Capitalism. The political system which has been responsible for the inequality of opportunity and wealth, and the erosion of human rights. Before we can understand its significance, we have to go back to the beginning.
It’s 1776, London. Scottish Philosopher Adam Smith has just completed ‘The Wealth of Nations’ his critically...
Capitalism. The political system which has been responsible for the inequality of opportunity and wealth, and the erosion of human rights. Before we can understand its significance, we have to go back to the beginning.
It’s 1776, London. Scottish Philosopher Adam Smith has just completed ‘The Wealth of Nations’ his critically acclaimed text, where he outlines the fact that waged workers would equate to more income, and the price of maintaining slaves far exceeds the cost of wages. As capitalism rose following the systematic breakdown of one social and economic system (feudalism) based on obligation, this was seen as a crucial turning point in the transition between feudalism and capitalism.
In 1860, London, the philanthropist John Ruskin published his harshly critiqued book ‘Unto This Last’, where he set out to define wealth. He then explained that wealth could only be acquired following certain moral conditions, such as honesty and justice. This text caused so much public outcry, that the publisher had to end its publication after only four months. The book widened the audience’s understanding of the true intentions of capitalism, and the underlying factors hidden from the public, such as the inequality it was causing.
Capitalism caused significant division between the rich and the poor. The predecessor of capitalism, referred to as mercantilism, centred on slavery, and this characteristic was also passed down to capitalism for a brief period of time. As dominance within a capitalist economy is held by the few elite aristocrats, money is recycled through these few people. These people also limit the flow of money through the classes, with the help of limited government control.
Capitalism also had a large influence on the Industrial Revolution, which needed significant funding from private investors, and not particularly the government. With the advent of the industrial age, a lot of capital was required to, for example, build factories, obtain raw materials, pay wages to the workers, and to transport the finished product to the markets. In Britain, where the Industrial Revolution began, wealthy entrepreneurs were crucial as they used their wealth to create factories and mines.
Much debate centres around whether Capitalism was essential or detrimental to society. For example, in spite of increasing wages and reducing slavery, Capitalism gave rise to the Opium War (1840 – 1842), where Britain was manufacturing and selling opium to China, and millions of Chinese became addicts. As Winston Churchill once said, “The inherent vice of capitalism is the unequal sharing of blessings.’ This quote shows the distaste of capitalism even to world leaders of the 20th century.
On the other hand, Capitalism is referred to as one of the underlying factors in some countries’ successes and victories in WW2, because of the fact that companies could construct automobiles such as tanks and planes in a short period of time. William Knudsen, president of General Motors and Roosevelt’s wartime director of production management was quoted as saying in the aftermath of the war, “We won because we smothered the enemy in an avalanche of production, the like of which he had never seen, nor dreamed possible,’.
Capitalism was immensely significant to the modern world because it implemented a defined division between the rich and the poor, influenced the Industrial Revolution, and shaped the economic and political systems used by many countries today.
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