Discuss the factors that led to the capitalist economic development in Europe.

Discuss the factors that led to the capitalist economic development in Europe.

1. Discuss the factors that led to the capitalist economic development in Europe.  20

Answer:

The factors which helped in the introduction of capitalist economy in Europe are the end of feudalism, growth of trade and change in manufacturing system. The revival of trade was accompanied by the growth of towns. Old towns became larger and many new towns emerged, mainly as centres of manufacture and trade. Towns often walled, gradually freed themselves from feudal control. Unlike the serfs in feudal estates, there were no restrictions on the movements of citizens in the towns. “Town air makes a man free” is an old medieval proverb. Towns provided asylum to serfs who escaped from feudal oppression. The towns encouraged the cultivation of cash crops needed for manufactures and peasants received their payments in money. Money had little use in feudal societies. There was very little of buying and selling and whatever there was, was done through barter. With the growth of trade, there was increasing use of money. The use of money indicated far reaching changes in economy.

The money that privileged people have was idle money in the form of gold and silver. It could not be used to make more money. With the growth of trade and manufacture the feudal economy changed to a capitalist economy in which money could be used to make a profit. This was done by investing money in business, trade and industry. The profits made where reinvested to make further profits. Such a wealth or money is called capital. Money increasingly became the measure of a man’s wealth.

The feudal societies there were three classes of people, the prayers, the soldiers and the workers. With the growth of trade, a new class emerged, the middle class mainly the merchants. They began to play an important role in society because of wealth they possessed.

The pattern of trade changed with the large geographical discoveries of the last decade of the fifteenth century – the discovery of a sea route ot the East and the discovery of the Americans. It was dominated by Portugal and Spain and later by Holland and Britain. With these developments, system of manufacturing goods also changed. The guild system was not suited to the requirements of large scale production necessitated by an expanding demand for goods and the system began to decline giving place to a capitalist system This system gave way to the factory system under which production was carried out in buildings owned by the capitalist with the help of machines owned by the capitalist. The workers only worked for wages. The period saw a tremendous expansion of manufactures.