Family Partnerships and Companies : From Assur to Amsterdam

The most common legal business organization before the Industrial Revolution was the basic partnership that was confined to designated activities like a single long-distance voyage, fragile in the sense that it was easily terminable and ended with withdrawal or death of a partner and closed in the sense that partnership interests could not be traded. A few societies developed more complex business organizations like the Old Assyrian naruqqum, that facilitated larger capital accumulation and risk sharing than the basic partnership. They were broader in scope, more robust, lasted longer and were open to a larger number of parties.

Economic demand for capital and risk sharing was the primary driver of business organizations in pre-industrial societies. Modern tax, liability and regulatory issues were largely absent in the pre-industrial world and did not play a role in the development of business organizations. Political and social factors did play a role. Innovation in business organizations is more likely where there is an entrepreneurial spirit --- as in the merchant oligarchy of Assur. Social and political factors also can block or delay development of business organizations, as seen with the Roman political and popular mistrust of large groups that limited the use of the societas publicanorum and the Islamic reluctance to legally recognize non-human entities.

Family, Partnerships and Companies: From Assur to Amsterdam surveys business organizations before the Industrial Revolution in nine pre-industrial societies in their economic, political and social contexts: hunter gatherers, Mesopotamia and Near East, Egypt, Athens, Rome, the Islamic world, India, China and Europe. In an Epilogue, Martin Gelter discusses the modern development of business organizations that began in the 19th century.