Purpose
This paper aims to expose the nature, pattern and mechanism of Roman private enterprise as the rudimentary form of capitalistic business. In the second part, it is shown why and how the directorship of slaves in private enterprise appeared and what shape it took.
Design/methodology/approach
By means of historical analysis and theoretical reconstruction, the author reveals the pattern and mechanism of business through slaves as the primordial form of private enterprise.
Findings
A comprehensive view of public and private entrepreneurship at the end of Republic and the beginning of Empire is presented. The origin and advantages of Roman public enterprise acknowledged by the state are brought to light. The way the benefits the corporate status affords were adjusted to a business framework allowed by law is demonstrated. It is just business through slaves that, combining peculium with free administration, secured limited liability for owners and turned the slaves to whom a business was entrusted into a kind of director. This construction enabled masters to become the proprietor of many formally separate enterprises at once, thereby expanding their business into something like a holding.
Research limitations/implications
The results obtained allow historians to retrace the origins of modern private enterprise to classical antiquity, and economists and managers to better understand the nature of private enterprise and organizational status of those owning and managing it.
Practical implications
Leaders and executives can draw from the paper an object lesson of how to make, within the existing political system, legal regulation and economic traditions, a radical innovation whose true meaning and social potential are so immense and far-reaching that show up in full measure evident many centuries later. The findings and conclusions the author comes to may be used in educational courses on economics, entrepreneurship, management, business history and so on.
Social implications
The paper provides an instructive model of conciliation of interests (social “compromise”). “Directors” – those organizing and managing a business but not owning it – were held subject to proprietors but within legally regulated relations with them. The state created incentives for initiative and competent businessmen in subjection to well-offs, to work hard, on one hand, and made their masters to use these incentives to public and their own profits. The benefits of all parties were taken into account, though, of course, not to the same degree.
Originality/value
The structure and “engine” of Roman private enterprise as well as the functions and organizational status of its “director” are demonstrated in relief for the first time.
On Limited Liability and the Development of Capital Markets: An Historical Analysis