When African societies were practicing communalism, slavery and feudalism as the mode of production during the 18th century; elsewhere in the world, Europe in particularly was step further practicing capitalism as the mode of production in most of their societies.
MEANING OF CAPITALISM
Capitalism refer to the political and socio-economic system based on the private ownership of the major means of production.
Or
Capitalism Was the economic system or relation of production in which the means of production are in the hands of a few individuals and operated for profit.
In Europe capitalism developed after the decline of Feudalism
PHASES OF CAPITALISM
Capitalism underwent different stages before reaching its maturity.
These stages included:
i. Commercial or Mercantile capitalism
ii. Industrial capitalism or Competitive capitalism
iii. Monopoly Capitalism or Imperialism.
1. MERCANTILE OR COMMERCIAL CAPITALISM
This was the first phase of capitalism in which trade was the main economic activity that produced profit. It took place between the 16th and the 18th centuries. Where by more traders come to Africa from England, Belgium, Netherlands and Portugal
FEATURES OF MERCANTILISM
1. Existence of classes of people i.e the rich class and poor class
2. Trade was the main economic activity which produced profit
3. The rural areas was the source of all source of all items of trade such as minerals, crops and animal products
4. Agriculture and mining were the primary sources of products and items of value
5. Money was the medium of exchange
6. Countries and rulers fought for the control of trade, trade routes and resources such as gold and silver. Example the Anglo-Dutch Wars, and the Franco-Dutch Wars.
2. INDUSTRIAL OR COMPETATIVE CAPITALISM
Industrial capitalism was the second phase of capitalism in which industries/ factories became the dominant factor in the production of goods. Or was the stage were by Machines began to be used for production in industries.
Few people owned the means of production these were known as Bourgeoisie where the wage-earning class known as proletariats. This stage took place around 1750s and 1870s
FEATURES OF INDUSTIAL CAPITALISM
1. Existence of classes of people: the lower, middle class and the upper class
2. Industrial production was the main economic activity which produced profit
3. Machines replaced humans in production
4. Existence of competitions in production of goods.
5. The rise of large scale industries which brought about industrial revolution
6. Existence of free trade system with minimal government tariff policies
Note:
Industrial capitalism associated with the industrial revolution which took place between the 1740s and 1850s in Europe. British industrialized in 1750 however, in the 19th century, other European countries such as France, Belgium, German, and Italy also industrialized
Question: What is industrial revolution?
Industrial revolution was the changes in the methods of production which entailed application of scientific procedures of production and markets
3. MONOPOLY CAPITALISM OR IMPERIALISM
This was the third phase in the development of capitalism where by large companies dominated the production of commodities and markets. It took place 1870’s
FEATURES OF MONOPOLY CAPITALISM
1. There was large scale production
2. Centralization of capital
3. Lack of open competition
4. Export of capital as opposed export of commodities
5. Rushing to colonies to satisfy economic needs such as market, cheap labour, raw materials and areas for investments
FACTORS THAT STIMULATED INDUSTRIALIZATION IN EUROPE
1. Availability of coal and iron in large amounts in Europe. Coal used as fuels for industrial machines and engines while iron used to build factories, bridges and railways.
2. The agrarian revolution or improvement of agriculture. Agrarian revolution encouraged the proper use of land, and scientific farming which led to high production of raw materials for the industries.
3. Advancement in science and technology. For example the spinning machines replaced the hand loom machines for weaving clothes.
4. Development of trade activities. European traders went as Far East and Asia in order to trade. The accumulated wealth from trade was invested in industries in Europe.
5. Availability of banks and insurance. Banks provided loans to the traders while insurance used insure trader’s factories and properties
6. Political stability in Europe. Presence of peace environment in Europe made people to engage in various activities including industrial activities
7. The large European population in Europe. The population insured availability of skilled and unskilled labourers to work in industries and farms, also being the market for the goods produced.
8. Improved transport system in Europe. Availability of good roads, railways and harbours facilitated transportation of raw materials, goods and people.
9. The support from the European government. They gave tax relief and subside to industries and encouraged industrial research and training.
