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Thread: Did capital exist in Antiquity and the Middle Ages? If trade was commonplace, why didn't Capitalism emerge then?

  1. #1 Did capital exist in Antiquity and the Middle Ages? If trade was commonplace, why didn't Capitalism emerge then? 
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    I'm studying economic history, and there's a big question bugging me (without solving it, I don't know I could completely understand the economic history of humanity):

    Why didn't Capitalism develop before it eventually did? After all, Land has been a form of capital for humanity since the Neolithic, when the discovery of agriculture allowed for the production of food at the disposal of the population. Why couldn't the land-owners invest their surpluses in newer forms of capital (such as tools or machines)?

    I understand that the necessary knowledge (especially scientific knowledge) for creating capital was not always there. But in the Middle Ages, for example, there WAS already some technological progress: I mean, you had plughs, cranes, bridges, windmills, etc. Why didn't any nobleman/merchant/artisan start to accumulate more and more capital to produce more and more (it's not like they couldn't create markets for their products)? They also had free labour (slaves and well, serfs were not that expensive to maintain).

    I'd really appreciate some insight on this. Thanks in advance! (I posted this on the Economics and History forums, as I thought it belonged rightly to both).


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  3. #2  
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    Quote Originally Posted by Matt24 View Post
    I'm studying economic history, and there's a big question bugging me (without solving it, I don't know I could completely understand the economic history of humanity):

    Why didn't Capitalism develop before it eventually did? After all, Land has been a form of capital for humanity since the Neolithic, when the discovery of agriculture allowed for the production of food at the disposal of the population. Why couldn't the land-owners invest their surpluses in newer forms of capital (such as tools or machines)?

    I understand that the necessary knowledge (especially scientific knowledge) for creating capital was not always there. But in the Middle Ages, for example, there WAS already some technological progress: I mean, you had plughs, cranes, bridges, windmills, etc. Why didn't any nobleman/merchant/artisan start to accumulate more and more capital to produce more and more (it's not like they couldn't create markets for their products)? They also had free labour (slaves and well, serfs were not that expensive to maintain).

    I'd really appreciate some insight on this. Thanks in advance! (I posted this on the Economics and History forums, as I thought it belonged rightly to both).
    Misinterpreted at first sorry. Most governments pursued protectionist policies as they thought the wealth of a nation was measured by how much gold it had, and therefore markets were not free from interference, the change in policy coupled with the industrial revolution (which made production far quicker) had a significant impact.


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    Capitalism wasn't really much of a change to previous systems. It's just a different way of looking at all the stuff that already happens.

    The biggest innovation was to outlaw collusion. That forced companies to compete for price, and ensured the rise of industrial machinery by rewarding those companies that were able to produce at the cheapest price.

    It's quite possible that the industrial revolution would never have happened without capitalism. Just because a technology exists doesn't mean it will be used. And most of the technology needed for building a textile factory had been around for over 1000 years and not used. There was reason to use it, because the clothing makers weren't threatening each others' businesses.
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    Quote Originally Posted by Matt24 View Post
    Why didn't Capitalism develop before it eventually did?
    the aspects of Capitalism already existed, its just the manner in which it is now described and its place within the study of economics took time to develop.

    After all, Land has been a form of capital for humanity since the Neolithic, when the discovery of agriculture allowed for the production of food at the disposal of the population. Why couldn't the land-owners invest their surpluses in newer forms of capital (such as tools or machines)?
    capital means a lot, including labor. back then it included men in general, who worked and/or fought. food and other things to offer were "capital" which many traded for their own development or needs.

    I understand that the necessary knowledge (especially scientific knowledge) for creating capital was not always there.
    It was there. Things were not as they are now. Education still existed and knowledge of the things around them still were present. just different manner.

    But in the Middle Ages, for example, there WAS already some technological progress: I mean, you had plughs, cranes, bridges, windmills, etc. Why didn't any nobleman/merchant/artisan start to accumulate more and more capital to produce more and more (it's not like they couldn't create markets for their products)? They also had free labour (slaves and well, serfs were not that expensive to maintain).
    That is what they did. slaves were expensive to maintain. that's why noblemen and the "rich" had them.
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    The biggest innovation was to outlaw collusion.
    That's more recent.

    The biggest change was in the law. Limited liability of shareholders as against the unlimited personal liability of partnerships meant that it was much easier to get capital from investors. The other great advantage of shareholdings is that transfers of ownership are much simpler. People can trade their shareholdings and there's none of the legal argy bargy that goes along with retirement of old partners and admission of new ones.

    Most important of all, if a venture succeeds and more capital is needed for expansion, it's much, much more straightforward to make a new issue of shares than to find new partners or to get existing partners to cough up more capital.
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    I understand that the necessary knowledge (especially scientific knowledge) for creating capital was not always there. But in the Middle Ages, for example, there WAS already some technological progress: I mean, you had plughs, cranes, bridges, windmills, etc. Why didn't any nobleman/merchant/artisan start to accumulate more and more capital to produce more and more (it's not like they couldn't create markets for their products)? They also had free labour (slaves and well, serfs were not that expensive to maintain).
    How do you define capitalism? Usually, it is assumed that under capitalism there is no slaves and serfs and everyone is equal under law, officially. If you have slaves and serfs then it is a slavery system or feudalism regardless the level of technological development.
    I think one of the crucial point for development of capitalism in Europe was increase in level of agricultural productivity what allowed to free many working hands. There is usually some factors assumed that played role in abolishing of classical feudalism, such as: 1) development of firearms which replaced knights with regular armies and conscription. 2) Development of colonies which required many free people. 3) Development of manufacturing in cities which required many free hands. 4) Increase in agriculture productivity which allowed to free many working hands.
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    The Industrial Revolution.

    With larger scale economics, there was and still is a need for base capital to start economic activity.

    Medieval feudal economics wasn't really supply and demand based, as it has been for a few hundred years now.

    And why does capitalism preclude slavery? If a business owner owned 100 slaves, and kept all profits to himself, so what? Slavery was only abolished in early 19th century because millions of slaves was a deadweight economically.
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    Another point is colonialism and its fruits, stable governments and peace and technological innovation, led to capitalism emerging as dominant. This is true in the 17th century Netherlands, and 18th century Great Britain. The Dutch more or less invented capitalism, and the British were the first to industrialise.
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    Usually, it is assumed that under capitalism there is no slaves and serfs and everyone is equal under law, officially. If you have slaves and serfs then it is a slavery system or feudalism regardless the level of technological development.
    Capitalism is not the same as democracy, not by a long shot.

    You think all those businesses that exploit illegal immigrants - or that actively engage in trafficking people - are not capitalist? Just because such enterprises are on the edge of the law or are mostly or entirely illegal doesn't make any difference to the fact that they exploit both capital and people with the intention of making profit. And there are plenty of apparently reputable, respectable businesses that have some dirty linen of this sort in their operations. Just look at cleaning "contractors". The only way any of those super low prices offered in bidding for tenders can happen is that the cleaning is not done (properly) or the workers are not paid a decent wage. Plenty of "respectable" business people turn a blind eye to this just as they do to the pay and conditions of their rich friends' household staff. A lot of those arrangements are exploitive or downright slavery - but there's no difference between the status of the worker who cleans in a private household and one who cleans half a dozen businesses each night.

    It's entirely possible to be both criminal and capitalist.
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    What incentive did a medieval nobleman have in being a capitalist? He could only sell to other noblemen, or the King and his family, so not a huge market for him.

    I'd think also that with no feudalism in the early modern period, this made mass production more viable.
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    Capital is not a thing, capital is a process, a social relation. In antiquity there is not even an economic sphere. Families were autonomous producers and trade occurred only at a very limited amount. The vast majority of produced goods where produced for self-consumption and not for exchange. Money was external to social reproduction and even when traders/merchants occurred their goal was not profit but mere survival.

    Middle Age and feudalism is a bit different though. Feudalism in western Europe is not a homogenous system even in similar countries (eg France-Germany-UK). Knowing this, we could generalize and argue that the basic economic agency in the county, used to be the manorial estate. An autonomous region that belonged to the feudal lord much like the antiquity. Ιn the urban though things were a bit different. Guilds were the major economic agencies but there is a distinct difference between guilds and contemporary enterprises. Guild's goal was just to ensure certain living standards (vs profit) and can not be connected with capital's birth.

    The birth of capital as a social relation I think is related to the itinerant merchant of the late feudalism. I believe that this social class was the ancestor of the bourgeoisie and the merchant capital. I think that capital's birth can be found in early 16th century while capitalism emerges early 17th. Although sometimes it's difficult to differentiate agrarian capitalism and late feudalism.
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