Corporation (feudal Europe) facts for kids

In feudal Europe, which was a time long ago when society was organized around land and loyalty, a corporation was like a special group of businesses or people working together. The word "corporation" comes from a Latin word meaning "body." These groups usually had a special permission or "license" from city leaders, the church, or even kings. This permission allowed them to be the only ones who could sell a certain product or offer a specific service. This meant they had a monopoly, which is when one group has total control over something.

These early corporations were a bit like the guilds you might have heard about. Guilds were groups of skilled workers, like bakers or blacksmiths, who worked together to protect their trade. Corporations, especially in trade and banking, were often even bigger and had more power.

How Did Early Corporations Work?

Imagine a company like the British East India Company or the Hudson's Bay Company. These were big corporations in England many years ago. They got special permission from the king or queen to be the only ones who could trade in certain parts of the world. For example, the East India Company had exclusive rights to trade in India.

This special permission meant they didn't have to worry about other companies competing with them. It was like having a secret key to a treasure chest that no one else could open. This encouraged them to take big risks, like exploring new lands for trade, because they knew they would be the only ones to profit from it. It also helped stop problems like piracy, because if only one company had the right to trade, there was less reason for others to try to steal goods.

Good and Bad Sides of Corporations

Having a monopoly had both good and bad effects. On the good side, these corporations were encouraged to invest a lot of money and effort into their businesses. They knew they would be the only ones to benefit from their hard work. This helped them grow and explore new opportunities. It also reduced competition, which could sometimes lead to problems between different businesses.

However, there were also downsides. Because there was no competition, these corporations didn't have to try very hard to make their products better or cheaper. This could stop new ideas and improvements from happening. Also, they could often set their own prices very high, because people had no other choice but to buy from them. Even though kings or towns could sometimes take away their special permission if prices were too high, this rarely happened.

See also

• Guild
• Guilds of Brussels
• Bourgeois of Brussels
• Bourgeois of Paris
• Corporatism