Capitalism

Definition

Capitalism is an economic system characterized by private ownership of the means of production and the operation of these means for profit. In this system, individuals and businesses are free to compete in a marketplace, driving innovation and economic growth, while prices are determined by supply and demand. The rise of capitalism significantly influenced various aspects of society, including political structures, social relations, and cultural developments.

5 Must Know Facts For Your Next Test

1. Capitalism emerged as a dominant economic system in Europe during the late 18th century, coinciding with the Industrial Revolution that spurred technological advancements.
2. The pursuit of profit in capitalism led to significant social changes, including the rise of a middle class and shifts in traditional social hierarchies.
3. The capitalist system fosters competition, which can drive innovation but may also lead to economic inequality between different social classes.
4. Government roles in capitalism can vary, ranging from minimal intervention (laissez-faire) to more active regulation aimed at addressing issues like monopolies and labor rights.
5. The impact of capitalism extended beyond economics; it influenced political ideologies, cultural norms, and sparked debates around individual freedoms versus collective welfare.

Review Questions

• How did capitalism contribute to the political and social upheavals experienced during the late 18th and early 19th centuries?
  • Capitalism played a crucial role in fueling political and social upheavals during this period by challenging existing feudal structures and empowering individuals economically. The rise of a capitalist economy fostered new social classes, particularly a wealthy bourgeoisie that sought political power. This shift often resulted in movements advocating for democracy and workers' rights as people began to demand a greater say in governance alongside their economic contributions.
• In what ways did capitalism influence the cultural landscape of 19th-century Britain as part of the broader 'play of ideas'?
  • Capitalism significantly shaped the cultural landscape of 19th-century Britain by promoting values such as individualism, entrepreneurship, and meritocracy. This economic system encouraged a 'play of ideas' where literature, art, and philosophy began reflecting themes of personal freedom, social mobility, and critique of traditional institutions. Writers and thinkers explored the moral implications of wealth accumulation, creating dialogues around class struggles that resonated through various artistic movements.
• Evaluate how industrialization under capitalism transformed social structures in 19th-century Britain and what long-term effects this transformation had on society.
  • Industrialization under capitalism radically transformed social structures in 19th-century Britain by leading to urbanization and the emergence of a distinct working class. As people flocked to cities for factory jobs, traditional rural communities diminished, altering family dynamics and social relationships. This shift resulted in significant long-term effects such as increased economic opportunities for some but also stark inequalities and labor exploitation, which would later inspire movements for reform and social justice.

Related terms

Industrial Revolution: A period of major industrialization during the late 18th and early 19th centuries that transformed economies from agrarian to industrial, leading to the growth of factories and urbanization.

Free Market: An economic system where prices for goods and services are determined by unrestricted competition between privately owned businesses.

Proletariat: The working class in a capitalist society who do not own the means of production and must sell their labor to survive.