The Evolution of Business Chapter Two The Evolution of Business © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Introduction to Business

Learning Objectives Understand how property rights work to control the way productive resources are used in society. Define the system of feudalism and understand how combining land and labor speeds the accumulation of capital. Appreciate the functions of money in business and how the development of money promoted the rapid development of capital and enterprise.

Learning Objectives Describe the system of mercantilism, and appreciate the role played by merchants and bankers in speeding development in global trade. Explain the causes of the industrial revolution and the development of capitalism, unionization, and the class system. Explain how and why the form of business organization used to manage business commerce has changed over time.

Feudalism: Land, Labor, and Property Rights The Emergence of the Hierarchy Hierarchy and Property Rights Feudalism

The Emergence of the Hierarchy Hierarchy of authority

Hierarchy and Property Rights Aristocracy

Money, Capital, and Commerce From Barter to Money From Money to Capital

From Barter to Money Double coincidence of wants

From Money to Capital Interest rate Risk

Mercantilism: Trade and Enterprise Merchants

The Growth of Enterprise Bankers Craftspeople Craft guilds

The Industrial Revolution A Revolution in Farming and Manufacturing Why Did the Industrial Revolution Occur So Late? Capitalism, Unionization, and the Modern Class System The Industrial Revolution Continues

Capitalism, Unionization, and the Modern Class System Capitalists Proletariat Trade union Class system

The Changing Forms of Business Organization Early Forms of Business Organization The Joint-Stock Company The Limited Liability Company The Partnership and Sole Proprietorship

The Joint-Stock Company Unlimited liability

The Limited Liability Company

The Partnership and Sole Proprietorship