Brief History of Capitalism

Capitalism can be traced as far back as Agrarian Capitalism back in England during the 16th century. When the manorial system broke down, only a few people held much of the land, these people would trade that land away in exchange for labor.

Next, we had Mercantilism. This economic philosophy ran rapid through Europe during the 16th – 18th century period. This was when countries would trade their goods to foreign lands in exchange for some of those countries goods. The Lord Chancellor of England during the Elizabethan era, when mercantilism was used the most, described the system like this; “the opening and well-balancing of trade; the cherishing of manufacturers; the banishing of idleness; the repressing of waste and excess by sumptuary laws; the improvement and husbanding of the soil; the regulation of prices.”

Industrial capitalism, as we have it today, is said to not have existed until 1834. The leaders of the ‘getting rid of’ of Mercantilism and the establishers of Capitalism were David Hume and Adam Smith. David Hume was a Scottish philosopher and Adam Smith was an English economist. The first company to officially adopt Capitalism was Britain in the 1840s, and the United States were not too far behind. A healthy capitalist system needs supply, demand, and a profit motive. Without these three things, making money and sustaining life can be made to be extremely hard. Capitalism is one of the few economic ideas throghout history that fosters all three of these things, which is that makes it objectively one of the best, if not the very best, economic system to exist. Since capitalism has become more popular throughout the world, the world poverty world has dropped drastically. For example, the amount of people living in poverty has dropped by 44% since 1840, and the amount of people living in extreme poverty has dropped by 58%.

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