Warm Up Tell me what you know about September 11, 2001.

Capitalism 7-1.4: Analyze the beginnings of capitalism and the ways that is was affected by mercantilism, the developing market economy, international trade, and the rise of the middle class.

What is Capitalism? Capitalism: system in which people, rather than governments, own property, make goods, buy and sell them freely. Based upon private ownership of resources and production that is driven to make a profit Capitalism grew out of mercantilism

How did capitalism begin? During the 17th and 18th centuries, changing economic activities began to alter the economic structure of Europe and lent itself to the establishment of capitalism. How did capitalism begin?

Capitalism = Private Ownership!!!!!! Mercantilism was based on government ownership of the colonies, but capitalism was based on private ownership. With the growth of international trade that resulted from the improved navigational techniques, the “discovery” and colonization of the new world and a growing merchant “middle” class, the economy became more complex. Capitalism = Private Ownership!!!!!!

Merchants and ship owners took risks and enjoyed profits from the growing international trade These merchants and businessmen formed the backbone of a growing middle class in Europe. These merchants and business men were the beginnings of the growing middle class in Europe Led to growing market economy in which individuals interact in the market place to exchange goods and services

Main Ideas Capitalism benefited the people as individuals, not the country Fairer system, more competition, but fairer

Factors that led to Capitalism 1. Mercantilism 2. International Trade 3. Rise of the Middle Class 4. Developing Market Economy

Capitalism Build up capital: or money…that’s more to invest in business Growth of middle class supported business Raw materials from colonies were cheap…mother countries produce manufactured goods Markets sell those goods