The Concept of Capitalism

Many undefined roots mark the advent of capitalism but pure capitalism is stated to have begun in north-west Europe, in the low-lying countries like Netherlands and Britain in the sixteenth and seventeenth centuries. The sixteenth and seventeenth century was a period of significant economic expansion. The expansion, on the other hand, led to transformations regarding the social, cultural and political development in the continent.

Capitalism originated from trade activities, on this note, it emerged from earlier forms of trade when merchants had gained sufficient wealth to start investing in the much-evolved technology that was viewed as productive. The narrative views capitalism as a natural extension of trade, which arose when people’s entrepreneurial spirit was free from the adverse effects of feudalism, mostly by the emergence of urbanization (Dimmock, 25). Capitalism is traceable back to early forms of merchant capitalism, traceable back to Western Europe in the Middle Ages.

The principle developed into the current form in the Protestant nations in North-Western Europe like the Dutch Republic (Netherlands) and England. Various traders in London and Amsterdam came up with the first chartered joint-stock corporations which in turn boosted trade and commerce. During this period, the first banks, stock exchanges, and insurance companies were set up. The Dutch played a very crucial role as pioneers of the rise of the capitalist system in the world.

When adapted, how is it different in its new context? How similar? (meat) Over the centuries, capital has evolved and is accumulated in a variety of methods, in small and large scale. It is associated with many developments including wealth and economic power concentration. Over the years, capitalism has become the dominant financial system in the entire globe. A huge part of history over the past five hundred years is centered around the development of the concept and its diversified forms.

Capitalism in the twenty-first century is similar to its advent in the 16th and 17th centuries. The basis of capitalism is using wealth to create more wealth (Hodgson, 458). In the Middle Ages, this was marked with the principle of lending money to individuals at an agreed interest rate. It was decided upon by the lender and the receiver of the loan to return the money within a specified period, where if there was any default, the individual would pay additional payments to make sure that the debt was fully satisfied. The practice is similar to the twenty-first century where banks and other lending institutions give loans to people as needed but the difference is that in this instance, the loanee has to provide collateral of equal value to the money being offered. The same principle of payment of interest during the period is similar to the practice in the middle ages. Another example of an advanced level of capitalism involves the investment of money. People invest their capital in different projects and entities in return for a share of the profit. People also get into agreements in different investment avenues where they agree to give a percentage of their companies in return for compensation in monetary terms from an interested corporation or individual.

Is the idea or practice still important in that new, non-Euro/Euro context today? Why or why not? The idea of capitalism is still essential in Europe in the modern age. Over the years, it has evolved into many aspects that have greatly influenced the economy. For example, in an industrial setting such as a factory, the set-up outlines a well-planned structure. The profits from the entity go to the owner although much of the work is divided among the employees. They are the backbone of the organization. Each person is assigned a part of the job where they are expected to fulfill their obligations as agreed regarding the work undertaken. This is an example of capitalism in its full-scale nature, which leads to a massive divide between the workers and the employer and the labor and capital.

Capitalism in the modern age still carries a great deal of risk. Not every entity that is funded or invested in works out in the long run. Some of the companies have collapsed due to a variety of factors. These include but are not limited to issues of mismanagement of resources, wrangles between the leaders of different organizations and lack of accountability in the entities. In many cases, however, the system has worked out well where the companies achieve their desired objectives as laid out at the time they were being formed. The principle has led to significant changes in Europe regarding technology in different sectors of the economy which have also propelled the continent to more significant accomplishments. Most notable are the industrial and healthcare sectors which have led to significant discoveries and changed people’s lives. Capitalism has had more advantages than disadvantages since its introduction in the sixteenth century.

Works Cited

Alcott, W. “The rise of capitalism and the development of Europe | Revealing Histories.”2018, revealinghistories.org.uk/how-did-money-from-slavery-help-develop-greater-manchester/articles/the-rise-of-capitalism-and-the-development-of-europe.html.

Dimmock, Spencer. The origin of capitalism in England, 1400–1600. Brill, 2014.

Hodgson, Geoffrey. ”The Cambridge History of Capitalism. Volume I: The Rise of Capitalism from Ancient Origins to 1848; and Volume II: The Spread of Capitalism: From 1848 to the Present both ed. by Larry Neal and Jeffrey G. Williamson.”Enterprise & Society 17.2 (2016): 457-463.