Capitalism started in Europe, specifically in England due to the weak feudal system, which gave peasants land rights and the bargaining power to dictate market trends for agricultural produce based on forces of demand and supply. Competition among peasants created room for job specialization and improved productivity, thus allowing farmers to feed a large population of people who could not own land. However, capitalism spread quickly from England to other parts of the world due to imperialism and globalization as discussed in this paper.
Starting from the late 16th century, European nations, especially Britain, had started overseas occupation starting with the Americas. By the early 20th century, imperialism had spread throughout the world with almost every nation colonized. Capitalism is closely linked with imperialism with some scholars arguing that this economic system was one of the major forces behind the colonization of various nations (Rosenberg, 1994; Teschke, 2002). British sought to establish a global empire through economic advancement and political influence, through accumulation by dispossession (Harvey, 2005).
Given that capitalism had started in England, it became the popular economic system among imperialists. Karl Marx, an economist, historian, and philosopher, argued that capitalism allowed the spread of imperialism because it could not be contained within the borders of one country (Sau, 1980). Marx noted that capitalism needed an international division of labor where “one part of the globe into a chiefly agricultural field of production, for supplying the other part which remains a chiefly industrial” (Sau, 1980, p. 4). Therefore, capitalism and imperialism were intertwined in a sophisticated scheme with each side requiring the support of the other to thrive (Hardt & Negri, 2000). Ultimately, Britain and other European countries spread capitalism to the world through imperialism.
Another theory that explains the spread of capitalism is globalization. The modern world has become one global village with the advancement of technology to facilitate connectivity and ease transportations barriers for goods and services. Therefore, multinational companies, which are structured around capitalism, seek to produce goods in areas with cheap labor and supply to various markets around the world. As such, globalization facilitates stiff competition by allowing international players to access markets in different places of the globe. Consequently, as a survival tactic, companies adopt principles of capitalism, which seek to accumulate wealth, especially by private entities.
With the free movements of goods and services across borders, markets have to rely on forces of supply and demand, which are the rudimentary concepts of capitalism (Lacher, 2006). With globalization, capitalism became the most popular economic system and ideology that nations have been willing to engage in war in its defense. For instance, the Cold War was an ideological confrontation with the US and Soviets seeking to defend capitalism and communism, respectively. Therefore, globalization has significantly facilitated the spread of capitalism from the developed world to the developing nations.
Capitalism started in England and quickly spread to the rest of the world through imperialism starting in the late 16th century and globalization from the 1900s. Imperialism and capitalism co-existed in a complex web of interdependence, as colonialists sought to expand their empires through economic expansion and political influence. Similarly, with globalization, capitalism became the preferred mode of operation for most multinational organizations in their bid to remain competitive and access a wide range of markets around the world. These two theories explain how capitalism spread from Europe to become the dominant economic system in modern times.
Hardt, M., & Negri, A. (2000). Empire. Harvard University Press.
Harvey, D. (2005). The new imperialism. Oxford University Press.
Lacher, H. (2006). Beyond globalization: Capitalism, territoriality and the international relations of modernity. Routledge.
Rosenberg, J. (1994). The empire of civil society: A critique of the realist theory of international relations. Verso.
Sau, R. (1980). Class struggles, economic laws and historical materialism. Social Scientist, 9(2) 3-11.
Teschke, B. (2002). Theorizing the Westphalian system of states: International relations from absolutism to capitalism. European Journal of International Relations, 8(1), 5-48.