Introduction

The political, social and economic structure a few centuries ago in Europe seemed hopeless. The economic system in Europe fostered no form of progress, and its political system promised no stability soon. It is interesting that amidst all these challenges, market capitalism was first witnessed in Europe. Contrary to the expectation of many that countries such as China that signified a lot of political stability would have topped the list for the likely occurrence of Market Capitalism, Europe took the lead. The political chaos in Europe fostered a good environment for the emergence of capitalism. This market system evolved because its rules were not imposed but instead discovered, and it was free to evolve. Also, these developments facilitated the rise of capitalism and to some the emergence of human rights and classical-liberal political theories. Therefor, on the basis of quality essay, this means that the political, social and economic disorganization that characterized Europe fostered the emergence of capitalism.

What is Capitalism?

Capitalism is an economic system in which people, private and public companies make the most significant decisions and own most of the resources. In this kind of economic system, the government plays a primary role meaning that most of the production is privately owned by individuals and companies. The motive behind this kind of economic system is profit making. Capitalism is also the only market economic system that gives everyone an equal opportunity to succeed in business regardless of one’s financial background or social class.

How did it Emerge?

Capitalism can be traced back to the 14th Century that witnessed some traces of merchant and banking activities in Europe. The emergence of capitalism became rampant during the 16th and 17th century. During this period, merchants helped in bridging the gap between the producer and the consumer. However, as time passed on the merchants began placing and paying for goods in advance then supplying the raw materials and paying wages for the work that was done in the production of finished products. This step signalled a crucial stage in the emergence of capitalism. It was the beginning of a new economic system that entailed a change from merchants who were making money from trading activities to capitalists who were now making wealth by owning and controlling the channels of production. This, therefore, signalled the first stage of capitalism which led to the introduction of a new class  that was commonly referred to as the primitive capitalists who were exercising some form of power over another new class who were referred to as the waged workers.

Early Capitalism was also characterized by new production methods a good example being the cottage industry. After, its introduction, the cottage industry witnessed a lot of developments such as the transition of private homes to mini-factories and the production process was now and the direction and control of capitalists. Later on, the cottage industry took dominance in the market and was now considered as a mass production method. This was a good development as it made wool trade become the most important industry in Britain at the end of the 17th Century. A lot of literature review shows that the hundred-year change from feudalism to primitive capitalism received a lot of state support. Feudal economies on a regional basis ran counter to the interests of the joint initiatives by the capitalists' parties and the centralized state. This made it easier for capitalism to become dominant in a lot of regions. The country was also sure that it would gain a lot of revenue in the form of taxes, duty loans, and customs that it would impose on capitalists. All these measures by the State helped it in gaining a lot of revenue to support the growing bureaucracy and its army. This continued to make the grounds for the emergence of capitalism favourable as the government increased its support for this economic system. The alliance between state and various capitalists occurred in different forms. In more developed countries, capitalism never dictated the market economy as compared to less developed countries. This, therefore, means that developed countries had more control of their economy as compared to less developed countries.

Capitalism in Reference to Max Weber

Max Weber was a German political economist and sociologist who was born on April 21, 1864, in Erfurt, Prussia. He is best known for his contributions in sociology about the Protestant Ethic and the Spirit of Capitalism. According to Max Weber, capitalism is the provision of human needs by private businesses or enterprises with the motive of making profits. It is some exchange that is carried out for positive gains rather than traditionally fixed trades. From the literature review on Capitalism, it is evident that Max Weber put much of his emphasis on the modern occidental species of capitalism as shown by what he refers to as the spirit of capitalism. According to him, Western Capitalism is likened to western art, science, history, and religion and is also characterized by some form of rationalization. Weber analyses his scholarly work carefully to avoid any misinterpretation and states that capitalism is not similar to greed because unlike capitalism, greed has always existed. He further stresses that capitalism is the continuous pursuit of profit and renewed profit by using a constant, capitalistic and rational enterprise. In the history of capitalism, Max Weber is remembered for his significant contributions to the relationship that exists between the ethics of ascetic Protestantism and the emergence of the spirit of modern capitalism.

Capitalism in Reference to Adam Smith

Scholarly research puts it clear that Adam Smith is primarily known as the father of economics. This is because his works regarding the market economy and the role played by the government in economics have laid the foundation for the modern capitalist system. According to Smith, capitalism is a system of social organization through which money making is the result. The activities carried out by capitalists in Smith’s definition are targeted for profit making at the close of business. Smith also defends his way of organizing human affairs not just on pragmatic terms but also on moral ones. Capitalism is also rational because it helps in discovering “employments most suitable to the interest of society” through a distributed, local and self-interested decision-making process.

According to Adam Smith, a government cannot achieve all that capitalism can achieve even if it tried to set the course for various economic activities. A good example could be seen in the case of competition and constant monitoring of profit and loss where the capitalism finds the right direction for the society to organize its energies around and also relieve the government of having to take charge of the economy. Smith concludes his definition of capitalism by stating that distributed markets will always perform stronger than the central planner. In other words, Smith is trying to say that modern capitalism will still play a significant role in the economy as compared to local and state governments even though its principal objective is profit making.

Criticism of Capitalism

Max Weber and Adam Smith’s works about capitalism have over the years faced some criticism. This criticism ranges from expressions of disagreement with the principles of capitalism. Over the years, this criticism has been witnessed from various philosophical and political approaches. These include socialist, nationalist, religious and anarchist critiques. Some Scholars believe that to overcome capitalism; there has to be a revolution in our market systems that will give the government an upper hand in controlling the economy.

Contrary to this, some other scholars believe that structural change in capitalism can only be established slowly through serious political reforms. Amidst this level of criticism, it is important to note that some critics believe in the advantages related to capitalism. This group of scholars thinks it best to balance these advantages with some form of social control. The most prominent critiques in this field are the accusations that capitalism is an exploitative economic system and that it is unsustainable because it leads to the creation of economic inequality, anti-democracy and the demeaning of human rights. Even though there has been a lot of opposition, capitalism still plays a central role in most markets and is yet to be replaced as demanded by some critiques.

Conclusion

Even though there have been a lot of economic changes that have taken place since Adam Smith’s time, it is worth noting that his notion of human nature plays a significant role to modern readers of the economy and the society. In his book, The Wealth of Nations, he tries to explain how self-interested people can contribute to the welfare of the community as they continue to pursue their self-interests. The author attaches a great sense of freedom and liberty over another system of performance. It is also important to note that his contributions on government interventions through labour policies and trading activities lead to the production of irrational inequalities and immobility still hold in the present day. The author also had some reservations about capitalism in respect to his reverence for liberty and efficient market systems. His two books, i.e., the theory of moral sentiments and the wealth of nations send a clear message to today’s world about modern capitalism. This message will help in reshaping capitalism and the relationship it shares with our societies.

Besides, the economic developments that have taken place in the past centuries make no significant difference to Max Weber’s ideology on capitalism. His arguments are still valid and have made a lot of contributions to the establishment of other market systems. The introduction of the free market system was a result of the capitalist system as suggested by Weber which gives the government a more subordinate role to play in the market. Even though the two scholars in question, i.e., Max and Adam seem to define Capitalism in different perspectives, it is worth noting that the motive behind this market system was to make profits at the end of the day. This is, therefore, likened to the modern day provision of goods and service by private individuals and public organizations to make profits. Just like the capitalist system, the free market system proclaims to bring services closer to the society, but the motive here is revenue generation.

Recommendations

There has been a lot of controversy about the issue of capitalism and its relevance in past and present-day societies. It is therefore essential to note that understanding this concept well enough entails going through a lot of literature review. In my opinion, capitalism played a significant role in laying the foundation for future businesses. The fact that it gave the common man a chance to participate in various business activities is a clear indication of self-development. Even though the system did not adequately address the challenges that faced ancient economic systems, it played a significant role in defining the economic and market structures of the 16th and 17th centuries.