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A Brief History of Business and Education





The commercial impetus behind the Renaissance, voyages of discovery to America and other far-flung places, mining of silver and gold in the New World, and the beginnings of American Indian and African slavery pushed human culture in a new direction. Ferdinand and Isabella were fanatical Christians who expelled the Moors from the Iberian peninsula in the same year that Columbus sailed to America. Christianity seemed poised for further conquests when St. Ignatius Loyola founded the Society of Jesus and Jesuit missionaries converted indigenous peoples of America to its faith. But the Spanish and Portuguese lost out to the commercially minded Dutch who, in turn, lost out to the English. Colonization for commercial purposes seemed to interest these people more than religion. It turned out that owning silver mines in America did not guarantee Spanish prosperity but only produced currency inflation and operating costs that forced the state into bankruptcy. Neither did French mercantilism fare much better. It was not until 1776 that Adam Smith produced a suitable explanation for the wealth of nations.

At the time of Columbus’ voyages to America, European trade was focused on the Far East where spices and silks could be purchased. This changed in the early 18th century. A Scottish financier named John Law, who had convinced the French Duke of Orleans to support him in establishing a bank similar to the Bank of England, merged this bank with a stock company organized for the purpose of promoting land sales in Louisiana. The idea was to encourage Europeans to settle on those lands, acquire African slaves, and grow coffee, sugar, and tobacco on plantations, which could then be marketed in Europe. The price of stock in Law’s “Mississippi Company” rose to great heights and then collapsed in December 1720. Law fled the country. However, the two years when his company operated had given Europeans a taste for the pleasurable commodities which might be grown in the American tropics. The bulk of trade shifted from the Pacific and Indian oceans to the Atlantic. Later in the century, a three-cornered trade took place between Europe, Africa, and the Americas. Europe sent manufactured goods to Africa in exchange for human slaves, who were then sent to the Americas to work on sugar plantations to produce the rum which Europeans so enjoyed.

The third epoch of history was a time when European nation-states fought each other for colonial possessions. Thanks to the voyages of discovery, Spain and Portugal held an early lead in the competition. Although their colonial possessions in South and Central America held firm, the Iberian powers were unable to keep the English and French out of American trade. Attempts to crack down on this gave rise to increased piracy. Enjoying naval superiority, the Dutch seized Portuguese possessions in Indonesia during the 17th century. As the English colonized the southeastern seaboard of North America, the French established control of Canada and the interior waterways of this continent, including the Great Lakes. These two nations fought for control of North America in what we Americans call “the French and Indian war”.

The English and French also fought for control of India. The Mogul dynasty had granted certain trade privileges to the English. The East India Company, chartered by England, became the defacto rulers of India when it took over the administration of certain provincial governments in north India on behalf of the Mogul empire and made its administrators rich. Actually, the East India Company made most of its money from tea acquired from China. It forced opium on the Chinese in exchange for the tea. England had to go to war with China in the 1830s to preserve trade access.

An important commercial event was James Watt’s invention of a steam engine which was installed in an English cotton mill in 1785. Besides furnishing factories with power, the steam engine led to the invention of the locomotive and steam boat. England meanwhile acquired a system of canals and iron bridges. The Industrial Revolution gave England a further advantage in trade. It was able to produce cheap cloth using the cotton acquired from America. Industrialization spread to Germany, France, and other European nations as well as to the United States. Agriculture was also being mechanized, putting cheap American grain on the market. During the 19th century, trade competition intensified. So did the competition for colonies in Africa. It was a prelude to war.

Agriculture remained the backbone of economies in the 19th century. In mid century, half of American workers remained on the farm. Railroads carried grain from the Midwest and western beef to eastern markets. Steel was used in the railroads and for bridges, building construction, and other purposes. Electricity sent through telegraph lines improved communication. The U.S. civil war destroyed the old plantation system in the south. Petroleum discoveries in western Pennsylvania, exploited by John D. Rockefeller, led to the creation of the Standard Oil Company whose product came to fuel automobiles, boats, and airplanes. Chemical manufacturers produced artificial dyes for clothing, aspirin, and plastics. The farm population dropped as the efficiency of agricultural production improved. There was an increase in the proportion of workers engaged in manufacturing. Henry Ford’s Model T made automobiles affordable to the average American family.

The exploitation of factory labor gave rise to labor unions which bargained collectively with the factory owners. An early object was to reduce working hours to eight hours a day. From this and related efforts came the international socialist movement, led by Karl Marx. The two leading industrial nations in the 19th century, England and Germany, became political adversaries. Their rivalry culminated in World War I, the most destructive war to date in human history. Ironically, the German Kaiser and the English monarch were grandson and son, respectively, of England’s Queen Victoria. The Russian czar had also married into her family. Yet, the outcome of the war was that three royal dynasties in Europe came to an end. Russia became under the control of Karl Marx’s ideological heirs.

The 20th century also saw a Second World War which again was fought between Germany and England. Germany found allies in Italy and Japan. England gained support from the United States and the Soviet Union. The Axis powers were defeated after inflicting much devastation on peoples in Europe and Asia. The Allied victory proved to importance of weapons technology and industrial capacity to winning a modern war. It took the dropping of two atomic bombs to produce Japan’s surrender. After this victory, the United States and Soviet Union engaged in a “Cold War” lasting more than forty years. This was also a contest between the economic ideologies of free-market capitalism and Marxist communism. The communist government of the Soviet Union ended in the early 1990s and the Soviet Union itself was dissolved into separate republics. Communist governments remain in China, Vietnam, and North Korea. Yet, the Chinese in particular have established close business relations with international capitalists.

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The third epoch of world history has, however, a second key institution: secular education. This civilization began five or six hundred years ago in Europe during the Renaissance. There were then two centers of culture: northern Italy and Flanders (Belgium). Both were intensely commercial places which supported a thriving artistic culture. They were centers of maritime trade where notable scholars and painters lived. There was, in other words, a connection between commerce and culture.

The city-states of Florence and Venice were centers of the Renaissance culture in northern Italy. In 1082 A.D., Venice had received a charter from the Byzantine empire granting its merchants freedom of transit and exemption from taxes in territories west of the Bosporus. With such access, its merchants specialized in goods such as silk, spices, and Damascus blades imported from the east This city cut a deal with knights of the Third Crusade in which Venetian boats would ferry the knights across the sea to Egypt in exchange for temporary service. It used this resource to conquer the Dalmatian coast and sack Constantinople. Fra Luca Pacioli published a book in 1494 on the Venetian art of double-entry accounting. Marco Polo was a Venetian engaged in Asian trade.

Florence, in the interior, became a center of weaving and dyeing cloth when the Order of Humble Brethren relocated there from Tyre, bringing with them secrets of oriental cloth preparation. As Florentine cloth gained a reputation for high quality, it became a center of cloth manufacturing using wool from northern Europe. A system of international credit was required for this trade. Florentine bankers, who managed accounts of the Roman church, worked out a system for purchasing wool in England with monies collected there for the church. In addition to banking, Florentine merchants became experts in controlling costs in manufacturing.

Thus these two cities, controlled by commercial oligarchs, became known for their wealth. There was meanwhile a cultural awakening, or reawakening, as the works of classical Greek and Roman culture became known. Italy was, of course, the heartland of the Roman empire. Ancient Greek texts were reintroduced when Constantinople fell to the Ottoman Turks and Greek-speaking scholars fled to the west. After a millennium of Christian culture, western intellectuals could look at the rediscovered works of pagan antiquity and decide that they were culturally superior.

The Italian poet Petrarch was the archetype of a humanist scholar. To him and his comrades we owe the tradition of looking at ancient texts from the standpoint of their original spirit and intent. We owe to them the art of textual criticism. Petrarch regarded classical authors as if they were his personal acquaintances. He put himself in their shoes and carried on imaginary conversations with them. He became an expert in the works of classical antiquity thought to be superior to the contemporary culture. The rich merchants of Venice and Florence engaged humanist scholars to educate their children. They became patrons of the arts. They spent money to purchase and copy ancient manuscripts. A connection was established between wealth and cultural polish which has remained to this day.

The first European universities were aligned with the church. The University of Paris stressed theological training along with studies in medicine, law, and the liberal arts. The number of universities in western Europe doubled between 1350 and 1500. The Reformation stimulated both religious and secular education. The Protestants believed that each man should learn to read the Bible. That gave a boost both to literacy skills and translation of the Bible from Latin into popular tongues. Such translation required skill in analyzing texts. Dante’s writing of the Divine Comedy in his native Tuscan rather than Latin encouraged others likewise to write in their contemporary languages. A tradition of national literatures was born. Printing fostered dissemination of this literature. Such developments undermined the solidarity of Christian culture in Europe. Toynbee writes: “The ecclesiastical Respublica Christiana was replaced to some extent by a literary and scientific ‘Republic of Letters.’ Its founding father had been Erasmus but Bayle endowed it, in 1684, with a periodical, Nouvelles de la Republique des Lettres.” This was the start of literary and scientific journals. Printed newspapers came later.

Both Protestants and Catholics saw education as an opportunity to mold young people in the faith. The Jesuits became known for their rigorous religious training. But the Protestants, too, paid special attention to schools. Indoctrination in religion was the spiritual equivalent of military training. European princes, mistrusting popular education, wanted schools to train clever young people to be of service to society. According to H.G. Wells: “Universities became “part of the recognized machinery of aristocracy ... A pompous and unintelligent classical pretentiousness dominated them ... The only knowledge recognized was an uncritical textual knowledge of a selection of Latin and Greek classics.”

After its defeat by Napoleon, Prussia reorganized its schools. The gymnasium became a center to educate elites. Applied science was added to the curriculum. Soon German training in science began to pay dividends in improved technology. Germany became a leader in chemicals. Prince Albert of Saxe-Coburg and Gotha, after he married Queen Victoria, warned the British of their educational deficiencies. German competition was used to scare his adopted nation into improving education much as, in the 20th century, Sputnik was used to promote scientific education in the United States. The English did improve their system of public education. Even so, the English “public schools” and prestigious universities such as Oxford and Cambridge remained havens for the upper class. American colleges took their cues from Britain.

In that regard, an important step in the development of western education was the decision by William Farish, in 1791, to put grades on papers written by students at Cambridge University in England. Grading made it possible to evaluate students quantitatively and that, in turn, facilitated the hierarchical stratification of graduates from the schools. Educational stratification led to eligibility for particular careers; and placement in careers laid a foundation for socioeconomic rankings within the general society. And so, the testing process has become as significant a part of secular education as the processes of teaching and learning. It gives individuals a place in society. This is the modern measure of success.

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