Question

1. How did the concept of Joint-Stock companies pave the way for Capitalism?

2.How would the role of government in this era (1450-1750) be described regarding economic activities? How are they linked?

Answer 1

Joint stock companies are erstwhile kniwn as corporation or limited companies in which stocks of the company can be bought and sold by shareholders allowing them to dilute equity withoutaany consent of group. This process in that era created largescale need for capital infusion and diffusions to make profits and hence eventually capitalism evolution took place where shareholders led companies and not the state government as rules were relaxed and regulatory norms were not in placeand subsequently government had secondary role in market as private owners of company indulged in trade to make colloquial profits.

Here the government just acted as secondary source and merely shareholders in assets of these companies and their domination was largely dissolved due to capitalism driven by market forces. Its major role was restricted to maintaining law anf orders, and negotiations with trading nations and strong strategic defence support.

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