During this same period, though, capitalistic practices were thriving in Arabia. By the 700s it was only a small slice of the culture of Europe. As the empire began to shrink in the fifth century, however, so too did mercantilism. The Roman Empire expanded, and mercantilism grew along with it. The merchants bought goods for less than they sold them. Mercantilism began in Rome in its simplest form.
Its earliest organized form was called mercantilism, the production and distribution of goods to make a profit. Capitalism has its origins in Rome, in the Middle East, and in Europe in the Middle Ages. In politics, this led to democracy, and with the economy, this led to the capitalistic system. In religion, this led to the Reformation. The idea of capitalism grew from individualistic notions. The theory of communal living continued but the beginnings of individualistic capitalism were sprouting as well, growing with along the ideas of freedom and liberty. He also thought that by allowing people to privately own their own homes and properties they would necessarily become enemies rather than neighbors in mutual protection of one another. He felt that they should share the state's wealth by keeping properties public to ensure equality. Plato argued that guardians were needed to protect people from injustice and from invasion. Plato (428–348 B.C.) began to outline some of the structural ideas of capitalism in terms of freedom and liberty, but subscribed more to communist and community based ideology then to the individualism that defines capitalism. The ideology has been around since before the philosophers Aristotle and Plato, however. Formally, capitalism began during the Middle Ages with the mercantilist period.
Living one's life to benefit another was looked down upon for the free man, however, as articulated by the philosopher Aristotle.Ĭapitalism as it is today is relatively new, but the ideas of markets and profits have been in place for thousands of years. The essentials were taken care of according to tradition, with slavery as the labor source. Markets existed to provide luxuries to those who wanted them but did not satisfy the essential needs of society. Markets joined suppliers and demanders but what was supplied did not change based on the details of demand. These healthy market and trading systems show the historical basis of money, mercantile groups and the idea of profit, but there was not a market system like exists today. In 400 B.C., there are records of a rich trading network and commodity exchange in addition to a complicated market in classical Greece and Rome. There are documented markets and trading relationships between the pharaohs of Egypt and the ancient Levantine kingdoms around 1400 B.C. Marketplaces have existed for several thousand years. HISTORYĬapitalism could not exist without the presence of a market. The first major work on capitalism was written by Adam Smith in 1776, Inquiry into the Nature and Causes of the Wealth of Nations, and along with his detailed analysis of capitalistic theory began a more structured and formally recognized ideology. Its development began, officially, in the 16th century, but the idea started in the ancient world and there have been healthy capitalistic niches ever since. Markets determine the production and distribution without government involvement, and the economy and the government remain separate. Capitalism has dominated the Western Hemisphere since the Roman Empire began to tumble and, following that, the feudal system disintegrated. Capitalists essentially acquire or create goods for less than they sell them. Capitalism is based on the relationships between the capitalists, the consumers, and the laborers. It's an entire ideology centered around the idea of the individual's right to choose his work, his goals, and his life's details. Who controls distribution of goods? Owners of capitalĬapitalism is more than an economic system. Who controls production of goods? Owners of capital What roles do the people have? Sustain the free market How is government put into power? Elected by the masses Who controls government? Elected officials