Jashore University of Science and Technology, Jashore

A REPORT WRITING ON
Capitalism, the growth of capitalism, features, and social consequences of capitalism and
socialism

Submitted By Submitted To

Tirtha Debnath Dr. Md Zakir Hossain

191907 Associate Professor

1st year 2nd semester Department of Biomedical Engineering

Department of Biomedical Engineering

Faculty of Engineering and Technology

Course Title: Sociology and Health Economics

Course Code: HUM-1201
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Title-- Capitalism, the growth of capitalism, features, and social consequences of capitalism and
socialism.
Name: Tirtha Debnath
Date:31/10/2020

Abstract
Topic: This report writing is about capitalism, the growth of capitalism, features, and social
consequences of capitalism and socialism, etc. This report writing is mainly focused on
capitalism and relations with other factors of sociology.
Purpose: Firstly, it will be introduced to readers with capitalism and socialism. Then it will also
be introduced to readers with some terminology. Terminologies give clear ideas at some points.
Finally, it will discuss some points that are related to capitalism. It will also discuss both
advantages and disadvantages of capitalism and its social consequences. Research method/
Method of collecting data: This report writing contains data from the internet and some
international books and own analysis. It will be cited at the end of the project. It will use photos
from google image or YouTube’s screenshots.
Finally, It will show the advantages and disadvantages of capitalism
Introduction
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Capitalism, an economic system that is connected to all elements of society. "Capitalism" is

derived from capital, which evolved from “capital”, a late Latin word based on caput, meaning
"head"—which is also the origin of "chattel" and "cattle" in the sense of movable property
(only much later to refer only to livestock). The term "capitalist", meaning an owner of capital,
appears earlier than the term "capitalism" and dates to the mid-17th century. Capitale emerged
in the 12th to 13th centuries to refer to funds, stock of merchandise, the sum of money, or
money carrying interest. By 1283, it was used in the sense of the capital assets of a trading firm
and was often interchanged with other words—wealth, money, funds, goods, assets, property,
and so on. On the other hand, Socialism is a political, social, and economic philosophy
encompassing a range of economic and social systems characterized by social ownership of
the means of production and workers' self-management of enterprises. It includes the
political theories and movements associated with such systems. Social ownership can be
public, collective, cooperative, or of equity. While no single definition encapsulates many
types of socialism, social ownership is the one common element. To explain capitalism and
socialism, there are some terminologies that we need to know. It's just a simple definition. We
will discuss their relationship with capitalism later.
Agrarianism: A social or political movement designed to bring about land reforms or to
improve the economic status of the farmer.
Mercantilism: An economic system developing during the decay of feudalism to unify and
increase the power and especially the monetary wealth of a nation by strict governmental
regulation of the entire national economy usually through policies designed to secure an
accumulation of bullion, a favorable balance of trade, the development of agriculture
and manufactures, and the establishment of foreign trading monopolies.
Industrial Revolution: A rapid major change in an economy (as in England in the late 18th
century) marked by the general introduction of power-driven machinery or by an important
change in the prevailing types and methods of use of such machines.
Modernity: The modern era or world and especially the ideas and attitudes associated with
the modern world.
Democracy: a system of government by the whole population or all the eligible members of a
state, typically through elected representatives.
Social Capitalism: Social Capitalism can be denied as a socially-minded form of capitalism,
where the goal is making social improvements, rather than focusing on accumulating capital
in the classic capitalist sense. It is a utilitarian form of capitalism with a social purpose.
Socialism: a political and economic theory of social organization that advocates that the means
of production, distribution, and exchange should be owned or regulated by the community as a
whole.
Socialism
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For Andrew Vincent, the words 'socialism' finds its root in the Latin social, which means to
combine or to share. The related, a more technical term in Roman and then medieval law was
societas. This latter word could mean companionship and fellowship as well as the more
legalistic idea of a consensual contract between freemen". Socialism was coined by Henri de
Saint-Simon, one of the founders of what would later be labeled utopian socialism. Simon
contrasted it to the liberal doctrine of individualism that emphasized the moral worth of the
individual whilst stressing that people act or should act as if they are in isolation from one
another. The original utopian socialists condemned this doctrine of individualism for failing to
address social concerns during the Industrial Revolution, including poverty, oppression, and
vast inequalities in wealth. They viewed their society as harming community life by basing
society on the competition. They presented socialism as an alternative to liberal individualism
based on the shared ownership of resources. Saint-Simon proposed economic planning,
scientific administration, and the application of scientific understanding to the organization of
society. By contrast, Robert Owen proposed to organize production and ownership via
cooperatives. Socialism is also attributed in France to Pierre Leroux and Marie Roch Louis
Reybaud while in Britain it is associated with Owen, who became one of the fathers of the
cooperative movement.

Substitiues factor markets and money with

integrated economic planning

Has engineered or technical plan based on

calculation perform in kind
Non market Eliminate crisises and inefficience

Different economic mechanism and law

Associated with capital accumulations and own
Socialism profit system

Retains The use of monetary prices factors

market and profite motives
Market
Profits are directly cintrolled by the workforce of firms

Figure 1: Main types of socialism

Socialist politics has been both internationalist and nationalist in orientation; organized
through political parties and opposed to party politics; at times overlapping with trade unions
and at other times independent and critical of them, and present in both industrialized and
developing nations. Social democracy originated within the socialist movement, supporting
economic and social interventions to promote social justice. While retaining socialism as a
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long-term goal, since the post-war period, it has come to embrace a Keynesian mixed
economy within a predominantly developed capitalist market economy and liberal democratic
polity that expands state intervention to include income redistribution, regulation, and a welfare
state. Economic democracy proposes a sort of market socialism, with more democratic
control of companies, currencies, investments, and natural resources. While the emergence
of the Soviet Union as the world's first nominally socialist state led to socialism's widespread
association with the Soviet economic model, some economists and intellectuals argued that in
practice the model functioned as a form of state capitalism or a non-planned administrative
or command economy. Academics, political commentators, and other scholars tend to
distinguish between authoritarian socialist and democratic socialist states, with the first
representing the Soviet Bloc and the latter representing Western Bloc countries which have been
democratically governed by socialist parties such as Britain, France, Sweden, and Western
social-democracies in general, among others.
History of Socialism
The intellectual roots of socialism go back at least as far as ancient Greek times,
when the philosopher Plato depicted a type of collective society in his
dialog, Republic  (360 B.C.).  In 16th-century England, Thomas More drew on
Platonic ideals for his Utopia, an imaginary island where money has been abolished
and people live and work communally. In the late 18th century, the invention of the
steam engine powered the Industrial Revolution, which brought sweeping economic
and social change first to Great Britain, then to the rest of the world. Factory owners
became wealthy, while many workers lived in increasing poverty, laboring for long
hours under difficult and sometimes dangerous conditions.

Early Socialism:
1.3rd century BCE Mauryan Empire of India was described as "a socialized
monarchy" and "a sort of state socialism".
Some great philosophers are Plato, Aristotle, Mazdak, Abu Dharr Ghifari.
2.The teachings of Jesus are frequently described as socialist, especially by Christian
socialists. Christian socialism was one of the founding threads of the British Labor Party
and is claimed to begin with the uprising of Wat Tyler and John Ball in the 14th century
CE.
3.After the French Revolution, activists and theorists such as François-Noël Babeuf,
Étienne-Gabriel Morelly, Philippe Buonarroti and Auguste Blanqui influenced the early
French labor and socialist movements.
4.The first advocates of socialism favored social leveling to create a meritocratic or
technocratic society based on individual talent.
5.Henri de Saint-Simon was fascinated by the potential of science and technology and
advocated a socialist society that would eliminate the disorderly aspects of capitalism
based on equal opportunities. He sought a society in which each person was ranked
according to his or her capacities and rewarded according to his or her work. His key
focus was on administrative efficiency and industrialism and a belief that science was
essential to progress. West European social critics, including Louis Blanc, Charles
Fourier, Charles Hall, Robert Owen, Pierre Joseph Proudhon, and Saint-Simon were the
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first modern socialists who criticized the poverty and inequality of the Industrial
Revolution.

Utopian Socialism:
1. Socialists like Henri de Saint-Simon, Robert Owen, and Charles Fourier.
A social organization is based on cooperation rather than competition.
2.Fourier and Owen (in France and Britain, respectively) proposed systems
based on small collective communities, not a centralized state.

Early 20th century’s Socialism:

1. In Argentina, the Socialist Party of Argentina was established in the 1890s led by Juan
B. Justo and Nicolás Repetto, among others. It was the first mass party in the country
and Latin America.
2. In 1904, Australians elected Chris Watson as the first Australian Labor Party Prime
Minister, becoming the first democratically elected socialist.
3. In 1909, the first Kibbutz was established in Palestine by Russian Jewish Immigrants.
The Kibbutz Movement expanded through the 20th century following a doctrine of
Zionist socialism.
4.By 1917, the patriotism of World War I changed into political radicalism in Australia,
most of Europe, and the United States.
5.In February 1917, a revolution exploded in Russia. Workers, soldiers, and peasants
established soviets (councils), the monarchy fell and a provisional government convened
pending the election of a constituent assembly.
6.In April of that year, Vladimir Lenin, leader of the Bolshevik faction of socialists in
Russia and known for his profound and controversial expansions of Marxism, was allowed
to cross Germany to return from exile in Switzerland. Lenin declared that the revolution
in Russia had only begun and that the next step was for the workers' soviets to take full
authority.
7.On 7 November, the capital of the provisional government was stormed by Bolshevik
Red Guards in what afterward became known as the Great October Socialist Revolution.
On 25 January 1918, Lenin declared "Long live the world socialist revolution!" at the
Petrograd Soviet.

Capitalism

Capitalism is an economic system based on the private ownership of the means of

production and their operation for profit. Central characteristics of capitalism
include capital accumulation, competitive markets, a price system, private property, and the
recognition of property rights, voluntary exchange, and wage labor. In a capitalist market
economy, decision-making and investments are determined by every owner of wealth,
property, or production ability in the capital and financial markets whereas prices and the
distribution of goods and services are mainly determined by competition in goods and services
markets. Economists, historians, political economists, and sociologists have adopted different
perspectives in their analyses of capitalism and have recognized various forms of it in practice.
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These include laissez-faire or free-market capitalism, state capitalism, and welfare

capitalism. Different forms of capitalism feature varying degrees of free markets, public
ownership, obstacles to free competition, and state-sanctioned social policies. The degree of
competition in markets and the role of intervention and regulation as well as the scope of state
ownership vary across different models of capitalism. The extent to which different markets are
free and the rules defining private property are matters of politics and policy. Most of the
existing capitalist economies are mixed economies that combine elements of free markets with
state intervention and in some cases economic planning. Market economies have existed under
many forms of government and in many different times, places, and cultures. Modern capitalist
societies—marked by universalization of money-based social relations, a consistently large and
system-wide class of workers who must work for wages (the proletariat) and a capitalist class
which owns the means of production—developed in Western Europe in a process that led to the
Industrial Revolution. Capitalist systems with varying degrees of direct government intervention
have since become dominant in the Western world and continue to spread. Over time, all
capitalist countries have experienced consistent economic growth and an increase in the standard
of living. Critics of capitalism argue that it establishes power in the hands of a minority capitalist
class that exists through the exploitation of the majority working class and their labor, prioritizes
profit over social good, natural resources, and the environment, and is an engine of inequality,
corruption, and economic instabilities and that many are not able to access its purported benefits
and freedoms, such as freely investing. Supporters argue that it provides better products and
innovation through competition, promotes pluralism and decentralization of power, disperses
wealth to people who can invest in useful enterprises based on market demands, allows for a
flexible incentive system where efficiency and sustainability are priorities to protect capital,
creates strong economic growth and yields productivity and prosperity that greatly benefit
society.

Figure 2: Actual facts of capitalism

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History of Capitalism:

Capitalism in its modern form can be traced to the emergence of agrarian capitalism and
mercantilism in the early Renaissance, in city-states like Florence. Capital has existed incipiently
on a small scale for centuries in the form of merchant, renting, and lending activities and
occasionally as small-scale industry with some wage Laboure. Simple commodity exchange and
consequently simple commodity production, which is the initial basis for the growth of capital
from trade, have a very long history. Arabs promulgated capitalist economic policies such as free
trade and banking. Their use of Indo-Arabic numerals facilitated bookkeeping. These
innovations migrated to Europe through trade partners in cities such as Venice and Pisa. The
Italian mathematician Fibonacci traveled the Mediterranean talking to Arab traders and returned
to popularize the use of Indo-Arabic numerals in Europe. There are some stages or eras of
capitalism’s history. These are:

Agrarianism
1. The economic foundations of the feudal agricultural system began to shift substantially
in 16th-century England.
2.Because of the breaking down of the manorial system and land began to become
concentrated in the hands of fewer landlords with increasingly large estates.
3.Workers were increasingly employed as part of a broader instead of a serf-based system
of labor.
4.Expanding money-based economy.
5.Unfortunately, the system put pressure on both landlords and tenants to increase the
productivity of agriculture to make a profit.
6. Terms of rent for land were becoming subject to economic market forces rather than to
the previous stagnant system of custom and feudal obligation.
7. By the early 17th century, England was a centralized state in which much of the feudal
order of Medieval Europe had been swept away.
8. The capital acted as a central market hub for the entire country, creating a very large
internal market for goods, contrasting with the fragmented feudal holdings that prevailed
in most parts of the Continent.

Mercantilism
1. The economic doctrine prevailing from the 16th to the 18th centuries is commonly
called mercantilism.
2.Mercantilism was a system of trade for profit, although commodities were still largely
produced by non-capitalist methods.
3.Most scholars consider the era of merchant capitalism and mercantilism as the origin of
modern capitalism.
4. England began a large-scale and integrative approach to mercantilism during the
Elizabethan Era (1558–1603). A systematic and coherent explanation of balance of trade
was made public through Thomas Mun's argument England's Treasure by Foreign Trade,
or the Balance of our Foreign Trade is The Rule of Our Treasure. It was written in the
1620s and published in 1664.
5.In the words of Francis Bacon, the purpose of mercantilism was "the opening and well-
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balancing of trade; the cherishing of manufacturers; the banishing of idleness; the

repressing of waste and excess by sumptuary laws; the improvement and husbanding of
the soil.

Proto Industrial Revolution

1. The British East India Company and the Dutch East India Company, after massive
contributions from the Mughal Bengal, inaugurated an expansive era of commerce and
trade.
2. These companies were characterized by their colonial and expansionary powers given
to them by nation-states.
3. During this era, merchants, who had traded under the previous stage of mercantilism,
invested capital in the East India Companies and other colonies, seeking a return on
investment.

Industrial Revolution
1. During the Industrial Revolution, industrialists replaced merchants as a dominant
factor in the capitalist system and affected the decline of the traditional handicraft skills
of artisans, guilds, and journeymen.
2. the surplus generated by the rise of commercial agriculture encouraged increased
mechanization of agriculture.
3. Industrial capitalism marked the development of the factory system of manufacturing,
characterized by a complex division of labor between and within the work process and
the routine of work tasks; and eventually established the domination of the capitalist
mode of production.
4. Industrialization allowed cheap production of household items using economies of
scale while rapid population growth created sustained demand for commodities.

Modernity
1. Capitalism was carried across the world by broader processes of globalization.
2. By the beginning of the nineteenth century a series of loosely connected market
systems had come together as a relatively integrated global system, in turn intensifying
processes of economic and another globalization.
3. Later in the 20th century, capitalism overcame a challenge by centrally-planned
economies and is now the encompassing system worldwide, with the mixed economy
being its dominant form in the industrialized Western world.
4. In this period, the global financial system was mainly tied to the gold standard.
5. The United Kingdom first formally adopted this standard in 1821.
6. New technologies, such as the telegraph, the transatlantic cable, the radiotelephone, the
steamship, and railway allowed goods and information to move around the world to an
unprecedented degree.

Characteristics of Capitalism
1. Capital accumulation: production for profit and accumulation as the implicit purpose of all or
most of production, constriction, or elimination of production formerly carried out on a common
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social or private household basis.

2. Commodity production: production for an exchange on a market; to maximize exchange-value
instead of use-value. Private ownership of the means of production.

3. High levels of wage Laboure.

4.The investment of money to make a profit.
5.The use of the price mechanism to allocate resources between competing uses.
6.Economically efficient use of the factors of production and raw materials due to the
maximization of value-added in the production process.
7.Freedom of capitalists to act in their self-interest in managing their business and investments.

Supply and demand

1. If demand increases (demand curve shifts to the right) and supply remains unchanged, then a
shortage occurs, leading to a higher equilibrium price.
2. If demand decreases (demand curve shifts to the left) and supply remains unchanged, then a
surplus occurs, leading to a lower equilibrium price.
3. If demand remains unchanged and supply increases (supply curve shifts to the right), then a
surplus occurs, leading to a lower equilibrium price.
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4. If demand remains unchanged and supply decreases (supply curve shifts to the left), then a
shortage occurs, leading to a higher equilibrium price.

Social consequences of capitalism

Problems of Capitalism:
1. Inequality
2. Financial instability/economic cycle
3. Monopoly Power
4.  Monopsony
5. Immobilities 
6. Environmental costs and externalities
7. Encourages greed/materialism
Advantages of Capitalism:
1. Efficient Allocation of Resources.
2.Efficient Production.
3.Dynamic Efficiency.
4.Financial Incentives.
5.Creative destruction.
6. Economic freedom helps political freedom.
7.Mechanism for overcoming discrimination and bringing people together.
8.Different types of capitalism.
9.Rising living standards.

Work Cited:
Advantages of capitalism, Tejvan Pettinger,
https://www.economicshelp.org/blog/1259/economics/advantages-of-capitalism/
Problems of capitalism,  Tejvan Pettinger,
https://www.economicshelp.org/blog/77/economics/problems-of-capitalism/
Capitalism, Wikipedia.org/capitalism
Socialism, Wikipedia.org/socialism
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