We explain what commercial capitalism is and what its characteristics are. In addition, we tell you in what historical context it arose.
What is commercial capitalism?
Commercial capitalism or mercantile capitalism is, in economic history, the first stage in the development and formation of the capitalist economic and social system whose origins are established in Europe from the 15th to the 16th centuries, and which was succeeded at the end of the 18th century by the so-called industrial capitalism.
It is, therefore, a pre-industrial and pre-financial stage of capitalism (often considered “pre-capitalism”), in which the rise of the bourgeoisie occurs hand in hand with trade and artisanal manufacturing. Even so, it was a big leap from the traditional feudal system. Thanks to commercial capitalism, the original accumulation of capital occurred that allowed, starting in the 19th century, the Industrial Revolution and the consolidation of the capitalist system in the world.
Commercial capitalism came hand in hand with mercantilism which consisted of the competition between the great economic and military powers of Europe for the accumulation of precious metals and other valuable resources, especially raw materials. Furthermore, commercial capitalism was favored by colonialism the political doctrine that consisted of the military and economic control of a foreign territory from the metropolitan capital of some colonial power.
Thus, the great European empires accumulated wealth through the exploitation of their American, Asian and African colonies, and also through strict control of their trade balance, favoring export over import of products. In fact, during this initial stage of capitalism, the absolute monarchies of Europe resorted to strong protectionist doctrines, through tariffs, technological patents and other mechanisms that allowed them to protect their business initiatives from foreign competition.
Historical context of commercial capitalism
The first steps of commercial capitalism were taken in Europe at the end of the Middle Ages and the beginning of the Renaissance, especially in the cities of central and western Europe (Italian, German, Flemish cities) in which a petty bourgeoisie of artisans and merchants proliferated. This insurgent social class was still a minority and relatively weak, compared to the absolutist monarchies of the time, but important enough to set a new course, which would be consolidated at the beginning of the 19th century.
For the emergence of commercial capitalism, the so-called Age of Discovery of the 15th and 16th centuries was indispensable, in which there was extensive maritime exploration of the planet as a consequence of the “discovery” of America in 1492.
These explorations brought with them the establishment of the first global empires, with colonies across the other four continents: the British Empire, the Spanish Empire, the Portuguese Empire, the Dutch Empire and the French Empire were the protagonists of this period. The presence of colonies in distant corners of the world It played an important role in the need to found new trade routes and in the availability of new inputs and raw materials
Main characteristics of commercial capitalism
Among the main features of commercial capitalism are the following:
- Capitalist production methods emerged for the first time, although restricted to artisanal manufacturing already on a low scale. This did not change until the 19th century, after the Industrial Revolution.
- Mercantilism became the prevailing economic doctrine especially among the European colonial powers, which competed with each other to hoard valuable resources, especially precious metals. They sought to export as much as possible and import as little as possible. The latter is known as the “favorable trade balance.”
- The monarchical and absolutist State intervened strongly in local economies through taxes, fees and prohibitions, with the purpose of promoting local commercial development.
- Unlike later capitalism (19th century), lacked industrialization and financial support but it already tended to the global flow of goods and raw materials, especially between the colonies and the metropolis.
- Paved the way for the rise of the bourgeoisie to power of societies, which led to the so-called Bourgeois Revolutions or Liberal Revolution.
Continue with: Industrial capitalism
References
- “Commercial capitalism” on Wikipedia.
- “Mercantilistic capitalism” on the CCH Academic Portal of the National Autonomous University of Mexico (UNAM).
- “From mercantile capitalism to industrial capitalism” at the Argentine Institute for Economic Development.
- “Commercial capitalism” in The Encyclopaedia Britannica.
