Capitalism

 

Capitalism is a system under which private entrepreneurs have complete freedom to devise and control production and distribution, for their profits.

 

Capitalism and its Impact

 

What was Capitalism and what was its impact on people?

 

The concept of capitalism came forward with the Industrial Revolution. But the question arises, what do we mean by Capitalism? It can be defined as the accumulation of the means of production, materials, land, tools, and property into a few hands.

 

It was realized during the revolution that wealth could be used for generating more wealth which is known as capital. The owners of this capital were known as capitalists.

 

On what principle was capitalism based?

 

Capitalism was based on the principle of the large-scale realization of profit by acquiring goods at lower prices than one sells them. Capitalists provide money for buying machines, tools, raw materials and promote research to develop improved machines.

 

The machines of weaving and spinning were initially used in England.
Richard Arkwright was a traveling barber who understood the economic potential of using machines �to clothe� millions of people.

Richard Arkwright

 

Do you know what the Latin form of �to clothe� is?

 

In Latin, �to clothe� is �investire� which gave rise to a new term called �investment�.

 

The capital was known as the money which was invested in producing different articles in a factory, for buying machinery, raw materials, and selling finished goods in the market.

 

In capitalism, the means of production such as labor, raw materials, tools, and machines were owned and controlled by private individuals or groups of them. The rent of land, wages of the labor, interest on the wealth invested, profit obtained by the scientists on patenting their inventions were all included under capitalism.

 

Individual productivity increased through the division of labor under capitalism. Productive labor was divided into smaller components. As a result, the value of the individual worker was lowered. The means of production and labor were manipulated for maximizing profits.

 

Impact of Capitalism

 

Let us discuss the impacts of capitalism on the life and growth of people.

 

� Loss of Traditional Jobs: The migration of people from rural to urban areas increased the pressure on the labour force. Women could no longer earn from spinning and weaving. Skilled laborers were replaced by new and efficient machinery.

 

� Exploitation: People were asked to work for more hours at low wages. More women and children were hired as they were paid fewer wages. Later, critics attacked this exploitation, especially the use of child labour.

 

� Stress and Strain: As there was a division of labor, the production process was also divided into different tasks. Each person was assigned a specific task instead of the entire process. This process increased productivity but the job became boring and repetitive. Factory workers were strictly monitored and forced to work for 12-14 hours per day. Workers often faced accidents which increased the stress among the workers.

 

� Overcrowding: People moved from small villages to cities, as a result, cities became overcrowded and unsanitary. Pollution increased along with population growth. The air was polluted by the fumes of coal and wood. Rivers and streams were also polluted by sewage water.

 

Capitalism Questions

 

1. What is the Latin form of �to clothe�?
a) pecunia
b) capitis
c) vestimenta sua
d) investire

 

2. The money invested in producing different articles in a factory is called __________.
a) profit
b) return
c) capitalist
d) capital

 

3. __________ provide money for buying machines, tools and raw materials.
a) Leaders
b) Farmers
c) Higher officials
d) Capitalists

 

4. From which word did �investment� come up?
a) Rebus
b) Machina
c) Habitu
d) To clothe

 

5. Who understood the economic potential of using machines �to clothe� millions of people?
a) John Key
b) James Hargreaves
c) James Watt
d) Richard Arkwright

Read More: Causes of Industrial Revolution: 10 Factors That Led To Revolution