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