The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times (Princeton University Press, 2010) is an anthology that gives an high level view of the broad history of trade and commerce. (My full review published by Libertarian Papers here.) In separate chapters, David Landes and Michael Hudson identify the difference between creative and corrosive capitalism. The latter dominates in societies that deny the former. The editors generally point out that in any society, some people will take the best advantage of whatever modes are offered for personal advancement.
In Rome, glory came from looting provinces. Making money was not honorable. So the wealthy left the management of their businesses to their freemen and slaves. In America today, we allow both the marketing of technology and gaining government subsidies. It is not just that both are legal, but that culturally, we do not distinguish between them. Instead of vilifying him for being an idiot, we should be praising Michael Moore for being a millionaire. He should get a hero's medal for selling large volumes of what people want to buy voluntarily.
Instead of praising clever children who memorize the Presidents in order, we should be teaching them that "LinkedIn started out in the living room of co-founder Reid Hoffman in the fall of 2002. The five original founders were Reid Hoffman, Allen Blue, Jean-Luc Vaillant, Eric Ly, and Konstantin Guericke." (Company "About" here. ) I am not sure how to commemorate the chic restaurants in Rep. Nancy Pelosi's district that won exemptions to opt out of Obamacare. The avoidance of regulation should not be taken lightly.
Deirdre McCloskey developed her theories on "Bourgeois Virtue" over the past two decades. She now has two books out, with a third on the way. She investigates the topic from many standpoints. Generally, she finds that the things we are taught to dislike about being middle class include the social graces that benefit and profit us all.
A potent source of bourgeois virtue and a check on bourgeois vice is the premium that a bourgeois society puts on discourse. The bourgeois must talk. The aristocrat gives a speech, the peasant tells a tale. But the bourgeois must in the bulk of his transactions talk to an equal. It is wrong to imagine, as modern economics does, that the market is a field of silence. "I will buy with you, sell with you, talk with you, walk with you, and so following. . . . What news on the Rialto?"Today we have social media. Corporations hire people or not, and fire them, based on what is revealed on Facebook and Twitter. Reputational gossip has become all the more intense. In a global culture, other people in other places grew up with different expectations entirely. Rather than forcing conformity and avoiding risk, hiring managers who want their firms to profit should have the mechanisms in place analogous to those engaged by entrepreneurs.
For one thing, talk defines business reputation, as at the Iowa City cocktail party. A market economy looks forward and therefore depends on trust. The persuasive talk that establishes trust is necessary for doing much business. "Bourgeois Virtue" by Deirdre McCloskey, American Scholar vol. 63, no. 2, Spring 1994, page 249, here.
Market theorist Henry Girard Manne suggests that insider trading is one of those.
In the anthology cited above, the chapter on the Middle East by Timur Kuran pointed to a biography of a Cairo merchant. Making Big Money in 1600: The Life and Times of Isma'il Ibn Taqiyya by Nellie Hanna is a detailed account of one merchant in one place. It so happened that he had his choice of courts, four of them, from different schools of law, in which he could register contracts. Abu Taqiyya flexibly extended his trade network by crafting the clauses in his agreements. Benjamin Franklin would have called it "prudence."
A MAN'S HOME IS HIS MARKET
We see the "castle" as a paradigm, not just because we are at war with our neighbors - Hobbes' war of all against all being the reason for government. For us, the home is primary protection against the elements. In a society of open courtyards, verandas (a Hindi word, likely borrowed from Portuguese), decks, roofs with hanging gardens, patios, arcades and colonades, concepts of safety, security, and ultimately, property rights, must have other paradigms. As he became wealthy, Isma'il Abu Taqiyya extended and expanded his personal space until his large home dominated his street. He shared that street with a partner who made the same arrangements. They also did this with their warehouses (wikalat), which served as storage, emporia, and guest lodgings. Public life was gradually excluded from private contexts as the visitor moved inward from the business into the home.
The piazza is a public space, but among urban Americans in the 19th century, it came to be a somewhat pretentious word for the front porch. For Americans, the front porch became the margin between the public street and the privacy of the interior home. Adults could sit and rock while children played games. Friends and neighbors could stroll pass and bid hello and good day. An industry arose to create special furniture for this special space. Europeans assigned to work in Detroit like Ann Arbor because our restaurants extend to the street, using the sidewalks for table spaces. The margins between public and private spaces are blurred. It would be difficult to discuss anything illegal or immoral in such a context. Business and social life become transparent when conducted on the street. In such a context, you grant privacy by minding your own business.
Therefore, rather than the castle which holds against the storm, a commercial society of productive traders, offering values in voluntary exchange, is better served by a theoretical model of ready communication. Jane Jacobs made the same point in Systems of Survival. It is the Trader's Ethic to be open and available to deals with strangers. Thus, capitalism is inherently globalist and democratic.
ALSO ON NECESSARY FACTS
A Man's Home is His Market
City Air Makes You Free