History of capitalization - Essay Example

Neo-colonialism (that flourished after the 16th century) is just another name for Western influence by means of political, military and ‘economics’ of the third world (Naipaul 3). The European merchants benefitted a lot from the colonialism as the sub-states depended so much on their European masters; the African colonies are the best examples of this dependency (Naipaul 75) that nurtured Merchant Capitalism. People were buying things they didn’t need but they lacked the skill and knowledge to make things that people (especially in African colonies) (Naipaul 54) and the merchants capitalized on this.

Africa wasn’t the only colony that gave a boost to Merchant Capitalism, the Indian subcontinent was once the capital of world trade. During the 17th century, the world trade was governed by Mercantile Capitalism, and the Indian subcontinent was the busiest workshop of the world. That place alone contributed to nearly a quarter of global manufacturing output (Robins 61). Considering what mercantilism means, it shouldn’t come as a surprise that various trading houses in India governed by people such as Amir Chand and Jagat Seth were wealthier than East India Company (Robins 65), which had huge military support and connections.

The East India Company (a monopoly corporation) was an essential part of England’s commercial armory (Robins 48). This company alone revolutionized the whole business pattern of the world. Other than capitalizing on merchant trade, this company was accompanied by the British navy and headed by a brilliant Merchant brain, Sir Josiah Child. Just like other successful merchants of the world, Child believed that wealth lies in extracting as much as possible from the landed regions (Robins 48). India was known as the golden sparrow of the world and the East India Company had caught this bird and was enjoying the benefits.

Child believed not only in military dominance but in commercial conquest abroad (Robins 49); the typical merchant business strategy. He traded with Mughals and got the better part of the trade by taking Bengal (Robins 49). Despite the fact that Mercantile Capitalism enjoyed world domination for centuries but like all other business tactics, time makes them old and they get replaced by a newer and a better one. By the end of eighteenth century, neo-colonialism didn’t remain as strong as it once used to be and lost its sparkle and with it went down the mercantile capitalism and the world witnessed the dawn of Industrial Capitalism.

With the start of the nineteenth century, great revolutions in Industrial field manifested and formed the basis for factory culture. Machines such as spinning jenny and cotton gin ruled the manufacturing grounds and produced remarkable results in terms of efficient output. As opposed to Mercantile Capitalism, the new trade strategy focused more on capital intensive market rather than going for labor intensive flea markets. Less labor meant more machine work, and this is where people like Walter Shewhart and Eli Whitney come in.

They revolutionized the trade with their great inventions (Green 74). Industrial machines such as spinning wheel, Spinning Jenny, Handloom and Power Loom etc., brought industry and trade to new heights. Productivity skyrocketed, and thus came mass production at lower prices. Technology wasn’t the only player in revolutionizing the trade; business practices played a huge part in it. Andrew Carnegie’s name will always be remembered in business reformation. Born in