Business and Capitalism: An Introduction to Business History

Business and Capitalism: An Introduction to Business History
By N.S.B. Gras
2003/07 - Beard Books
1587981939 - Paperback - Reprint -  425 pp.

Scholars and others interested in the rise and role of business history will find this book informative and appealing.

Publisher Comments

Categories: Banking & Finance

This title is part of the Business Histories list.  

Of Interest:

Lost Prophets: An Insider's History of the Modern Economists

This is a reprint of the 1939 classic written by the foremost authority of business history for the first half of the twentieth century. It is often cited and is on many required reading lists for business history courses. Subjects covered include the author's classifications of petty capitalism, mercantile capitalism, industrial capitalism, financial capitalism, and national capitalism. One dictum that emerges: "One group of capitalists may win over another and the victory may be progressive or retrogressive, but some form of capitalism will remain triumphant."

Review by Henry Berry
Turnarounds and Workouts, July/August 2004:

Gras's book is as relevant and enlightening to the fundamentals, practices and trends of today's business world as it was when it was first published in 1939.  This was a time when the value and resiliency of capitalism were being challenged from without by communism and other ideologies and also from within by the depression.  But such is the breadth and soundness of Gras's history, that he is able to put these threats into perspective even in his own day.  Obviously, capitalism survived; whereas the threats to it of Gras's day, as he saw them did not much affect the basics of business and capitalism.

From Gras's point of view, business and capitalism cannot be put aside by revolution or political change or superseded by utopian societies because they are inextricably rooted in history, human nature and society, particularly social needs and aspirations.  Rudiments of business can be found in primitive and ancient societies.  Gras focuses of these much as anthropologists focus on the religious rituals and family structures of early societies.  He sees in some of these a cultural nomadic economy, and in others, a pastoral nomadic economy.  Herds of animals, for example, were the capital in the cultural nomadic economy; in the pastoral nomadic economy, the capital was field of crops.

The "business man" is differentiated from the primitive shepherd in that the shepherd raises his sheep mainly to feed himself and a small number of others, only occasionally trading them outside this small circle.  By contrast, the business man is not directly involved in production; he administers labor and resources to produce something that can be exchanged, i.e., sold.  Gras stresses that "business is administration that looks toward exchange."  "Petty capitalism," is the first stage of the intertwined business and capitalism that takes up most of Gras's lengthy history and analysis, formed in early towns on all continents.  The names of many of these towns are well known: Babylon, Athens, Rome, London, Paris, Amsterdam.  That they were centers of petty capitalism of their bourgeoisie is a principal reason they had significant roles in history.

Peddlers, shopkeepers, and tradesmen represented this petty capitalism.  This first stage of capitalist business became more highly organized in the course of history, and more multifaceted.  The petty capitalism was succeeded by mercantile capitalism, represented by merchants who entered into partnerships with other merchants, issued stock in their businesses and developed sophisticated bookkeeping practices.  Later came industrial capitalism with its large factories, complex production processes, and widespread, and in some cases, international markets.  Industrial capitalism spawned financial capitalism involving diversified practices and services of stock markets and banks to meet the big and sometimes unexpected financial requirements to sustain it and allow it to grow.

Today's diversified, vibrant, and global US economy can be seen as the high point of Gras's industrial capitalism mixed with his financial capitalism.  He ends his economic history with a chapter on the national capitalism practiced by Nazism and Fascism which, at the time, challenged the centuries of business progress based on private capitalism.  But these challenges were turned back in World War II.

Economic historian N.S.B Gras was a professor of business history at Harvard's Graduate School of Business.  In 1926, he founded the Business History Society along with its "Journal of Business History."

N.S.B. Gras, 1884-1956, was an economic historian. He was the first to thoroughly examine the field of business history and was the foremost authority in the field for the first half of the twentieth century. He was a Professor of Business History at the Graduate School of Business, Harvard University. In 1926, he founded the Business History Society and its Journal of Business History.

The Dominance of Status

1. Capitalism before private business 1
2. The earliest stages of economic activity 3
3. The capitalism of the pastoral nomads 7
4. Cooperation in the settled village 13
5. Administration of the large estate and manor 18
6. Civilization of pre-business capitalism 23

The Birth of Private Business

1. The nature of private business 27
2. Rise and nature of petty capitalism 30
3. Sedentary petty capitalists 33
4. Traveling petty capitalists: traveling merchants 37
5. Traveling petty capitalists: pedlars 44
6. Agents and auxiliaries in petty capitalism 48
7. Forces at work 51
8. Accumulation and flow of capital 52
9. Strength and weakness of petty capitalism 58
10. Survival and revival of petty capitalists in our day 62
Birth of Control in Private Business
1. Rise of the sedentary merchant 67
2. Policy and management of the sedentary merchants 74
3. Partnership flourishes 81
4. The flow of capital 85
5. Control 88
6. The mercantile capitalist and industry 92
7. Joint stock companies 103
8. Bookkeeping as a business device 114
Maturity with a Tendency to Disintegrate
1. Merchants' policies and mercantilism 120
2. Metropolitan economy 127
3. Managers, contractors, promoters, and speculators 132
4. Credit instruments and merchant bankers 141
5. Sedentary merchants and commercial banks 146
6. Forces at work 151
7. Strength and weakness of mercantile capitalism 157
8. Development within mercantile capitalism: various types 165
9. End of the sedentary merchant and mercantile capitalism 169

The Triumph of Firm Specialization in Big Business

1. The rise of industrial capitalism 175
2. The new transportation 181
3. Commercial banking and its relation to business 186
4. Three phases of industrial capitalism 189
5. Marketing in industrial capitalism 195
6. Business agents and auxiliaries 207
7. Secular trends in prices and profits 215
8. Flow of capital under industrial capitalism 218
9. Effect of industrial capitalism on internal organization 224
10. Social engineers 227
11. Strength and weakness of industrial capitalism 234
The Money Middlemen Influences or Controls Business
1. Search for profits by turning away from specialization 238
2. Financial capitalists 246
3. Flow of capital 259
4. Industrial integration and diversification under financial capitalism 266
5. Transportation and communication 272
6. Public utilities 279
7. Merchandising under financial capitalism 288
8. Use of agents, auxiliaries, and business tools 293
9. Secular trends and financial capitalism 297
10. Mistakes and crimes in business 304
11. Strength and weakness of financial capitalism 316
Political instead of Financial Control of Private Capital
1. Meaning of national capitalism 323
2. Early administration of national capitalism 332
3. Forces making for national capitalism  337
4. Fascism 339
5. Nazism 343
6. The American New Deal 348
7. The secular trend in business and the growth of national capitalism 359
8. Flow of capital under national capitalism 362
9. Strength and weakness of national capitalism 365
10. The philosophy of capitalism 368
Readings 373
Suggested Studies 386
Index 393

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