POSC 1200U Lecture Notes - Lecture 3: Karl Polanyi, Second Industrial Revolution, Merchant Capitalism
January 30, 2018
Social Policy Market Exploitation
Lecture 3
Markets that exploit
• The markets as exploitation argument is associated most commonly with Karl Marx, and
Karl Polanyi, but Adam Smith also warned of the corrosive dangers of free markets.
• A form of conflict theory.
• Remember, the reasons for the opposition to feudalism especially in the late 18th
century: Plague, war, poverty of the masses, emergence of the merchant class.
• The defeat of feudalism is more the result of a war between two powerful classes than a
true struggle for freedom or democracy.
• The iers ere the erhat/apitalist lass’ Losers ere Feudal aristoray; pas
were the masses of poor.
• The iers desiged the orld i their iterest – there as o spotaeous order
• The Rich are Rich Because the Poor are Poor
• The Poor are Poor Because the Rich Are Rich
Key dates
• Democratic Revolutions:
o England (1640-1688)
o American Revolution (1775-1783)
o French Revolution (1789-1792)
o Mercatilist Period or erchat capitalis 5s to late-1800s)
▪ Note that all the democratic revolutions occurred at the end of this
period
• Transition from Merchant to Industrial capitalism (1700s – mid 1800s)
• First industrial revolution (mechanization) late 1700s
• Second Industrial Revolution (Steam) late 1800s
• Many (Karl Polanyi) say that capitalist market society began around 1776
Meratilia Merhat Capitalis
• Late 1500s – late 1800s
• Based on colonialism and trade backed by state power
• Not based on production
• Merchants became incredibly wealthy and gained much political power
Primitive (first thing you need before you can have an industrial revolution) Accumulation
• The accumulation of resources in the hands of a few merchants
• Led to their conversion to capitalists in 18th C (first industrial revolution)
• Two forms:
• Eclosure: In Britain, in the 18thc, Feudal lands were privatized, became the
property of wealthy merchants
find more resources at oneclass.com
find more resources at oneclass.com
• Later, in the US, former slave plantations were transferred to large private owners who
hired workers instead of holding slaves
• 2) Colonial Accumulation: The taking of vast wealth through force, from colonies, by the
major merchants
Proletarianization
• In Britain, in the 18thc, Feudal lands were privatized, became the property of wealthy
merchants (no longer the king), and the peasants were pushed off.
o This created a large mass of unemployed people who owned nothing but their
ability to work (proletariat)
▪ Moved to the cities in search of work (urbanization)
o Also, merchants became owners of land as well as the riches they had
accumulated through trade
o Many of them began to own factories and produce goods (bourgeoisie)
Two classes
• Primitive accumulation and proletarianization led to the creation of the capitalist system
ad it’s to oflitig lasses:
o Proletariat: the ajority. Did ot o the eas of produtio lad, or
capital). Only sold their labour
o Bourgeoisie: Owned land and factories. Hired proletariat
Industrial Capitalism
• Starting late first in late 1700s, intensifying in late 1800s
• Based more on production of goods than on trade
• Bourgeoisie owned factories and employed some proletariat in factories
• Conflict: between the two classes because:
o Owners want high profits
o Workers want high wages
• Reserve army of unemployed kept ages do ad assured low wages and poor
working conditions
Political and economic revolutions
• The revolutions in this period were transition points in both politics AND economics
• Transition to democracy was accompanied by transition to industrial capitalism and was
led primarily by wealthy, but non-feudal, class (merchants/capitalists)
• This is why constitutions which called for democracy, equality, and rights, also called for
the protection of private property – assuring that economic equality cannot be achieved
through redistribution (this would have required the taking of wealth from
merchants/capitalists)
Leaders of American Revolution
• Samuel Adams: Son of a wealthy merchant. Harvard educated
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Lecture 3: the markets as exploitation argument is associated most commonly with karl marx, and. Mer(cid:272)a(cid:374)tilia(cid:373) (cid:862)mer(cid:272)ha(cid:374)t capitalis(cid:373)(cid:863: late 1500s late 1800s, based on colonialism and trade backed by state power, not based on production, merchants became incredibly wealthy and gained much political power. Two classes: primitive accumulation and proletarianization led to the creation of the capitalist system a(cid:374)d it"s t(cid:449)o (cid:272)o(cid:374)fli(cid:272)ti(cid:374)g (cid:272)lasses, proletariat: the (cid:373)ajority. Did (cid:374)ot o(cid:449)(cid:374) the (cid:862)(cid:373)ea(cid:374)s of produ(cid:272)tio(cid:374)(cid:863) (cid:894)la(cid:374)d, or capital). Only sold their labour: bourgeoisie: owned land and factories. Leaders of american revolution: samuel adams: son of a wealthy merchant. Harvard educated: patrick henry: born into wealthy virginian elite class. John adams: upper middle class, harvard education, did well, but not born into extravagant wealth: benjamin franklin: not born into wealth but had become wealthy in business. Retired by: thomas jefferson: born into elite virginian plantation slave-holding family. Extremely wealthy: george washington: born into prosperous slave-holding planter family.
