The Simplified Wealth of Nations of Adam Smith, Book 5, Chapter 1o: Intellectual Property and Corporation Rules

Chapter 1o: Intellectual Property and Corporation Rules

119 When a mercantile company establishes a new trade with a barbarous nation at their own risk and expence, it may be reasonable to: It is the easiest and most natural way the state can recompense them for hazarding a dangerous and expensive experiment. 120 Abbé Morellet is an eminent French expert in the political economy.
André Morellet
121The only trades which seems possible for a joint stock company to do successfully without an exclusive privilege are those where all the operations are routine or where all operations are so uniform that it has little or no variation.122"Though the principles of the banking trade may appear somewhat abstruse, the practice is capable of being reduced to strict rules."123 The value of the risk from fire, loss by sea or by capture perhaps cannot be calculated very exactly. 124 The management of the following becomes simple and easy after they have been made: It is reducible to strict rule and method. 125 It would certainly unreasonable to: Aside from its operations being reducible to strict rule and method, two other circumstances are needed to make the establishment of a joint stock company perfectly reasonable:
  1. It should have the clearest evidence that its undertaking is of greater and more general utility than most common trades
  2. It should require more capital than can easily be collected into a private co-partnery
126 Book 2 explained banking's great and general utility, when prudently managed. 127 The insurance business gives great security to private fortunes. 128 That navigable canals and the works which supply a great city with water are of great and general utility. 129 Except for the four trades mentioned, I cannot remember any other trade which would justify the establishment of a joint stock company.

Next: Chapter 1p: Educational Institutions