Account for the rise of capitalism in europe pdf

Emoticon Emoticon. Tags History. The Meaning of Capitalism. Characteristics of Capitalism. A Two-Class System. Historically, capitalist society was characterized by the split between two classes of individuals - the capitalist class, which owns the means for producing and distributing goods the owners and the working class , who sell their labor to the capitalist class in exchange for wages.

The economy is run by the individuals or corporations who own and operate companies and make decisions as to the use of resources. Profit Motive. Companies exist to make a profit. The motive for all companies is to make and sell goods and services only for profits. Companies do not exist solely to satisfy people's needs. Even though some goods or services may satisfy needs, they will only be available if people have the resources to pay for them. Minimal Government Intervention.

Capitalist societies believe markets should be left alone to operate without government intervention. However, a completely government-free capitalist society exists in theory, only. Even in the United States, the poster child for capitalism, the government regulates certain industries, such as the Dodd-Frank Act for financial institutions. By contrast, a purely capitalist society would allow the markets to set prices based on demand and supply for the purpose of making profits.

True capitalism needs a competitive market. Without competition, monopolies exist, and instead of the market setting the prices, the seller is the price setter, which is against the conditions of capitalism. Willingness to Change. The last characteristic of capitalism is the ability to adapt and change. Technology has been a game-changer in every society, and the willingness to allow change and adaptability of societies to improve inefficiencies within economic structures is a true characteristic of capitalism.

Property Rights. Land ownership and property ownership -- two key individual rights -- enable private businesses to operate freely without leasing land or property from the government. The government doesn't have the authority to seize control or manage business operations, unless the company engages in illegal activity.

In the United States, tax laws require business owners to pay taxes on their real estate, equipment, inventory and profit after deducting a variety of operating expenses and depreciating the value of durable, long-lasting tools and equipment. Technological Advancement. Capitalists support technological advancement because it increases productivity, encourages modernization and leads to increased revenue, according to "The Challenge of Global Capitalism" by Robert Gilpin.

They also understand that there are growing pains associated with progress, such as initial implementation costs, learning curves, increased training demands and the need for more highly skilled and educated workers.

Stages of Capitalism. The era of mercantilism was featured by external movement of merchants to various parts of the World for accumulating gold and silver. Mercantilism existed from the 15 th to the 18 th century, specifically to The stage is also referred to as industrial capitalism because there was competition in industrial production among the capitalist nations.

The stage existed from to During this period, the capitalist nations happened to divide the World into spheres of interests, the colonization of Asia and Africa took place during this stage of capitalism.

Thus, a feudal society is the one in which the basic social and political structure are determined by a practice of fief holding. In other words, feudalism is based on holding of land for renting. The dependent serfs farmed and ran small economies on the land belonging to the feudal lords. Moreover, the relationship between the land lord and his tenants serfs was not only an economic one but also social one.

The tenant was a vassal of the lord, that is her or she was bound to the lord by special oath of loyalty. The Basic Features of Feudalism. There was bounded relationship between the lords and tenants. The lord normally exercised right of jurisdiction in the land which he held as a fief.

The landlord was a governor of the fief. There was antagonistic classes of lords and the serfs. The function was mainly due to exploitative tendencies of the lords. The lords exploited the serfs. Under feudalism the two dominant classes were feudal lords and tenants. Tenants were attached to the soils for the production of substance as well as surplus. The surplus was consumed mainly by the landlords. Production was for subsistence i. Feudalism in Europe went hand with the building of armies.

The armies and other willing class —kings and nobles supported themselves from the produce of their estates. Serfs were the producer in the lords or willing class estates. In feudalism the feudal activities were basically agrarian for food production although few industries existed, many people were attached to the soil, that is cultivating the soil to earn a living.

Agrarian revolution refers to the rapid changes which occurred in agriculture sector. The changes were accompanied by the application of science and technology. In Britain, agriculture revolution happened between the 16 th Century and 18 th Century. Before the agrarian revolution in Britain, agricultural production was very low.

The low productions of agricultural produce were party caused by the land tenure. Land was divided, owned and worked by serfs or peasants. Most of the land was also left fallow ie the large part of the land was not under farming. In addition to low production in agricultural the majority of population in pre-agranal revolution. Generally, there was low production in agricultural sector before the agrarian revolution. However, there was an increment in agricultural production because changes which constituted agranian revolution.

This is the drastic change in agricultural production through better technique, methods and land tenure. It started in but reached maturity in Agranian revolution started in Netherland-Holland and later English. Causes of Agrarian Revolution. The changes in agricultural production were caused mainly by two factors:. The first cause was the rapid increase of population. The large population necessitated the changes in the methods on producing crops and animals so as to cope with the high demand of force from the populate.

The population of Europe as a world and Britian in particular was steadily increasing between 15 th and 18 th centuries, For example the population of Europe rose from sixty —nine million people to million people between 15 th and 18 th centuries. This increase of population mainly happened in the cities and towns.

The second factor was high demand of wool. The high demand of wool led to sheep commercial farming. The commercial sheep farming in the 16 th century due to the demand of wool clothes. Changes that took place during Agrarian Revolution. The agrarian revolution in Britian entailed the following changes:. Crop rotation. Unlike the pre-agranian revolution times, farmers of 16 th and 18 th centuries Britian started to practice crop rotation.

They rotated cereal crops with legumes and fodder crops. Legumes crop-peas, beans and clovers-restored nitrogen in the soil. Nitrogen makes soil fertile. One example of farmer who in grew fodder crops in rotation with other crops was lord Town shed. The second change was the introduction of new crops in Britian crops such as maize, sweat potatoes and fodder crops were introduced in England from the Americans.

The introduction fodder crops led to the constant supply of meat throughout the year because the presence of fodder crops made it possible to make bay for use during writer. This was sharp departure from the pre-agrarian revolution error when all the cattle and other animals were slaughetered during writer for lack of feed. The use of improved farm instrument. Extensive use of time to neutralize soil acidity. In addition to liming, farmers applied fertilizers in their farms.

Land reclamation. In order to get more arable land big farmers embarked on draining swam ply land, for example: King Charles I of England financed a Dutch expert Cornelius Vermigden to drain Yorkshire and Cambridge shire. Irrigation also practiced during the agricultural revolution. Another aspect of the agrarian revolution was the improvement in animal breeding.

Better horses, cattle and sheep were raised. It was during the agrarian revolution that farmers kept animals for multipurpose. For example, a farmer in Leicester called Bake well produced a large quantities of beef and mutton to feed millions of people. The agrarian revolution involved the evection of serfs and peasants from the land for pasture i. Enclosure of the land. Agrarian Revolution. How Agrarian Revolution led to the Capitalism in Europe. The agrarian revolution had a number of contributions to the rise capitalism in Europe:.

Increase of supply of food to the growing population in cities including workers in the factories. The agrarian revolution especially the enclosing of land released to the growing workers in the The agrarian revolution especially the enclosing of land released or supplied cheap labours to industries. Many serfs and peasants who were evicted from the land for commercial sheep farming enclosure were employed in factories in towns and cities. The agricultural changes also provided market to the industrial manufactured items.

N State Italian state Y Corporate I Chase M anhattan2 A SA Y Corporate B 2 German banks J 5 Y Corporate B. Y Corporate B Dresdner Bank Y Fami l y M etro Holding J 6 Y N one Pohjola Insurance Co. Y State N orw egian state Y N one Sandoz family 4. N Fami l y Otto family Desmarais Y Fami l y Peugeot family N eth. Y Fami l y H alley family N Other Bosch Foundation8 Y Fami l y Founding families Y N one Prudential Corporation 1.

Y N one Vivendi 9. Y N one Siemens family 6. N State N orw egian state Y N one Banca A rgentaria 5. Y Other Krupp Foundation Y N one Leverhulme Trust 2. Y State State of Bavaria Bank Y Corporate C Saint-Gobain Y State State of Low er Saxony Y Corporate I ForeningsSparbanken Pension Fund 5. Indirect holding are shares held by companies that that shareholder ultimately controls.

In the case of joint control, the tw o or more partners do not have to be of equal w eight, i. Of these, M etro founder Beisheim maybe regarded the dominant shareholder. See further note 3. In 9 other cases the largest shareholder controls less than 10 per cent but through board representation can still be said to exercise a predominant influence sometimes even outright control so that in only 27 cases could w e find no dominant ow nership interest at all w ith the largest shareholders holding no more than a few per cent, w hich is still significant in money terms but not w ith regard to voting pow er.

Restricting our analysis, then, to continental Europe w e find that 61 out of the total of 78, or almost 80 per cent, of continental European companies are subject to direct ow ner control w ith a further 10 per cent subject to predominant influence. H ence examining ow nership and control structures from the vantage point of concentration of voting pow er, it appears that w e can indeed distinguish betw een an A nglo-Saxon and a continental European model, w ith the latter continuing to be dominated by large blockholders.

The first important conclusion, then, that w e can draw is that the process identified by Berle and M eans 70 years ago, and often assumed to have been universal, has 11 apparently never fully taken place w ithin continental Europe. The dispersal of share ow nership has been limited, and there are still large blockholders in almost all continental European countries, ow ners w ho can partially control management through their voting pow er and are indeed as such in almost all cases 56 out of 64 represented on the board.

On the concentration of ow nership dimension, then, continental European capitalism w ould still be on the right-hand side of our earlier 2x2 matrix. A lthough certainly important, it falls outside the scope of this paper to engage in such a comparison. Not es: Cases w here the ultimate ow ners are of the mixed category see Table 1 — e. Relative majority control is intended to describe those cases w here a minority controller is subject to a significant countervailing influence of one ore more other shareholders.

This is here operationalised as follow s. Cases of relative minority control are allocated by largest shareholder by voting rights , even if in some cases control may be distributed about equally betw een the different dominant ow ners how ever, if w e w ould split companies on this basis, the distribution w ould be practically the same.

This is follow ed by state ow nership 21 and ow nership by banks and insurance companies A lthough I w ill later argue, that family ow nership is nevertheless in relative decline, and moreover that its nature is being transformed for now it is important to note that in this respect continental European capitalism is still different from the shareholder capitalism said to prevail in the US and the UK as w ell as from classical managerial capitalism!

What then about the alleged rise of shareholder capitalism in continental Europe? This is w here w e have to extend our analysis to include the second basic mode of corporate control, that of control through the stock market. Below , I w ill argue that taking this into account w e can, on the basis of the evidence available, in fact observe the emerge of a new shareholder capitalism in continental Europe, but still of a different kind than that prevalent in the A nglo-Saxon countries.

A European Sharehol der Capi tal i sm i n the M ak i ng? The decline of traditional blockholders takes tw o forms. First, although ow nership concentration is still high in continental Europe compared to the US and the UK it has been decreasing and probably w ill continue to do so in the foreseeable future, even if only to a certain point. For the foreseeable future, large blockholders w ill continue to dominate the European corporate landscape.

In fact as important as their quantitative is the transformation of the role they play in corporate governance. I w ill argue that large blockow ners w ill increasingly become themselves subject to the pressures and the temptations of the capital market. The Decline of Traditional Owners The most dramatic, and most consequential, decline of traditional ow nership concerns that of the state. Of these 33, 15 have now been completely privatised w ith the state holding no shares at all , w hereas in a further nine cases the state has sold off a substantial part of its holding.

A s is w ell know n, the privatisation w ave in Western Europe started in the UK in the early to mids under Thatcher, then expanded to France in the second half of the s under the new centre-right government to an extent involving companies that had only been nationalised a few years before , as w ell as to Germany w here state ow nership had alw ays been limited and to Italy w here state ow nership has been extensive again a bit later.

This process is set to continue. Indeed, apart from the UK, the privatisation process has not been completed in most European countries, and several large companies are expected to have their first Initial Public Offering IPO very soon or in fact have already gone to the market just recently. In other companies w here the state still holds a large stake, further sell-offs are expected see Table. In the majority of cases all that happens is that property titles pertaining to existing capital change hands at a handsome profit.

Aerospace UK A i rw ays UK Not es: The years of privatisation give — if know n - respectively the year in w hich the privatisation process started and the year in w hich it w as completed before and after the hyphen.

Family ow nership, by w hich I mean the ow nership of often founding families passing on their firm from one generation to the next — less so personal ow nership in general - is also in a relative, long- term decline, even if it is still a major feature of continental ow nership and control structures.

M any of the companies in my sample — or their predecessors — have a history going back a century or more, that is to the era of competitive family capitalism. In fact, the overw helming majority of the 13 Stake held by Westdeutsche Landesbank, w hich is controlled by the State of N orth Rhine-Westphalia.

N ow there are 21 companies left in w hich the founder or his never her descendent s still hold five per cent or more of the shares, 19 of w hich hold a controlling stake of more than 10 per cent. There is one UK company among these, all other 18 are from various continental countries.

These are partly indeed old companies, such as Fiat founded in and Franz H aniel founded in ! In addition there are four cases of continental companies that w ere not founded by the presently controlling families but of w hich the ow nership has already passed through more than one generation and still amounts to more than 10 per cent. The total of 22 cases out of 78 continental European companies in w hich their has been controlling family or personal ow nership since foundation or at least across more than one generation, is still very high in comparison to w hat w e find in the UK or in US, but low compared to w hat w e w ould have found a century or also several decades ago.

M oreover, family ow nership is still in the process of further dilution, mainly because of the continuing merger and acquisition w ave. Family controlled firms too have to grow in order to compete in an increasingly global product market and this — almost in all sectors — necessitates merging or a large take-over or indeed, being 15 taken-over.

Ow nership by other corporations, w hether of a cross-shareholding kind or not, has been a feature of the traditional ow nership and control patterns in in particular France and Germany, w ith the latter show ing a large degree of ow nership by banks basically the big three: Deutsche, Dresdner, and Commerzbank, as w ell as the insurance company A llianz , and the former show ing more complex netw orks of cross-holdings involving both industrial companies and financial institutions.

H ow ever, these corporate blockholders are also in decline. In France, the s have seen a spectacular unw inding of its complex system of cross-shareholdings, w ith inter-corporate ow nership declining from 59 per cent to less than 20 per cent of total market capitalisation from to N estor and Thompson In sum, traditional ow ners, w hether the state, families, corporations or other insiders that provided committed capital bound in a set of stable and long-term relationships to the firm, its management and its w orkers, have been, and continue to be in decline.

Below I w ill argue, that at the same time, how ever, a new type of blockow ners is emerging. Other family ow ned firms are under pressure to merge rumours of w hich regularly appear in the financial press and some controlling families may even consider to just sell their stake to a competitor liquidifying their assets. In the case of the state and of some corporate ow ners, particularly banks and insurance companies in the Germanic systems, this is in fact more of a transitional phenomenon, in anticipation of the further sale of the equity holdings of these ow ners.

A lthough not maybe adopting an explicit financial perspective, it does so by default inasmuch as it allow s the other shareholders operating through the market to exercise their control through the market sometimes supplemented by voice mechanisms w ithout making use of its voting pow er as a counterw eight.

Thus, the CEO of A llianz has indicated that the equity stakes his company — w hich is in many w ays the spider in the German corporate w eb — holds, and indeed, the w hole post-w ar German system of banks and insurance companies holding large blocks in German corporations, served a useful purpose in the past — providing the system w ith a stability that it needed in the era of post-w ar reconstruction — but that it 19 has now outlived its usefulness and that they might thus be up for sale.

In the meantime, as long as they are not sold, A llianz w ill look much more critically at the financial performance of these assets and is likely to expect higher returns than in the past. Indicating a similar change in strategy, Deutsche and Dresdner Bank have put their equity holdings into separate companies that are supposed to manage these holdings independently N estor and Thompson A nother important transformation of blockholders concerns that of families and individuals.

H ere, w e may again deal in part here w ith a transitional phenomenon as families maybe become more focused on financial performance as a prelude to the selling of their business. But w e also observe the rise of a new type of personal ow ners w ho are in it for the long-run, i. The case of the Wallenberg family may be an illustration of both developments. The Wallenbergs have dominated Sw edish industry for a large part of this century and still 20 control about 40 per cent of the market capitalisation of the Sw edish stock market.

Within my sample, the Wallenbergs are indirectly the largest and controlling shareholder of Electrolux and Ericsson, and the second largest of StoraEnso and A BB. Their main vehicle for control is the publicly quoted industrial holding company Investor, of w hich the Wallenberg family foundations control 41 per cent of the votes and 19 per cent of the capital. If a stake is seen as strategic than it represents an interest beyond that of pure financial return, i. Financial press reports indicate that Investor is increasingly under pressure from other shareholders that those 58 per cent not controlled by the family to improve its financial performance and to this aim accelerate the restructuring — including 22 foreign relocation of their operations - of the industrial companies it controls.

One of these new outside shareholders is the US mutual fund Franklin M utual A dvisors w hich has become the second largest shareholder of 24 Investor by taking up a stake of 8. H ere w e thus see a clear example of a growing discrepancy between voting control and market control and w hy w e have to take into account both in order to determine by w hom and how a firm is subject to ow ner control. Large blockow ners thus become themselves subject to the market-based pow er of other, smaller, shareholders and they may either resists their pressures or succumb to them by embracing the shareholder value ideology themselves.

Let us finally look at some examples of first-generation ow ners w ho seem to have taken this perspective already at a much earlier point, billionaire financiers w ho are taking up increasingly central positions in the ow nership and control netw orks of parts of European big capital.

H e has now transformed himself more into an insider by becoming a board member of most of the companies in w hich he has invested, but his perspective is still an explicitly financial one, and he has certainly not lost any of his reputation as a campaigner for shareholder value 25 and a foe of entrenched management. Indeed, he is much more of a finance capitalist accumulating his w ealth through a diversified set of holdings. These personal blockow ners thus make use of the market, and are in their control strategy either constrained or enabled by that market and its disciplinary mechanisms.

These market pressures w ill of course increase to the degree that capital markets are further developing in volume and liquidity, and this is precisely w hat is happening at the moment in Europe. The Rise of Anglo-Saxon Finance or Foreign Institutional Ownership A s noted before, institutional investors have already for a longer time been a key feature of the ow nership and control structures of the US and especially the UK, but the grow th in institutional ow nership is also a global phenomenon that can be observed across the w hole OECD.

Particularly in the s annual grow th of institutional holdings has been spectacular. Within continental Europe part of this grow th is indigenous, but, except in some countries like The N etherlands and Sw eden, the development of domestic A nglo-Saxon style funds is still in its infancy.

M ore of this explosive grow th in institutional ow nership then is of foreign and particularly A nglo- Saxon origin. It are these A nglo-Saxon institutions that are often among the first to buy up European equity that is brought into the market through privatisation, the public listing of formerly private family firms, and the dissolution of inter-corporate shareholdings.

There is a clear trend among especially US mutual and pension funds — w hich used to be more domestically focused - to diversify internationally OECD 29 There is thus a clear trend of rising foreign — especially A nglo-Saxon ow nership - of major European corporations, and this a trend that can be expected to continue. Thus, w ithin my sample, those listed companies for w hich data have been found, foreign ow nership excluding stable blockholders ranges betw een Particularly in France and Germany w here w e also have the most data foreign ow nership is very substantial, often around a third or more.

Of these foreign holdings, a significant part ranging from one to more than tw o thirds is typically held by 30 institutional investors from the UK and the US. Mercantilism led to the rise of European nationalism; where by small European nations united together to increase and expand the market for their nations, removed trade barriers among the nations joint, protected merchants and used the resources available among the small nations unified.

This was an economic system which involved in conducting trade overseas searching for gold and silver. Merchantalism led to the rise of Trans-Atlantic slave trade which was a trading activity which involved Africa, America and Europe. During this trade millions of Africans were shipped to America to provide cheap labour in mines and plantations.

During merchantalism European capitalist established different plantations of coffee, tea, sugar cane, cotton and tobacco which called for massive supply of cheap labours, thus the supply of white labour was getting difficult compared to the expanding needs of the plantations, therefore this called for importation of slaves from Africa.

Due to the industrial revolution, there was need to expand home markets thus the merchants and the ruling class in Europe were afraid of under population, this prompted the campaign against the use of white labourers. The crisis called for massive importation of slaves from Africa to provide cheap labour in mines and plantations. In addition a white worker was expected to acquire land at the end of the contract while on African slaves was prevented by law from owning land.

These conditions necessitated the use of African origin in the new world. This acted as a pushing factor for Africans to be taken as slaves. Maritime technology eased transportation and guided the merchants to locate Africa. Thus be in position to transport people of African origin to the new world. Initially the Europeans were using Native Americans, Red Indians to provide cheap labour power on the plantations and mining centers but later the red Indians died in huge numbers due to plague.

This called for importation of African slaves which contributed to the existence of people of African origin in the new world. The Discovery of the new world by Christopher Columbus in contributed to the existence of people of African origin in the new world. The discovery led to the establishment of plantations and mining centers that demanded for cheap labours which called for importation of African slaves.

The Trans Atlantic slave trade refers to that type of trade that involve three continents America, Africa and Europe. In this trading system, Africa was the source of cheap labour in the form of slaves, America was the source of raw materials and Europe was the source of manufactured goods. The main participants were Britain, France, Holland and Portugal.

The British were the ones who benefited so much from this trade since the 17 th C, took the lead in the abolition of slave trade in the first half of the 19 th C. There are various forces that compelled the British to abolish the Trans Atlantic slave trade. These factors included the following;. These were the main factors that forced the British to abolish the Trans Atlantic slave trade, they included;. Capitalist production involves two classes of societies, which are the capitalists who control the major means of production and the workers who are employed by the capitalists.

For the workers to be effectively employed, they must be free and not slaves. Due to the industrial revolution, there was increased production of industrial products in Europe that lacked enough demand; this forced the British to abolish slave trade so that markets can be created in Africa for their manufactured goods. Due to the industrial revolution, there was increased demand for raw materials in Britain.

The existing raw materials were limited to supply due to the mushrooming of industries. This situation necessitated the abolition of the Trans Atlantic slave trade so that Africans can produce the needed raw materials.

The industrial revolution was characterized by the use of machines in the production process, these machines replaced human labour. The owners of the machines campaigned for the abolition of the Trans Atlantic slave trade because slave labour had become redundant. For so long period, the British had a monopoly on sugar in the European market. The sugar was produced by slave labour in the British West Indies.

The British was selling their sugar at very high prices thus making huge profits. However by the end of the 18 th C, the French West Indies and re union islands were producing sugar in large quantities and selling at a cheaper price thus making more profits than the British.

This situation made slave labour in British West Indies useless thus forcing the British to abolish the Trans Atlantic slave trade. The religious bodies contributed to the abolition of the Trans Atlantic slave trade in Africa. They argued that slave trade was against the will of God because he had created all people equal but slave trade was treating Africans as an inferior class. The Christians denounced slave trade in the name of God and argued that it must be abolished. The French revolution of had a role to play in the abolition of the Trans Atlantic slave trade.

The slogan of the revolution was fraternity, liberty and equality. Philosophers such as Rousseau campaigned for the abolition of slave trade. These philosophers claimed that slave trade was against the ideals of the French revolution thus it had to be stopped. The humanitarians such as Granville sharp and Thomas Clarkson played a certain role in the abolition of the Trans Atlantic slave trade. These people argued that slave trade had caused a lot of suffering to the people thus it had to be abolished.

These efforts were followed by British declarations of and which abolished slave trade and slavery. Effects of the abolition of the Trans Atlantic slave trade.

These areas were established by the Europeans powers as settlements for the freed slaves. They received freed slaves from America. It should be noted that the Trans Atlantic slave trade uprooted millions of Africans who were supposed to offer labour in America. There was introduction of legitimate trade that involved the buying and selling of natural resources, Example palm oil and cocoa.

The colonial powers introduced legitimate trade so that it can facilitate the acquisition of raw materials and markets which were crucial in Europe after the industrial revolution.

Before the abolition of the Trans Atlantic slave trade, the colonial powers operated along the coast of West Africa searching for slaves, but after the abolition of slave trade they penetrated the interior searching for raw materials and market where they can sell their manufactured goods. The European powers increased the spread of Christianity after the abolition of slave trade. Christianity was a way of compensating for the ills committed by slave trade. This religion was also spread to counter the spread of Islam in West Africa.

The colonial powers increased the provision of social services especially education. The main aim of colonial education was to train Africans to become better producers of raw materials that were needed in Europe.

Colonial education was also supposed to change the mentality of Africans to prefer European goods thus created a ready market for them. The colonial powers improved the agricultural sector by introducing better methods of farming to increase the production of raw materials. It should be noted that the colonialists discouraged the production of food crops in Africa. The colonial powers studied native languages so that they can be able to translate the Bible into local languages.

This move was to convert many Africans to Christianity. The languages that were studied by the imperialist were Hausa and Fulani. Feudalism did not collapse at once; the decline was a gradual process which was caused by various factors.

There was a rapid increase in population especially in Britain at the end of the 15 th C; this increase was caused by better medical facilities and early marriages.

In AD, Britain had three million people. This increase in production contributed to the rise of capitalism by providing a ready market for manufactured goods and cheap labor in industries. Also increased population facilitated cheap labor in industries, leaving rural areas hence decline of feudalism and rise of capitalism.

The Growth of towns for example Manchester and Liverpool contributed to the rise of industrial capitalism. These towns attracted many people who undertook trade and commerce which contributed to the demise of feudalism. The improvement of agriculture contributed significantly to the collapse of feudalism.

The changes in agriculture for example crop rotation and the use of machines led to increase in production. The Increase in production led to acquisition of wealth which was used to finance the industrial revolution hence rise of capitalism. Political revolutions e. These revolutions destroyed feudalism and put the major means of production in the hands of capitalists hence leading to the rise of capitalism.

Refers to fundamental changes which were characterized by the development of international trade and the rise of merchant class. Through international trade, European countries especially Britain acquired a lot of capital which was used to finance the industrial revolution, thus the rise of capitalism.

The Introduction of money as a medium of exchange played a great role in the rise of capitalism in Europe. Money formed the basis of capitalism by financing the industrial revolution, thus the rise of capitalism. The war was fought between the British and the French, during the course of the war British plundered French towns and enriched themselves. The historian Eric Williams argued that a huge amount of money was made by Europeans from their network of colonies, and their plantations of sugar, cotton and tobacco.

It was used to pay for the industrialisation of Europe. So the transatlantic slave trade and plantation wealth were the major causes of the growth of capitalism in Europe. At the beginning of the transatlantic slave trade era, the British government did not allow rich individuals to try to make profits from the trade.

Established in , this Royal Company transported an average of 5, enslaved Africans a year between and Then in the law changed. It became legal for other British merchants to trade enslaved Africans as a 'fundamental and natural right'. The number of enslaved Africans transported increased dramatically from One port, Bristol, shipped , Africans from to In , slave ships with a capacity for 36, enslaved people sailed from British ports, while in that number had increased to ships with a capacity for 47, enslaved Africans.

Technological developments were funded with transatlantic slave trade money. James Watt expressed eternal gratitude to the West Indian slave owners who directly financed his famous steam engine.