleon  
    • Schnookums:

      Well said. Hope it's not too far down the road. But I do think it's inevitable they'll blindly and arrogantly overreach and implode. A new wave of them will form and have their 75 to 100 year run... Cyclical in nature just like the economy itself.

    • 11 months ago
  • Steamed_N_More
  • artemis6
  • remanns
  • kvb1
    • +2
      kvb1  
    • Surprisingly, it was the corporation and market trading that led to the King of France helping to finance the American Revolution, imploding in a market crash, the fall of the king, anarchy and culminating in the sale of France's territories west of the Mississippi River to Thomas Jefferson, who bought it for a song. It was the total control of trade by EIC that Americans were fighting against, represented by the crown.

      Corporations and market capitalism is a failed system that won't go away, like a festering sore.

      Great article. Don't know how everyone has time to read other things besides what gets posted here, but keep it up.

    • 11 months ago
  • Novek
    • +2
      Novek  
    • kvb1:

      correction: bought the rights of the Louisana purchase that France claimed over the land that was not theirs to own in the first place. Please remember there were approximately 20 million 'Americans' (american indians) here long before anyone else arrived.

    • 11 months ago
  • Warren_Merrill
    • +1
      Warren_Merrill  
    • kvb1:

      You better read more than what's available to you on Current. Otherwise you will have a very biased, bigoted view of the world.

      Snookums .... Thanks for the post. It's an interesting article.

    • 11 months ago
  • Schnookums
  • Joeydee44
  • Warren_Merrill
    • +1
      Warren_Merrill  
    • Schnookums:

      I'm not sure I believe in the decline of the corporation. But the history is accurate. I heard some names and terms I hadn't heard in years.

      I believe the corporations are getting stronger and stronger. I don't neccessarily mean this in a positive way in terms of consumerism. Mergers and acquisitions diminsh competition. Diminished competition reduces price and product competition. A lot of people would be surprised if they knew how many companies are owned by larger entities.

    • 11 months ago
  • Schnookums
    • 0
      Schnookums  
    • Warren_Merrill:

      Agreed. M&A's have drastically changed the business landscape in the last 30 years....and I also believe not for the better.

      As for corporations getting stronger; I think the corporation will continue to permeate our lives, but only in the short term (30-40 more years). A brief reference in the article leads me to believe that the author also thinks that the death-spiral of the corporation involves this last grasp for power and influence. I may be reading into it too much, and hopefully future posts will clear up his position.

    • 11 months ago
  • kvb1
    • 0
      kvb1  
    • Novek:

      Sometimes we focus too closely on the issues and not on the larger picture. The Native Americans have been getting the shaft ever since Columbus came here. I am not sure how relations went with the Vikings when they arrived, although I do not believe that would have gone over well either. Bt our government was the most cruel of all, convincing the Natives that an agreement actually had meaning.

    • 11 months ago
  • kvb1
    • 0
      kvb1  
    • Warren_Merrill:

      I do read more, but it seem that people are all over the web bringing information to Current. I actually spend a bit of time on international papers like Guardian, Der Spiegle, The Nation, but I do not always have the time.

    • 11 months ago
  • TheAmbivalante
    • +3
      TheAmbivalante  
    • Schnookies - who luvs ya! Great Great Great post! For a long time, I've argued with many friends and enemies about the growing irrelevance of the nation-state and its borders and the covert growth of multinationals as the (very negative) driving force of our lives. Thank you for finding this enlightening piece! I'll use info here to kick some hornet's nests!

    • 11 months ago
  • wynnmeg61
    • +1
      wynnmeg61  
    • good read snookums. I wish I could be as optimistic about the coming collapse of the corporation structure though. I don't see that coming in my lifetime or even my grandchildrens lifetimes.

    • 11 months ago
  • MDBard
  • AJILIVIZION
    • +2
      AJILIVIZION  
    • http://www.youtube.com/watch?v=sOBWhVe68os&feature=channel_video_title

      LIFE INC.

      For more information about Douglas Rushkoff's book, "LIFE INC. How The World Became A Corporation And How To Take It Back" check out
      http://www.rushkoff.com and the LIFE INC. 9min movie by Janine Saunders

      Douglas Rushkoff is the author of ten books on media, technology, and society, including Cyberia, Media Virus, Coercion, Nothing Sacred, Get Back in the Box, and the novel Ecstasy Club. He made the PBS Frontline documentaries Merchants of Cool, The Persuaders, and the upcoming Digital Nation. He is the host of the WFMU radio show The MediaSquat, and he will be teaching the New School University this Fall.

      In Life Inc., award-winning writer, documentary filmmaker, and scholar Douglas Rushkoff traces how corporations went from a convenient legal fiction to the dominant fact of contemporary life. Indeed as Rushkoff shows, most Americans have so willingly adopted the values of corporations that theyre no longer even aware of it.

      www.lifeincorporated.net

    • 11 months ago
  • EmileZ
    • +1
      EmileZ [removed]  
    • AJILIVIZION:

      The fun of the barbeque is all well and good, but we need a bit more concrete information.

      Like the damn supreme court rulings. We need to find out more about those damn supreme court cases that gave corporations the rights of citizens.

      I think it would be just dreamy to find out about these damn supreme court rulings. Then maybe we can get on with "LIFE INC.", but personally I opt out of that particular hell.

    • 11 months ago
  • Kelly_Balthrop
  • EmileZ
    • +1
      EmileZ [removed]  
    • Personally, I would rather watch "The Corporation".

      I have been thinking a lot lately about how corporate rights came to be such a dominant force. It was early in the twentieth century, long before "Citizens United".

      I haven't figured it out yet.

    • 11 months ago
  • ClassicalGas
  • figgdimension
  • Schnookums
  • figgdimension
  • figgdimension
  • DavidGabbard
    • +3
      DavidGabbard  
    • Very good. I think the author should add Karl Polanyi's THE GREAT TRANSFORMATION to that list of essential readings. I know, I know. We could all add our own reading list.

    • 11 months ago
  • Schnookums
  • DavidGabbard
    • +1
      DavidGabbard  
    • Schnookums:

      It's interesting that people like Alexander Hamilton, James Madison, and others would go on to craft the Constitution in such a way so as to lay the groundwork for the re-invention of the East India Company. James Madison: "our government ought to secure the permanent interests of the country against innovation. Landholders ought to have a share in the government, to support these invaluable interests, and to balance and check the other. They ought to be so constituted as to protect the minority of the opulent against the majority."

      So, in light of Thom Hartman's piece, we ought to be able to identify counter-revolutionary figures among the most powerful of our "founders."

    • 11 months ago
  • Schnookums
    • +1
      Schnookums  
    • DavidGabbard:

      Indeed. There are many among the founders (many died in the Revolution itself and are relatively unknown to most) who were proponents of the revolt for purely selfish reasons. In today's vernacular; "You're not the boss of me". They didn't really want to reorganize society for the better, they just wanted to shuffle the deck and put themselves on top.

    • 11 months ago
  • Milieu
    • +1
      Milieu  
    • Schnookums:

      That was one of the reasons that the majority of what was later to become "Americans" did not support the Revolutionary War.

      "Historian Robert Calhoon wrote in 2000, concerning the proportion of Loyalists to Patriots in the Thirteen Colonies:

      Historians' best estimates put the proportion of adult white male loyalists somewhere between 15 and 20 percent. Approximately half the colonists of European ancestry tried to avoid involvement in the struggle — some of them deliberate pacifists, others recent immigrants, and many more simple apolitical folk. The patriots received active support from perhaps 40 to 45 percent of the white populace, and at most no more than a bare majority.[9]"

      http://en.wikipedia.org/wiki/Loyalist_%28American_Revolution%29

    • 11 months ago
  • kennymotown
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