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Capitalism. Capitalism is an economic system based on the private ownership of the means of production. This is generally taken to imply the moral permissibility of profit, free trade, capital accumulation, voluntary exchange, wage labor, etc. Its emergence, evolution, and spread are the subjects of extensive research and debate.
ECONOMY: A BRIEF HISTORY OF GLOBAL CAPITALISM OXFORD REVIEW OF ECONOMIC POLICY, VOL. 15, NO. 4 JEFFREY D. SACHS Harvard University Modern capitalism emerged in the early nineteenth century in western Europe and the European offshoots of the Americas and Oceania. Recognizing the unparalleled dynamism of the new socio-economic system,
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Authoritative and accessible, Capitalism is an enlightening account of a force that has shaped the modern world like few others. 978-1-4008-7341-8. History, Economics. In this authoritative and accessible book, one of the world's most renowned historians provides a concise and comprehensive history of capitalism within a...
- Jürgen Kocka
- Overview
- History of capitalism
Also known as: free enterprise economy, free market economy, private enterprise economy
Written byRobert L. Heilbroner,
Robert L. Heilbroner
Norman Thomas Professor Emeritus of Economics, New School for Social Research, New York City. Author of The Worldly Philosophers; The Nature and Logic of Capitalism; and others.
Peter J. Boettke
Peter J. Boettke
Although the continuous development of capitalism as a system dates only from the 16th century, antecedents of capitalist institutions existed in the ancient world, and flourishing pockets of capitalism were present in Europe during the later Middle Ages. The development of capitalism was spearheaded by the growth of the English cloth industry during the 16th, 17th, and 18th centuries. The feature of this development that distinguished capitalism from previous systems was the use of accumulated capital to enlarge productive capacity rather than to invest in economically unproductive enterprises, such as pyramids and cathedrals. This characteristic was encouraged by several historical events.
In the ethic fostered by the Protestant Reformation of the 16th century, traditional disdain for acquisitive effort was diminished while hard work and frugality were given a stronger religious sanction. Economic inequality was justified on the grounds that the wealthy were more virtuous than the poor.
Another contributing factor was the increase in Europe’s supply of precious metals and the resulting inflation in prices. Wages did not rise as fast as prices in this period, and the main beneficiaries of the inflation were the capitalists. The early capitalists (1500–1750) also enjoyed the benefits of the rise of strong national states during the mercantilist era. The policies of national power followed by these states succeeded in providing the basic social conditions, such as uniform monetary systems and legal codes, necessary for economic development and eventually made possible the shift from public to private initiative.
Beginning in the 18th century in England, the focus of capitalist development shifted from commerce to industry. The steady capital accumulation of the preceding centuries was invested in the practical application of technical knowledge during the Industrial Revolution. The ideology of classical capitalism was expressed in An Inquiry into the Nature and Causes of the Wealth of Nations (1776), by the Scottish economist and philosopher Adam Smith, which recommended leaving economic decisions to the free play of self-regulating market forces. After the French Revolution and the Napoleonic Wars had swept the remnants of feudalism into oblivion, Smith’s policies were increasingly put into practice. The policies of 19th-century political liberalism included free trade, sound money (the gold standard), balanced budgets, and minimum levels of poor relief. The growth of industrial capitalism and the development of the factory system in the 19th century also created a vast new class of industrial workers whose generally miserable working and living conditions inspired the revolutionary philosophy of Karl Marx (see also Marxism). Marx’s prediction of the inevitable overthrow of capitalism in a proletarian-led class war proved shortsighted, however.
Adam Smith, paste medallion by James Tassie, 1787; in the Scottish National Portrait Gallery, Edinburgh.
Courtesy of the Scottish National Portrait Gallery, Edinburgh
Sep 11, 2017 · In this essay, I offer a conceptualization of capitalism, by focusing on its root—capital. Much historical writing has treated capital as a physical factor of production. Against such a “materialist” capital concept, I define capital as a pecuniary process of forward-looking valuation, associated with investment.
- Jonathan Levy
- 2017
This passage echoes Michio Morishima’s argument on Marx’s dual definition of value, i.e., embodied labor and socially necessary labor.7 In his modern interpretation of Marx’s theory of value, while the former is determined by simultaneous equations that are now known as Dmitriev equations, the latter is derived as the sum of labor inputs required to obtain one unit of net product as ...
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Oct 18, 2023 · The history of capitalism, from its early rise in the commercialization of agriculture in the sixteenth century in England, through mercantilism and 19th-century liberal capitalism to industrial and post-industrial capitalism and the information age is a history of types of capitalism, which can be seen in terms of the development of an economic logic that can be theorized in terms of the ...
