ORIGIN OF CAPITALISM: FACTORS AND HISTORICAL STAGES - HISTORY - 2025

The origin of capitalism has been the subject of multiple economic and sociological positions, although all agree that it was born in the 15th century in Europe. The crisis of feudalism (previous system) gave way to the new capitalist system. Its characteristics began to be visible to historians in the late Middle Ages, at the time when economic life temporarily migrated from the countryside to the city.

Manufacturing and commerce began to be much more profitable and profitable than working the land. What led to an unusual increase in income from feudal families to peasants. Peasant revolts took place across Europe protesting the steep tax hike.

The money changer and his wife. Quentin Massys.

The demographic catastrophe caused by the bubonic plague meant one of the largest famines in history. People felt that feudalism would not respond to the economic and social demands of the population, it is there when the transition from one system to another begins.

Burgos (new town planning) were being installed throughout Europe. In them, people began –incipiently- to specialize in the workmanship of hides, wood and metals mainly. That is, to add value to things and to market or exchange them.

While the inhabitants of the boroughs (bourgeoisie) took power and accumulated capital, the fiefdoms suffered meteorological attacks, bad harvests and pests that were weakening them.

Factors for the origin of capitalism

One of the characteristics that gave way to capitalism is that in Europe a bourgeois could have more wealth than a feudal lord and a king, while in the rest of the feudal world no one could hold more wealth than the one who exercised power.

Etymologically the word capitalism derives from the idea of ​​capital and the use of private property. However, today its meaning goes beyond, contemporary capitalism took the form of a market economy and for many authors it is a system.

For the father of classical liberalism, Adam Smith, people have always tended to "barter, exchange and exchange one thing for another" for this reason, capitalism arose spontaneously in the Modern Age.

Karl Marx names, in the Manifesto of the Communist Party, the bourgeois class as a "revolutionary class" for opposing the feudal system, they established another mode of production and universalized it. For Marx, the bourgeois class created capitalism and in turn the contradictions that would end it.

Renaissance philosophy and the spirit of the Protestant Reformation became ideological strongholds of capitalism in the 14th century. These movements questioned the worldview of the feudal State and introduced ideas of Modern-National States that propitiated the ideological conditions for the emergence of capitalism.

Capitalism arises as a historical necessity of the moment and responded to various social and economic problems of feudal society.

Historical stages of capitalism

Throughout its 6 centuries, capitalism has been transformed, it has gone through different stages that will be examined below.

Commercial capitalism

It took place between the 16th and 18th centuries. It should not be confused with simple merchandise trade because merchants and exchange have existed since the beginning of civilization.

Commercial capitalism first appeared in England with the trade of ports. The accumulation of wealth generated through trade gradually introduced the structure of the market society and made transactions more and more complex.

Industrial capitalism

The second phase of capitalism begins with the Industrial Revolution in the second half of the 18th century. It represented a decisive economic, social and technological transformation that exponentially increased capital accumulation and consolidated capitalism.

Historians and sociologists argue that for the first time the population experienced a sustained increase in the standard of living. From that moment on, machinery schemes were made to replace animal traction and manual work.

Financial capitalism

Monopoly capitalism emerged in the 20th century and lasts to this day. The rapid increase and multiplication of capital also caused the development of banks and financial institutions.

Bankers and bag owners discovered that one of the ways to make money is by having money. Previously, the way of producing money was under the DMD (Money-Merchandise-Money) scheme now it became D + D: D (Money + Money: Money)

Contemporary capitalism integrates these three stages based on the accumulation of capital. Authors like Vladimir Lenin argue that the last phase of capitalism is not the financial one, but the imperialist phase as a form of economic domination of industrial nations over backward nations.

Mercantilism

It was born as a form of nationalist capitalism in the 16th century. Its main characteristic is that it united the interests of the State with the industrial ones. In other words, it made use of the state apparatus to promote national companies within and outside the territory.

For mercantilism, wealth increases through what they called the "positive trade balance", in which if exports exceed imports, the original accumulation of capital would be leading to.

Weber and the Protestant Reformation

Martin Luther

The German sociologist and economist Max Weber in his book The Protestant Ethic and the Spirit of Capitalism in 1904 exposes the influence of the religious element in the rise of capitalism.

This book studies Lutheran and Calvinist Protestantism and its significance in culture. For Weber, Calvinism was more decisive and influential than Lutheranism in the way of life and morals of the bourgeoisie in the 15th and 16th centuries.

Weber thinks that capitalism arose because Calvinism proclaimed habits and ideas that favored economic well-being as a condition for obtaining redemption. Calvin advocated maximizing performance and minimizing unnecessary spending.

According to Weber, Calvin in his Protestant ethic placed the scope of prosperity as a sine qua non condition to draw closer to God. This led to the massive idea of ​​work and the accumulation of capital in the devotees of this trend.

Some researchers attribute to Protestantism the rapid growth and expansion of the United States, which went from being a colony of the United Kingdom where Protestants arrived, to being - today and for 200 years - the capitalist power and richest nation in the world.

For Weber it is Calvinism that gives rise to capitalist morality, the spirit of progress and the accumulation of wealth. This conception succeeds in instilling the idea of ​​glorifying God while being successful in economic life.

Beginnings of capitalism and participation of the State

In principle, capitalism and modernization processes emerged as an initiative of the bourgeois classes that opposed feudalism. The state played no role in the initial development of European capitalism. In America, the processes of modernization and industrialization - on the contrary - are sponsored by the State.

The first political and economic doctrine that studied the subject of the State in economics was liberalism. Its most famous representatives are John Locke and Adam Smith. Classical liberals hold that state intervention should be reduced to a minimum.

The classical liberal thought established that the State should only deal with the laws to preserve private property, the defenses of freedoms and the design of policies so that the market can freely regulate itself.

Opposite was the Marxist current, whose ideas were carried out in the Soviet Union from 1917. Under the vision of Marxist authors this free competition and reduction of the state left the majority without rights.

For this reason, the main levers of the economy had to be managed by the State to guarantee the welfare of the majority.

Although later theoreticians like Ángel Capelleti, he would call the order of the Soviet Union "State Capitalism." After seeing the effects of an uncontrolled market in 1929 and feeling the inefficiency of oversized states, the authors considered another way.

One of the most accepted approaches is that of the researcher John Keynes, “Keinesianism”, in which there should be a balance between the functions of the State in the economy and the freedom of the private to exercise their work.

Capitalism in history

All new systems have emerged as a result of the implosion and crisis of the old systems. Without the wars, the crusades, the plagues and the increase in the material needs of the population, the transition to capitalism would surely have been postponed for several centuries.

Capitalism meant an advance in the mode of production and the generation of wealth for the bourgeoisie and the National States, but it has a significant debt to the environment and the rights of the workers.

For some researchers capitalism has been the cause of wars between nations and for others the greatest advance of the millennium.

References

1. Beaud, M. (2013) History of Capitalism. Editorial Ariel. Buenos Aires.
2. Capelleti, A. (1992) Leninism, bureaucracy and perestroika. Black Sheep Editorial. Bogota
3. Czech, F; Nieto, V. (1993) The Renaissance: formation and crisis of the classical model. Illustrated Editorial.
4. Globus, C. (2014) The Great History of Capitalism Or How Money Controls The World. Editorial Globus. Madrid Spain.
5. Smith, Adam. (1776) The Wealth Of Nations. Editorial William Strahan, Thomas Cadell.
6. Marx, K. (1848) Manifesto of the Communist Party. Editorial Longseller. Argentina.
7. Keines, J. (1936) General theory of employment, interest and money. Editorial Palgrave Macmillan. London.
8. Weber, M. (1905) The Protestant Ethics And The Spirit Of Capitalism. Editorial Alliance. Spain.
9. Wikipedia, The Free Encyclopedia (2017) Capitalism. Recovered from: wikipedia.org.