History of capitalism

• 1. Introduction

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  The history of capitalism begins not in a counting house or a stock exchange, but in a muddy English field. In the early 14th century, the manorial system of medieval Europe looked permanent. Lords owned the land. Serfs owed labor. Everything held together by custom and coercion. Then the ground shifted, literally and climatically. Bad weather brought the Great Famine of 1315-1317. The Black Death arrived in 1348-1350 and killed enough people to shatter the old order beyond repair. What replaced it, over the next five centuries, became capitalism: an economic system built on private ownership of the means of production, the drive for profit, and the steady accumulation of capital.

  The word itself came late. "Capitalism" in its modern sense only emerged in the mid-19th century, when thinkers like Louis Blanc and Pierre-Joseph Proudhon coined it to name a system where some people owned capital and others simply labored. Karl Marx then gave the concept its most thorough examination in Das Kapital, published in 1867. By that point, the system had already transformed England from a feudal patchwork into the workshop of the world.

  How did a crisis of famine and plague become the seedbed of global trade? How did English landlords and their tenants stumble into a market logic that would eventually cross every ocean? And what happens to capitalism when it reaches the boundaries of the planet itself? Those are the questions this documentary will pursue.

• 2. Crisis and Enclosure

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  Feudal manors were almost entirely self-sufficient. Serfs produced for their lords and for their own families. Lords extracted wealth not through market competition but through force. The entire system depended on a stable population and stable harvests. Both conditions collapsed in the 14th century.

  Agricultural productivity had already hit its technological ceiling before the weather turned. The Great Famine of 1315-1317 then drove a population already under stress into crisis, and the Black Death of 1348-1350 delivered the decisive blow. Lords responded to the resulting labor shortage and declining production by pressing their serfs harder, demanding more tribute to fund military campaigns aimed at expanding their own domains. In England, many serfs refused. Some moved to towns. Some bought land outright. Others negotiated favorable rental contracts with lords who desperately needed tenants to repopulate their depleted estates.

  By the 16th century, England was already a centralized state with a road network that allowed London to function as a central market for the entire country. Land was concentrating in the hands of fewer landlords with larger estates, and both owners and tenants faced pressure to raise agricultural productivity and generate profit. The old stagnant system of feudal custom was giving way to market rents subject to economic forces.

  The instrument that accelerated this transformation was enclosure. Common land, previously held in the open field system where peasants had traditional rights to mow hay and graze livestock, was progressively closed off and transferred to private ownership. The process became widespread across the English agricultural landscape during the 16th century. By the 19th century, unenclosed commons had shrunk to rough pasture in mountainous areas and a few scattered lowland patches. Anthropologist Jason Hickel records that the dispossessions provoked myriad peasant revolts, among them Kett's Rebellion and the Midland Revolt, both put down with violent repression and executions.

  Marxist historians argue that wealthy landowners used their grip on state power to appropriate public land for private gain, producing a landless working class ready to staff the new industries of northern England. One quoted account describes the years between 1760 and 1820 as years of wholesale enclosure, village by village, in which common rights were extinguished. Critics of that reading argue that better-off peasants actively participated in enclosure, seeking to escape the chronic poverty of subsistence farming. The argument continues among historians, but the economic result was not disputed: a large population now depended entirely on wage labor and market purchases for survival, a precondition that industrial capitalism would soon exploit.

• 3. Merchants and Mercantilism

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  Long-distance trade is far older than capitalism. The earliest recorded activity of profit-seeking merchants reaching across great distances can be traced to Assyrian traders operating in Mesopotamia in the 2nd millennium BCE. The Roman Empire developed more advanced commercial networks, and equally widespread networks existed across Islamic nations. Capitalism, however, took a distinct shape in Europe during the late Middle Ages and the Renaissance.

  In the Italian city-states of the late Middle Ages, including Florence, Genoa, and Venice, a new commercial culture emerged on monastic estates and in the counting rooms of independent merchants. These cities pioneered financial instruments such as bills of exchange and new banking practices that made long-distance trade practicable at scale. The competitive rivalry among those city-states fostered a spirit of risk-taking and innovation that carried the seeds of capitalism's central principles: private ownership, market competition, and profit-seeking behavior.

  The Atlantic Ocean, not the Mediterranean, proved to be mercantilism's real birthplace. England launched a large-scale approach to mercantile policy during the Elizabethan era. A 1549 document, Discourse of the Common Weal of this Realm of England, articulated the core logic plainly: "We must always take heed that we buy no more from strangers than we sell them, for so should we impoverish ourselves and enrich them." Elizabeth promoted the Trade and Navigation Acts in Parliament and ordered her navy to protect English shipping against the far larger Spanish Empire.

  The theorists who gave this system its intellectual framework included Gerard de Malynes and Thomas Mun. Mun's England's Treasure by Forraign Trade gave a systematic account of the balance of trade doctrine. Written in the 1620s and published in 1664, it remained a foundational text. French mercantilism found its clearest expression in the policies of Jean-Baptiste Colbert, who held office from 1665 to 1683.

  At its heart, mercantilism rested on bullionism: the belief that a state's wealth was measured in precious metals and that exports should always exceed imports so that foreigners paid the difference in gold and silver. The state used subsidies, monopolies, and protective tariffs to encourage domestic manufacturing and to ensure that colonies served as sources of raw materials and captive markets for finished goods. Francis Bacon summarized the mercantilist purpose as "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."

  Karl Polanyi later argued that mercantilism, for all its commercial energy, never fully dismantled feudal protections over land and labor. According to Polanyi, a competitive labor market was not established in England until 1834, which meant industrial capitalism as a social system could not be said to have existed before that date. The Muscovy Company, established in 1555 with a monopoly on trade between England and Russia, represented a precursor of what was coming next: the chartered joint-stock company, which would give capitalism its first genuinely global reach.

• 4. Chartered Companies and Empire

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  The Muscovy Company grew from an earlier venture, the Company of Merchant Adventurers to New Lands, founded in 1551 by Richard Chancellor, Sebastian Cabot, and Sir Hugh Willoughby as they searched for a Northeast Passage to China. That search failed, but the organizational model it tested did not. Within fifty years, the same structure had produced two of history's most consequential corporations.

  The British East India Company, chartered in 1600, and the Dutch East India Company, chartered in 1602, launched a new era of large state-chartered trading enterprises. Both held monopolies granted by letters patent from their respective states. Both were recognized as chartered joint-stock companies and, remarkably, both held lawmaking, military, and treaty-making privileges. Merchants who had previously traded on their own account now invested capital in these companies expecting a return, pooling risk across a class of shareholders rather than bearing it individually.

  Mercantile imperialism drove military conflicts across the globe as powerful nations competed to accumulate precious metals and control trade routes. The colonies that empire produced were not incidental to this system. Mercantilist doctrine insisted that colonies denied the right to manufacture or trade with foreign powers served as captive sources of raw materials and guaranteed markets for the colonizing nation's finished goods.

  Eric Williams argued in his 1944 work Capitalism and Slavery that plantation slavery played a crucial role in the growth of industrial capitalism, since both emerged across similar time periods. A later analysis by Harvey pointed out that the Lancashire textile mills, described as a flagship of the industrial revolution and employing some 465,000 textile workers, were in the 1860s entirely reliant on the labor of three million cotton slaves in the American Deep South. The Napoleonic Wars provided an unexpected illustration of the system's resilience: Napoleon's Continental System, designed to render Europe economically autonomous and strangle British trade, instead stimulated British industries. Pig-iron production rose from 68,000 tons in 1788 to 244,000 tons by 1806, partly as a direct result of wartime demand.

• 5. The Industrial Revolution

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  Starting in about 1760 in England, a steady transition to new manufacturing processes began that would alter the material conditions of human life more rapidly than anything before it. The shift touched multiple industries simultaneously: hand production gave way to machine production, new chemical and iron-making processes replaced older ones, water power improved in efficiency, steam power spread, machine tools multiplied, and coal displaced wood and other bio-fuels.

  The textile sector produced the most dramatic productivity jumps. Mechanized cotton spinning powered by steam or water increased the output of a single worker by a factor of about 1,000, drawing on James Hargreaves' spinning jenny, Richard Arkwright's water frame, and Samuel Crompton's Spinning Mule, among other inventions. The power loom increased weaving output by a factor of over 40. The cotton gin raised the productivity of removing seed from cotton by a factor of 50. Gains in spinning and weaving wool and linen were also substantial, though not as extreme as those in cotton.

  Karl Marx dated the onset of industrial capitalism from the last third of the 18th century. He identified its distinguishing feature as the factory system of manufacturing, with its complex division of labor both between and within work processes and its routinization of tasks. Industrial capitalism, as he saw it, finally established the global dominance of the capitalist mode of production. In the process, the industrialist displaced the merchant as the dominant actor in the system, and traditional handicraft skills, the guilds, and journeymen artisans declined accordingly.

  Capitalism also transformed rural England during this period. The rise of commercial agriculture pushed production toward cash crops for the market rather than for subsistence on a feudal manor. The surplus generated by this shift encouraged increasing mechanization of farming itself, which in turn freed more labor for the factories.

  The growth of industry produced a parallel growth in financial infrastructure. Cheques had been invented in 17th-century England. Around 1770, banks began meeting in a central location to settle payments, and by the 19th century a dedicated bankers' clearing house had been established in London, using a method where each bank paid and received cash through an inspector at the end of each day. The first overdraft facility was set up in 1728 by the Royal Bank of Scotland. In 1844, Parliament passed the Bank Charter Act, tying bank notes to gold reserves and effectively creating the institution of central banking. Two immigrant families, Rothschild and Baring, established merchant banking firms in London in the late 18th century and came to dominate world banking in the following century. The poet George Gordon Byron noted their influence in 1823, writing: "Who makes politics run glibber all? / The shade of Bonaparte's noble daring? / Jew Rothschild and his fellow-Christian, Baring."

• 6. Free Trade and the Gold Standard

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  In 1817, David Ricardo, James Mill, and Robert Torrens advanced the theory of comparative advantage, arguing that free trade would benefit the industrially weak as well as the strong. Ricardo's Principles of Political Economy and Taxation stated the counterintuitive doctrine that even an inefficient producer benefits from sending the merchandise it produces best to a country able to produce it more efficiently, because both countries gain from the exchange.

  By the mid-19th century, Britain had committed fully to free trade. In the 1840s, the Corn Laws and the Navigation Acts were repealed, opening what historians describe as the first era of globalization. The global financial system anchored itself to the gold standard: the United Kingdom formally adopted it in 1821, Canada followed in 1853, Newfoundland in 1865, and the United States and Germany in 1873.

  New technologies compressed distance at a pace that reinforced the economic logic of open markets. The telegraph, the transatlantic cable, the radiotelephone, the steamship, and the railway all allowed goods and information to move around the world with a speed and regularity that earlier merchants could not have imagined. The vision of a London resident ordering goods by telephone while drinking morning tea and expecting delivery by the same day came to stand for the entire era. That era, as one observer wrote, came to an end in August 1914.

  Nineteenth-century imperialism shaped globalization decisively during this period. After the First and Second Opium Wars waged by Britain and France, and the completion of the British conquest of India by 1858, vast populations across Asia became consumers of European exports. The French conquest of Africa, Polynesia, and Indochina was largely complete by 1887. Sub-Saharan Africa and the Pacific islands were incorporated into the world system chiefly by British and French action. The European conquest of these territories yielded rubber, diamonds, and coal, fueling trade and investment among European imperial powers, their colonies, and the United States.

  The American Civil War, which erupted in 1861 and blockaded cotton exports from the Deep South, cut off the main cotton supply to the Lancashire mills. Textile manufacturers shifted to cotton from Africa and Asia, and the resulting need for a new trade route created pressure for an Anglo-French-controlled canal through the Suez peninsula. The Suez Canal opened in 1869, the same year the Central Pacific Railroad completed the first transcontinental rail link across North America.

• 7. Crisis, Keynesianism, and Neoliberalism

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  Several major challenges to capitalism concentrated in the early 20th century. The Russian revolution of 1917 established the first state governed by a communist party. A decade later, the Great Depression triggered sweeping criticism of the existing capitalist order. One response was fascism, an ideology that advocated state capitalism. Another was outright rejection of capitalism in favor of communist or democratic socialist alternatives.

  The rapid economic recovery that followed the Second World War eased talk of capitalism's terminal decline. Keynesian economics, which gave the state an active role in regulating and moderating the capitalist system, became widely accepted. In the United States, total government expenditures amounted to less than one-tenth of gross national product in 1929; from the 1970s onward they amounted to around one-third. Similar increases occurred across all industrialized capitalist economies, with some countries, including France, reaching ratios even higher than those in the United States.

  The long post-war boom ended in the 1970s following the 1973 oil crisis. The "stagflation" of that decade led economists and politicians toward market-oriented prescriptions drawn from the laissez-faire tradition, particularly under the influence of Friedrich Hayek and Milton Friedman. The theoretical alternative to Keynesianism emphasized individual rights and the absence of government intervention. Market-oriented policies gained their most prominent political expression under Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom during the 1980s. Political economist Clara E. Mattei has argued that the three booming post-war decades were an anomaly in the history of capitalism, and that austerity has been the system's consistent default rather than a feature unique to the neoliberal era beginning in the 1970s.

  After the Bretton Woods system was abandoned in 1971 and strict state control of foreign exchange rates ended, the total value of transactions in foreign exchange was estimated to be at least twenty times greater than that of all foreign movements of goods and services. The internationalisation of finance, combined with the growing ease with which large corporations could relocate operations to low-wage states, raised what some analysts called the question of the eclipse of state sovereignty. In 2017, the International Monetary Fund warned that inequality within nations, despite a fall in global inequality in recent decades, had risen sharply enough to threaten economic growth and risk further political polarization. Gary Gerstle and Fritz Bartel, writing after the Cold War, concluded that capitalism had become a truly global order in a way not seen since 1914, while economist Radhika Desai argued that neoliberal reforms had bequeathed increased inequalities, divided societies, and sluggish growth, suggesting the system was losing economic weight and world influence.

• 8. Women, Labor, and Capitalism

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  Alice Clark argued that capitalism's arrival in 17th-century England had a measurable negative impact on the status of women. Clark traced what she saw as a prior condition: in 16th-century England, women were active participants in industry and agriculture. The home served as a central unit of production, and women played vital roles in running farms, in certain trades, and in the management of landed estates. That economic function gave them a practical equality with their husbands.

  As capitalism expanded through the 17th century, Clark argued, a deepening division of labor separated work by location and gender. Husbands moved into paid employment outside the home. Wives were reduced to unpaid domestic labor. Middle-class women found themselves confined to a supervisory domestic existence while lower-class women were pushed into poorly paid work. Capitalism, on this reading, narrowed women's economic world rather than widening it.

  Ivy Pinchbeck offered the opposite conclusion: that capitalism created the conditions for women's emancipation. Tilly and Scott mapped a middle path by identifying three historical stages. In the preindustrial era, production was centered in the home and women supplied many household needs directly. The early industrial phase introduced what they called the "family wage economy," in which all family members, husband, wife, and older children, contributed wages to a collective household income. The third stage, which they called the "family consumer economy," brought women into retail and clerical employment in large numbers to sustain rising consumption. The question of which reading is most accurate remains open, and the debate itself reflects how much the material stakes of capitalism's origins depended on who was doing the labor and under what terms.