The Rise of Modern Capitalism:

1
The Rise of Modern Capitalism

• multinational corporations, intangible property

2
British and European model 19th century

• Capitalists seek new markets for their products
• Two models of capitalist expansion
• British/European model
• Imperialism geographical expansion
• Weak internal based on low wages

3
US -- A New Model

• Internal expansion founded
• On internal colonialism
• Relatively high wages
• Mechanisation
• Introduction of new products to market

4
The Origins of the new model

• Available land Go West Young Man!
• Lack of labour

5
The Origins of the new corporation

• Railway systems 1870
• Excellent reading
• Josephsons Robber Barons
• The cost of linking East and West coast are
  prohibitive
• US Federal government offered franchises

6
Origins of New corporations

• To finance the ventures franchisees
• Sold bonds on European markets
• Raised money from towns and outposts on the way
• Sold land near the proposed railway lines
• Effectively the value of land is potential future
  earning of these land

7
Origins of new corporations

• They set up new types of organisation that were
  able to mobilise great financial resources,
  engineers, workers and material and move them
  over great distances
• Learned techniques of organisation from the army
• The new organisations were hierarchical and
  bureaucratic
• They moved to other businesses, steel making,
  sawing machines (Singer)

8
Origins of US Steel Trust

• In 1870/1
• Carnegie joined with J.P. Morgan to create a new
  organisation, the trust
• Existing mill owners in Pittsburgh, about 85 of
  all US steel production were convinced to pool
  their shares in the new trust
• Vanderbilts railway were behind the scheme

9
US Steel and Intangible property

• Carnegies own company was worth about 75 m in
  reconstruction costs
• He claimed shares of 300 m
• Claimed to have brought his good will into the
  project
• Essentially his good will meant he removed
  himself from competition
• It was part of a process of new property
  relations, intangible property

10
Property relations

• Corporeal property
• Incorporeal property
• Intangible property
• Intangible is anticipated future earnings, the
  future defines the present