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GEO 108 (19)
Lecture 2

Lecture 2 - Historical Development of Capitalism.docx

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Ryerson University
GEO 108
Peter Kedron

Chapter 2: The Historic Development of Capitalism Feudalism - Social and economic relations prior to capitalism  A stable system (lasted 1000 years) – sometimes referred to as the Middle Ages or the Dark Ages  Eurocentric view – not everywhere was dark during the dark ages o Characteristic Institutions  Actively discouraged experimentation and change  The Church was the predominant political/ideological institution in Europe  No major distinction between private and public property o Characteristic Spatial and Social Organization  Ruling class: aristocratic nobility whose power lay in ownership of land  People were serfs and were bound to the land, limited mobility  Overwhelmingly rural society  Farming hamlets and cities were small o Characteristic Economic/Production Organization  Farming based upon animate energy  Markets were small and poorly developed  Agriculture was organized around the rhythms of the seasons  Guilds were common in the cities to produce goods - Figure 2.4 – The pre-capitalist world of the fourteenth century o Stretching from Europe to the Middle East formed one network embedded in a broader system - End of feudalism o Eleventh century – gradual agricultural revolution based on the heavy plow, waterwheels, etc. o Expansion of the international trade system centered around Damascus and Baghdad o Expansion of agricultural lands through deforestation o Bubonic plague killed one-quarter of Europe’s people in 4 years  Historians speculate this destabilized the feudal foundations of Europe, opening the doors for a new type of society  Labour shortage (supply/demand for labour)  Legal system faded, allowing serfs to run away  Capitalist systems (banks) were already emerging - Figure 2.6 – Italian city-states in the nineteenth century, prior to unification in 1861 o Capitalism began in Northern Italy, and for much of its history, its political geography was characterized by city-states, not nation-states. The most important of these city-states had extensive trade relations with the rest of the Mediterranean world Characteristics of Capitalism - Markets – most important institution of allocation o Consists of buyers and sellers of commodities (goods and services bought and sold for a price) o PROFIT is incentive for selling goods and services o Competition provides strong incentive to produce goods and services cheaply and efficiently to please consumers o Private property is a key requirement for production o Did not begin with capitalism, but are unique in importance to capitalism  the major way resources are allocated - Class Relations o Capitalist class system based on money and earned status (not tradition and born rank) o Rise of the middle-class or bourgeoisie – capitalist class o As merchants and burghers gained wealth, and also gained political power  Aristocracy (hereditary) resisted, low opinion of capitalists o Labor itself became a commodity, gave some power to the workers  Became the working class - Finance o Money became standardized, and ubiquitous as a measure of value replacing the barter system  Monetary value on time, space, and labour o Organization and control of money became an industry (banking, investment, insurance, commercial credit) o Turn-over rate important in the accumulation of wealth o Joint stock companies – precursor to modern stock markets (helped to eliminate risk) o Accounting became important profession - Territorial and Geographic Changes o Capitalism creates uneven spatial development o System with Europe at the center and colonies the periphery  Europe became wealthy  Within Europe there were regional differences o As capitalism spread, dominated by the emerging nation-states, urban areas became mor
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