History of Business Exam
2 hour exam
Answer 2 out of 5 questions
Each week a particular theme or issue was presented, and these themes
were all building upon larger themes that run throughout the course:
Main themes of course:
The Emergence of capitalism
-In order for capitalism to take place, 3 things need to occur:
-Society needs to establish orderpublic order, safety etc.
-State emerges as the primary vehicle for order to take place
-Market society depends on trade and order
-Capitalism as a system is a construct, a cultural system. It is therefore not natural, and is
adopted by certain people at a certain time to achieve a certain end.
-Adam Smith came up with capitalism.
-Made possible by the order of the state.
-Needs the creation of a system based on money. Takes the form of banks, stock
-Interestingly enough business tends to be more trusted than government. Slightly backward
because the government should be the voice of the people, business is private and government
-To what extent should public institutions (state) control private operations?
The Rise of the State and the Pursuit of Social Order
-The state makes economy, market, order possible. It is the primary defender of capitalism.
-The rise of business follows the rise of the state
Capitalism and its Critics I
Capitalism and its Critics II
The Rise of Labour Unions
The Regulation of Business
The Business of Modern Imperialism and War
The Crisis of Capitalism: The Great Depression
The Affluent Society
The De-Regulation of Business
The Economic Meltdown Capitalism and its Critics
-What’s ‘normal’ is growing in proportion to the market, we associate the passage of time with progress.
Obviously not always the case (ie. Roman Empire into chaos)
-With modernity comes the growing intolerance of anything or anyone who does not agree with
capitalism or the market.
-Karl Marx is the counter to Adam Smith. Declared revolutionary and radical, demonized.
-Marx offers a sophisticated analysis
-People start to come to terms with the growing problem that is poverty.
-Outdoor relief is because of things outside your control. Indoor relief is where you are required to enter
into some sort of institution
-There has been a loss of jobs because of technology, poor laws helped perpetuate poverty. Proving
people with aid gives little incentive for the employer to give them higher wages.
-Thomas Malthus said poverty was natural, and it isn’t necessary for the wealthy to help them. Keep the
poor in poverty, make them have fewer children.
-limit population growth, poor multiply like rabbits.
-Came as the rise of eugenics, keeping people out of society, sterilization.
-the trends show that the more money you have, the less children you have.
-re-vamped poor law of 1834 meant to cut people off from relief if they didn’t work
-State has to challenge capitalism in order to really help the poor.
-Freidrich Engels: the condition of the working class in England (1845)
-Karl Marx: Engels’ accomplice, counter to Adam Smith’s wealth of Nations
-The Communist Manifesto (1848) by Marx and Engels. ‘Spark’ for communist revolution. Marx is no
more radical than Smith, he identifies weaknesses in capitalist system and expects it to flop.
-Marx is significant for offering a material understanding of history, offers us the idea that technology is
the key to history.
-also offers the idea that there is a glaring flaw in capitalism that will lead to its collapse.
-whatever happens on the ground is going to determine a society’s consciousness. Society isn’t
organized to a set of theories or consciousness, thinkers base their ideas on the realities on the ground.
-people who ‘control’ society have run of political institutions, general theory and the consciousness of
-the tension between particular periods and within certain periods helps to put the consciousness into
-technological change will alter the consciousness, create tension as old elite face an emerging new
-competition between old feudal lords and industrialists.
-those who control history are those who can control economic systems.
-conflict between workers and bosses, superstructure determined by realities on the ground.
-societies mode of production (base) relationship with the ideological, political and legal framework
(superstructure that grows out of base).
-Marx says that the problem with capitalism is that industrial production is premised on
interdependence and connections. Superstructure is based on private property, individualization and
freedom. The base takes individualization away. -superstructure pursues policies that will end up destroying the organization.
-capitalism requires order and regulation. Market is unable to meet demands of society. Have entire
towns living in poverty, market has failed as the chief allocator of resources.
-defenders of the market economy say that individuals haven’t worked hard enough, Marx says NO.
-the leadership class is blind to what is taking place, the superstructure wont be able to withstand the
pressure from base. Capitalists sit there while other classes are organizing, upper class (superstructure)
is blind to this.
-the problem with capitalism is that there is a disconnect between the base and superstructure
-Marx is not calling for an overthrow of the system or a revolution, but believes that capitalism will fail
on its own.
-was Marx right? We can never know because capitalism has never been applied properly. Same with
Adam smith, we can never know if he was right because his system is not at full realization.
-tweaked system is just enough to keep the system itself intact. The Regulation of Business
-Progressivism: cultural, social and legal movement that challenges the underlying assumptions of the
Gilded Age. Based on scientific rationality, it borrowed from techniques of scientific management to
promote greater government intervention in the economy.
-progressive mind rejects formalism, the idea that society evolves according to a series of fixed laws that
cannot be altered.
-market operates according to irrational desires rather than according to rational decision-making
-Oliver Wendell Holmes Jr (supreme court justice)
-law is creature of society, society organizes iteslef in a manner to uphold its values.
-Charles A Beard: An Economic of the United States (1913)
-Americans: constitution = ‘sacred’ document (1787)
-constitution = gods will
-dont want to challenge or change it, any advancements in freedoms for workers were thought
as against the constitution
-Beard tries to take the constitution off of its pedestal
-Constitution reflects values of country
-NEVER was intended to serve forever as a cornerstone of the US today
-26 amendments to constitution. Document was flawed and incomplete. Ironic that the people who
fight for constitution are fighting for direct amendments, not the constitution itself.
-necessary step in humanizing the law and shifting peoples attitudes about business
-henry George: Progress and Poverty. Through him journalists increased writings on poverty and
workings of business
-people are dying because of the free market. Upton Sinclar: The Jungle (1906)
-Almost every aspect of life is governed by the law today The Crisis of Capitalism: The Great Depression
-There were 2 occurences that help explain the increasing economic problems leading up to the 1930’s.
Obviously the Great Depression of the early 1930’s was the climax of these issues.
1. Young men and women moved from rural jobs to urban industrial centres
2. National firms became more connected to a global