Capitalism has been defined as that economic system that allows both wealth as well as its production means to be controlled and owned privately, as opposed to being controlled and owned by the state, or the public for that matter (Wallerstein 1979). As such, land, capital, labor and any other resources are usually operated and owned by corporations to realize a profit.
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In addition, distribution, investments, production, incomes, goods supply, pricing, services, and commodities are chiefly determined based on private decisions within the realm of a market economy that enjoys freedom from the intervention of the government (Ross & Trachte 1990).
During the 16th as well as the 19th centuries, practices in capitalist economics witnessed high levels of institutionalization and have since become a dominant factor in the western countries as far as industrialization is concerned (Ross & Trachte 1990).
A historical perspective
The 1789 French revolution has been touted by many scholars as to the gateway to capitalist development. Nevertheless, there are some historians like Alfred Cobban who have argued that this revolution as opposed to capitalistic rising forces, and eventually led to the merging of powers of the landowners (Wallerstein 1979).
Newer concepts of the french revolution however became popular in Europe, in the face of the then prevailing atmosphere of revolution, especially the equality, liberty, and fraternity concepts (Maddison 2001). The modern system of state may have been greatly influenced by the French revolution, but Great Britain’s “twin revolution” is believed to be responsible for the establishment of a capitalistic economic base.
The Industrial Revolution, and especially in Great Britain is believed to have greatly enhanced technological advances, such as gunpowder technology. In addition, technology, coupled with social relations, led to the realization of experimentation and innovations (Heilbroner & Milberg 2002). The social changes scale during the Industrial Revolution may appear modest in comparison to the twentieth century standards, but they nevertheless were unprecedented about the period in history n which they occurred.
In his book, “in defense of global capitalism” Norberg (2001) explores the case advanced by movements that are opposed to globalization. Norberg (2001) posits that over the last decade, capital diffusion has led to the reduction in the rates of poverty, while at the same time giving opportunities to people all over the world.
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As a result, the life expectancies and standards of living have drastically improved in a majority of the places. Infant deaths, world hunger, and inequality have also reduced significantly (Norberg 2001). This has been attributed to technical and economic development, thanks to the policies of a ‘free market’.
Countries that are poorly able to loosen up their economies have also recorded remarkable results, and those that have failed to liberalize their markets have ended up getting stuck in a lot of miseries. This is a clear indication that there is a dire need to advance the course for both globalization and capitalism in tandem, for a much better world. (Ross & Trachte 1990).
The approach used to trace the path through which the current capital economy has both emerged and developed its key characteristics, as well as its domination impacts is vital. By analyzing the past, we are batter able to come into terms with the current practices in the capital economy.
The developments that have over the decades been witnessed in the emergence of a global capitalist economy could be seen as a way of explaining how well we are acquainted with security issues, peace and war. Moreover, it is also a pointer to how well we have come to understand a sovereign state. Finally, such an understanding tells a lot about our appreciation of the modern-day globalization process.
In the text, “The making of economic society”, Heilbroner (1961) has assessed the restoration of provisions that are socially embedded by markets with the hope of organizing production and society over the Industrial Revolution era. The approaches of Heilbroner in as far as ‘political economics’ are concerned, and which have been deeply explored in another of Heilbroner’s text, “The worldly philosophers” pays homage to Karl Marx’s inexorable system, as well as Thorstein Veblen’s “The savage of society”.
Robert Heilbroner’s book, “The making of economic society” appears to have roots both in history, as well as in the future. The book offers a balanced point of view s to why the present-day economic society appears the way it does. By tracing its roots to the Middle Ages, Heilbroner offers guidance as to where the economic society may be headed (Heilbroner & Milberg 2002).
This could never have been more correct, seeing that one is not in a position to comprehend the current woes in the economic conditions, without first having a detailed assessment of their root causes. Historical perspectives of, for example, economic crisis helps us to appreciate the current challenges, and also in devising mechanisms to handle these, while at the same time also drawing parallels (Maddison 2001). For instance, the current credit crunch is being likened to the great depression of 1929.
While the magnitudes may be quite similar, advances in technology and economic conditions of the world have dramatically changes since then, but we still find ourselves relying on historical perspectives to help us chart a common path into the future. The years between 1945 and 1973 have been regarded as the Golden Age, when economic prosperity loomed large.
Sadly, this came to an abrupt end following the oil crisis of the mid 1970s, and which had far-reaching political, social and economic repercussions. Since then, inequalities in terms of income and globalization have both totally altered capitalism. Nevertheless, capitalism does present itself in a number of forms, with markets, states, employers and workers, all having divergent relationships in a capitalistic economy.
In reference to a capitalistic economy, Karl Marx has let his aggression get the better of him. He posits his aggression over capitalism by recounting a ‘capitalistic world’ where competition is perfect. In such a world, he market tends to be free, where there are no unions, monopolies, or even any special benefits for anybody (Wallerstein 1979).
Each and every product gets sold at its correct value and price. Marx has also asserted that a product’s value is chiefly attributed to the labor value directed to its making. While a worker looks at trading their labor-power, a capitalist, on the other hand, is more interested with realizing a profit.
Heilbroner’s book,”Wordly Philosophers”, has explored the precarious and paradoxical nature of man’s behavior. Heilbroner has written that the human nature is characterized by self-centeredness. Man also tends to be cooperative according to Heilbroner. The impact of this is what he has referred to as ‘a struggle’ (p. 18.).
In light of this, Heilbroner’s has explored the plight of ‘primitive societies’, like the Eskimos. For these, struggle is no handicap to them. These individuals, when faced with strong pressures, tend to behave themselves in a bid to survive (Heilbroner 2002).
In contrast, the ‘more advanced ‘societies lacks both in the social obligation web, as well as in the tangible environment pressure. Such societies lacks in the necessary incentives to enable survival.
Heilbroner (2002) further describes three ways through which societies have handled such a state of precariousness; authoritarianism, market systems, and tradition. While authoritarianism and tradition are confined to the conventional ways, market from the viewpoint of Heilbroner, is akin to a modern-day revolution.
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In the modern societies unlike the conventional ones, there exist limited survival incentives, with the result that such societies’ existence, according to Heilbroner, “hangs by a hair”. (Heilbroner 2002). The precariousness revolution, in the words of Heilbroner, appeared to be more fundamentally weighty, in comparison to the French Revolution of 1789, the American Revolution, as well as the 1917 revolution witnessed in Russia.
World development outline
Angus (2001) writes that there has been a 22 fold increase in the population of the world over the last millennium, with the global GDP having risen almost 300 times, while the per capita revenue is believed to have raised 13 folds. These findings are in a sharp contrast to the previous millennium, in which the population of the world witnessed approximately a 15growth in the population.
Furthermore, the per capita earnings have not improved in any significant way. Ever since the 1820s, the world has witnessed a much more dynamic development, with the per capita earnings having increased eight times, and the population increased by more than five folds (Angus 2001).
This notwithstanding, the per capita growth in income should not be seen as the single index of welfare. Over the years also, life expectancy has been seen to rise dramatically. By the year 1000, the average life expectancy was pegged at 24 years, with as many as one third of all children born dying before they celebrated their first birthday, thanks to epidemic diseases and hunger (Angus 2001).
Over the years through the 1800s and to the current times, the infant mortality rate has risen significantly, to now stand at an average figure of 66 years (Angus 2001). In the last millennium, the rise in both income and population has been attributed three factors. First, there has been a rise in capital movements and international trade.
Secondly, conquest as well as the settlement of somewhat unoccupied areas with fertile lands, untapped biological resources, or even an ability to contain population transfers, livestock, and crops. Finally, institutional and technological innovations have also been linked to the rise in income and population (Angus 2001).
Appreciating the economy of the world is fundamental to the center issues of the rise in global capitalism. The rise in global capitalism id poised to go a notch higher, given that the inequality gap seeing to rise by the day. Previously, the use of quantitative research in the assessment of economic history appears to have concentrated more on the last two centuries, a time when the world recorded the fastest growth rate in its history.
The analysis of the world economic to beyond this point would entail the use of weaker evidence and a much greater reliance on conjunctures and clues. However, it is a necessary, meaningful and useful undertaking since differences in pattern and pace in major world parts of the global economy tends to be deeply rooted into the past.
- Baylis, J, & Smith, S, 2000, The globalization of world politics: an introduction to international relations, Oxford. Oxford University Press.
- Heilbroner, R, 2000, The Wordly Philosophers (7th edition). London: Penguin.
- Heilbroner, R & Milberg, W, 2002, The Making of Economic Society (11th edition). Upper Saddle River: Prentice Hall.
- Maddison, A, 2001, The World Economy. Paris, OECD.
- Ross, J. S. R. & Trachte, K. C, 1990, Global capitalism: the new Leviathan, New York, SUNY Press.
- Wallerstein, I, 1979, The capitalist World economy, Cambridge, Cambridge University Press.