History 3: The first stock and perpetual life

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Once upon a time, every business was a small business. It was run by the owner, maybe the spouse and the kids. Maybe they borrowed money from friends and relatives, but there was only so big it could get.

Then came what can only be described as the big bang of economics. Over the span of a few decades, people figured out a way for businesses to sell ownership shares – otherwise known as stocks – and let people trade those shares. There was suddenly money to buy machines and expand. Businesses grew and became companies. Companies could take risks and share the risks and the rewards with thousands of strangers. This also leads to the idea that a company could outlive its founder and original owner, and how we got to have perpetual life organizations.

Today, we head to the Netherlands around the year 1600. First, we'll visit the bridge in Amsterdam where some of the first stock trading took place. Then we track down the Dutch water company that's the source of the oldest "living" bond. It's the origin of stocks and bonds and the stock market and it leads directly to many of the financial innovations that we still have today.

We cover:

• Liquidity
• Limited liability 
• Perpetual life
• Short-selling

This series is hosted by Robert Smith and produced by Audrey Dilling. Our project manager is Devin Mellor. This episode was edited by Planet Money Executive Producer Alex Goldmark and fact-checked by Sofia Shchukina.

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