EconAir

  INTRODUCTION   The English East India Company (EIC) might be a model for how a multinational corporation could survive and prosper in an increasingly chaotic and hostile geopolitical world.   HISTORIC BACKGROUND   The East India Company (EIC) was chartered in 1600 by Queen Elizabeth I to promote and monopolize English trade with Asia. England, a poor country in the 1600s but with colonial ambitions after defeating the Spanish Armada in 1588, outsourced its colonial ambitions to the EIC and other private companies.    The East India Company was privately funded by 218 merchants and other investors. It was the first modern multinational corporation. The EIC was a joint stock company, that is, a company with publicly traded stock bought and sold in a secondary stock market.  Like modern companies, the EIC issued financial reports, held annual meetings for stockholders, and had quarterly meetings of the Board of Directors.    The EIC was vertically integrated. The company designed, built

Adam Smith’s Pin Factory Adam Smith’s description of a Pin Factory is on the first page of The Wealth of Nations .   (Chapter 1 – “Of the Division of Labour”)   Drawings of pin factories of this period show workers using hand tools. Smith says the process can be broken down into 18 distinct steps, including the packaging the pins.  He  mentions that pin factory workers were poorly paid, despite their high productivity.  This contradicts the economic assumption that higher productivity (output per worker) leads to higher wages.  Adam Smith goes on to say he visited a pin factory employing 10 men who produced 48,000 pins per day.   If ten workers did every step themselves, Smith says they could each produce 10 or 20 pins per day.   So the pin factory replaces up to 4,800 pin makers.   The increase in labor productivity (output per person per day) is as high as 50 times that of individual pin makers.    The reduction in unit cost or average cost (AC) and the huge increase in

The Rocket - Famous Steam Locomotive England , more than any country, started the Industrial Revolution in the late 1700s.   And for over 150 years, England continued to discover new products and technologies.   Yet England eventually fell behind the United States and Germany in industrial technology, production efficiency, and economic growth.   What happened? The seeds of England ’s relative economic decline were there right at the beginning. Producing cotton cloth became England's great industry in the 19th Century.   But m illwrights, mechanics with specialized knowledge of how to build wool and cotton mills and their machinery, felt frustrated because they seldom became part owners and couldn’t find financing to start their own mills.   Some illegally emigrated to the United States and France .   Much of the early American textile mill technology was due to English immigrants.   The first cotton spinning mills were designed by an English millwright financ