Capitalism in Europe Series" - Part 2: The Condition

 

Conditions of development of capitalism in Europe

In the sixteenth century, capitalism came to the forefront in Western Europe and increased economic growth in England, Holland, northern France, and northwest Germany. No one will ever argue that capitalism accelerated economic expansion in Western Europe. From the end of the eighteenth century forward, capitalism allowed European powers to dominate the rest of the world. Some conditions influenced the development of capitalism. To be precise, the social and economic reformation and structured development led to the advancement of capitalism.

Mercantilism can be considered the first stage of capitalism that appeared during the 15th century. This is the first stage of the capitalistic system based on international trade and commerce and conducted overseas during 15thC-18thC during this trade, a country attracted the trend of using precious metals (gold and silver) in European transactions. This is whereby trade and commerce were conducted by European countries with the continent of Africa, Asia and America through overseas trade, and silver was used as the coin. E.g. Venice, Genoa, and Pisa in the early modern period had mercantilistic practices based on commerce in metal in the Mediterranean. It led to the emergence of strong military states to protect the wealth of nations, merchants, and their boundaries. It also led to rising European nationalism, where small European nations united to increase and expand the market for their nations.

Many of Europe's advanced capitalist economies are highly interconnected. As a result, they have a long history of international trade, and even though they speak different languages, they have a relatively free exchange of ideas. Regardless, the movement of labor and capital has been limited until lately. Trade openness has achieved increased efficiency due to specialization, and market forces have become more powerful because of it. It has also contributed to economic growth by making new products and processes readily available. Around 30% of GDP was exported by core and peripheral countries by 1996, compared to 16 and 9% in 1950. Since World War II, trading has been an important factor in Europe's productivity growth. 

In Werner Sombart's words, "In all probability, the United Provinces or Dutch were the land in which the capitalist spirit for the first time attained its fullest maturity; where this maturity related to all its aspects, which were equally developed; and where this development had never been done comprehensive before. The Dutch Vereenigde Oost-Indische Compagnie (VOC) issued shares in 1602 to form what is often regarded as the world's first publicly listed business. The role of Dutch-speaking areas, particularly modern-day Flanders and the Netherlands, in the history of capitalism has been much debated and explored. During the Early Modern period, Protestant countries in North-Western Europe, particularly the Netherlands (Dutch Republic) and England, began to create capitalism in its modern form. The Dutch played a pioneering role in the rise of the capitalist world system. World-systems theorists like Immanuel Wallerstein and Giovanni Arrighi consider the economic and financial supremacy of the 17th-century Dutch Republic to be the first historical model of capitalist hegemony. It's crucial to emphasize that the Dutch Republic's economic, business and financial systems were the most developed and sophisticated in history from the early 1600s through the mid-18th century. Marxist historiography in the Netherlands definitely saw the revolution as capitalist.[3]

Three continents participated in the transatlantic slave trade: America, Africa, and Europe. Britain, France, the Netherlands, and Portugal were the key contestants. In the first half of the 19th century, the British took the lead in eradicating the slave trade in the Americas and Europe. The British revolution abolished the slave trade due to a variety of circumstances. Because of the slave trade, colonial powers boosted the supply of social services, particularly education, and increased the spread of Christianity. They were able to produce sugar in vast amounts and sell it for less than the British, making them more profitable.

French state revenues grew due to "geopolitical accumulation" in the absence of agricultural capitalism. The French Revolution resulted in the partial emancipation of French labor at a period when English employees were subjected to greater subordination to employers who benefited from the state's active legal assistance during the industrialization process. The working class arose in response to a governing class of notables who exploited state authority by monopolizing it. Before the second world war, France comparatively had a fragmented capitalistic economy. France had enormous economic and demographic growth in the postwar decades. The approach was seen as a combination of the United States' philosophy of limited government participation and the Soviet Union's policy of total state control.[6]

For France and England, the creation of the territorial state after 1500 was important to the early development of capitalism. The English and French revolutions, as well as the revolution in Holland, are classic Marxist examples of bourgeois and capitalist revolutions.

The entire peninsula, including the south, was commercially linked by interregional and marine networks in the fourteenth and fifteenth centuries. The integration of the primary, secondary, and tertiary sectors enabled rapid urbanization and the formation of new political institutions, social interactions, and cultural values associated with the Italian Renaissance. The Italian economy expanded until around 1600. There are three basic interpretations of Italian capitalism's failure to grow further. Agriculture could not sustain the commercial and industrial sectors beginning in the 1570s, with food costs leapfrogging those in trade and industry.

Germany, or the  Holy Roman Empire, was Europe's most advanced center of emerging capitalism between the 1470s and the 1520s. In Germany, by contrast, feudalism and lordship grew stronger during the end of the fifteenth and sixteenth centuries, and the new economic dynamism enabled the concurrent strengthening of capitalism and feudalism. Germany experienced the Industrial Revolution about a decade later than England. Within approximately four decades between the end of the Second World War and German unification, West German society gave developed an unusual kind of capitalist economy, governed by nationally specific social institutions that made for high international competitiveness at high wages and, at the same time, low inequality of incomes and living standards.

Western elites increasingly discarded superstition, magic, and subjection to religious authority as a result of the Renaissance and Enlightenment. By the seventeenth century, the Western scientific tradition that drives the modern approach to technological change and innovation had evolved and began to pervade the educational system. Norms were abandoned, and the yearning for innovation and evolution was unleashed. The majority of protocapitalist innovation resulted from pragmatic experience and learning through practicing. Changes in agriculture, population, and political revolutions contributed to feudalism's collapse and capitalism's rise. A substantial amount of capital was generated by European countries, especially Britain, through international trade. This wealth was utilized to fuel the industrial revolution, which led to the emergence of capitalism.

However, Marx believed that detachment and exploitation of the proletariat would eventually cause the working class to protest against the capitalists and seize power over the mode of production. In this revolt, educated leaders called the vanguard of proletarian revolution would guide the workers by developing their cognition. Marx’s belief has been proved numerous times in history. The working class often revolted against the bourgeoisie. Clear depictions can be noticed in the Luddite movement, which was the first industrial working-class movement in Britain, and the Chartism movement led by the British working class of the 1830s, named after the peoples’ charter, which was drafted in London in 1838. This movement occurred during the industrial capitalism era when employees' numbers had surged, making their working conditions even more horrendous