Corporation (feudal Europe)
Encyclopedia
In feudal
Europe
, a corporation (from the Latin corpus, corporis a body) was an aggregation of business interests into a single legal body, entity or compact, usually with an explicit license from city, church, or national leaders. These functioned as effective monopolies
for a particular good or labor.
The term "corporation" was used as late as the 18th century in England
to refer to such ventures as the East India Company
or the Hudson's Bay Company
: commercial organizations that operated under royal patent
to have exclusive rights to a particular area of trade. In the medieval town, however, corporations were a conglomeration of interests that existed either as a development from, or in competition with, guild
s. The most notable corporations were in trade and banking.
The effects of a corporation were similar to a monopoly. On the one hand, the ability to have sole access to markets meant that the business was encouraged (e.g., the ability to be an exclusive trader provided an incentive to the East India Company to accept financial risks in exploration) and the negative effects of competition were avoided (to take the same example, exclusive patents cut down on merchants sponsoring piracy). Innovation was stifled, however, and prices were unregulated. (In the case of patent corporations, the town or monarch was ostensibly able to regulate prices by revoking the patent, but this rarely occurred.)
Feudalism
Feudalism was a set of legal and military customs in medieval Europe that flourished between the 9th and 15th centuries, which, broadly defined, was a system for ordering society around relationships derived from the holding of land in exchange for service or labour.Although derived from the...
Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
, a corporation (from the Latin corpus, corporis a body) was an aggregation of business interests into a single legal body, entity or compact, usually with an explicit license from city, church, or national leaders. These functioned as effective monopolies
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
for a particular good or labor.
The term "corporation" was used as late as the 18th century in England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
to refer to such ventures as the East India Company
British East India Company
The East India Company was an early English joint-stock company that was formed initially for pursuing trade with the East Indies, but that ended up trading mainly with the Indian subcontinent and China...
or the Hudson's Bay Company
Hudson's Bay Company
The Hudson's Bay Company , abbreviated HBC, or "The Bay" is the oldest commercial corporation in North America and one of the oldest in the world. A fur trading business for much of its existence, today Hudson's Bay Company owns and operates retail stores throughout Canada...
: commercial organizations that operated under royal patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
to have exclusive rights to a particular area of trade. In the medieval town, however, corporations were a conglomeration of interests that existed either as a development from, or in competition with, guild
Guild
A guild is an association of craftsmen in a particular trade. The earliest types of guild were formed as confraternities of workers. They were organized in a manner something between a trade union, a cartel, and a secret society...
s. The most notable corporations were in trade and banking.
The effects of a corporation were similar to a monopoly. On the one hand, the ability to have sole access to markets meant that the business was encouraged (e.g., the ability to be an exclusive trader provided an incentive to the East India Company to accept financial risks in exploration) and the negative effects of competition were avoided (to take the same example, exclusive patents cut down on merchants sponsoring piracy). Innovation was stifled, however, and prices were unregulated. (In the case of patent corporations, the town or monarch was ostensibly able to regulate prices by revoking the patent, but this rarely occurred.)