1. Chapter 2 The Historical Development of Capitalism
Feudalism and the Birth of Capitalism
The Emergence and Nature of Capitalism
The Industrial Revolution
Colonialism: Capitalism on a World Scale
Summary

2. The Importance of Historical Processes
The present economic landscape can only be understood as the result of an historical process
Decisions to site production facilities “yesterday” produce the spatial pattern that is the foundation for trade and patterns of consumption today
We can visualize these processes at various geographic scales

3. Feudalism and the Birth of Capitalism
From hunting & gathering to domesticated agriculture (animals and crops)
Slave-based empires (e.g. Roman) and their feudal successors (ca. 5th Century)
A form of economic and social relations that extended in Europe to ca. 15th century
Settlement in North America did not succeed feudalism, but was capitalist in character from the outset

4. Characteristics of Feudalism
Tradition shaped life and work
In Europe the church was the dominant political and ideological institution
Aristocratic land-owners formed the ruling class, who extracted rents from tenant farmers (often serfs) in low productivity agriculture
Feudal cities – often fortified – with guilds – markets, where universities were established
A hierarchy of feudal towns, mostly small trading centers, with negligible interregional trade

5. Feudal Regions & The Beginnings of Trade
Agricultural innovations; bubonic plague; the European Renaissance

6. Characteristics of Early Capitalism
Markets: buyers and sellers of goods & services at agreed upon prices
Market types: perfect competition – perfect monopoly – oligopoly (and other types)
The profit incentive = revenue – cost
Dynamic behavior of buyers and sellers, including incentives from innovation in products and production processes
Class relations: merchants & burghers vs. the old aristocracy. “Unlike feudal Europe, workers under capitalism must sell their labor power to survive. Thus the process of commodification extended to include the capacity to labor.”

7. The Emergence and Nature of Capitalism
Rise of trade-based city states – links to old trade routes to the Far East and in Europe

8. Alternative Models of Competition
Barriers to Entry - High
Barriers to Entry - Low

9. Attributes of Alternative Market Types
“Pure” Monopoly

10. Early Capitalism, Continued
Finance: replacing barter with money, and institutions to handle and regulate money
Uneven development as an inevitable outcome, historically persistent, at scales ranging from local to global
Long-distance trade – fueled by transport innovation – allowing regional specialization based on principle of comparative advantage
Ideological change – printing/reading, religion, science, the Enlightenment – “a worldview that stressed secularism, individualism, rationality, progress, and democracy.”

11. Early Capitalism, Continued
Feudal empires (e.g. Holy Roman Empire, Figure 2.11) with multiple nation-states
Replaced feudal monarchies with nation-states
Nation states supporting development of capitalism through regulations, public investment and programs (e.g. education, defense, trade protectionism…
BUT: these institutions do not preclude transnational capitalist development, evident in this era of globalization

12. The Industrial Revolution
Industrialization as a process with multiple transformations in inputs, output, and technologies. Driven by:
Harnessing inanimate sources of energy
(Figure 2.12), wood-coal-petroleum & gas
Technological innovation (Table 2.1)
Rising Productivity (Figure 2.14)
Spatial diffusion of the Industrial Revolution

13. Spread of the Industrial Revolution

14. Global Diffusion of the Industrial Revolution

15. Cycles of Industrialization – Kondratiev Long Waves
The Fifth
Wave – IT
& producer
Services

16. Consequences of the Industrial Revolution
Creation of an Industrial Working Class
Rise of organized labor
Urbanization – industry as “city forming” activity
Population Effects: Malthus’ warning vs.
productivity increases, health improvements, lowered birth rates
Growth of Global Markets & International Trade – transport improvement, international finance, timing of development