History of capitalism

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Capitalism is an economic system based on the private ownership of the means of production. This is generally taken to imply the moral permissibility of profit, free trade, capital accumulation, voluntary exchange, wage labor, etc. Its emergence, evolution, and spread are the subjects of extensive research and debate.

Capitalism is an economic system where the means of production are privately owned. This system typically involves the acceptance of profit, free trade, capital accumulation, voluntary exchange, and wage labor. Modern capitalism evolved from agrarianism in England and mercantilist practices across Europe between the 16th and 18th centuries. The 18th-century Industrial Revolution cemented capitalism as the primary method of production, characterized by factories and a complex division of labor.

The term "capitalism" in its modern sense emerged in the mid-19th century, with thinkers like Louis Blanc and Pierre-Joseph Proudhon coining the term to describe an economic and social order where capital is owned by some and not others who labor. Karl Marx discussed "capital" and the "capitalist mode of production" extensively in Das Kapital (1867).

Some historians argue that the roots of modern capitalism lie in the "crisis of the Late Middle Ages," a period of conflict between the aristocracy and agricultural workers. This system differs from earlier forms of trade by focusing on surplus value from production rather than simply "buying cheap and selling dear." Conceptions of capitalism have evolved significantly over time, influenced by various political and analytical viewpoints. Debates sometimes focus on how to bring substantive historical data to bear on key questions.^[1] Key parameters of debate include: the extent to which capitalism is natural, versus the extent to which it arises from specific historical circumstances; whether its origins lie in towns and trade or in rural property relations; the role of class conflict; the role of the state; the extent to which capitalism is a distinctively European innovation; its relationship with European imperialism; whether technological change is a driver or merely a secondary byproduct of capitalism; and whether or not it is the most beneficial way to organize human societies.^[2]