From Feudalism to Modernity, Part I: Management, Technology, and Work, AD 450–1750

Abstract

In assessing managerial practices in the pre-modern world, one needs to maintain a sense of balance, to neither understate nor overstate the level of advancement. In looking at the achievements of Western and Southern Europe prior to 1750, for example, it is evident that many of the underpinnings of modern management were well established. Double-entry bookkeeping gave firms a better understanding of their costs, at least where they were desirous of such understandings. Mechanical clock allowed maritime officers the ability to calculate longitude, a feat that made oceanic commerce a feasible proposition. Mechanical printing opened the door to mass literacy. Despite such achievements, however, Western Europe had few of the attributes of “modern management” prior to 1750. There were no mass markets. In the early 1600s, the carrying capacity of Europe’s entire maritime fleet (600,000–700,000 tons) was miniscule, equating to that of four modern “Capex” ships. In the absence of mass markets, there was little competition, allowing producers a capacity to charge high prices with little regard to costs. Capital intensity was low. Most “capital” equipment – ships, spinning wheels, weaving frames – was made of wood. Easily destroyed, such “investments” seldom endured. In the absence of a substantial stock of capital, the living standards of most were abysmal. Ultimately, only Britain proved capable of breaking the bonds of the pre-modern world. By exploiting its limitless reserves of coal, Britain turned a world of wood into a world of iron: a world of iron-ships, railways, mass markets, competition, and modern forms of management.