CONTRIBUTION OF MERCANTILISM TO THE DEVELOPMENT OF CAPITALISM IN EUROPE
CONTRIBUTION OF MERCANTILISM TO THE DEVELOPMENT OF CAPITALISM IN EUROPE
Mercantilism had great impact in the development of industrial revolution and the eventual transformation of European countries into big powers. The European countries accumulated capital for around 300 years. It should be noted that mercantilism was a blessing to Europe, but a tragedy to Africa.
The contribution of mercantile trade to the developing of European industrial capitalism included the following;
1. Accumulation capital.
The European countries acquired a lot of capital from mercantilism. The countries were able to accumulate a lot of capital throughout the 300 years of mercantilism through unequal exchange, the obtained precious metals such as gold, silver and diamond which they used to finance the industrial revolution.
2. Source of cheap labour.
Mercantilism was associated with slave trade, during this period millions of Africans were uprooted and exported to America, where they provided cheap labor in mines and plantations of sugarcane and coffee belonging to European absentee capitalists.
3. Supply of raw materials.
Mercantilism contributed to the rise of capitalism by supplying raw materials that were needed by European industries. Raw materials such as gold, tobacco, sugar cane and cotton were obtained from Africa and America. These raw materials played a great role in the rise of industrial revolution.
4. Development of science and technology.
Mercantilism was associated with maritime technology that led to the development of science and technology. The ships enabled the transportation of large quantities of raw materials and manufactured goods over long distances. This played a great role in the rise of industrial revolution.
5. Development of towns and cities.
Mercantilism contributed to the development of towns and cities in Europe. These towns developed due to the booming trade that existed in that period. The towns include the following; Manchester, Liverpool, Nantes and Bordeaux. These towns attracted the establishment of industries which contributed to the rise of capitalism.
6. Development of financial institutions.
Mercantilism contributed to the development of financial institutions. Part of the money which was used to establish Barclays bank in England was obtained from slave trade during mercantilism. This financial institution played a great role in the rise of capitalism by providing loans and credit to people who wanted to invest.
7. Development of agricultural sector.
Mercantilism was associated with new farming methods and agricultural sector. The wealth accumulated from mercantilism was invested in agricultural sector thus contributing to the agrarian revolution. The agrarian revolution played a leading in the development of capitalism.
8. Rise of aristocratic class.
The most successful merchants during mercantilism became rulers by staging political revolution such as the English revolution of the 1640 and the French revolution of 1789 that over threw despotic regimes. The new governments that were controlled by merchants abolished feudalism and introduced capitalist relation of production.
9. Minting of coin money.
The golden silver that was obtained in mercantilism was used to mint coin money. This money formed the basis of capital accumulation that later financed industrial revolution in Europe.