Demands of Industrial Capitalism

Industrial capitalism

Meaning of capitalism

Capitalism is the social, political and economic system based on private ownership of the major means of production.

Capitalism is an economic system in which the major means of production was privately owned.

Capitalism underwent different stages before reaching its maturity. These stages included:

1. Commercial or mercantile capitalism
2. Industrial capitalism
3. Monopoly capitalism

Forms of capitalism

Commercial or mercantile capitalism

1. Time Period: Mostly between the 16th and mid-18th century.
2. Basis: Primarily based on trade activities.
3. Key Actors: Merchants played a crucial role during this period, focusing on the buying and selling of goods.

Industrial capitalism

1. Time Period: Emerged with the Industrial Revolution between 1750 and 1850.

2. Basis: Centered on industrial activities and the use of machines in production.

3. Key Actors:

   • Large traders known as bourgeois.
   • The bourgeois owned the means of production (factories, machinery).

4. Association: This form of capitalism was significantly associated with the Industrial Revolution, especially in Britain, which was the first European country to industrialize.

Monopoly capitalism

1. Basis: Focused on large companies that dominated the production of commodities.

2. Key Features:

   • Large-scale production.
   • Centralization of capital and lack of open competition.
   • This system created monopolies, where a few companies controlled the market.

Transition to industrial capitalism

1. Starting Point: The transition from mercantile capitalism to industrial capitalism began as early as the period of mercantile capitalism.

   • European nations such as Spain, Holland, Portugal, and Britain sold goods from local small industries to regions like Africa and Asia.

2. Growth of Capital: European merchants earned sufficient capital from trade to invest in industrialization by the mid-18th century.

3. First Industry: The first significant shift to industrial capitalism occurred in Britain starting around 1750, marking the beginning of the Industrial Revolution.

Factors that stimulated industrialization in Europe

1. Presence of Coal and Iron, Iron was used in building factories, bridges and railways, Coal was used as fuel for Industrial machines and Engines, and all these led to the improvement of Agriculture.
2. Industrial revolution encouraged proper and use of soil and this increased soil fertility and better animal husbandly hence increased the production and ensured availability of raw materials for the industries.
3. Advancement of Science and Technology for example presence of spinning machines replaced the use of human hands for weaving clothes. This led to an increase in the production for textile factories.
4. Trade activities also stimulated Industrial Capitalism, European Traders accumulated wealth from Asia and Far East and all these were invested in Industries.
5. Political stability in Europe also influenced the Industrial revolution.
6. Availability of skilled and unskilled labor needed in Industries also influenced the Industrial revolution.
7. Improvement of roads, railways and water transport made it easy to transport Industrial workers, materials and finished goods.
8. European Government supported industrialization process.

The demands of industrial capitalism

1. Areas to invest capital: Due to unreliable markets and high concentration of capital in Europe, profit marginalization occurred. As a solution new areas for investment were needed among other areas, Africa provided the best areas for investment of such capital.
2. Need areas of market: Due to the investment of capital in production, industrial goods flooded the European markets. Overproduction and under consumption became a critical problem among the industrial capitalists hence they were forced to look for markets outside Europe.
3. Needs for raw materials: The increasing production due to expansion of industries needed large quantities of raw materials supply. These materials included cotton, coffee, tea, iron ore, palm oil, sisal, sugar cane, tobacco and rubber.
4. Demand of cheap labor: Due to labor consciousness caused by working class in Europe and Britain in particular, the need to search for cheap labor become important. This was a measure taken to compete in production for profit maximization.
5. Area to settlement surplus labor: In addition, they demanded the area for surplus unemployed personal population in their countries.