Capitalism entails the use of wealth to generate more wealth. Major elements of capitalism include price system, competitive markets, and capital accumulation. Capitalism became popular in the world, especially the western world after the collapse of feudalism (Attached File 4). Individuals who argue for capitalism have claimed capitalism has enabled people to accumulate wealth beyond imagining. On the other hand, those against capitalism claim that it contributes a lot of economic instability. The bottom-line is that capitalism has been practiced in many parts of the world since prehistory.
This paper intends to examine the key drivers in the development of capitalism from pre-history to the end of the 19th century.
History of Capitalism
Humans had established a multifaceted system of community that had elements such as trade, labor, and rewards in the prehistory period. This in turn led to the domestication of livestock and plants. As a result, the scope of tradeable products and services was increased. Consequently, people were tied to lands to ensure the development of economies. It has been argued by scholars that many systems were developed to ensure the management of economies. Nonetheless, the rule of elites proved to be most effective among them all.
In the ancient world, rulers controlled every aspect of people’s life. However, whenever, this was removed, people could revert to subsistence farming. People could start working on their farms as well as look for ways through which they can ensure their survival until a leader came along to claim them. In Europe less than five percent of people stayed in towns. This was until the 12th century (Attached File 5). Skilled workers used to stay in the cities working which enabled them to receive their save from the medieval lords. This meant that they did not receive any real wage. Farmers during this period were basically serfs for landed aristocrats. It was the Black Plague that shook the system in a significant manner. For instance, it led to the shortage of serfs hence nobles were fighting to employ enough people to ensure their estates were up and running. This also led to them offering real wages to serfs in order to attract more. As a result, more and more people were attracted to towards considering the fact that they were able to make cash rather than exchanging labor for subsistence. Ultimately, this led to increase in birth hence increased labor base.
Feudalism followed mercantilism. Mercantilism began in towns especially in Europe. Europe actually won when it came to mercantilism capitalism. Traditionally, different towns in the region had different goods and services. However, things changed with time as they were homogenized as a result of demand. This led to expansion of trade. For example, towns started to trade with one another. With time, counties also started to trade with one another followed by the provinces and finally nations. Many nations offered almost similar goods. Many countries decided to look for colonies to be able to access more raw materials. The raw good were processed then sold back to colonies. Pseudo-currencies were used to prevent the colonies to trade with any other country. Generally, mercantilism was viewed as a system that barred the world from advancing (Attached File 6-7).
Many countries especially European countries were working under the assumption that colonialism was a gold mine. However, industrial capitalism disapproved all of them. Mechanization of the industry became the new gold mine for these countries. Essentially, industrial revolutions enabled countries to reduce their dependence on waterways. Initially, companies used to build their factories near rivers to be able to ensure their functionality. However, technological advancements led to the development of factories in the cities (Attached File 7). This was done to ensure access to human labor that was plenty of such areas. Industrial businesspersons were able to benefit more from the industrial revolution. For example, they were able to amass more wealth as compared to the noblemen and women. They were also able to outperform banking and money lending families. This is a period when common people started to have hope of amassing wealth without necessarily being born with or in it.
It is evident that the new group of wealthy people has been just as wealthy as noblemen and women. However, this group of individuals was not in any way interested in maintaining the status quo. This is evident as they invested more and more in the creation of new factories. This led to the increase in the demand for labor as well as the creation of more products and services for human consumption.
Essentially, industrial capitalism has been the only system since prehistoric time that seemed to have benefited the entire society. This unlike before when the noble class benefited more at the expense of other people in the society. It is a time when wages increased among people. This in turn led to the formation of unions aimed at protecting the interests of workers. It also led to the improvement in the standard of living among people around the globe. This is also a period when products and services became more and more affordable considering the fact that they were produced in mass. Moreover, it also led to the formation of the middle class in the society. Correspondingly, this aided people to rise from lower class in the society to the middle class.
The late 18th and early 19th century saw capitalism grow beyond wholesome industrial capitalism. This is evident as it was turned into more palatable forms depending on the region it was established in. The United States has been ranked the best among countries that were able to establish capitalism. This can be attributed to the fact that the government did not interfere with the business affairs (Attached File 27). Essentially, the government ensured minimum regulations to ensure the economy was being controlled by supply and demand. This allowed people to amass wealth as they were able to engage in numerous activities that enabled them to trade in goods. It also increased competition among wealthy people hence technological development. This is one of the major reasons to why the United States has been able to rise to the world’s superpower. On the other hand, Nordic countries and Canada tried to strike a balance between capitalism and socialism. Globalization in the 19th century contributed a lot to spread of capitalism to other regions in the world.
Capitalism can be dated back to the prehistory period. The world has been able to experience capitalism under different systems. This includes spaces between empires, feudalism, mercantilism, and industrial capitalism. Nonetheless, it is only industrial capitalism that many people in the society were able to benefit from the same. The other systems seemed to benefit more the nobles in the society.
Attached File. Course Notes. Attachment, n.d. Print.