Some

economic historians Economic history is the academic learning of economies or economic events of the past. Research is conducted using a combination of historical methods, statistical methods and the application of economic theory to historical situations and in ...

use the term merchant capitalism to refer to the earliest phase in the development of capitalism as an economic and social system. However, others argue that mercantilism, which has flourished widely in the world without the emergence of systems like modern capitalism, is not actually capitalist as such. Merchant capitalism is distinguished from more fully developed capitalism by its focus on simply moving goods from a market where they are cheap to a market where they are expensive (rather than influencing the mode of the production of those goods), the lack of industrialization, and of commercial finance. Merchant houses were backed by relatively small private

financier An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Type ...

s acting as intermediaries between simple commodity producers and by exchanging debt with each other. Thus, merchant capitalism ''preceded'' the capitalist mode of production as a form of capital accumulation. A process of

primitive accumulation of capital In Marxian economics and preceding theories,Perelman, p. 25 (ch. 2) the problem of primitive accumulation (also called previous accumulation, original accumulation) of capital concerns the origin of capital, and therefore of how class distinctio ...

, upon which commercial finance operations could be based and making application of mass

wage labor Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under ...

and industrialization possible, was the necessary precondition for the transformation of merchant capitalism into industrial capitalism. Early forms of merchant capitalism developed in the 9th century, during the

Islamic Golden Age The Islamic Golden Age was a period of cultural, economic, and scientific flourishing in the history of Islam, traditionally dated from the 8th century to the 14th century. This period is traditionally understood to have begun during the reign ...

, while in

medieval Europe In the history of Europe, the Middle Ages or medieval period lasted approximately from the late 5th to the late 15th centuries, similar to the post-classical period of global history. It began with the fall of the Western Roman Empire a ...

from the 12th century.Jairus Banaji (2007), "Islam, the Mediterranean and the rise of capitalism", ''Journal Historical Materialism'' 15 (1), pp. 47–74, Brill Publishers. In Europe, merchant capitalism became a significant economic force in the 16th century. The mercantile era drew to a close around 1800, giving way to

industrial capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private ...

. However, merchant capitalism remained entrenched in some parts of the West well into the 19th century, notably the

Southern United States The Southern United States (sometimes Dixie, also referred to as the Southern States, the American South, the Southland, or simply the South) is a geographic and cultural region of the United States of America. It is between the Atlantic Ocean ...

, where the plantation system constrained the development of industrial capitalism (limiting markets for consumer goods) whose political manifestations prevented Northern legislators from passing broad economic packages (e.g. monetary and banking reform, a

transcontinental railroad A transcontinental railroad or transcontinental railway is contiguous railroad trackage, that crosses a continental land mass and has terminals at different oceans or continental borders. Such networks can be via the tracks of either a single ...

, and incentives for settlement of the American west) to integrate the states' economies and spur the growth of industrial capitalism.Headlee, S. E. (1991). ''The political economy of the family farm: The agrarian roots of American capitalism''. Praeger series in political economy. New York: Praeger.

Notes

References

*John Day, Money and finance in the age of merchant capitalism, 1999. *J.L. van Zanden, The rise and decline of Holland's economy: merchant capitalism and the labour market, 1993. *Joseph Calder Miller, Way of death : merchant capitalism and the Angolan slave trade 1730–1830 1988. * Elizabeth Genovese & Eugene D. Genovese, Fruits of merchant capital : slavery and bourgeois property in the rise and expansion of capitalism, 1983. *Paul Frentrop, A History of Corporate Governance, 1602–2002. Amsterdam: Deminor, 2003. *

Andre Gunder Frank Andre Gunder Frank (February 24, 1929 – April 25, 2005) was a German-American sociologist and economic historian who promoted dependency theory after 1970 and world-systems theory after 1984. He employed some Marxian concepts on politi ...

, World accumulation, 1492–1789. New York: 1978 *

Henri Pirenne Henri Pirenne (; 23 December 1862 – 24 October 1935) was a Belgian historian. A medievalist of Walloon descent, he wrote a multivolume history of Belgium in French and became a prominent public intellectual. Pirenne made a lasting contributi ...

, Economic and social history of Medieval Europe. London: Routledge, 1936. *Michel Beaud, A history of capitalism 1500–2000. New York: Monthly Review Press, 2001. * Nicolas Vrousalis, Capital without Wage-Labour: Marx's Modes of Subsumption Revisited', Economics and Philosophy. Vol. 34 No 3, 2018. *

Immanuel Wallerstein Immanuel Maurice Wallerstein (; September 28, 1930 – August 31, 2019) was an American sociologist and economic historian. He is perhaps best known for his development of the general approach in sociology which led to the emergence of his wor ...

, The Modern World System: Capitalist Agriculture and the Origins of the European World Economy in the Sixteenth Century, Academic Press, 1997. *Immanuel Wallerstein, The Modern World System II: Mercantilism and the Consolidation of the European World-Economy, 1600–1750, Academic Press; (June 1980). *Immanuel Wallerstein, The Modern World System III: The Second Era of Great Expansion of the Capitalist World-Economy, 1730–1840s. Academic Press, 1988. {{DEFAULTSORT:Merchant Capitalism Capitalism Medieval economics Economy of the medieval Islamic world

See also

Notes

References