Why did a Capitalist Civilisation emerge when it did? Illustrate your essay with specific examples.

The change from a feudal society to one based largely upon trade and commerce was one of the most striking developments in world history. Capitalism, in the sense purely of buying and selling for profit was as old as humanity; Adam Smith considers it to be the most basic and natural of human impulses (Smith 1990). However, after what historians have dubbed the crisis of feudalism, capitalism truly emerged as an “over arching organisation that could focus large scale expansions and efforts” (Wolf 1982). This was not necessarily an entirely homogenous development; it was as different in England and France as it was in Japan and China. Furthermore, it did not sweep all before it immediately, as property and rank remained of great importance in almost all societies, even the most commercially driven such as eighteenth century England. However, by 1664 Thomas Munn remarked that in Europe at least trade and commerce was “The great revenue of the King, the honour of the Kingdom, noble profession of the merchant, the employment of our poor” (Munn, 1664, 47).
Therefore this essay seeks to analyse a rise of capitalist civilisation that began around the start of the sixteenth century, and was well into its stride by the seventeenth. By capitalist, I mean a system where the means of production were in mostly private hands, trade and commerce was the engine of the economy and the pursuit of profit was a worthy and common societal goal. The period 1500-1800 encapsulates its rise and rise in a manner which truly changed world history.
Its starting point can be found slightly earlier than these prescribed dates in the collapse of the old feudalist system which had previously dominated the more developed world. By the fourteenth century technology had seemingly reached the limits of its productive power, and the system was increasingly characterised by diminishing returns and an existence of self-sustenance. It gave a few rank and privilege, but offered no social mobility or opportunity of increasing the quality of life of the vast swathe of rural poor which characterised the system. At the same time its increasing failure brought political unrest (such as the Peasant’s revolt in England in 1381), population growth and expansion was leading to a renaissance of great cities and towns. Moreover, nation states began to exist in reality, not just geographical theory, with England having a unitary parliament and one common law code when the more feudalised France had 360 law codes and several legislative bodies. The feudal system, characterised by rural poverty, technological inertia and a nation divided into small fiefdoms failed on all fronts to meet the demands of either the peasant, merchant or ruling classes in many states by the 16th century.
Beaud has argued that “…in this decomposition of the feudal order the formation of mercantile capital took root” (Beaud 1983 17). Something which was both a cause and a symptom of this was greater urbanisation and the renaissance of the great cities mentioned above. Smith (1990) saw the growth of the great European cities as fundamental to the growth of a capitalist civilisation, and certainly the nations which urbanised first and fastest gained an immediate edge in commerce. The low countries soon created “centres of craft and production” (AK Smith, 1991, 98), with centres of commerce such as Leyden, Haarlem and Rotterdam providing a booming trading culture for the area. Holland reached a level of urbanisation, 50 percent of its citizens dwelling in cities, which Britain was not to reach for another 400 years (AK smith, 1991, 27).
The end of feudalism had produced a flexible, liberalised Labour market requiring low wages. This was augmented by a newly emerging class, the bourgeois, who offered the dynamism and drive to capitalise on the opportunity commercial cities provided and to turn states such as Holland and later England into capitalist citadels. Furthermore, the fact Europe consisted largely of a variety of individual polities, with no over-reaching Empire, allowed it in particular to develop autonomous cities which offered a seedbed for capitalist civilisation. Wallerstein has linked this rise of cities to the fall of feudalism, arguing capital raised in the former system lubricated the progress of the latter, and that rural areas still offered food and raw materials to the urbanity. This was what he called a “…cohesive agro-industrial complex” (Wallerstein 44).
This increased urbanisation went hand in hand with broader social changes. In the social flux which had followed the crisis of feudalism, the emerging gentry class had considerably enhanced its social position, for example in England gaining 50% of the land by the start of the seventeenth century (AK smith, 1991, 112). At the same time the population growth and urbanisation noted above in Holland had also occurred across the water, with the English population doubling in the 170 years from 1485 (AK Smith, 1991, 109). The tremendous change in social mobility which the end of feudalism brought about had a widespread effect on the new capitalist civilisation; it provided new markets beyond the existing luxury ones for the nobility; it offered a mobile and cheap workforce; it provided a new class of hungry and driven individuals who would rise or fall on their own merit and were inclined to risk taking. The unleashing of the entrepreneurial spirit of the world’s population inevitably creating great social flux – capitalism offered freedom and the potential for rapid enhancement which had never been possible under the old feudal system. Perhaps most of all, for the first time the merchant was a pre-eminent figure in society.
The merchant was, of course, always in existence; the human urge is far too strong for him to have ever been anything but, and he was one of the characters chosen by Chaucer in his Canterbury Tales. However, the variety of new societal conditions described above both made merchants more numerous and propelled them into a position of great respectability and cultural centrality. This was captured in Rembrandt’s art, with pieces such as the Syndicate of merchants (1661) and the weigher of gold (1639). In what is modern day Sri Lanka, merchants such as Anand Arangam Pillais of Pondicherry had significant social and political influence (Mukund, 1999). The change, from a collective (and importantly Catholicised) European culture to a more individualistic, industrious Protestant dominant ethic was vital in the greater esteem in which commerce was held. This cultural change was unsurprisingly most evident in the countries (such as Holland and England) which were most commercially successful.
This noticeable shift in society’s opinions, formation and underlying philosophy was added to by a much more tangible development; the fast paced changes in technology between 1500 and 1800. The aforementioned stagnation of technological development under feudalism gave way to fast paced change under capitalism; the innovation and desire for profit of merchant’s and states was matched by the technological sector. Transport was inevitably crucial to the development of a capitalist civilisation, allowing as it did access to a wider variety of markets, greater movements of good s and labour and an ever greater demand to be met by corresponding supply. It was here that technological advances were most strident and most significant; for example, the development of the three masted heavily armed sail ship capable of carrying crews and cargoes transoceanic distances was very important to the rise of merchant capitalism on a world basis.
The fifteenth century improvements in caravels and navigation techniques allowed new maritime routes to be used, and therefore new markets accessed. Access to the sea was of great importance – cities or nations which had it, such as Bruges, London or Japan had a great advantage in the new commercial age. Furthermore, the Dutch used and developed their internal canal system to both boost home markets and improve their competitive edge in those abroad. The big advances of the period, which both serve to highlight the importance of technological change occurring when it did, took place in Holland and England.
The Dutch’s early domination of the new capitalist world, incredible for such a small state, relied on their advances in ship production. They bought cheap raw materials, standardised production and used a range of new machinery, such as cranes and wind powered saw mills. England, who at the end of the fifteenth century had been a relatively backward northern European outpost, used the next two centuries to first catch up, and then overtake, its rivals. This technological advance went hand in hand with the nation’s change from a bit part player in the feudal world to a premier nation in the capitalist one. Furthermore, Mukund (1999) has documented how the creation of new banking and credit organisations was the key to expansion of capitalist civilisation in sub continental Asia. Technological advance may have taken many forms, but it always had the same effect. As Beaud has argued “capital, more abundant merchandise, sailing ships and weapons. These were the means of expansion for commerce” (Beaud, 1981, 18).
Crucial to this expansion was the discovery and creation of new markets far beyond established hinterlands. This was a period of great exploration; in 1487 Diaz rounded the Cape of Good Hope, in 1492 Columbus discovered America and in 1498 Vasco di Gama arrived In India. Monarch’s of newly founded and/or more united nation states realised that in greater discovery, conquest and trade lay wealth, power and status. The merchant was now embraced and sponsored by the nobility and royalty; offered sponsored ships and adequate protection to enhanced his country’s power and prosperity abroad. Government funded schemes such as the East India company (founded 1600) and the Dutch East India company flourished; the latter offering dividends of twenty five to thirty percent and having a stock value of 18,000 florins by 1670 (Beaud, 1981, 25). The lack of competition in domestic markets and the fresh availability of much needed raw materials led European nations to flock to the new world, with the Spanish and Portuguese the leaders in the rush for gold and commerce. Of course, one state using conquest and empire to develop a powerful and efficient capitalist civilisation put a market imperative on others to follow suit. Therefore France, Holland and England followed the Iberian states into these new territories, and into trading with emerging capitalist nations in the far east.
States quickly realised than in the modern world, an overseas empire and expanded capitalist network was necessary for world influence. The decline of Spain, and rise of England, can be linked to the latter’s defeat of the Armada in 1588, which played a key role in England developing commercial and colonial superiority. Empires offered markets, resources and labour; the latter was most notably produced by the slave trade, with 275,000 slaves sent to America in the period 1451-1600. In the seventeenth century this quintupled to 1,341,000. Europe successfully colonised parts of East Asia, but such was the power of that continent’s broader commerce, and its access to newly formed colonial markets, that by 1717 the French government passed a law against the wearing of Chinese Silk.
The development of Empire was a crucial reason for the creation of a capitalist civilisation in the years 1500-1800. It reflected nation state’s new found interest in wealth, the advances in technology and exploration, the rise of the city as commercial centre and the broader social changes occurring in the period. Indeed, Wallerstein (1980) has seen colonialisation as a direct reaction to the crisis of feudalism identified earlier in the essay. What is clear is that in this period, rapid social, technological and political changes removed the barriers which had previously withheld capitalist endeavour. With these removed, it burst forth to dominate the world. Genovese is absolutely right to conclude that, in the period 1500-1800, “Capitalism…created a new and dynamic theory and practice of individualism and carried it…to the far reaches of an astonished world” (Genovese, 1983, vii).