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Lecture

MGMT1030 Lecture 1 Note.docx

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Department
Management
Course
MGMT 1030
Professor
jodah
Semester
Fall

Description
September 7, 2012 The Rise of Market Society in Europe and the Industrial Revolutions in Britain Industrialization  machines used in production  emphasis on efficiency = mass production = profits (capitalization) urbanization = consumerism -people who live in urbanized areas cannot produce or create their own things  these people are forced to buy unlike self-supported country folk The Three Industrial Revolutions – General Features 1. First Industrial Revolution (1760 – 1840) -led by Britain, followed by France, United States, and Germany several years later -due to increases in agricultural activity, there was an increase in the development of new transportation (iw. Canals, factory systems, rise of urban society) -new items: steam engines, factory items (cotton textiles, ironware) 2. Second Industrial Revolution (1840 - 1940) -led by United States, Britain, Germany several years later -businesses started to move away from family owned & operated to commercial -communication (telegraph) & transportation (railroads, internal combustion engine) revolutions -development of modern corporate structure -typical new products: steel, chemicals, automobiles, home appliances 3. Third Industrial Revolution (1950 – present) -led by the United States and Japan -marked the rise of service economy, international financial and trade transactions, introduction of computer -focus on consumer electronics and pharmaceuticals -political breakdown 1 The Pre-Market Economy to 1700 1. Economic Society in the Middle Ages a. The Manorial System -breakdown of political structures in Europe forced creation of self-sufficient manorial estates -serfs and peasants tied to land and owed service to manor lord in return for protection -society based on custom and tradition  no money for transactions -self-sufficient society  not much opportunity for businesses to form b. Feudal Towns -limited semblance of commercial life in towns -no currency  bartering system -guilds rigorously controlled skilled artisans in towns to restrict competition and maintain traditions and customs -huge agricultural based community -church is very powerful  based on agriculture -church and lord have most of land -common pasture is crucial to all who have live stock to raise  important to entire community c. Medieval Economic Thought -Catholic church adopted negative attitude towards trade and economic gain (interest on a loan) -money lending & usury = parasitic activities -the way people thought of their society affected industrialization due to their tradition and culture -easier for a camel to fit through the eye of a needle than a rich man to go to heaven -money makers = sinful = hindered profits Agricultural -no sense that one could grow -economic pie  when one takes more, others have less Labour -live in a subsistent economy  enough for everyone, no profit Merchants -subsistent economy/society  basic necessities to survive only 2. Pre-requisites for a Shift Toward A Market Economy a. A New Attitude Toward Economic Activity Required -members of society need to be free of constraints and traditions to seek their own place in society -social values shaped the way people behaved -church played HUGE role  profit and growth was not desired b. Monetization of Economic Life Required -cash transactions need to be common at all levels of Society -what cash did:  Bartering limited people, cash brought opportunity for transaction to become efficient and affective  not limited by time  Capitalization  Cannot industrialize without capital  ultimate goal 2 c. Pressures of Market Demand Dictate the Regulation of Economic Takes in Society -market orientation must replace tradition and custom to determine production and distribution of goods in society -people look to the market rather than guilds for prices -marked based society -supply and demand  factors that determine market prices: environment, consumers, merchant needs Why Did Britain Industrialize First? 1. Political Stability and Territorial Integrity -unlike other areas of Europe, Britain had emerged as a political entity by the end of the seventeenth century -English Civil War (1642 – 1648) an d Glorious Revolution (1688) enabled a strong Parliament dominated by economic interests to largely control the government 1600s: – Henry VIII separated the church from the government in order to divorce his wife since the church refused – allowed for freedom within government to no longer seek permission from the church within decisions -instituted free election to parliament -taxes could only be levied through parliament -freedom of speech -taxation without representation  Boston Tea Party: Americans boycotted ship full of tea because they weren’t being treated fair -led to American Revolution -British government now has major economic interests  influence and make demands for what they want 2. The Enclosure Movement *What is the historical significance (exam Q) -began in England in 13 C. -landed nobility began to enclose common fields for productive purposes -eventual expiration of peasant plots and creation of a landless workforce -labour became a factor of production -peasants had no more land  either left or available to work in factories 3. Population Growth -increase from 6.5 million – 11 million from 1700 – 1801 -decline in infant mortality rate and increase in fertility -higher profits because labour will be cheaper  more competition -labour surplus is crucial to make profits (ability to…)  higher profits because you c
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