2. The birth of cooperative enterprise: where, when, how 2.1 WHERE COOPERATIVES AROSE The birth of cooperative enterprise coincided with the advent of the industrial revolution, but the sense of solidarity and concern for the poor antedated it by centuries. Medieval cities, beginning in Italy, developed an inclusive institutional structure in which the representatives of the productive strata (merchants and craftsmen) formed both organizations that administered their interests in a cooperative fashion (guilds and merchants’ chambers) and organizations that looked after those who for one reason or another were not part of the productive classes or who were in temporary distress: hospitals, orphanages, convent schools, pawn banks, dowry funds, public lending institutions, poor laws. All this was coordinated within a network of market relations that harmonized social life within the city, not excluding any of its members a priori, and carried out trade externally, thus increasing the overall prosperity. The productive enterprise in its modern version was then in its infancy; its typical form was the family run craftsman’s shop. Only the great merchant companies, with their large size and, very early on, their organization by equity shares, foreshadowed the characteristics that firms would take on later. With the industrial revolution in the eighteenth century, the ‘capitalist’ form of enterprise, the public limited company, became solidly established. The holders of equity capital entered into contracts with all the other factors of production, paying them the minimum possible for their services and distributing the entire gain as remuneration of the capital...
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