History of Capitalism

Humankind has evolved in many ways. The basic reason for this evolution
has been the non-stop urge for more. Innovation has helped
humankind to facilitate living and increase the
standard of living too. Capitalism has served the same purpose. It was by the way of capitalism
that a major part of the population was able to earn higher wages and
increase the standard of living. Capitalism has a long history. This history has some positives
and some negatives based on the viewpoints of the
various sections of the society. Capitalism benefited the lower class
by increasing their incomes, but at the same time, it reduced the power
of the upper class and the state. The benefits that could be
enjoyed only by the landed gentry were now also being enjoyed
by the poor and the landless. There were rebellions and
resentments among both the sections but still
capitalism has emerged as a major economic system and it has been
followed till date in many of the economies. Capitalism took many forms
and has evolved itself. Capitalism is based on the fact that the
wealth of the people increased with time. Capitalism took so many forms
according to the changes in the world. There is still no consensus of the
chronological trend of capitalism, but a major outline of general states
of capitalism has been defined. Some of these forms of
capitalism are laissez-faire, agrarian capitalism,
mercantile capitalism, industrial capitalism,
Monopoly, colonization, welfare capitalism,
mass production, etc. Capitalism dates back to the
13th century when the rapid development of trade and
prosperity was witnessed. It was when people started using their wealth
to create more money by lending the money at interest or investing
it in various kinds of projects that are
joint stock companies. In the case of a single owner, all the
profits went to one man, but in the case of capitalism, the profits were divided into
various stakeholders in the enterprise. Netherlands and Italy
were two countries that witnessed the creation
of wealth rapidly. Florence and France are also
good examples of wealth creation and investments and an
increase in workers standards. Capitalism can be seen in
large scale in two forms such as the investment in
the joint stock companies where people pool money and invest it in
commercial undertakings and secondly after the industrial revolution when a single
firm employed a large number of employees. Capitalism is mentioned when
the feudal societal system was replaced by the mass production
systems for the common people. It witnessed the change of hands of
power from the upper and the rich class to the lower poor people by
means of production and distribution. There were two problems that the
economies of the 18th century witnessed. The expansion of the population because of
which land was not a supportive resource. The number of people
increased and the occupation opportunities
were still limited. They did not have land to cultivate
and could not move to the states for jobs in industries and another
problem was the lack of raw materials. The economies faced the depletion of
forest and natural resources which posed an issue of the availability of wood
for the industries and the houses. The states and the upper class
were clueless on how to handle the situations when the poor
people started to innovate. These innovations were done
by the way of production of cheaper products
for everyone’s needs. This is when the beginning of
mass production is noticed and the fundamental principle of
capitalistic industry emerged. The production was mainly done
for the masses and it formulated the base for capitalism as it
exists today in the markets. Capitalism finds its existence because
of the savings done by people by reducing the current consumption and
accruing income for investment purposes. This increased the demand for the
work and the raw materials giving benefits to all the factors of
production in some way or the other. There is criticism about capitalism,
but it still remains one of the major economic systems that is followed
by many economies in the world. There are several challenges
that still remain. People lost faith in
capitalism many times in the past centuries, but
still it is accepted as a major economic
system due to its benefits and advantages to the
economies and markets. Capitalism witnessed an increase
in the number of monopolies and sometimes in the
competitiveness of the industries. Globalization has increased the
trade and the mobility of people and capital from one place to another
thus improving capitalization. The 21st century has
seen the emergence of capitalization again in
a very different form. This form is called the new
phase of financial capitalism. The emerging markets
in the field of Banking and financial capital
and insurance have been promoted extensively by
the government as they are more volatile and mobile
across the countries. Capitalism could be stated
as one of the reasons for the inevitable inequality among
people across the world. Capitalism can also be
traced as the reason for the increased adoption of mixed
economies across the world. Even the major countries
such as the US adopted a mixed economy because
of the drawbacks it saw in the times of the
Great Depression and the wars and the losses
incurred after that. Capitalization is important for the
sustenance of the growing world population due to its ability to allot resources
in a better way among the population. It has advantages and disadvantages
just like any other thing. What remains is the trade-off between the
adoption or elimination of such a system. Historical trends provide both
criticisms and support for this system. Thus, the results could
inconclusive and dependent on the discretion of
the modern states.

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