Corporations: From royal charters to biotech gold rush

Chapter 2: A brief history of the corporation — Factor in the growth of the biotechnology industry — 'Independent' research companies — A new gold rush: the run on genes and genomes

2.1. A brief history of the corporation

The rise of the modern corporation, with its increasing freedom to operate and its lack of obligations, except to make profits, has helped to shape modern technology in general, and the development of genetic engineering in particular. Corporations were first created in Europe for charitable activities such as establishing hospitals during the medieval period of European history (eleventh–fifteenth centuries). They were meant to advance the public good and were non-profit making. However, the commercial corporation has become a very different entity. During the medieval period in Europe, businesses typically operated as groups of people in partnership who shared the risks of an enterprise, which did not have a separate legal identity. During this period the restrictions on usury, or lending at interest, gradually broke down and the use of money was replacing payment in kind or barter of goods. Thus the conditions for the accumulation of capital were created. At the same time, the voyages of ‘discovery’ meant that new trade routes were being opened up, offering possibilities for the investment of capital for commercial enterprise. Towards the end of the sixteenth century, certain trade associations were granted royal charters of incorporation by the British Crown to act as not-for-profit corporations with a monopoly over a certain area of business. [...]