How did Capitalism change during the Industrial Revolution?
http://en.wikipedia.org/wiki/Capitalism#Industrialism
During the Industrial Revolution, capitalism underwent significant changes that transformed the economic system. To understand how capitalism changed, we first need to understand what capitalism is and what changes occurred during this period.
Capitalism is an economic system characterized by private ownership of industries and the means of production, where goods and services are produced for profit and distributed through voluntary exchanges in a competitive market.
Now, let's examine the changes that occurred during the Industrial Revolution:
1. Shift from agriculture to industry: Prior to the Industrial Revolution, economies were primarily agrarian, with most people engaged in farming. However, the revolution brought about a shift from farming to industrial production as new technologies, like the steam engine and mechanization, enabled the mass production of goods in factories.
2. Increased specialization and division of labor: With the rise of factories, workers became more specialized in specific tasks, leading to a more efficient division of labor. This specialization increased productivity and allowed for the production of goods at a larger scale.
3. Emergence of capital-intensive industries: The Industrial Revolution required substantial investments in machinery, factories, and infrastructure. This led to the growth of capital-intensive industries, such as textiles, mining, and manufacturing. These industries required significant financial resources, leading to the concentration of wealth in the hands of a few capitalists or entrepreneurs.
4. Growth of urban centers: As industries expanded, there was a significant migration of people from rural areas to urban centers to work in factories. This urbanization resulted in the growth of cities, the establishment of new social classes, and the emergence of a large working class.
5. Expansion of the market economy: Industrialization led to the growth of markets and the transformation of local economies into national and international markets. This expansion of markets allowed for the exchange of goods and services on a much larger scale, increasing the reach and interconnectedness of capitalism.
6. Rise of industrial capitalism: The Industrial Revolution marked the transition from agrarian capitalism to industrial capitalism. Industrial capitalism is characterized by the dominance of industrial production, large corporations, and wage labor.
In summary, the Industrial Revolution brought about significant changes to capitalism, including the shift from agriculture to industry, increased specialization, the emergence of capital-intensive industries, the growth of urban centers, the expansion of the market economy, and the rise of industrial capitalism. These changes propelled capitalism into a new era, setting the stage for modern economic systems.