This is the fifth in a series of posts discussing themes from The Aid Trap by Glenn Hubbard and William Duggan. In Chapter 2, the authors assert that England’s rise to prosperity began after adopting the Dutch model of commerce. William of Orange became king of England, Ireland and Scotland as a result of the Glorious Revolution in 1688. The London Stock Exchange opened just ten years later, in 1698.
Anglo-Dutch business practices quickly spread to America. In Europe, the feudal monarchies with their anti-business practices began to be overthrown in the 1800s in the “bourgeois revolution” in which the bourgeoisie, the business class, replaced feudal aristocrats. By the end of the 19th century, most people in Europe were employed by businesses. During the 20th century, business practices spread throughout the world largely through colonies of European nations.
During the 20th century, business encountered a new adversary: socialism, which was first proposed by Marx and Engels in 1848. Business does not reward people equally for their labours, and Marx viewed all profits as a form of theft. A pure socialist system essentially eliminates business by putting the means of production in the hands of the state. By the end of the 20th century, the general consensus was that socialism does not work as effectively as business-based systems of government.