He Commercial capitalism Or mercantile capitalism is the economic system based on a process of capital accumulation.
This phase required a great work of production, which finally led to the development of factories and later to industrialized capitalism.
As trade and exchange began to grow, many territories around Europe were explored and colonized in search of new sources of capital, raw materials and goods.
This, together with the great influence of precious metals, especially gold, marked the beginning of commercial capitalism, better known as mercantilism.
Commercial Capitalism in History
The seventeenth century is known in history as the golden era, the time of kings and princes, where countries had a large amount of wealth obtained through trade in raw materials extracted from the colonies, as the species that came from India, Indonesia.
The gains were mainly obtained from the exchange. This practice is considered the beginning of commercial capitalism.
Commercial capitalism, mercantile capitalism or mercantilism was the most important economic system of trade and exchange between countries during the sixteenth, seventeenth and eighteenth centuries.
It was based on the premise that the best way to increase the wealth and power of nations was to increase exports and receive precious metals as payment.
This economic system replaced the feudal organization that prevailed during the Middle Ages In Western Europe, especially in France, England and Holland.
The mercantilist nations were impressed by the fact that precious metals, especially gold, were a universal demand and the fastest way to obtain other commodities and commodities. Therefore, they began to identify money with wealth.
As foreign trade was the best way to obtain gold bullion, it was favored over domestic trade. The manufacturing and processing industry was privileged, as it delivered the goods to be traded with other countries, rather than the extractive industries such as agriculture.
State action was a major figure in the mercantilist system. Through his policies he sought to achieve his purposes that the nation sell more than he bought to accumulate gold bullion.
In addition to the ingots, raw materials for generating manufactures were also of interest. Also, they had to pay taxes to increase with this the revenues of the government.
The state exercised much control over economic life, ruling over corporations and commercial companies.
In addition, production was carefully regulated with the aim of ensuring the creation of the highest quality goods but at low cost, which would allow the nation to secure an important place in foreign markets.
International treaties aimed at obtaining exclusive trade privileges. The colonies were exploited for the benefits of the"mother country".
An example of this is England, where mercantilist policies succeeded in creating a highly skilled population in industrial development and a strong maritime industry, which succeeded in removing its most important rival in trade across the seas, Holland.
However, economists began to discover that mercantilist policy was not as beneficial as it generated an excess of money and a lack of goods. There was a inflation Significant.
Mercantile capitalism or commercial capitalism continued to be the most important economic system in the world until the arrival of the Industrial Revolution and the new concept of Laissez-faire .
Some important exponents of commercial capitalism are Queen Elizabeth I, King Henry VIII, Olivier Cromwell, and in France, Jean Baptiste Colbert.
Commercial capitalism ranged from the years 1440 to 1815, with the supremacy of Chartered companies such as Hudson's Bay, Dutch and British East Indian Companies, the Virginia company and the Association of Adventurous Merchants (Muscovy Company).
England was the most important country in the development of commercial capitalism, mainly for its security based on its strategic island geography.
Commercial capitalism in the West
The nations of the West constitute the richest and most powerful social organization that has been created by man. One reason for this is economic organization, which throughout history has gone through six successive stages, of which at least four are called"capitalism", with three representative and notable features in its development.
Each economic stage has created the necessary conditions to move on to the next stage. From the feudal society, organized around agriculture and trade in domestic goods, the stage of commercial capitalism was derived.
In this second period, markets began to expand and become interested in the foreign trade of foreign luxuries such as species, fine fabrics and other luxuries from remote places.
Markets increased their demand for textiles and other goods, which could only be achieved by increasing production. This, on the other hand, led to the increase of the development of the industries, generating in turn, industrial capitalism.
Returning to commercial capitalism, this became an institution that was called mercantilism. Here the merchants sought profit-making, not through the movement of goods, but restricting the movement of goods.
Thus the pursuit of profits which at first increased the prosperity of nations by the increase of trade and production, soon became a restriction of the same trade and the same production.
This is because profit was transformed into a commodity by itself, rather than as an accessory mechanism of trade as an integral system.
Merchants began to discover that an increase in the flow of goods, from a low price area to a high price area, tended to raise prices initially and then lower them.
For example, every time a shipment of species arrived in London from a merchant ship, the price of the species began to fall.
Traders, instead of realizing that they could reduce prices while still leaving a margin of profit, began to restrict the flow of goods in order to increase their profits. This was achieved by reducing shipments, shipments and costs.
Over time, the attention of traders ceased to be centered on the goods and changed to the profits in money that they obtained by their transactions.
On the other hand, bankers preferred lower prices - which would increase the value of money - and higher interest rates on their loans.
This preoccupation with only one or another part of the economic process caused the system to begin to be threatened.
Finally, the relation of goods and money, central point of the transaction and the development of the economic system, became clear to the bankers.
The bankers expected lower prices, to mobilize the circulation of money; While traders preferred to have few circulating and very expensive goods, in order to obtain more profits.
The economic organization of commercial capitalism was transformed into mercantilism - which restricted its scope and possibilities -, generating an inflation crisis that finally led to the end of this economic stage.
Even though commercial capitalism was no longer used as a commercial economic system in Europe and, following the advent of the Industrial Revolution about 1800, in the United States it continued to function through the system of plantations in the south. This did not allow the development of industrial capitalism and limited the market and the consumption of goods.
Importance of commercial capitalism
Commercial capitalism generated great social, economic and cultural changes during the times in which it developed. Undoubtedly, the greatest importance of this economic system was to enable the progress of industrialized capitalism.
In addition to this, it allowed for an expansion of the markets of America and the East, creating a large fleet of merchant ships, which allowed the use of maps, compasses, compasses and other instruments of scientific origin, as well as the application of mathematics in The explanation of reality and in daily life.
Another contribution of commercial capitalism was the development of an international structure of business ethics. This is one of the bases of industrial capitalism, which, in turn, is the cause of the growth of large cities around industrial centers. Capitalism shaped the structure of modern cities.
The increase of the demand of articles like textiles, arms, equipment of different classes, wine, among others; As well as commercial services and transportation of processed goods; Generated an interest in raw materials and encouraged the transportation of black people to be slaves in America.
However, production did not increase proportionally to the high demand for goods. With less goods, inevitably generated a rise in prices.
Another contribution of commercial capitalism was that the accumulation of capital - broadly or moderately - allowed the development of more elaborate capitalist techniques. The same happened with the credit system, which began to be implemented during the era of mercantilism.
References
- Commercial Capitalism. Recovered from ondirectorship.com.
- Retrieved from encyclopedia2.thefreedictionary.com.
- Commercial Capitalism. Professor Carroll Quigley. Recovered from ecointl.blogspot.cl.
- Merchant Capitalism. Retrieved from Wikipedia.org.
- What was the result of commercial capitalism? Retrieved from publishyourarticles.net.
- Rise of commercial mercantilism capitalism. Retrieved from economictheories.org.
- Development of commercial capitalism and beginning of world economy. Retrieved from tijdvakken.nl.