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The Dutch East India Company (founded in 1602) was the first joint-stock company to get a fixed capital stock and as a result, continuous trade in company stock occurred on the Amsterdam Exchange.

I understand that the Dutch East India company is the first company in modern history (Renaissance onwards?) to allow people to be shareholders on their capital stock property and thus enjoy benefit from production (dividends, in todays terminology, I guess) and that this was later developed into an common practice and other companies in Amsterdam, Holland and the world started to incorporate shareholders.

What, besides technology, differs the first stock exchange market in Amsterdam from current day stock exchange market? What may be a major difference in principles of selling and buying, if at all there is one?

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  • $\begingroup$ @Giskard about your second question, no and I think it isn't relevant because it's not in my field of expertise so I ask a possible expert. $\endgroup$ Oct 6 at 4:20
  • $\begingroup$ I have read the first passage of the article (I can't believe you read the entire article in say 5 minutes) ; I understand that indeed, joint-stock market is for any case when there are two or more stocks on one company so yes, it is what most people mean by "stock". $\endgroup$ Oct 6 at 4:24
  • $\begingroup$ I have read in Wikipedia about fixed capital, I understand it to be a "method of production". $\endgroup$ Oct 6 at 4:27
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    $\begingroup$ @Giskard I should try to edit. $\endgroup$ Oct 6 at 4:28
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This should probably be in another forum, but I don't know which one, so I am answering it.

The word "stock" meant inventory originally. Stock still means inventory for a store.

In Amsterdam, there were joint ventures where different vendors brought different inventory to a store. They received a certificate showing that they owned a certain amount of inventory (stock) at the store. The retail store then sold an item belonging to some inventory owner, they received money and the certificate was exchanged for a corrected version. That would also be true if more inventory were added.

Stock was not fixed. It varied as different vendors contributed inventory. Of course, in practice, inventories were roughly stable. It also was observed that somebody could really just contribute money and the store owner could buy the materials from someone that didn't want to contribute to the inventory.

A joint stock company with fixed capital is the next iteration. Unlike a traditional partnership, it could survive the death of an owner. After all, if I had contributed 100 candles, my death only passed ownership to my estate for my claims on the candles. Likewise, if I had a claim on candles, I could pledge them or sell them to somebody else.

Like a partnership, joint stock companies do not provide any immunity to shareholders from any lawsuits. That is still true today. Very few joint stock companies still survive to this day, but they do exist. The largest one that had been a joint stock company was American Express. However, a lawsuit scared the shareholders and they converted to a traditional corporation once it was settled.

It is not true that the Amsterdam exchange differed only in technologies. Old exchanges did not use double auctions. The double auction, where buyers bid against buyers and sellers bid against sellers, is relatively new.

The Amsterdam Exchange traded other things than just the one joint stock company at that time. It was a general commodified asset exchange.

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