1. Capitalism is a socioeconomic system where money is used to make more money. Capital: the money you invested into production, which will generate profit for you. Wage labor is treated the same as other production elements. Wage labor then consumes the products they collectively produced, which generate money for the capitalists. In the market, competition is sprouted to control price.
2. The roots of capitalism can be found in medieval Europe, particularly in England. One determining factor that brought together various possible causes was the lack of a cohesive and all-dominating elite throughout the continent. Unlike in the advanced society of the Roman Empire or China’s medieval imperial dynasties, Europe’s political fragmentation laid the groundwork for capitalism, particularly through feudalism and multi-state structure.
Unlike slavery or self-sustaining peasantries, economic producers in the feudalism society has to submit their production surplus, in exchange for money. The multi-state structure allows flow of entrepreneurs and investors across different states. Refugees escaped from the Counter-Reformation movement gathers in the UK, bringing with them financial innovation ideas.
3. Industrial capitalism started out anarchic, but quickly became increasingly managed.
"Early industrial capitalists are unbridled by the state and this form of production becomes widely spread, which cultivating the philosophy of liberalism, which placed freedom of both individuals and markers as paramount to human liberty."
But this anarchic state soon begets problems: low-income workers set off riots and protest, breaking machineries, which means loss to capitalists. Thus market regulations are formed. Voting rights are given to most workers. Universal healthcare and secondary educations are introduced as well.
4. In the 1980s, Neoliberalism kicks in. New issues such as increasing international competitions forced factory owners to cut off worker’s welfare, which leads to a new round of problem. Neoliberalism heralded a return to capitalism’s more anarchic beginnings. Unions ability to organize workers has been compromised. This movement also involves privatization of nationalised industries. The downside of this is less public service, people’s safety is compromised.
5. While displaying differences, capitalism’s marketization had similar effect in Sweden and the US. Result is income inequality, and industries moved to lower-wage countries such as Mexico in face of international competition.
6. The financial crisis happened in 2008 is the result of this wave of re-marketization. UK and US’s choice of capitalism affects the rest of the capitalism world. Apart from this: (1) financialization of capital (capital being invested in high-risk and potentially high profit financial contracts. Such as derivatives. Due to deregulation, such risky contracts are signed across borders; (2) the growth of debt.
7. After the crisis, people are thinking how to avoid it in the future. The crisis is a manifestation of the inherent feature of capitalism, as speculative investors are always seeking new ways to make money. Leaning towards a strong government can be the first step towards solution.
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