Capitalism - Europe’s Enduring Economic Evolution
DescriptionAn essay that talks about the rise capitalism in Europe and how it has been one of the most enduring parts of their history.
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Between 1648 to 1815, the European continent and, by extension, the world, was changing rapidly. For almost two centuries, one idea of economics dominated the many divine dictators of the West: mercantilism, or the belief that the world's wealth was limited and that nations needed to hoard as much of it as possible. But by 1606, the first stock exchange opened in Amsterdam, bringing in a huge evolution, one that emphasized the ownership of goods and businesses by private individuals in order to generate personal profit. The Age of Exploration also jump-started this, as commerce between colonies and their parent nations led to an explosion of trade and cash flow, pushing settlers and general subjects to get in on this newest form of money making and risk taking.. Together, the mostly positive changes to European government and business practices with the emerging enigma of labor unions, the usage of the first banknotes, and the key concept of free market trade led to success never seen before, becoming Europe's everlasting mark on world economics.Though there were many positives with the arrival of capitalism, multiple negatives plagued the oncoming economic overhaul. The Chapelier Laws, passed in 1791 during the French Revolution by the French National Assembly after a series of workers' protested work conditions, presents four articles, all of which discuss ideas against forming assemblies, showing a push for workers rights, especially as enlightenment starts to take hold in France. One of the worst things to come from the beginnings of capitalism and the industrial revolution is the horrible working conditions, as employees were forced to work in factories for hours (and even days) on end in dingy, dirty, and unclean environments. Plus, the usage of child labor and other horrible practices led to a decrease in life expectancy, the risk of factory work constantly killing off many workers. All of these together led to the idea of unionizing, meaning that workers would band together and push for better wages, conditions, and other necessities. Moreover, they needed to because if they did not, they would likely live, eat, and die in their workplace, forced into labor until death. But there was much pushback, especially from the owners of factories and such. Though the workers continued, and even though the laws are made AGAINST them, unions eventually became a standard, one that we can still see today. And, if they did not exist, if they never came to be, it is likely that the significant evolution that had come would likely have failed, as economic cooperation, not control and exploitation, would lead to unimaginable amounts of growth. It is clear that the advent of the Industrial Revolution and the rise of capitalism was not perfect, and led to much pain before pleasure, making an apparent argument against it. But there is more to the story of this burgeoning economic idea, a more positive light to it all. And one of these, one that changed how people exchanged goods, was the banknote.One of the most significant changes from 1648 to 1815 was the introduction of the official state banknote, along with the establishment of lending money through debt. The first banknote from the Stockholms Banco of Sweden in 1661 is the next document on the list, as it shows a massive expansion of how trade worked in Europe. Even though the concepts of currency have existed for centuries, this was the first time that a major bank had revealed a form of completing transactions not based on bartering or heavy coins for the continent. The idea that a little piece of paper could represent the value of something like gold or silver heavily altered the current status quo, meaning that exchanging with people and places from far away could be much easier. It also establishes great trust within the government. Though this was not the end, not even close, as these concepts spread quickly. The Age of Exploration and, from there, the ideas of joint-stock companies, were a massive evolution that maintained itself in the Netherlands and Sweden. Though England soon got word of this all, likely due to the fact that their new king, William of Orange, was Dutch. The Governor and Company of the Bank of England wrote out a charter to him, requesting for the right to make a public bank where the people and corporations could take out loans to fund expeditions to the new world, ceasing the previous practice done by failed empires like Spain where the royal government would take the risk (and reward) of exploration. That idea, along with the invention of the banknote, heavily influenced this new era of commerce in Europe and is what led many nations, including England, to finally flourish financially. With William accepting the concept of the bank, and paper money spreading across the continent, it was clear that a new age had arrived. And both these concepts are seen to this day, as banknotes, big banks, and deliberate debt are significant factors in how modern economics work today, as people take risks on things like buying a home or going to college, all a bet taken by a bank and, to an extent, the government, in the hope that you will succeed and contribute to the economy as a whole. Though for this to all work, for banknotes, banks, unions, and the like to work, one idea really needed to come into play: the free market.The ideas of Adam Smith are some of the most important in history. His economic theory followed this: to divide labor into jobs where people take one specific role and specialize in it. The thought process behind this, shown in The Wealth of Nations written in 1776 by Smith, talks about how if the government lets people do what they love. People are more likely to be their best selves this way, as the motivation for working is not entirely one of money, but passion, leading to more devoted laborers in society. And the more devoted they are, the more effective they are. However, these ideas are not alone, as a series of pictures by Franz Phillip Florin in Oeconomus Prudens et Legalis (The Prudent and Legal Economist) in 1719 show both the pre and post-Industrial Revolution Europe, as people moved from being majority farmers to silk manufacturers and such, seemingly via cottage industries, meaning business or manufacturing being done in someone's home. But this clearly represents the idea of specialization, as people went from all doing one job to specific ones, just as previously discussed. Together, these begin to unravel the bigger scheme here, as Smith is known more by another name: the Father of the Free Market. In a painting by Dutch artist Emmanuel de Witte in 1653, there is a large and diverse group of men stand outside the stock market in Amsterdam, rich and poor coming together to invest in joint-stock companies like the Dutch East India Company that were funding voyages to the New World and Asia. And this is, yet again, where we see the ideas of capitalism taking hold, just like Smith's specialization. There is also The Charter of the Carolinas, signed by Charles II of England in 1663, that granted eight of his friends the ability to control and privatize the North American colonies of Britain. Much mention of how bountiful, rich, and lucrative the continent is, pushing for both the colonization and exploration of it. This opened up many new markets and pushed privatization, all in the hopes of extracting natural resources to make products that can be sold around the world to other colonies. Altogether, these show the massive evolutions coming within England and the rest of Europe, as the ideas of the free market encouraged individuals to take on the world head first, taking risks and expanding their abilities by specializing in certain industries, starting their own private businesses, and trying to be a helpful part of the greater economy. And many of these ideas were set up by Adam Smith, by the ideas of enlightenment and endless possibilities, fully taking advantage of humanity's greed and selfish yet powerful hunger for more.European governments and businesses were forever changed by the largely positive enigma of unions, the invention of the first banknote, and the groundbreaking theory of free market trade, all things that have spread far beyond those borders to become one of Europe’s most lasting impacts on the world of economics. And nowhere is this more clear than in the United States of America, a place that took many of the ideas introduced by Adam Smith and the many other evolutions that came from their former colonizer. The US has become one of the largest, most powerful nations in the world, dominating trade as they take division of labor, Laissez-Faire economics, and risk-taking to the max, for the most part blindly trusting the Invisible Hand as it guides them toward success, just like it did for Europe. Plus, with a GDP (gross domestic product) of over 20 trillion dollars, one of the highest in the world, it is undeniable that the free market and the many concepts that surround it are the leading factors why. And those ideas didn’t come from nowhere, they were chosen by the Founding Fathers to ensure that their nation would succeed, and they were right. The English, Dutch, and even the French, inspired how the United States would come to be, and the time period from 1648 to 1815 is when this is the clearest. Truly, capitalism is one of Europe’s more enduring marks on the world, one of Europe’s most enduring economic evolution, and without it, everyone may all be stuck farming away, wishing they could just have one chance to escape the limits of life; wishing to see a world where everyone can succeed, something it seems only capitalism can bring.
Sources
Domain, Public. The First Banknote from the Stockholms Banco of Sweden founded by Johan Palmstruch. 1661. Accessed 13 March 2023.Florin, Franz Phillip. Oeconomus Prudens et Legalis (The Prudent and Legal Economist). 1719. Accessed 13 March 2023.French National Assembly. The Chapelier Laws. 1791. Accessed 13 March 2023.Governor of The Bank of England. The Charter of the Governor and Company of the Bank of England. 1694. Accessed 13 March 2023.II, Charles. Charter of the Carolinas. 1663. Accessed 13 March 2023.Smith, Adam. The Wealth of Nations. 1776. Accessed 13 March 2023.Witte, Emmanuel de. The Stock Market in Amsterdam. 1653. Accessed 13 March 2023.
