Capitalism

Definition

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. It is characterized by the accumulation of capital, competitive markets, and wage labor.

5 Must Know Facts For Your Next Test

1. Capitalism emerged in Europe during the 16th and 17th centuries, driven by the growth of trade, the development of financial markets, and the accumulation of wealth.
2. The consumer revolution in the 18th century was closely tied to the rise of capitalism, as mass production and global trade allowed for the widespread availability of consumer goods.
3. The vibrant capitalist republic of the United States in the 19th century was characterized by rapid industrialization, the growth of big business, and the rise of a new social order with distinct class divisions.
4. The building of industrial America in the late 19th and early 20th centuries was fueled by the exploitation of labor, as capitalists sought to maximize profits and productivity.
5. Capitalism has been a driving force behind the economic and social transformations that have shaped the modern world, for both good and ill.

Review Questions

• Explain how the rise of capitalism in Europe during the 16th and 17th centuries was connected to the broader social and economic changes taking place at the time.
  • The emergence of capitalism in Europe was closely tied to the growth of trade, the development of financial markets, and the accumulation of wealth. These factors were part of a broader set of social and economic changes taking place in Europe, including the decline of feudalism, the rise of the merchant class, and the expansion of colonial empires. Capitalism both shaped and was shaped by these larger transformations, as the private ownership of the means of production and the pursuit of profit became central to the European economy and society.
• Describe the role of capitalism in the consumer revolution of the 18th century and its impact on the social and economic structure of the time.
  • The consumer revolution of the 18th century was closely linked to the rise of capitalism. Mass production and global trade allowed for the widespread availability of consumer goods, which in turn fueled the growth of a new middle class and the emergence of a consumer culture. This had significant social and economic implications, as the bourgeoisie, or business owners and professionals, gained increasing power and influence, challenging the traditional social order and class divisions. The consumer revolution both reflected and contributed to the broader transformation of European society under the influence of capitalist economic principles.
• Analyze the ways in which capitalism shaped the development of the United States in the 19th century, particularly in terms of industrialization, the growth of big business, and the emergence of a new social order.
  • The United States in the 19th century was a vibrant capitalist republic, characterized by rapid industrialization, the growth of large corporations, and the rise of a new social order with distinct class divisions. Capitalism was a driving force behind these transformations, as the private ownership of the means of production and the pursuit of profit fueled economic expansion and the accumulation of wealth. The exploitation of labor, often through the exploitation of marginalized groups, was central to the building of industrial America, as capitalists sought to maximize productivity and profits. These developments had far-reaching social and political consequences, shaping the class structure, power dynamics, and cultural values of the United States in the 19th century and beyond.

Related terms

Free Market: An economic system where prices, production, and the distribution of goods and services are determined mainly by competition in a largely unregulated market rather than by central planning or government regulation.

Industrialization: The process of developing manufacturing and other industries for the purpose of increasing productivity and economic growth.

Bourgeoisie: The social class that owns the means of production and employs wage labor, such as business owners, professionals, and managers.