Describe some of the basic components of the evolution of capitalism?
According to Investopedia (2017), capitalism grew from
European feudalism in which workers were controlled by feudal
lords. The system was mainly agricultural in nature, and as
economies became more urbanized, child labor and long working
hours were common. Mercantilism and colonialism expanded
trade among countries, with periods characterized by wars,
nationalism, exploration, and exploitation.
Henri See (1928) also believed that capitalism was part of an
economic revolution in Europe, which first appeared in the form
of commercial and financial capitalism. The capitalistic businesses,
which manifested themselves in the nineteenth century, went
through some transformation with labor businesses and relations
between employer and employee.
Historically, capitalism was seen as an exploitation of labor
in the wealth-creation process and in the reproduction of social
relations. According to Shaikh (1990), the manner in which
society was structured enabled some people to live off the labor of
others. The subordinate classes supported the ruling class, and the
existence of a ruling class was the result of the exploitation of labor,
as well as the perpetual reproduction of the social and material
conditions of that exploitation. Such conditions gave rise to social
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Albert Duncan
and political unrest. Shaikh further explained that capitalism is
a class society in which the upper class’s existence is the result of
the ownership and control of a large portion of society’s means
of production. In commenting on Marx’s ideas, Shaikh (1990)
demonstrated that it is the surplus of the working class’s labor that
provided the capitalist profit.
Today, one thing is certain—over many decades, capitalism has
gone through a dynamic evolution. The capitalism of today is vastly
different from the one that existed centuries ago. Therefore, some
of the justifiable rationale used to condemn this economic system
many years ago is not applicable today. Capitalism has evolved into
an
In describing the evolution of capitalism, it is clear that wealth
creation was accomplished mainly from the acquisition of land
with added labor. Agricultural and forced labor were common. As
capitalism progressed with manufacturing and industrial activities,
capitalists were seen as extractors rather than contributors. Wars,
revolution, and slavery were all associated with capitalism. It was
about being selfish, not about self-interest. The world economy
was seen as a fixed pie; someone’s gain was at the expense of others’
loss. Today, the wealthy are more of contributors and should not
be seen as extractors. Their wealth is not created by exploiting
others. Due to the advancement in technologies associated with
transportation and communication and the interconnectedness and
interdependence of economies, capitalism should not be equated
with the European economic systems of centuries ago.
Computers and the Internet have significantly transformed
the manner of wealth creation. It demonstrates the importance
of human capital in economic prosperity, and easy access to the
Internet for business transactions is conducive to economic growth.
According to Li (2011), there is a 2.5% increase to GDP growth
for every 10% increase in broadband implementation.
Modern capitalism is propelled by the acquisition and
enhancement of human capital. Human capital plays a significant
role in wealth creation. Competition leads to innovation because
people are in constant pursuit of trying to produce better, cheaper,
and newer products, as well as more improved distribution methods.
Therefore, those innovators and creators in technology can become
billionaires. Those with the relevant and needed knowledge and
information to sell have the opportunity to become wealthy. This
is certainly not the accumulation of wealth by exploitation of
others. These people have a service to sell—a service that can
transform society for the better—and as a result, they are highly
rewarded for their service. As a result of this, the education system
is propelling the income inequality. According to Dadush et al.
(2012), advancement in technology results in replicating the task
performed by low-skilled labor but not the tasks performed by
high-skilled labor. The interdependency of the different forms
of technological research and advancement cause an increase in
productivity. This, in turn, creates a tremendous demand for
educated workers who are associated with the development and
operations of such technologies. As a result, the wages of these
workers, such as computer programmers, application developers,
software developers, and computer engineers, experience a
tremendous increase compared to low-skilled workers.
For example, the Bloomberg company receives large sums
of money for providing data, news, and other information to
companies.
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