Many people consider the start of Capitalism to be the Industrial Revolution, or even the publication of The Wealth of Nations by Adam Smith. However, the origins of Capitalism could be traced back to the formation of the Verenigde Oostindische Compagnie (Dutch East India Company) in 1602.
At the time, world exploration was in its infancy, and it was customary to finance a single expedition to explore Indonesia, Africa, Sri Lanka, etc. However, the Netherlands created a single company, known as the Dutch East India Company, which had the able to declare war and govern itself through a 17 member board. The people of the Netherlands were able to invest in the Dutch East India Company, so Dutch East India Company was the first publicly traded company in the history of humanity. It created a monopoly on the Spice Trade in the Indian Ocean, which was an extremely profitable enterprise, and by 1648 the Netherlands was wealthier than every other European Nation. The Dutch East India Company had no rivals in the Netherlands, and was state-sponsored, they could rely upon the Netherlands for funding. Basically, the Dutch East India Company was a state-sponsored company that could declare war, and was a sovereign entity in itself, and was the first public corporation in history.
The Dutch East India Company eventually bankrupted in 1799, but there are some important things that can be gleaned from its existence. First, it shows the dangers of giving a corporation the powers of a sovereign nation. The duties of the state at the most basic level is to defend and empower its population, while the sole duty of a corporation is to profit. This is not necessarily a bad thing, however this means that what the corporation chooses to focus on is not what a government would.
Second, it shows the need for responsible management of corporations by the government, and reasonable amounts of regulation. Because the Dutch East India Company was so closely tied to the Netherlands, they felt immune from financial and legal penalty, and as a result they massacred and enslaved thousands of people in Indonesia in the search for profit and for natural resources.
Finally, the Dutch East India Company shows that a corporation must survive without government assistance. If a corporation can only survive through government revenue, this corporation is not fit to exist, since it brings no value to the taxpayer. The Dutch East India Company received millions of Guilders in financial aid from the Dutch Legislature, and this state-sponsored attitude for the private sector only stifles competition and raises prices.
Even though the Dutch East India Company went bankrupt in 1799, it is an important reminder of the dangers of mixing the public and private sectors, and gives us a poignant reminder of why corporations are not states.