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He spends another few paragraphs (only three this time, thankfully!) before he gets to his next point:

It is at least probable that this joint-stock design maximizes corporate efficiency. If there existed a more effective structure — if firms were more productive when managed not by a committee but by an executive, or by the collective decisions of their customers or employees, by separate legislative and judiciary branches, etc., etc. — we would know. Someone would have found a way to construct a firm on this design, and it would have outcompeted the rest of the stodgy old world. (In fact, I think one of the most plausible explanations of why the Industrial Revolution happened in England, not in Sung China or the Roman Empire, was that the latter two never evolved anything quite like the joint-stock company.)

So, there are two reasons why this is a fucking bizarre statement.

Firstly, he’s insisting that people have already found the best organizational forms. Which is… well… very Francis Fukuyama.

Regardless, though, he’s doing so while in the middle of proposing a new organizational form. Which is it supposed to be? That we’ve already found the best forms, or that the best form is his proposed Patchwork composed of sovereign corporations?

Secondly: he says “one of the most plausible explanations of why the Industrial Revolution happened in England, not in Sung China or the Roman Empire, was that the latter two never evolved anything quite like the joint-stock company”. The issue with this statement is that that isn’t an explanation at all — it’s another turtle on the stack. Why didn’t Sung China or the Roman Empire develop the joint-stock company?

Photo by Sarah White on Unsplash

Also, just tossing this out here, fucking Wikipedia has better research than this guy. The joint-stock company was invented in China:

The earliest records of joint stock company can be found in China during the Tang dynasty (618–907) and the Song Dynasty (960–1279). The Tang dynasty saw the development of ho-pen, the earliest form of joint stock company with an active partner and passive investors. By the Song dynasty this had expanded into the douniu, a large pool of shareholders, with management in the hands of ching-shang, merchants who operated their businesses using investors’ funds, with investor compensation based on profit-sharing, reducing the risk of individual merchants and burdens of interest payment.

Even in Europe, the first examples don’t come from Britain, or from the 1800s:

Finding the earliest joint-stock company is a matter of definition. Around 1250 in France at Toulouse, 96 shares of the Société des Moulins du Bazacle, or Bazacle Milling Company were traded at a value that depended on the profitability of the mills the society owned, making it probably the first company of its kind in history. The Swedish company Stora has documented a stock transfer for an eighth of the company (or more specifically, the mountain in which the copper resource was available) as early as 1288.

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All of which severely undermines his point — the joint-stock company is not an unstoppable juggernaut of infinite growth. It existed for 1000 to 800 years prior to when it started having a notable (at least to Moldbug!) effect on world history.

Is it perhaps possible that a specific, and intentionally engineered (limited liability, anyone?) set of economic regulations and laws were instrumental to the modern success of the joint-stock company? After all, laws in countries around the world sharply limit what forms of organization a company may use and still be legally valid.

There’s a huge influence from the rule of the state here, an influence that Moldbug completely ignores.