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Reflections on the Economic Revolution - Zodiac Case Study

Essay by review  •  February 11, 2011  •  Case Study  •  1,051 Words (5 Pages)  •  1,296 Views

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Reflections on the Economic Revolution

The "Economic Revolution" Heilbronner described transformed the European economic system from feudalism to capitalism. This change is best seen in the current assumptions that businesses make and contrasting them with what was believed in the years before and during this revolution. The assumptions that are made are used to define terms of modern economic studies and practices. Therefore, the birth of capitalism was also the birth of a new vocabulary to identify its properties. While Heilbronner focused on the ideas of labor, land and capital; the ideas of how to generate profit from content employees, and research and development and the use of bookkeeping are equally important. Thus, the previous uses of these concepts were vital in the conversion from feudal to capitalistic society.

Primarily of course in today's business life is the idea that companies exist to make money, or a profit. The term profit simply means the amount of revenue that remains after accounting for all expenses. This was the underlying focus of the Zodiac study, and the choices made were how best to make a profit for the shareholders. However, before the economic revolution, "The idea of 'making a living' had not yet come into being. Economic life and social life were one and the same thing. Work was not yet a means to an end - the end being money and the things it buys. Work was end in itself" (Heilbronner 26). Therefore, although the term profit had the same meaning, it had a negative connotation. A minister even accused a parishioner of a "heinous crime: he has made over a sixpence profit on the shilling, an outrageous gain" and preached a sermon on the idea that "to seek riches for riches' sake is to fall into the sin of avarice (Heilbronner 22-23). Even the government believed that a "concentration of wealth would set a bad precedent" (Heilbronner 29). It was not until (DATE) that "Acquisitiveness became a recognized virtue - not immediately for one's private enjoyment, but for the greater glory of God." (Heilbronner 35).

Because profit became the aim of multitudes, employees were now considered a valuable resource. While the idea that "Happy employees are productive employees," is common today and an assumption made in the Zodiac Coursework, this idea is contrary to what was viewed before and during the Economic Revolution. As proprietor of Zodiac, I wanted to attract and keep employees so I was willing to increase benefits to maintain my workforce. However, before the Economic Revolution "It was generally admitted that unless the poor were poor, they could not be counted upon to do an honest day's toil without asking for exorbitant wages" (Heilbronner 40). This was especially true because as one person observed, "When wages were good, labor was 'scarce to be had at all, so licentious are they who labor only to eat, or rather to drink" (Heilbronner 24). However, this is not simply based on timing, it is still observed in developing countries, "a raw working force, unused to wage work, uncomfortable in factory life, unschooled to the idea of an ever-rising standard of living, will not work harder if wages rise; it will simply take more time off..." This is true because "the idea of gain...[is] quite foreign" (Heilbronner 24). When everyone began to appreciate gain, they also wanted to keep better track of it in keeping their books to verify that they were not being taken advantage of.

Before the economic revolution, "Books of business, open on the table, are sometimes no more than notebooks of transactions; a sample extract from one merchant reads: "Owed ten gulden by a man since Whitsuntide. I forgot his name" (Heilbronner 22). Therefore bookkeeping and financial statements,

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