Commercial capitalism, also called mercantile capitalism or mercantilism, was the first phase of the capitalist system . It begins at the end of the 15th century, with the decline of feudalism, and ends in the 18th century, with the strengthening of industrialization. Commercial capitalism definition
Also known as the pre-capitalist phase, commercial capitalism originated with the emergence of National States and marks the end of the Middle Ages and the beginning of the Modern Age.
Capitalism is an economic system that seeks to accumulate wealth . In this phase, the accumulation of capital was the result of commercial exchanges – the main economic activity in Europe at that time.
Commercial capitalism has as main characteristics protectionism, state control of the economy , metalism and a favorable trade balance .
The following phases of this economic system are industrial capitalism and financial capitalism – the current phase of the system. Commercial capitalism definition
Main features of commercial capitalism
- State control over the economy: mercantilism was marked by strong state intervention in the economy. Absolutist states controlled the markets and determined the amount of taxes.
- Protectionism: Customs taxes and tariffs protected the entry of imported products into countries, in order to protect national industries and manufactures.
- Metalism: the wealth of a country was determined by the accumulated amount of precious metal (gold and silver). A large part of these metals were removed from the colonies and sent to the metropolises during this period.
- Favorable Trade Balance: countries tried to make their exports exceed imports, so that the country’s financial situation remained positive. Commercial capitalism definition
History of commercial capitalism
One of the main changes that mark the end of feudalism and the beginning of commercial capitalism is the relationship between labor and capital. Instead of the servile relationship of manors, free and wage labor appears here .
This is also the time of the great navigations , when Europeans discovered and started to colonize lands on the African and American continents. This colonization was largely due to the exploitation of natural and human resources for the benefit of the metropolis.
In general, what happened in these colonizations was the exploration and sending of raw material from the colony to the metropolis, which produced and sold more expensive goods and, with that, accumulated capital. Many of these goods were bought by the colony itself, guaranteeing the metropolis huge profits.
At that time, the wealth of a nation was measured by the amount of accumulated precious metals. Hence the incessant search of Europeans for these metals in their colonies – in this period, immense amounts of silver and gold were taken from the American continent.
The slave trade and commercialization was also a very profitable type of business for the colonizing countries in this period.
Commercial capitalism was an important phase for the development of capitalism in the following centuries, as it allowed the accumulation of capital that later made possible the Industrial Revolution.
Emergence of commercial capitalism
Before the beginning of commercial capitalism, the system of production prevailing in Europe was feudal. Feudalism was a form of social, political, economic and cultural organization that was based on land tenure . Commercial capitalism definition
It was a society of estates, formed by the nobility , the clergy and the serfs and there was no social mobility. That is, it was not possible for a person to change from one social stratum to another.
The nobility was formed by the feudal lords, the clergy was composed of members of the Catholic Church and the serfs were the workers, who received food and a place to live in exchange for work on the lords’ lands, but did not receive a salary.
The feudal economy was self- sufficient and all production was destined for local consumption.
With the intensification of commerce, the merchants – who represented the bourgeois class – began to accumulate capital. Capital became the source of wealth for this society, replacing land in feudalism.
International division of labor in commercial capitalism
An important concept that explains the world productive organization from this period is the international division of labor. According to this theory, each part of the world plays a certain role in the global productive organization .
During mercantilism, the international division of colonial labor prevailed, represented by the division between colony and metropolis. In this scheme, the colony supplied spices, precious metals and raw materials to the metropolis and the metropolis produced manufactured goods. Commercial capitalism definition