Question

Answer the two questions below in two pages by reading the chapter titled with “What does Capitalism mean”? [“Capitalism: A Short History, Jürgen Kocka, 2016, Princeton University Press]

1. When did capitalism emerge as a concept in Germany, France and England?

2. What are the main features of the three thinkers Marx, Weber and Schumpeter's views on capitalism?

Answer 1

Question 1) Capitalism emerged in 17th century to over throw the feudal economy, the primary cause of the shift away from feudalism was increased foreign trade, which led to the emergence of a new class of merchant capitalist. Merchant capitalist used to purchase foreign goods at cheap price and later selling them with huge profits.This boom led to many European countries growing rich from taxes and attempting to boost their share of trade by establishing colonial empires. The first impact of capitalism was seen on cottage industry, which saw production directed by the capitalist.The cottage industry model became so widespread in the woollen textile industry that it became a method of mass production. In Germany capitalism was much less developed and therefore weaker which later indicated the development of the social market in Germany in which the state had much more power. Britain capitalism was much more developed and so was able to exert much more influence, leading to the development of the free market system. France capitalism was far more state-directed.

Question 2) The main features of the three thinkers on their views of capitalism are as follows:

a) Profit making- The company's main motive is to make profit in the market through exchange of good and services, the companies do not exist solely to satisfy people's needs, good are only made avaliable when there is a demand for them and customer is willing and has ability to pay.

b) Division in market- the market is divided in two classes the capital class who owns the business and takes large chunck of profit and the working class who is reponsible for production for such goods and services.In capitalism generally the working class is exploited by capital class for the increase in revenue and eventually their profits.

c) Government intervention- In purest capitalism is it expected that their is no or very minimal intervention of government so that market sets the price and any inefficiency or intervention that reduces profit making will be eliminated by the market.

d) Flow of good and services: There should be free flow of good and services in the market with pure competion to avoid monoply in the market.