How did entrepreneurship start
In the early days of human civilization, entrepreneurship was an integral part of any society. People would create objects and trade with others for things they themselves didn’t have. The most famous example is that of the “peasant who paints a picture” and trades it with someone else in exchange for goats or other provisions they need.
Throughout time, however, it became more difficult to engage in such trade because families became settled and people stopped moving around as much. This made it impossible for people to do business with those outside their immediate community.
In order to counteract this problem, governments began providing special facilities that helped foster commerce. For example, contracts were drawn up which specified what was expected from both parties involved in a transaction.
The problem with this, of course, is that the government was not always trustworthy. For instance, the government might decide not to honor its end of a contract because it would be more convenient for itself.
Because of this, people were distrustful of contracts and thus invasions and disputes became common throughout history. This is where fairness comes in: it ensures that what is signed up for is what will be delivered.
There are many examples throughout history where fair solutions have been ineffectively implemented by governments while unfair ones have succeeded.
Basically, if you are going to do something, make sure that it is fair. People are more willing to abide by the wishes of an entity that doesn’t take advantage of them. This is why most governments in history have been “corrupt”.
Another example of government interference was the situation when a nobleman or royal ruler needed something repaired. Since artisans were obligated to work for their lords, they could never refuse.
In order to get around this rule, some artisans began charging their lords extra money. This was an early form of entrepreneurialism. The reason it is called “feudal” is because it arose during the feudal era in Europe in which feoffees were able to do business with anyone they pleased and retain the profits for themselves.
Eventually, though, these artisans became known as “craft guilds”. When craftsmen tried to engage in trade with outsiders, they were periodically fined by their governments.
The first craft guild was set up by a blacksmith in the 12th century. It provided blacksmiths with a place for them to work out their disputes without abusing their lords. Soon, they were creating all sorts of things: utensils, incense burners, and jewelry. Eventually, the craft guilds became so large that they basically did all of the work for lords and kings and made more money than they could spend.
As a result of the increasing popularity and power of these guilds, one thing became absolutely clear: governments dislike them. The first craft guild was set up in the 12th century by a blacksmith wanting to protect his trade secrets; the people he worked with did not want to lose that advantage. Craft guilds were usually set up by artisans (the people who produce and repair things) rather than merchants (the people who buy and sell things). As time progressed, craft guilds became powerful enough to force their lords into becoming members just so they would be left alone. They became so popular that they threatened any lord who tried to lop them off at the knees.
When craft guilds became too powerful, their governments started to crack down on them. That’s when we see the emergence of “Manufactories”. They were different from craft guilds because they specialized in producing a single thing. For example, the Manufactory of the King and Queen would produce all the furniture for royal residences. Unlike the craft guilds, these manufactories did not engage in any actual production; they just provided orders and apprenticeships for skilled artisans who could do such things without them. It is believed that these manufactories were introduced by the French government in order to centralize manufacturing under state control.
: Despite the increase in wealth, this period was not very productive. Guilds were constantly fighting one another because they were all trying to gain a monopolistic hold on their profession. Basically, it was a lot of wasted energy which could have been used more productively if they had just cooperated. It got so bad that people started to question whether craft guilds were even necessary.
In the mid-18th century, the Industrial Revolution came around and changed everything. With the emergence of steam-powered machines, manufacturing became mechanized and production began to skyrocket. (More details on this later)
This is when we see the emergence of “manufactories” (factory-like buildings that produce goods using steam power).