Skip to main content

Economy Lessons - Joint-Stock Companies


Some interesting ideas from the Wealth of Nations by Adam Smith regarding big capital:

"The trade of a joint-stock company is always managed by a court of directors. This court, indeed, is frequently subject, in many respects, to the control of a general court of proprietors. But the greater part of these proprietors seldom pretend to understand any thing of the business of the company; and when the spirit of faction happens not to prevail among them, give themselves no trouble about it, but receive contentedly such halfyearly or yearly dividend as the directors think proper to make to them."

"The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master’s honour, and very easily give themselves a dispensation from having it. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. It is upon this account, that joint-stock companies for foreign trade have seldom been able to maintain the competition against private adventurers. They have, accordingly, very seldom succeeded without an exclusive privilege; and frequently have not succeeded with one. Without an exclusive privilege, they have commonly mismanaged the trade. With an exclusive privilege, they have both mismanaged and confined it."

And one of the examples:

"The Royal African company soon found that they could not maintain the competition against private adventurers, whom, notwithstanding the declaration of rights, they continued for some time to call interlopers, and to persecute as such. In 1698, however, the private adventurers were subjected to a duty of ten per cent. upon almost all the different branches of their trade, to be employed by the company in the maintenance of their forts and garrisons. But, notwithstanding this heavy tax, the company were still unable to maintain the competition. Their stock and credit gradually declined."

Comments

Popular posts from this blog

Wine - 2011 Brown Brothers Crouchen Riesling

Very nice wine with fruity taste - peach and pear: Consumed with Hungarian salami. Tasting notes .

Scrum - Team Culture and Wall Manifesto

In the Scrum framework one of the key components is the wall and daily stand-up. In some organisations I worked with the whole concept of the wall is not accepted by many developers, because of the stand-up necessity and "time waste". Very often all that methodology is used for the sake of methodology and not to achieve what we actually do - adding or creating value to our customer (usually called "The Business"). I can understand frustration that is caused by the wall and stand-up process. From the software developer perspective it is really a waste of time for the following reasons: 1. In 95% of cases developers are head down working like hell delivering valuable outcomes that they are accountable for. Extra effort to go to the wall, staying there for 15-30 minutes and listening or not listening to what others were doing yesterday and will be doing tomorrow is annoying for them; 2. The mere fact of having to do something mandatory to do that looks like

Mastering The Multitasking

There is usually two distinct perspectives on multi-tasking: 1. Multitasking is counterproductive. We get distracted by multiple tasks that all get our way and fight for our scarce attention, time and resources. This leads to a common fallacy that if you do multiple activities “at a time” you are not doing good work in any of those. 2. Multitasking is a way of getting many things done in a short period of time or in a long run. Indeed it can be either a disaster or a great helper depending on how it is used and practiced. Most recent research shows that we don’t do multiple tasks purely in parallel or simultaneously. That means we don’t purely multi-task, but switch between tasks and execute them one at a time, but by spending very small timeframes on each task. A good example from the history is a story about Julius Caesar capabilities in that area. Plutarch writes, “Caesar disciplined himself so far as to be able to dictate letters from on horseback, and to give directi