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Evolution of Capitalism
And the Social Responses
Capitalism• An economic system– Characterized by innovation and investment to
increase wealth
• Also a cultural system– Rooted in the need of private investors to turn a
profit
Supply and Demand
• Supply High Demand Low = $• Supply Low Demand Low = $$• Supply High Demand High = $$
• Supply Low Demand High = $$$$$$
Mercantilism• The process of making money from selling
finished products• Merchants would often borrow money to buy the
goods they need to produce the product which would be sold for a profit
• Monarchs and nations would pull resources out of their colonies to support this money making venture
Middle-Ages• Most people were farmers• Most of the rest were nobles• Small fraction were merchants• Guilds awarded royal charters dominated
trade and labour and there was little to now competition
Age of Exploration/Exploitation• Western European countries
gained access to new lands and valuable new resources
• Initially only monarchs could afford to fund expeditions
• Soon merchants began to pool their money together to fund their own expeditions – the beginnings of Joint-Stock companies
Mercantile Capitalism• Merchants began to become wealthier but
there are still only a few capitalists• Most people are still peasant farmers with no
interest in buying luxury goods• Supplies are growing but demand is moderate
because only a few nobles can afford to buy the goods
Mercantile Capitalism• Created many unintended
evils such as slavery and the decimating of Aboriginal societies for land
• Most Europeans were unaware and little was done
• Abolition movements began to gather momentum
• Slavery would eventually be outlawed
Olaudah Equiano
Industrial Capitalism An economic system that relies on investment of capital in machines and technology that are used to increase production of marketable goods
• Spurned on by the Industrial Revolution• Innovations in technology meant that
products could be produced on a larger and faster scale– Costs to production fell – Products could be sold for less – More people could afford the products– More money was made by the merchants
Industrial Capitalism• Developed first in Britain– Britain’s advantages
• Dominant power on the seas• Good money off of trade with its colonies
– Tea, cotton, tobacco, sugarcane, spices, slaves• Large reserves of coal• English Civil War had removed a lot of regulations on the
economy that had existed under the king – these regulations were still in place in other European countries
Capitalism as Culture• Idea emerged that people are both consumers
and producers• For capitalism to work people need to buy
stuff• The way people thought had to change– The word individual did not apply to a person until
the 17th century
Land Enclosures• In the Middle Ages (Land)Lords made
money from peasants working the land for them
• In the 18th and 19th centuries landlords could make more money from animals (sheep, cattle, etc.) and found ways to kick people off their land
• These landless poor made their way to cities looking for work
• Created a surplus of workers for the new factory owners to exploit…kept wages low
Industrialization and Urbanization• City populations grew rapidly• Living conditions were horrible• Many new towns grew up
around factories which in turn were built close to coal mines
• The majority of the population lived in poverty, misery, and pollution
Industrial Era City
Living Conditions
Living Conditions
Living Conditions
Stages of Communist Takeover - Theory1. Class conflict between Bourgeoisie and the Proletariat2. Alienation, exploitation, miserable conditions vs. wealth &
greed3. Revolution Occurs4. Dictatorship of the Proletariat and end to opposition5. State (rulers) whither away6. Communist Society will exist, an ideal classless society
without private property, and free from exploitation and want