European Capitalism and Colonialism - Assignment Example

European capitalism and colonialism affiliation Task Capitalism is characterized by an economy whereby corporations own moneymaking assets and investments like factories, land, transport system, and communications, or private business who engage trading in a free market of competition. These economic systems utilize the investment of money in various project with the major aim of making profits. In the process, a small class of upper class people own large corporations and wealth hence creating that gap between the rich and the poor. This economic system is different from the one that was in place in middle Ages where control of workers boned to that land. Hence, there were no much differences between people in terms of their wealth. Colonization played a great role in the development of capitalism in Europe. It started by the European counties bringing in a number of slaves into their territories. The people, who were termed as slaves from Africa mostly, were used to build and develop a number of institutions and business in Britain and other parts of Europe. In fact the slave trade become such a business leading to the development of a number of ships to aid in ferrying the newly acquired slaves to different parts of Europe (Sen, 1988). Actually, some cities like Liverpool developed form the booming business of slave trade at that time. According to Bruff, (2010), Barclays bank, which is one of the largest bank and insurance company in the world, had its roots on salve trade. Furthermore, most of these countries utilized land and natural resources in their colonies to enrich themselves. Most raw materials and minerals that were discovered in the European colonies, was sent back to the colonizing country, which led to further development of this countries. The west, had developed vast numbers of factories back at home and to keep them running, they needed these raw materials. These colonies provided these raw materials at a very cheap price hence leading to a further flourishing economy. Development of Africa was stalled by the invasion of European countries in the early centuries. A number of countries in Africa had developed much stronger economical practices by the time Europeans came in to colonize them. Most of the activities that were taking place came into a standstill hence halting the process of innovation and continued economic gain. Much worse is the fact that most of the raw materials and minerals of value to these colonized states were taken over by the colonizing countries. Egypt, which was one of the oldest African cultures, had advanced in terms of technological and economic development. However, it continued quest for much better services for its people were affected by the innovation of turkey in the 7th century. Land in Egypt was owned by the state and was used for production of food and other raw material a factor that kept the nation going and continued growth of the textile industry. This continued development was frustrated since sultan military lords took custody of the land and sent most of its raw materials back to Turkey hence leaving Egypt to deteriorate economically. European development by is of their colonies is directly proportional to the colonies impoverishment. In fact, the countries took away that special raw materials and serenity that this countries needed to develop too. Which is the major reason as to why most of the late European colonies remain impoverished (Bardhan, 1993). Task 2 Development of the European capitalism was enhanced by a number of socio-economic factors that can be of use in the current underdeveloped countries. At the beginning of capitalism, in most of the European families there was a clear separation between household and productive enterprise. This led to the focus on making profit and ensuring that the enterprise practices led to the development of much more prolific market and business practices. This could be achieved since business materials were separated from the household one, which made the venture more focused. Furthermore, the development of the western cities in Europe led to further development of capitalism in the countries (Wallerstein, 1983). There was a high level of political autonomy among urban communities in Europe hence led to the development of middleclass societies from agricultural feudalism. The middle class people in these urban set ups, led to the investments in various mall scale business and development of industries. The cities led to sprawling business owned by cooperation and private business. One of the major drivers of any logical economy is an existence of law guiding general operations. Law will definitely lead to development of a much organized and logical business practices. In addition, this law will ensure that there is no malpractice or fraudulent practices among participants in the economy. The European countries, inherited the then developed tradition of Roman law. The law provided a more developed and integrated rationalization of practices in judicially all over the world later on. Through the precise, judicially system in place because of the Roman law, most countries managed to from nation-state. These states were administrated by bureaucratic officials to the levels that had not been seen in eastern civilization at the time. This rational legal system of the states was adapted by the business entities in their management. This led to an improved system of management in business, which made them legal and well controlled. Workers in various business were required to report to their leaders and ensure proper management of resources. Business leaders utilized the system to ensure that workers worked more effectively, efficiently and professionally to achieve goals and objectives of the specific business entities at that point in time. Furthermore, development of double entry book keeping in Europe was a major factor that led to development of a more sophisticated way of managing business. According to Chew & Sklair, (1995) this activity was fundamental in the management and regulation of the capitalize enterprise. Business owners were able to keep record of their activities, stock and rate of selling hence limiting loses made from poor documentation of business products. This increased the revenues of business owners hence providing more money for further expansion of their business. Most underdeveloped countries in the world today have utilized most of the factors that led to the development of capitalism in Europe. However, there is still inadequate level of awareness among people on the methods of capitalism in developing countries. Thus, by creating awareness among people in developing countries on these strategies, there is likelihood of more increased levels of capitalism and entrepreneurship practices among its citizens. It is evident that the practices worked for the Europeans earlier entrepreneurs hence it is likely to work in these countries today coupled with the advanced technology (Gerhart, 1997) Task 3 Solow-swan model is an exogenous development model. It is used to determine the long run economic growth as it is set in the neoclassical economics (Dohtani, 2010). The model utilizes capital accumulation, population or labor growth and productivity increase, which are mostly stated as technological progress. By using these parameters in determining economic growth, the models implication is convergence of the economic growth and direction capital. Solow model can be used to determine convergence by analyzing a number of issues that are critical in the economic growth. From the model, it is evident that there is an accelerated rate of convergence with developing countries than the developed countries. To drive divergence, capital should be flowing from the richer countries to the poorer countries since the rate of return is much lower with much higher worker per capital in developed countries. At the same time, convergence is much accelerated in developing countries since they can always utilize the modern technologies developed in other countries to carry on their daily activities without having to invent them necessarily. Using empirical tests, regress growth on measuring initial income, there can be a negative co-efficient, which is a sign of convergence and a coefficient of zero, which denotes no convergence (Dowrick & Rogers, 2002). According to Rodokanakis (2003), the model has been beneficial in determining economic growth of various countries. The exact determination of growth in various countries has been motivated by the fact that the roots of the model are based on the major determinants of economic growth. The roots can be used to explain economic growth of a number of countries since they share most of the determinants. For instance, all countries have population growth or productivity, utilise capital accumulation to determine the economic growths. The model has been used in a number of instance to determine the economic growth of a number of countries in the world today form the time that it was put in place. Its success has been seen in a number of states including the United States. Through the model it is evident that there are different levels of economic growth in a number of countries depends on its economic status. Countries with larger growth domestic product are likely to experience a lower rate of economic growth that the developing countries. This is one of the major breakthrough of the model in explaining the trends in the world economy today. References Bardhan, P. (1993). Economics of Development and the Development of Economics. The Journal of Economic Perspectives, 129-142. Bruff, I. (2010). European varieties of capitalism and the international. European Journal of International Relations. doi:10.1177/1354066109344379 Chew, S. C., & Sklair, L. (1995). Capitalism and Development. Contemporary Sociology. doi:10.2307/2077367 Dohtani, A. (2010). A growth-cycle model of Solow-Swan type, I. Journal of Economic Behavior and Organization, 76, 428-444. doi:10.1016/j.jebo.2010.07.006 Dowrick, S., & Rogers, M. (2002). Classical and technological convergence: beyond the Solow-Swan growth model. Oxford Economic Papers, 54, 369-385. doi:10.1093/oep/54.3.369 Gerhart, G. M. (1997). How Europe Underdeveloped Africa. Foreign Affairs. doi:10.2307/217137 RODOKANAKIS, S. (2003). The Impact Of The European Structural Policies On The Eu Member States From 1988 To 2000. Region et Developpement, 17, 181-209. Sen, A. (1988). Chapter 1 The concept of development. Handbook of Development Economics. doi:10.1016/S1573-4471(88)01004-6 Wallerstein, I. (1983). Historical Capitalism. In Historical Capitalism (pp. 12-43). Read More