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From the Enlightenment to Business Models. Episode 3. How did the Enlightenment develop?

Gybing before the 1500s. Before the preparation of this saga, I wasn´t too prone to describe the enlightenment as the historians’ gurus or erudite authors specialized in modern history have written about it.  In consequence, my own authorship inclination and storyline has been to try to discover and connect the way in which business (and trade) triggered or sparked the crescent possibilities of thoughtful echoes of those intellectuals or authors who purposely left a trace of it, in the form of written literature (handmade letters, printed books, texts, etc.).

For this effort, first, we must position ourselves in the context of those who were thinking and writing and sometimes observing or advising the leaders (rulers) of the European economies, centuries before the enlightenment times. We must travel to it beforehand, to the medieval times, watching the process even before the renaissance. And you will perceive why at the end of this episode.

The Enlightenment was not an explosive disruption.
The enlightenment took place through a long process that started before the 1350s. It was the time that historians have baptized as the medieval epoch. It was the time in which Europe also began a soft but steady transformation in terms of its economic modus-operandi. The Middle Ages transition to the Enlightenment centuries didn’t occur in a decade. It took more than 400 years. It was a progression of several situations (including a plague) and the discovery of the new world that characterized this conversion. The Middle age period was extensive, and probably it would have continued as such if the discovery of the Americas and the expedited maritime routes to Asia wouldn’t happen in the 15th century. The enlightenment occurred not because of political changes or fighting conquests. It wasn’t politically driven, initially. It was propelled, mainly, by the slow sophistication of the expansive maritime opportunities of business trade between all the nations of Europe and Asia; and then the colonies of the newly discovered territories in America. It was urged by the immigration (and adjacent consequences) from those who left the agrarian lands to the urban cities for merchant trading. It was triggered by organic population growth who were demanding more and more products and services; and by the ascendence of a new solid commercial emergent middle class that began to compete in assets and money with the traditional monarchs, nobles, and aristocrats of that time. When the printing press soared, and the protestant reformation took place, the whole nest for a merchant economy was already in place.  Even though, the medieval societies’ core economic pillars of agriculture, were dominated by landowners (the nobles and the monarchs) all in conjunction with the papacy religious organization’s existing network; the merchant communities were also thriving for centuries too. When the assumptions of medieval Catholicism were broken (with Luther and the reformation), then the well-entwined cosmos ideology that “cemented the society” under the trends of those rulers began inexorably to fade.

Map of the Holy Roman Empire (the reich of the german kings for 10 centuries. From 800-1806) Illustrative and non-commercial image. Used for educational use. Utilized only informatively for the public good.

The Enlightenment started before the printing press.
Many historians and political-social philosophers unequivocally list a multitude of conditions that provoked the enlightenment. For Holton (1) and Wallerstein (2), the two main developments of the transition from feudalism to the origins of capitalism (which are marked by the Enlightenment centuries) were:

  1. The process of incorporation of non-European regions into an expanding international merchant economy by means of territorial control.
  2. The extension of the proletarianization of labor and commercialization of landed relations within the world economy.

Eleonora Escalante Strategy hypothesis is by far beyond that. In our 2023 strategic management buzzword, we perceive without hesitation that it was a slow-motion shift of a mentality approach and the conventions of wealth creation and progress, or in our current vocabulary: how to do business modeling. It was a shift from the harvest as the heartbeat for subsistence to the origins of the merchant trading international economy. It was a swing from the “land” agrarian system (land cultivated by individual farmers, larger farms, and/or tenancies in the hands of powerful fewer peasants) to a merchant trading system. But with the accumulation of wealth in the hands of the new merchant economy players, a sense of dissatisfaction appeared: they didn´t wished the subordination to the rules of the kingdom monarchs of the city estates. As a result of these centuries of changes, the Enlightenment philosophers only arrived to try to put on paper and debate, how to authenticate those changes in the mindset of the souls who were playing a novel role in the fresh emerging incipient merchant system.

The Enlightenment in the context of the political structures before the 1500s.
The latter paragraph influences us to reflect, or ask ourselves, how were the monarchs ruling their societies in the middle of such a transition, how did they maneuver the impact of the weather on the agricultural yields, how did they sort out to solve the issues of famine and poverty, and how did they manage to accept the premises of the scientific foundations, with the acknowledge that in the late medieval society, a new world with colossus exploration and resources was imminently around the corner.  Was the business model for agrarian production correctly designed in the middle ages?  According to Humfrey Butters (3), there was an official and accepted super-structure of corporate leaders of that agrarian business model. And the business model wasn´t successful for anyone participating in it. The nobles, the monarchs (king, princes, or rulers by heritage), and the Church. “Nobles were considered to be the natural advisers of kings and princes and played a crucial role both in central and in local decision making and governments… they also were located in the upper ranks of the church and served the military caste (knights) per excellence”. Most settlements during the medieval ages, were rural, even though urban villages and “trade” spots existed. As a result, before the 16th century, the harvest and the yield of the crops were chauffeuring the success of the economies of the nations. The climate/weather was imminently stirring the quality of life of the farmers, who were not the owners of the land. Peasants worked the land of the landlords, “and barely received a little more than a precarious living for most self-provisioning households, many times unable to pay the rent in cash, but by selling other goods or labor services to the landlords”(3). The rural base of the population was formed basically by landless farmers, living in scarcity and lacking well-being.  The manorial scheme was also the governing ecosystem of this value proposition. And all of this happened in the European lands, which were diverse and well established into farming regions within and across the city-estates.

The Enlightenment and urban growth in merchant communities.
We have prepared a set of slides to illustrate this matter. Our reference point is a chapter of a precious book prepared by Frederick Mauro (4). I consider these slides as the justification of our premise: business is always conducting countries’ politics-economics strategies. And then later, the intellectuals of any nature, make sense of it with a particular theory. Let´s observe the slides, and print them, please.

The Enlightenment and the merchant empires
Between 1350 to 1700s, the European long-distance trade and the operations of reselling imports and exports in Europe gave birth to the notion of a new sort of economy for the different kingdoms of the established monarchs and nobles. The fragmented kingdoms, particularly those under the Holy Roman Germanic Empire were more fragile than the rest of the kingdoms in Europe. Let´s remember the definition of an empire: “the political system that comprises a number of territories or nations ruled by a single supreme authority”. By trading goods, city estates under the format of agrarian economies and serfdom began to open the doors to a new social class, that wasn´t meant to be so wealthy. But it was. Sometimes richer than some of the most traditional kingdoms.

European Map. The year 1444. Source: Illustrative and non-commercial image. Used for educational use. Utilized only informatively for the public good.
European Map. The year 1700. Illustrative and non-commercial image. Used for educational use. Utilized only informatively for the public good.

The flourishing of merchant communities, under distinct governments, was also different. Look at the slides, please. For example, we can´t proceed any further without at least brushing up on some insight about the Holy Roman Empire or the Sacrum Romanum Imperium  Nationis Germanicae (5) which took the shape of a sum of tiny fragmented little kingdoms in Central Europe. Nevertheless, the Holy Roman Empire leaders weren´t able to discover and conquer directly as the Spanish, French, and British did. Indirectly, by using strategic alliances with Spain, the Habsburg dynasty of Austria was also able to find its way into Latin America. Or at least they tried. By coincidence, the main major figures of the Enlightenment appeared from the lands of the germans, not just tied to the former Frankish kingdom, but also against the catholic rulers of the House of Habsburg (Austria) between 1556 to 1806.

In the meantime, the voyages of exploration and colonial establishment after 1492 were extensive for France, Spain, Britain, the Dutch (Holland), and Portugal.  So, with all these travels, the merchant empire era began.  

The Enlightenment didn´t start with the radical enlightenment philosophers.
The Enlightenment philosophers (in all ample formats: from radicals, to moderate and even the counter-enlightenment representatives) were the men of ideas required to complete the loop of the business model shift that took place with the colonies-empires. These Enlightenment authors (writers) were the equivalent to the Michael Porters of our current diamond forces and value-chain frameworks. Nevertheless, these authors weren’t studious of the industries as Porter, but imperfectly, they were state-of-the-art theorists, the backbone at the philosophical level for the new business models much required for the merchant empires’ expansions. Please take a look and stand up in the context of the late medieval ages: go back in time to the commencement of the political reconfiguration of Europe and the Americas. During those centuries, business growth was guided by war and conquests, not through mergers and acquisitions. The expansion of the economic empires was through imposition, through the victory of those conquests. So, the strategists were the militaries. But, the new business models of trading (against the local agrarian economies) were expanding over the shoulders of the merchants, not the militaries. There was a mismatch between the objectives and actions of the monarch’s militaries with the mission of colonialization; and the new wealth creators who managed the overseas expansion of trading. The premises of growth during the colonialization of the new world weren´t suitable to react promptly to the motives or the needs and wants of those who embarked on fortune-seeking, searching for the independence of the Church states and from the crown rules in the colonies. Once they settled in the new world, acting individually or tied under large corporations owned or in partnership with the European Kingdoms, they also weren’t able to manage the business model properly. For example, the utilization of slavery from Africa was a business model mistake. But it was their formula for strong cheap labor resources for production in the new world.

The business model of the merchant empires functioned under the wrong premises: to consider slaves as a key resource was their worst mistake. Illustrative and non-commercial image. Used for educational use. Utilized only informatively for the public good.

During the whole 16th and 17th centuries, the business model of the merchant empires evolved and developed. The investments were beyond the vessels and army required to establish themselves as colonies in the newly discovered lands. The monarchs, traders, and nobles, all together (including the catholic church and the protestant new ecclesiastical entities), were so busy trying to tie the knots and control of the new settlers, supervising the key activities and responsibilities, building customer relationships, and understanding the new revenue streams, that they little care to establish their own trial-error value chain, which was full of theoretical mistakes. The conquerors of the new world were trying to domineer the Native Americans in the whole continent, in extensive new lands of America, and none of them was prepared to do it well. Each of the merchant empire nations used a different strategy. For example, the Spanish monarchy used the Church as a key partner to neutralize the indigenous occupants in North America, Mesoamerica, Brazil, and Peru. The Spanish Habsburgs were also dealing with the aftermath of their pre-European decline. The Dutch, higher in educational standards and technologies than their European peers, were busy in Asia (using a cost minimizer strategy), but also opted to go undercover or clandestine in the new urban centers disrupting the new technological discoveries to serve industries in North America, a maneuver or tactic that still is outstanding to these days. The French and the British were so occupied with making profits and yielding raw materials using slaves in the United States of America, making horrendous mistakes, in their transition from a raw-materials vacuuming strategy to a solid market-seeker strategy.

To me, it is fascinating to write about this now, 500 years later, and observe that the business model was wrong for each of these merchant nations. Sadly, without the proper honoring values philosophy beyond wealth accumulation, an empty vision only could dump sooner or later, its own disaster. The Enlightenment thinkers came as a reaction and counter-reaction to the lack of a solid intellectual theoretical proposition for freedom in the “new conquered world”. And the Enlightenment thinkers simply created a set of theories towards how to sustain ideologically, the prosperity of the new wealth creators in America. A new group of wealthy that didn´t need the European monarchs anymore.

Next week, we will publish only on Fridays. Remember that for this saga, I am explicitly demanded to read much more than other of my past sagas. We will publish it only once a week. The next topic is “Who moved the ways of the Enlightenment, part A”. On Friday 3rd of February 2023.

Ocean Musical Section

Since our last episode, the VO65 boat teams, and the IMOCA teams arrived last Saturday in Cabo Verde. The winner was the Holcim-PRB team. Once, in Cape Town, the teams also received the visit of the chief in command of the United Nations Mr. Antonio Guterres. After some days of sleep and repair, press conferences, and maintenance, the 5 IMOCA teams: Biotherm, 11th Hour Racing, Guyot Environment, Holcim-PRB, and Malizia departed towards Cape Town, South Africa, last Wednesday. We have been following them daily, and we share, a video about how the fleet commenced its journey last Wednesday. At the same time, since the sailors are moving with lighter conditions of breeze, that doesn´t mean less work for them. Each of the boats has embarked “in shifting gears, making sail changes and gybing, a route of zig-zag southwest towards the equator and the doldrums”. In our next publication, we will explain to you the meaning of the doldrums. There is a lesson to learn from the doldrums, I will come back to explain it in the next publication.

Leg 2 has started!
Fonseca LIVE concert in Bogotá. Perfect Latin music for the next days on our route to Cape Town.

See you next Friday 3rd of February. Thank you and blessings for reading to me.

We are heading to Cape Town.

Sources of reference are utilized today.





Disclaimer: Illustrations in Watercolor are painted by Eleonora Escalante. Other types of illustrations or videos (which are not mine) are used for educational purposes ONLY.  All are used as Illustrative and non-commercial images. Utilized only informatively for the public good. Nevertheless, most of this blog’s pictures, images, or videos are not mine. I do not own any of the lovely photos or images posted unless otherwise stated.

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