Capitalism - Meaning and Development Globalization

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Capitalism- Meaning and Development; globalization
Paper: Introduction to Comparative Government and

Politics
Lesson Name: Capitalism- Meaning and Development;

globalization
Lesson Developer: Dr. Pranav Kumar
College/Department: Motilal Nehru College, University of

Delhi
1
Institute of Lifelong Learning, University of Delhi
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Content:
1. Introduction
2. Meaning
3. Capitalism and Modernity
4. Emergence of capitalism
5. The Industrial Revolution
6. Growth and expansion of Capitalism
7. Types of Capitalist systems in contemporary world
8. i)Capitalism and Globalisation
ii) Defining Globalization
9. Globalization and modern nation- states:
9.1 The three views
II. Different types of states and globalization
10. Conclusion
11. Questions.
I. Essay type questions
II. Objective type question
III. True/False questions
12. Reference
2
1. Introduction:
An understanding of capitalism is essential to make a sense of contemporary world. If

market and individual economic liberty is the kernel of capitalism, then there are hardly one
or two countries on this earth which do not follow one or another form of capitalism.
Interestingly there is a great variation in the systems followed by different countries. The
Western Europe and the USA had long been seen as the citadels of capitalism. But now,
even a formerly communist country like China, follows the capitalist path of development.
Today the juggernaut of capitalism is pushed by the process of globalization. The process of
globalization in turn penetrates every region of this earth and affects the human life in
many ways.
The ideology of capitalism is based on the writings of many liberal economists. Most
prominent among them was Adam smith, who propounded the idea of ‘invisible hand’,
which says that if everyone pursues his/her own good it will automatically lead to social
good.
Value addition—Important to know
Philosophy of Adam Smith
Adam Smith was an 18th century Scottish philosopher. He

is credited of being the pioneer of the study of economics. In
his famous book ‘The wealth of nations’ he has given the
idea of ‘invisible hand’. He believed that rational human
beings in a free market environment will lead to prosperity
in society. Smith’s idea make the bedrock of liberal
economic philosophy.
( Source of picture:
http://en.wikipedia.org/wiki/Adam_Smith#mediaviewer/File:Adam_Smith_The_Muir_portrai
t.jpg, accessed on 9/06/2014)
It is argued that the ideology of capitalism, is an ideology of crass profit and exploitation of
labour. This argument was propounded by the communists and the socialist. The post
second world war world witnessed a cold war between the capitalist and communist
3
ideologies. However the demise of communism in Soviet Union led scholars to proclaim the
victory of capitalism over all other ideologies (End of History thesis by Francis Fukuyama )
Value addition—Important to know
Basic theme of End of History –Francis Fukuyama
American political Scientist Francis Fukuyama wrote a book “The End of

History and the Last Man” in 1992. This book claimed that the end of
cold means that the liberal democratic ideology has triumphed and we
have reached the end point of ideological evolution. Now the mankind
has found that the western liberal democracy is the final form of human
government. The end of ideology thesis raged a heated debate
amongst scholars. Scholars like Jacques Derrida criticized Fukuyama for
what he calls the celebration of liberal hegemony. Source:
http://en.wikipedia.org/wiki/Francis_Fukuyama#mediaviewer/File:Fran
cis_Fukuyama_2005.jpg , accessed on 14/06/2014.
This chapter will try to provide a basic understanding about capitalism. First of all, given the
diversity of capitalist regimes across the world, it is pertinent to delve upon the meaning of
capitalism. The chapter will also trace the origins and development of the ideas and
institutions of capitalism. In the development of capitalism, the process of globalization will
be explained. Finally the chapter will also provide a critical assessment of capitalism.
2. Meaning
Value Addition: Surf and know
Defining the Concept

“Capitalism is a social system based on the principle of individual rights. Politically, it is the
system of laissez-faire (freedom). Legally it is a system of objective laws (rule of law as
opposed to rule of man). Economically, when such freedom is applied to the sphere of
production its result is the free-market” (http://capitalism.org/, accessed on 5/6/2014).
4
Capitalism is variously described as an economic system, a social system, an ideology, or

even a type of state/government. The liberal economists assume that Capitalism is an
economic or social system in which the means of production are owned privately and
distribution happens through market mechanism. Many sociologists will argue that
capitalism is a social system where the social structures, institutions and relations are
woven around market. On the other hand there are some philosophers (like Marx) who see
capitalism as an ideology of the ruling bourgeois class, who owns the means of production.
Today, in common newspaper language the word capitalist state is frequently used to
denote many western developed countries. Hence the term capitalism is used in different
senses by different people.
Interestingly the term capitalism was given to it by the opponents of capitalism as a term
of disparagement. Today a great number of countries follow capitalist system. However, we
can observe a diversity among these countries about the capitalist policies followed by
them. Therefore it becomes difficult to say which country is real capitalist country. Despite
the uncertainty surrounding the use of the word, we can safely identify some of the central
ideas inherent in any meaning of capitalism:
i) Investment of money to make profit.
ii) Any type of assets can be converted to capital with the help of various institutions and
mechanisms.
iii) Wage labour is central to the functioning of capitalism.
iv) Production and consumption are divorced, markets are central to human life.
V) The institution of private property is not violated. In addition to private property the
system of inheritance is also very crucial in the capitalist system.
vi) Economic freedom translating in freedom of contract, freedom of choice, freedom of

enterprise and freedom to use one's property.
vii) Competition at every level is the key to efficiency in capitalism. A large number of
producers, buyers and sellers work in their self-interest.
viii) Limited role of government in economic sphere. Absence of economic planning or

interference by the government.
5
Historically there is disagreement amongst scholars about the definition, nature, origin and
concept of capitalism. How a scholar defines capitalism becomes important for determining
the historical origin of capitalism too. The definition used, also indicates how the features of
modern capitalism are different from earlier existing systems. Maurice Dobb has identified
three separate meanings of capitalism that is used in writings.
First, some scholars like Werner Sombart, and Max Weber understand capitalism in
terms of a special spirit of enterprise among human beings. They find that capitalism is a
product of rational human attitude. According to Max Weber the capitalism should be
understood with reference to the growth of Calvinist ideas and spirit. Weber defines the
"Spirit of Capitalism" as "that attitude which seeks profit rationally and systematically."
Second, this set of views differentiates between ‘natural economy’ and ‘money
economy’ and emphasizes that in money economy the production and retail sale is
separated by space and time. This type of definition is closely linked to the ‘profit motive’
definition. Since there will be people who will invest in production or trade to gain profit
from this time-space distance. Professor Nussbaum defines capitalism as a system of
exchange economy in which the orienting principle of economic activity is unrestricted
profit.
Third, this type of definition is attributed to Marx. In the Marxist definition the focus is on
the ownership of means of production. In this system of commodity production the labour
power itself becomes a commodity. Hence there is an emergence of a bourgeois class
(owners of means of production) and proletariat class (property less and sellers of labour
power).
Value-Addition:Surf and know
To know more about Capitalism, you may go to: -
http://www.jstor.org/discover/10.2307/4288032?uid=2129&uid=2&uid=70&uid=4&sid=211
04578103273
6
ORIGIN AND DEVELOPMENT OF CAPITALISM
Some of the features of a capitalist system were present in many ancient societies. Trading
between societies, nations and empires is as old as human civilisation. There were private
individuals who used to do trading in every era. We can even say that there were people
who owned capital. But the economic system of capitalism is a modern system. One of the
most important distinguishing features of this system is the centrality of market and
dependence of people upon the system. Unlike earlier trading system, the capitalism
envelops every sphere of human activity and guides production, distribution and
consumption in totality. In Marxist terminology the creation of surplus value is the
distinguishing feature of modern capitalist system which was not present in earlier systems.
Further Marxists also emphasize the emergence of new type of class system as a
distinguishing feature of capitalist system. There are disagreements about the origin and
growth of capitalism. However most of the scholars of capitalism regard this as a modern
phenomenon. Therefore an understanding of modernity will be essential to comprehend the
historical explanations of the origin of capitalism.
3. Capitalism and Modernity
Since capitalism is a phenomenon of modern society, we need to understand the emergence

and features of modernity. The term modern is used in a wide array of meanings. Here we
are referring to a particular period of European history, which emerged after the medieval
‘dark ages’ in Europe. The ideas, ideologies, institutions, politics, that emerges during this
period and the social and scientific changes that occurred can be said to make the
background for the origin and growth of capitalism and capitalist ideas.
There are important historical events, movements and phenomenons which led to the
change in society and people in Europe. Renaissance (rebirth) spanned from 14th century to
17th century was an important period, which marked the beginning of modern times. The
renaissance scholars tried to break the shackles of religion, tradition and conformism. They
stressed upon inventive and innovative ideas.
Value addition---Did you know:
Basic understanding of Rennaissance
7
Renaissance (rebirth) spanned from 14th

century to 17th century was an important period,
which marked the beginning of modern times. This
was primarily a cultural movement which is marked
by the renewal of interest in classical learning and
values. The movement also was humanistic as it
believed in this ability of human beings to gain
knowledge. The renaissance scholars tried to break
the shackles of religion, tradition and conformism.
They stressed upon inventive and innovative ideas. ,
Mona Lisa by Leonardo da Vinci is a masterpiece of
Renaissance and world art.
(http://en.wikipedia.org/wiki/Renaissance#mediavie
wer/File:Mona_Lisa,_by_Leonardo_da_
http://en.wikipedia.org/wiki/File:Mona_Lisa,_by_Le
onardo_da_Vinci,_from_C2RMF_retouched.jpg
, accessed on 7/6/2014.)
The Enlightenment gave primacy of reason and rationality. It also contained other important
features: knowledge is based upon the empirical facts, experimental method leads to
scientific knowledge, reason and science are universal, natural and social condition of
human beings could be improved by reason and science, individual is the starting point of
all knowledge and action, the knowledge should be secular and free of religious
orthodoxies, all human beings are essentially the same and opposition to feudal and
traditional constraints on freedom of individual.
8
Value addition—Did you know:

Basic information about Enlightenment
According to the Stanford Encyclopaedia of Philosophy, the Enlightenment is the

period in the history of western thought and culture, stretching roughly from the mid-
decades of the seventeenth century through the eighteenth century, characterized by
dramatic revolutions in science, philosophy, society in western world. This period marked the
change in the worldview about God, nature and human beings.
The Reformation of Christianity brought individual at the centre of society. The emphasis of
individual and freedom of will had long term and wider social implications too. Max Weber, a
German Sociologist had claimed that cultural values have the potential to affect economic
success. He argued that the value changes (values that drove people toward worldly
achievements, a hard work ethic, and saving to accumulate wealth for investment) brought
by the protestant reformation created the conditions for the growth of capitalism.
1.
Value addition—Additional information
Introducing Reformation
(http://en.wikipedia.org/wiki/Protestant_Reformation#mediaviewer/File:95Thesen.jpg, Martin
Luther's Ninety-Five Theses, accessed on 7/6/2014).
9
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The Encyclopaedia Britannica describes Reformation as the religious revolution that took place in
the Western church in the 16th century. Its greatest leaders undoubtedly were Martin Luther and
John Calvin. Having far-reaching political, economic, and social effects, the Reformation became the
basis for the founding of Protestantism, one of the three major branches of Christianity. On October
31, 1517, Martin Luther, posted his Ninety-five Theses on the door of the Castle Church,
Wittenberg, Germany, this is the traditional date for the beginning of the Reformation. The
reformation challenged the traditional authority of the Pope and claimed that the scriptures alone
are authoritative (sola scriptura). So now any one can read the holy books and achieve his or her
own salvation.
The scientific Revolution between 1500-1700 is critical for the emergence of modern science
and consequently for modern society itself. The developments in mathematics, physics,
astronomy, biology, medicine, and chemistry transformed the way knowledge is gained and
applied. Many new and revolutionary ideas mark the period of scientific revolution: There
were many thinkers and scientists who challenged the traditional medieval knowledge and
established the modern views about man and natural world. Some of the important thinkers
were: Copernicus, Galileo, Newton, Kepler and Tycho Brahe.
10
Value Addition: Additional Information
Weber's model of capitalist development
Source: http://en.wikipedia.org/wiki/File:Weber%27s_model_of_capitalist_development.svg,
accessed on 20/05/2014.
The Renaissance, Enlightenment, Reformation and scientific Revolution closed the chapter
of medieval period of European history and opened a new chapter of Modernity in European
history. The man and his thinking changed, the relationship between one man and one
group of men to other changed, the way men produce and consume goods changed, the
way men understood natural and social world changed, the way men were governed also
changed.
4. Emergence of capitalism
There are many factors which are important to explain the emergence of capitalism. They
are as follows:-
11
i) Prior growth of merchant capitalism: Merchant capitalism grew significantly by 16 th

century in Europe. The main focus of the traders was to make money out of the price
difference of goods. Hence there was no investment in production rather the investment
was done in buying the goods at lesser price and selling it at higher prices by manipulating
the space and time difference. The merchants were either individuals, groups or backed by
small private financiers. They will bring some goods from there and sell in Europe and the
price difference will lead to huge profits. However merchant capitalism was different from
modern industrial and commercial capitalisms, as there was lack of industrialization and
commercial finance. James Fulcher (A very Short Introduction to Capitalism) argues
that Merchant capitalism particularly in the shape of East India Company developed strongly
in the 17th century.
ii) Disintegration of Feudalism: Maurice Dobb in his seminal book (Studies in the
development of Capitalism) defines Feudalism as being virtually identical with what we
usually mean by serfdom: an obligation led by the producer by force and independently of
his own volition to fulfil certain economic demands of an overlord, whether these demands
take the form of services to be performed or of dues to be paid in money or in kind.
Christopher Hill (The English Revolution) says that by feudalism mean a form of society
in which agriculture is the basis of economy and in which political power is monopolised by a
class of landowners. The feudal social relationship existed between the 9th and 15th
centuries in Europe. There are many reasons for the decline of feudalism. However it is very
clear that the decline started in England. First, sometimes the Black Death is given as an
important reason for the decline of feudalism. During 1348-50, more than 100 million
people died in Europe due to various types of plague. The population of England was
reduced by more than one third and as a consequence labour became a valuable
commodity.
Value Addition: Illustration
12
(Illustration of the Black Death from the Toggenburg Bible (1411))

Source :http://en.wikipedia.org/wiki/File:Smallpox01.jpg, accessed on 15/06/2014.
Second, the hundred year’s war between France and England in 14 th and fifteenth century
strengthens the power of the monarchs and weakened the feudal lords. Further the king can
manage his own standing army with the money provided by the emerging middle class and
traders. Third, the emergence of many new towns provided the opportunity for serfs to
leave rural areas and work in towns. Fourth, it is argued that feudalism in England was
never very solidly established and hence a centralized state emerged in England. James
Fulcher argues that in feudal societies judicial and military authorities were dispersed to
local lords, England been however been a relatively unified, orderly and cohesive monarchy
since the Norman Conquest in 1066. By the 16th century, under the Tudors it had become
the least feudal and the most unified and centralised of European states.
According to James Fulcher, the origins of capitalist production in Britain are to be found
less in merchant capitalism than in the earlier growth of production, consumption, and
markets in 16th-century England. The 16th century England witnessed the growth of simple
commodity exchange and production. One of the important characteristics of modern
th
Capitalism is wage labour .In 16 century the number of people dependent on wage labours
roughly became half of the total household of England. Fulcher points out that this meant
that people increasingly had money to buy such goods and market relationships were
becoming more important in their daily lives. The growth of wage labour also saw a
rudimentary emergence of labour unions by 18th century. putting-out system’, was coming
into existence. Use of capital investment in production is a critical point in the development
of capitalism. The use of capital leading to a new form of production can be noticed in the
13
clothing business. The merchants used their capital to buy wool and put this out to spinners
and weavers, before collecting the cloth, distributing it to other crafts for finishing off, and
finally selling it. This was called ‘putting-out system’.
Defining Putting –out System
Putting-out System, production system widespread in 17th-century western Europe in

which merchant-employers “put out” materials to rural producers who usually worked in
their homes but sometimes laboured in workshops or in turn put out work to others.
Finished products were returned to the employers for payment on a piecework or wage
basis. The domestic system differed from the handicraft system of home production in that
the workers neither bought materials nor sold products.
(Source : http://www.britannica.com/EBchecked/topic/168578/domestic-system. accessed
on 15/6/2014 )
Fulcher argues that although this system was organized by merchants, they were much
closer than those engaged in international trading ventures to the production process and
hence this was a clear and important step on the road to capitalist production.
iv) Nation states and capitalism: Many authors link the emergence of capitalism and the
emergence of nation states. This set of argument believes that a centralised and powerful
state removes the hurdles from the path of commercial activities of the bourgeois. A
centralised state was essential to create a national economy. The centralised state also
helped in the transition the old feudal system to further free the labour to enter in to
industrial wage market. Another type of argument which connects the nation state in
Europe to capitalism focuses on the unique nature of European state system. According to
Immanuel Wallerstein, the organization of Europe into multiple polities, instead of in one
over-arching empire, permitted the development of trade based division of labour, without
the burden of massive appropriation by an imperial state that syphoned off surpluses that
could otherwise have been invested. Further, the multistate character of Europe proved
beneficial for commercial activities.
5. The Industrial Revolution:
Value Addition—Interesting to know
14
Exposure to spinning wheel
(http://en.wikipedia.org/wiki/File:Spinning_jenny.jpg , Model of the spinning jenny in a museum

in Wuppertal. Invented by James Hargreaves in 1764, the spinning jenny was one of the
innovations that started the revolution, accessed on 8/6/2014.)
The Industrial revolution can be said to be one of the defining periods of human history. It
changed, for all times to come, how humans live. Before the industrial revolution the
economy was mainly agricultural and production was hand based. The period of industrial
revolution is generally agreed as 18th-19th century. The industrial revolution mainly started
in Britain and gradually spread to other parts of Europe and North America. A society which
was already impregnated by the ideas generated by renaissance, reformation and
enlightenment found the physical means to dominate nature and become the masters of the
earth. The industrial revolution brought many technological changes in the economic
system.
15
Industrial revolution and related changes

According to the Encyclopaedia Britannica the technological changes included the following:
(1) the use of new basic materials, chiefly iron and steel, (2) the use of new energy
sources, including both fuels and motive power, such as coal, the steam engine, electricity,
petroleum, and the internal-combustion engine, (3) the invention of new machines, such as
the spinning jenny and the power loom that permitted increased production with a smaller
expenditure of human energy, (4) a new organization of work known as the factory system,
which entailed increased division of labour and specialization of function, (5) important
developments in transportation and communication, including the steam locomotive,
steamship, automobile, airplane, telegraph, and radio, and (6) the increasing application of
science to industry.
(http://www.britannica.com/EBchecked/topic/287086/Industrial-Revolution, accessed on
7/6/2014 )
Market became the place where exchange of goods and services were occurring. Now
concentration of population was in cities and the sources of wealth was not in land. The
industrial revolution changed the social relationship too. At the same time the industrial
revolution also brought inhuman living and working condition in cities, child labour, and
exploitation of labour, concentration of wealth in the hands of few people. And in Marxist
terminology there emerged a bourgeois class which now owned the means of production.
6. Growth and expansion of Capitalism
The above mentioned major factors coupled with the industrial revolution led to a
remarkable development of productive forces. And by the beginning of 18 th century the
capitalist mode of production became widespread in England and gradually in all over
Europe.This created a large consumer market for the products. By now capitalism has
reached a phase where it has replaced all other economic and social relations. From here we
can trace the journey of capitalism in two directions. One, the capitalism passes through
various stages in Europe, (primarily in Britain, which is seen as the mother of capitalism).
Two, capitalism expanded to other parts of the world in search of raw materials, markets
16
and labour. A very different type of social relationship was established in these parts, which
were called colonies.
James Fulcher divides the journey of capitalism in Britain in three stages. The first stage is
called the Anarchic capitalism. This was the stage in 18th and early 19th century when
industrial capitalism made it breakthrough. The states legislation to manage the
entrepreneurs was non-existent and there was no organized labour to protest against the
entrepreneurs. This period also saw a rise in liberal ideas and consequently the state was
seen as a mere night watchman. The main function of the state was to remove the hurdles
before the commercial activities. The welfare functions of the state were non-existent. With
the backing of liberal ideas the freedom of individual and market was taken as the supreme
virtue. The second stage of capitalism is called by Fulcher, the Managed capitalism. This
stage roughly began in the second half of the 19 th century and lasted till 1970s. On the level
of ideas, the growth of modern liberalism marked a rethinking about anarchic capitalism The
industrial units became bigger and bigger and role of managers achieved a central place.
The state tries to manage the working class dissent by increasing the representation of the
working class and widening the net of welfare activities. This period marked the provisions
of free education and healthcare by the state. Gradually the issues of equality were also
becoming important in political discourse. However the increasing role of government in a
market environment created problems and this led to a crisis in economy in 1970s.
Eventually, the market forces saw a revival in 1970s. James Fulcher calls the period after
1970s as remarketized capitalism. This period is marked by the rise of neoliberal beliefs
in freedom of individual and free operation of market forces. The state was ‘rolling back’
and the welfare activities of the state were diminishing.
Ankie Hoogvelt in his book ‘Globalization and Post-Colonial World’ traces the
expansion of capitalism outside Europe. Hoogevelt distinguishes four periods of European
expansion:
i) 1500-1800; Mercantile Phase: The characteristic feature of this phase is that in the
name of trading relations the European merchants transferred the economic surplus from
Africa, Asia and South America to Europe.
ii) 1800-1950; Colonial period: colonialism not only involves transfer of resource but it is
subjugation and domination. The colonialism linked all other parts of the world with Europe
in a relationship of economic exchange through direct rule. The colonial powers imposed
unequal terms of trade and depleted the colonies by transferring economic resources.
17
iii) 1950- 1970; neo-colonial period: after the political independence the newly
independent countries adopted a development model which resulted in transfer of economic
surplus through ‘developmetalism’ and technological rent.
Value Addition: Did you know
Defining Developmentalism
Developmentalism is an economic theory which states that the best way for Third World
countries to develop is through fostering a strong and varied internal market and to impose
high tariffs on imported goods.
iv) 1970 - ; Post imperialism: In this period the transfer of economic surplus occurs
through debt patronage (an undefined pledge to do service in repayment of the debt).
7. Types of Capitalist systems in contemporary world:
We can observe that there are various types of capitalist regimes around the world.
Various types of capitalist systems

Many Scholars have classified the existing capitalist systems. According to political
economists Peter A. Hall and David Soskice (“Varieties of Capitalism: The Institutional
Foundations of Comparative Advantage”) there are two major types of capitalist economies:
liberal market economies (LME) and coordinated market economies (CME). In ‘Good
Capitalism, Bad Capitalism’ William J. Baumol, Robert E. Litan, and Carl J. Schramm identify
four varieties of capitalism: entrepreneurial Capitalism (USA), big-firm capitalism (Europe
and Japan), state-directed capitalism (China), and oligarchic capitalism (Russia).
Andrew Heywood in his text book on ‘Politics’ identifies three types of capitalist systems in
the modern world:
i) Enterprise Capitalism: Enterprise capitalism is the purest form of capitalism as it is

based on the ideas of classical economists like Adam Smith. This type of capitalism is
prevalent in the United States of America. This system is based on the idea of free market
and minimal state interference. The enterprise capitalism promotes marketization and is a
driving force behind economic globalisation.
18
ii) Social Capitalism: this type of capitalism is present in western and central Europe.
According to Heywood the central theme of this model is the idea of a social market; that is
an attempt to marry the disciplines of market competition with the need for social cohesion
and solidarity. In this system, the state undertakes a number of welfare activities and the
trade unions are very strong. A good example of this type of system is Germany. In
Germany a form of ‘stakeholder capitalism’ has developed that takes in to account the
interest of workers and those of the wider community. This contrast with the shareholder
capitalism found in the USA. In crux, the market remains largely free of governmental
interference and the government actively takes part in welfare activities to maintain social
cohesion.
iii) Collective Capitalism: According to Heywood this type of capitalism is based on the
example of post-1945 Japan. Later this model was adopted by South Korea, Taiwan and
Singapore and other East Asian countries. Even it has influenced the current Chinese
capitalism. This type of capitalism mainly takes account of the social factors and weaves
capitalism around the indigenous ways of life. The workers give their loyalty commitment
and hard work and they are rewarded with lifetime employment, pension and social
protection. A particular stress is placed on teamwork and the building up of collective
identity, which is underpinned by relatively narrow income differentials between managers
and workers.
Value –addition: Surf and know

To know more about the classification of Capitalism in different typologies you may go to :
http://www.cerium.ca/IMG/pdf/HALL-_A_Peter_and_SOSKICE_David-
_An_introduction_to_varieties_of_capitalism-2.pdf
8. i) Linking Capitalism and Globalisation:
The first question that arises here is how capitalism is linked to globalisation? The
contemporary process of globalisation accelerated in post-cold war period. To understand
the reasons behind this we need to look back in to the world economic history. As we have
seen, that by the 19th century, the industrial capitalism was well established in the Europe
and settler colonies of Europe. Further, the colonies were also linked to capitalist European
powers in an unequal relationship. The 1917, Bolshevik revolution in Russia, presented the
first major challenge to the capitalist national economies. By the end of second world war,
19
the United States of America emerged as one of the most powerful countries, which was
now seen as the seat of industrial and financial capitalism.
On the other hand the emergence of the USSR as the socialist power was critical to
challenge the capitalist model of growth. In the post second world war world the process of
decolonisation accelerated. Many newly independent countries adopted socialist model of
economy or a mixed model of economy. Hence in major parts of the world, the economic
freedom was limited, private investment was either nil or highly regulated and the state was
the most dominant player in economy. The emphasis was given on self-sustainability.
Therefore, world economic integration was highly improbable. However, by 1980s cracks
started appearing in soviet bloc. Even the problems of the socialist economies were
apparent. Many countries, which were following socialist path of development gradually
started changing their policies and moved towards capitalism. The critical moment came in
1991, when the champion of socialism, the USSR collapsed. With the collapse of the USSR,
now there are no true socialist economies left on this earth (except North Korea and Cuba).
Now the first world (the capitalist countries during the cold war) the second world (the
socialist countries during the cold war) and the third world countries, all are adopting (in
various degrees) neoliberal policies. The adoption of neoliberal policies meant privatisation
and liberalisation. Eventually, this process has accelerated the rate of interaction between
countries and integration between economies, which are the key to globalisation.
8. ii) Defining Globalization
Globalization is a complex process affecting our daily lives in many ways. However, defining
globalization remains one of the most challenging tasks for modern scholars. The challenge
mainly arises due to widest spectrum of disciplines and discourse that the phenomenon of
globalization tends to cover. And most of the definitions are limited to one or other
disciplinary area covering some aspects of this process and leaving out some. Any study of
globalization must understand beforehand that the process of globalization pervades into
almost every sphere of human activity and touches every aspect of human experience (for
example; social, cultural, political, spiritual, technological etc.). Thereby an all-
encompassing definition of globalization is very difficult to provide. We can see some of the
definitions of globalization:
1. “Globalization can thus be defined as the intensification of worldwide social relations

which link distant localities in such a way that local happening are shaped by events
occurring many miles away and vice versa. (Anthony Glidden’s)
20
2. “ Globalization may be thought as a process(or a set of processes) which embodies a

transformation in the spatial organization of social relations and transformations assessed in
terms of their extensity, intensity, velocity and impact – generating transcontinental and
interregional flows and networks of activity interaction, and the exercise of power” (David
Held)’
Value Addition: know it more
Various perspectives on Globalization

“Globalization describes a trend of increasing transnational flow and increasingly thick
networks of interdependence” (Robert.O.Keohane).
“Globalization is a process along four dimensions: economic globalization, formation of world
opinion, democratisation and political globalization. This was rounded off with the assertion
that changes along one of the dimensions (such as economic globalization) elicited changes
among the other dimensions” (George Modelski).
For our purpose we can find out important elements of globalization from these definitions:
a) Globalization is multidimensional and multifaceted.
b) Not a single set of phenomenon or process but a complex web of phenomenon or

processes.
c) Marked by communication, interdependence, integration, connection and mobility.
d) Globalization is primarily a descriptive rather than a prescriptive term.
e) Nation states are no longer the only actor in International relations and many other
actors (Non-Governmental organizations, supra national actors, sub national actors,
transnational corporations, etc.) are becoming important.
f) The boundaries of states are becoming porous and permeable leading to increasing
movement of people, goods, ideas, services and information.
As we have seen that there is no agreement about the process of globalization. Even some
scholars question the use of the term globalization itself to explain the contemporary world.
According to Held there are three courses of analysis of globalisation in contemporary
21
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literature. First, there are hyper -globalists, who view globalisation as a ‘legitimate and
irrepressible historical process’. They view globalisation as a novel phenomenon occurring in
human history which is leading towards more integrated market and society. Second, there
are sceptics, who emphasize the fact that national economies are still relevant and the
process should be called internationalisation. They even point towards the fact that the
volume of world trade was higher even in pre-1914 period. Third, there are
transformationlists, who see a fundamental change in society but at the same time take a
multidimensional view of the picture. For example Anthony Gidden’s, “considers
globalisation as a phenomenon shaped by forces of modern capitalism: politics, military
power and industrialism”.
Globalisation is a multidimensional, multilevel and multilayer process. Essentially it’s not a

single process, rather a complex combination of many processes. We can compare
globalisation with the waves of ocean where many waves interact with each other and affect
each other at the same time. In the process of globalisation too, many dimensions (political,
economic, and social) interact and affect each other.
9. Globalization and modern nation- states
I. The three views:
There is a diversity of opinion about the impact of globalization on nation-states. George

Sorenson identifies three major positions in this debate about the impact of globalization on
nation-states.
Defining Nation -State

Nation-state is a political community with defined territory and sovereignty. The population
living within a nation-state are conscious about their commonness and generally belong to
one national group. In ideal terms there are hardly any nation-states in modern world. But
the term has now been loosely used to mean any state in the modern international system.
1) The Retreat Scholars: This group of scholars treat globalization as a highly influential
contemporary phenomenon. And they regard that there is a considerable erosion of state’s
power in various senses. There is a retreat of the state. In the opinion of Kenichi Ohame-
22
the nation state has become an unnatural, even dysfunctional unit for organizing human
activity and managing economic endeavours in a borderless world. It represents no genuine
shared community of economic interest; it defines no meaningful flows of economic activity.
Ohame primarily focuses on the economic functions of the state and emerging challenges
for those functions. On the other hand Susan Strange believes that not only economic but
other spheres of state’s authority is now not the sole domain of state power. Further,
scholars like John Naisbitt, predicts the breaking up of modern states in many tiny units as
a consequence of new tribalism.
2) The State-Centric Scholars – Many scholars question the emphasis on the term
globalization itself. They argue that there is nothing unprecedented about the economic
openness and integration. Linda Weiss argues that to understand contemporary economic
interactions we should employ the term internationalization rather globalization. The nation-
state remains the most important and dominant actors in this interaction and hence the
phenomenon globalization) and its impact are highly exaggerated. Robert Gilpin argues
that the nation- state remains the prominent actor in both domestic and international affairs
and the impacts of globalization are nothing more rather than consequences of technological
development. Many other scholars argue that that state still remains the decision maker in
economic sphere. Despite the emergence of other economic actors in domestic and
international scenario, it is the state which creates a level playing field, and makes rules and
builds norms for economic interaction. Further it is the state which acts as a gatekeeper for
the economic domain.
3) The Transformationalist scholars: David Held and Anthony McGrew are two major
transformationlist scholars. According to them globalization is a multi-causal phenomenon
and only economic logic will not explain the process of globalization. They say that both the
state centric and retreat scholars are partly true and partly false. Essentially, the outcome
of the globalization process cannot be easily determined. There is no winning or losing game
between globalization and states. Actually, the states might become powerful in some
domains and might lose authority in some other domains. The transformation occurring in
the states power is very complex and it cannot be put in black and white.
Value Addition:Surf and know

To understand the pattern of relationship between Globalization and Nation-States and their
survival you may go to
:http://www.jstor.org/discover/10.2307/20050051?uid=2129&uid=2&uid=70&uid=4&sid=2
23
1104578103273
II. Different types of states and globalization:
George Sorenson examines the consequences of globalization on sovereign states. He

identifies four aspects of the statehood- political administrative institutions of the
government national-economy, national identity and sovereignty. These four aspects are
present in modern capitalist nation-states. However these aspects of statehood are either
less-developed, mixed or in nascent stage in many other parts the world (Africa, Asia and
Latin America). Hence we need to look at these states differently since they are differently
constituted. Sorenson identifies three categories of states- Advanced capitalist states, weak
post-colonial states and modernizing states.
a. Advanced capitalist states- The literature on the impact of globalization on nation-

states are mainly focused on the modern capitalist states. Since the peace treaty of
Westphalia in 1648, different aspects of statehood had developed and blossomed in these
states. In these states a centralized national government enjoys national authority in the
form of constitutional independence and organizes a largely self-sustained segregated
national economy. And this nation state is inhabited by citizens who are bound by the bonds
of nationalism. This is an ideal of a pure modern nation state, which had developed in west.
Now the question is how far this modern nation-state has transformed by the impact of
globalization. Sorenson says that a new form of state is emerging due to this transformation
and he calls this new form; Post-modern states. He identifies four prominent aspects of the
statehood of Post-modern states- multi-level governance, less exclusive national identities,
deep integration of economic activities across borders and emergence of supranational
authorities.
b. The weak post-colonial states- Commenting about the ‘retreat’ and ‘state-centric’
scholars debate about the impact of globalization on nation-states, Sorenson says- “this is
not a relevant debate for weak post-colonial states in the third world. They were never
modern states in the first place and they are not on the way of becoming post-modern
states”. In these states the institutional structure of the government is not strong and the
institutions are marred by corruption and personal rule. The political elite were never
successful and binding all tribal and religious nationalities together in a common
nationhood. In terms of economy, they are largely producers of raw materials and remain
24
bystanders in the process of globalization, because they are unable to partipcate in this
process as partners. Although these weak states have formal sovereignty, as they have
constitutional independence, but they have hardly any control over external intervention.
c. Modernizing states: George Sorenson argues that the modernizing states combine the
features of modern, post-modern and weak post-colonial states. The modernizing states,
like China, India, Malaysia, Brazil, and Thailand are better positioned than the weak post-
colonial states to benefit from globalization. In these states the different aspects of the
statehood has developed in different degrees. For example in Indian economy we find a
mixture of overreliance on agricultural sector and at the same time development of software
based service sector. Similar mix can be found in society and polity in every modernizing
country. These countries have opened their economies to participate in the globalization
process, but at the same time their domestic economic and political institution is plagued by
severe weaknesses.
Value Addition-Surf and know

To know more about Nation States and their dynamics you may go to:
http://www.jstor.org/discover/10.2307/4402944?uid=2129&uid=2&uid=70&uid=4&sid=211
04578103273
10. A critical Assessment of Capitalism:
25
(http://en.wikipedia.org/wiki/File:Pyramid_of_Capitalist_System.png, a caricature of
capitalism, accessed on 5/06/2014)
“Capital is dead labour, which, vampire-like, lives only by sucking living labour, and lives
the more, the more labour it sucks”.- Karl Marx
“The worst enemy of humanity is capitalism. That is what provokes uprisings like our own,
a rebellion against a system, against a neo-liberal model, which is the representation of a
savage capitalism. If the entire world doesn't acknowledge this reality, that the national
states are not providing even minimally for health, education and nourishment, then each
day the most fundamental human rights are being violated”.- Evo Morales
26
“But every acquisition that is disproportionate to the labour spent on it is dishonest.” ―

Leo Tolstoy
Capitalism is the most dominant economic system of last three centuries. But its dominance
is not unchallenged. Thinkers, philosophers, rulers, activists, societies, communities, tribal,
locals, workers, humanists, religious and spiritual people- almost all types of people have
criticised capitalism. However we can put the criticisms of capitalism in four categories:
Marxist criticism, socialist criticism, religious criticism and others (including anarchists,
environmentalists, feminists etc). Why people criticise capitalism? The criticism of capitalism
mainly involves these issues: private property, exploitation of labour, leads to fascism,
imperialism, colonialism and neo-colonialism, dehumanization of human beings, destruction
of community and society, distortion of democracy, growing inequality, market failures and
unsustainability, putting material pursuit as ultimate goal, etc.
The most trenchant critic of Capitalism comes from Karl Marx and other Marxist thinkers.
Marx’s criticism of capitalism can be said to be of two types: scientific criticism of capitalism
and humanistic criticism of capitalism. Marx argues that capitalism is the last stage in the
exploitation of human beings by human beings. This last but most advanced stage is the
culmination of the institution of private property. Where the bourgeois (the capitalist) owns
the private property and exploits the proletariat.
Marxist critique of capitalist mechanism
“Under capitalism, Marx claimed, workers are not paid fully or fairly for their labour because
the capitalists siphon off surplus value, which they call profit. Thus, the bourgeois owners of
the means of production amass enormous wealth, while the proletariat falls further into
poverty. This wealth also enables the bourgeoisie to control the government or state, which
does the bidding of the wealthy and the powerful to the detriment of the poor and the
powerless”
(http://www.britannica.com/EBchecked/topic/129104/communism/276325/Historical-
materialism#toc276326, accessed on 8/6/2014)
The existing democracy in the capitalist countries is only a bourgeois democracy and there
is no democracy for the majority of people. Ultimately the proletariat will rise in revolution
and demolish capitalism. The humanistic criticism of capitalism is based on the idea that the
27
Capitalism dehumanizes the human beings and uses the proletariat merely like tools. Here
Marx provides his theory of alienation and says that in a capitalist system the worker is
alienated on four counts: Alienation of the worker from the work — from the product of his
labour, Alienation of the worker from working — from the act of producing, Alienation of the
worker from himself, as a producer, Alienation of the worker from other workers.
In his book, Imperialism, the Highest Stage of Capitalism (1917), noted Marxist
revolutionary and thinker, Vladimir Lenin argues that imperialism is a result of the
capitalist’s search for greater profits outside their own country. This imperialism leads to the
exploitation of people and the economy of the colonies. In last one century various Marxist
thinkers have analysed and criticised every minute process of the capitalist economy. The
Marxist critic like Immanuel Wallerstein see a terminal crisis in the capitalist world
economy, which will eventually lead to a transition from this world-system to some another
world system.
Apart from the Marxists, the anarchists and the socialists criticise the insitution of private
property. Some thinkers even equate private property to theft. There is also a general
criticism of wage labour. Some anarchist thinkers say that wage labour is like wage slavery.
Noam Chomsky contends that there is little moral difference between chattel slavery and
renting one's self to an owner or "wage slavery". He feels that it is an attack on personal
integrity that undermines individual freedom. He holds that workers should own and control
their workplace (http://globetrotter.berkeley.edu/people2/Chomsky/chomsky-con2.html,
Conversations with Noam Chomsky,).
Most of the religious traditions are critical of capitalism due to its high materialist
orientations. The Islamic philosophy does not believe in interest in money, which is an
essential feature of capitalism. The Hindu and Buddhist philosophy despise the
overindulgence of the capitalist society and believes that capitalism degenerates the human
beings and human civilisation. Even, recently the highest pontiff of Christianity, Pope
Francis severely criticised capitalism. He writes:
“Just as the commandment “Thou shalt not kill” sets a clear limit in order to safeguard the
value of human life, today we also have to say “thou shalt not” to an economy of exclusion
and inequality. Such an economy kills. How can it be that it is not a news item when an
elderly homeless person dies of exposure, but it is news when the stock market loses two
points? This is a case of exclusion. Can we continue to stand by when food is thrown away
while people are starving? This is a case of inequality. Today everything comes under the
28
laws of competition and the survival of the fittest, where the powerful feed upon the
powerless. As a consequence, masses of people find themselves excluded and marginalized:
without work, without possibilities, without any means of escape” (The Washington Post, 26
November 2013).
The criticism of capitalism and struggle against capitalism is fought not only through the
writings but also in various ways by waging small and big struggles. The struggles by the
Latin American countries against capitalism attracts special attention. The iconic figure of
Fidel Castro is projected as a thorn in the foot of capitalism. Castro says “I find capitalism
repugnant. It is filthy, it is gross, it is alienating... because it causes war, hypocrisy and
competition”. In recent times there is an upsurge of movements against capitalism in Latin
America, which has brought many anti-capitalist regimes to power. One of the recent
celebrities in this list is Evo Morales of Bolivia.
The frequent economic crisis has also led to a greater criticism of capitalism from various
quarters. In popular culture, like movies and documentaries there is an incisive critical
portrayal of capitalism and its consequences. Some of the famous documentaries are:
Michael Moore's Capitalism: A Love Story, Charles Ferguson’s, The Inside Job, and
Overdose: The Next Financial Crisis – Directed by Martin Borgs, Erwin Wagenhofer’s Let’s
Make Money.
29
(http://en.wikipedia.org/wiki/Capitalism:_A_Love_Story#mediaviewer/File:Capitalism_a_lov
e_story_poster.jpg, , accessed on 7/6/2014.
(This documentary by Moore explains the social costs of corporate interests and portrays
that corporates are pursuing profits at the expense of the public good).
11. Conclusion:
In human history people have always endeavoured to earn an income whether in form of
kind or money. The business and trading are as old as human civilisation. It is said that
people have always invested money to earn a profit. So capitalist were always there. But
the phenomenon of capitalism is modern. We might find trading activities in historical period
but the institutions and processes of modern capitalism arose in Europe after medieval
period. The renaissance, reformation, enlightenment and scientific revolution had prepared
the ground for the beginning and growth of capitalism. Specific historical institutions and
process in England in particular and in Europe in general has shaped the nature and
character of modern industrial capitalism. The decline of feudalism, the growth of mercantile
capitalism, the emergence of nation state, has played a critical role in the development of
30
capitalism in Europe. With scientific discoveries the European capitalism travelled from
Europe to Americas, Australia, Asia and Africa, it colonised and bound the colonies in a
relationship of unequal trade, where the transfer of surplus occurred. In its long journey
many new institutions have evolved to make capitalism stronger. The role of state has
always been a contentious issue in capitalist economies. The 20 th century saw an increased
role of state after the middle of the century. However, the state once again started rolling
back by the end of the millennium. The adoption of neoliberal policies by many nations has
accelerated the process of economic integration of world, which is also called the process of
globalisation. The globalisation has been criticised by many scholars and thinker at various
points of time. Marxism is built around a criticism of capitalism. The capitalism has tried to
reinvent itself after every crisis and with every criticism. There is no linear growth pattern
and no homogenous type of capitalism. The capitalism is found of many varieties in different
parts of the world. At the one hand we see enterprise capitalism of the USA and on the
other a more welfare variant of capitalism in northern European countries. Despite frequent
economic crisis and virulent attack from the critics, the capitalism survives in different parts
of the world and claims to create prosperity and benefits for ordinary people.
Glossary:
1. Invisible hand: a concept of Adam Smith
2. Investment: time/energy/money spent in expectation of future benefits
3. Renaissance (rebirth) : primarily a cultural movement in Europe
4. Ninety-Five Theses: posted by Martin Luther to reform Christianity
5. Feudalism: social system in medieval Europe
6. Black Death: various types of Plagues in 14th century Europe.
7. Merchant: a businessperson, who buys and sells goods.
8. Enterprise: an undertaking or project
9. Stakeholder capitalism: takes in to account the interest of workers and those of the
wider community.
10. Bolshevik revolution: Revolution by Marxists in Russia in 1917.
12. Questions:
I. Essay type questions:
31
1. What is capitalism? Highlight the central features of capitalism.
2. Provide a critical assessment of capitalism.
3. Explain the causes of the growth of capitalism in Europe.
4. Critically evaluate the growth and expansion of capitalism.
5. What is globalisation? Critically analyse the major dimensions of globalisation.
6. Examine the debate about the impact of globalisation on modern nation states.
II. Objective type questions:
1. Which among the following is not a feature of capitalism:
i) Investment of money to make profit.
ii) Wage labour
iii) Markets
iv) State ownership of means of production.
2. Who is not a critic of capitalism?
i) Karl Marx
ii) Lenin
iii) Wallerstein
iv) Adam Smith
3. Imperialism, the Highest Stage of Capitalism was written by
i) Karl Marx
ii) Lenin
iii) Mao
iv) Michael Moore
4. Enterprise Capitalism is found in
32
i) China
ii) Japan
iii) USA
iv) Neitherlands
5. Which is not a feature of globalization:
i) Globalization is multidimensional and multifaceted.
ii) Marked by communication, interdependence, integration, connection and mobility.
iii) The boundaries of states are becoming porous and permeable leading to increasing
movement of people, goods, ideas, services and information.
iv) The states are adopting socialist economic policies
6. The capitalism should be understood with reference to the growth of Calvinist ideas and
spirit. Which thinker is associated with this view?
i) Max Weber
ii) Immanuel Wallerstein
iii) Karl Marx
iv) Susan Strange
7. Which is not a feature of Feudalism:
i) Agriculture is the basis of economy
ii) Political power is monopolised by a class of landowners
iii) Majority of people live in small towns and cities
iv) It is virtually identical with what we usually mean by serfdom
8. Ankie Hoogvelt in his book Globalization and Post-Colonial World distinguishes four
periods of European expansion of capitalism. Which among the following is not a period
mentioned by Hoogvelt:
33
i) Mercantile Phase
ii) Colonial period
iii) neo-liberal period
iv) Post imperialism
9. Which is not a feature of George Sorenson’s advanced capitalist states:
i) A centralized national government
ii) Social divisiveness.
iii) Citizens who are bound by the bonds of nationalism.
iv) A largely self-sustained segregated national economy.
10. Who is associated with the idea of ‘invisible hand?’
i) Adam Smith
ii) Maurice Dobb
iii) Lenin
iv) Noam Chomsky
ANSWERS
1. IV, 2. IV, 3. II, 4, III, 5. IV, 6. I, 7. III, 8. IV, 9.II, 10.I.
III. TRUE/FALSE QUESTIONS:
1. Immanuel Wallerstein views a terminal crisis in the capitalist world economy- T/F.
2. Karl Marx is one of the greatest champions of Capitalism- T/F.
3. Wage labour is central to the functioning of capitalism- T/F.
4. Max Weber, a German Sociologist had claimed that cultural values have the potential to
affect economic success- T/F.
5. In the Marxist definition of capitalism, the focus is not on the ownership of means of
production – T/F.
34
6. In capitalist countries there is an unlimited role of government in economic sphere- T/F.
7. The industrial revolution mainly started in Britain- T/F
8. James Fulcher calls the capitalist period after 1970s as remarketized capitalism- T/F
9. Recently the highest pontiff of Christianity, Pope Francis greatly praised capitalism- T/F
ANSWERS:
1. T, 2. F, 3. T, 4.T, 5. F, 6. F, 7. T, 8 T, 9 F.
13. Reference:
Baumol, J. William, Robert E. Litan and Carl J. Schramm (2009) Good Capitalism, Bad
Capitalism, and the Economics of Growth and Prosperity, Yale University Press, Yale.
Dobb, Maurice (2007) Studies in the Development of Capitalism, Kessinger Publishing,

Montana.
Fulcher, James (2004) Capitalism: A Very Short Introduction, Oxford University

Press,London.
Hall,A. Peter and Soskice, David (2001) Varieties of Capitalism: The Institutional
Foundations of Comparative Advantage, Oxford University Press, London.
Heywood,Andrew (2007) Politics, Palgrave Macmillan, New Delhi.
Hill, Christopher (1955) The English Revolution, Lawrence & Wishart Ltd,London.
Hoogvelt, Ankie (2001) Globalization and the Postcolonial World: The New Political Economy
of Development, Johns Hopkins University Press,USA.
Sorenson,George (2011) “Globalization and the Nation-State” in Daniele Caramani (ed.)

Comparative Politics, Oxford University Press,London.
Wallerstein, Immanuel (2011) Historical Capitalism with Capitalist Civilization, Verso Press,
London.
Wood, Ellen Meiksins (2002) The Origin of Capitalism: A Longer View, Verso Press, London.
What is capitalism? http://capitalism.org/, accessed on 08/06/2014.
35
The Washington Post (2013) http://www.washingtonpost.com/blogs/post-

partisan/wp/2013/11/26/pope-franciss-stinging-critique-of-capitalism/, Pope Francis’s
stinging critique of capitalism, , 26 November.
Conversations with Noam Chomsky

http://globetrotter.berkeley.edu/people2/Chomsky/chomsky-con2.html, Institute of
International Studies, UC Berkeley, accessed on 6/6/2014.
WEB LINKS:
1. Portrait of Adam Smith-

http://en.wikipedia.org/wiki/Adam_Smith#mediaviewer/File:Adam_Smith_The_Muir_portrai
t.jpg, accessed on 9/06/2014.
2. Picture of Francis Fukuyama:

http://en.wikipedia.org/wiki/Francis_Fukuyama#mediaviewer/File:Francis_Fukuyama_2005.
jpg , accessed on 14/6/2014.
3. Definition of Capitalism: http://capitalism.org/, accessed on 5/6/2014.
4. Monalisa painting by Vinchi:

http://en.wikipedia.org/wiki/File:Mona_Lisa,_by_Leonardo_da_Vinci,_from_C2RMF_retouch
ed.jpg. Accessed on 7/6/2014.
5. Martin Luther's Ninety-Five Theses:

http://en.wikipedia.org/wiki/Protestant_Reformation#mediaviewer/File:95Thesen.jpg,
6. Weber’s model of capitalist development:

http://en.wikipedia.org/wiki/File:Weber%27s_model_of_capitalist_development.svg,
7. Illustration of Black Death : http://en.wikipedia.org/wiki/File:Smallpox01.jpg, accessed

on 15/06/2014.
8. Putting-out system : http://www.britannica.com/EBchecked/topic/168578/domestic-

system. Accessed on 15/6/2014.
9. Model of spinning jenny : http://en.wikipedia.org/wiki/File:Spinning_jenny.jpg, accessed

on 8/6/2014.
10. Industrial Reovlution : http://www.britannica.com/EBchecked/topic/287086/Industrial-

Revolution, accessed on 7/6/2014 .
11. A caricature of capitalism

http://en.wikipedia.org/wiki/File:Pyramid_of_Capitalist_System.png, , accessed on
5/06/2014.
36
12. Explanation of Capitalism by Marx :

http://www.britannica.com/EBchecked/topic/129104/communism/276325/Historical-
materialism#toc276326, accessed on 8/6/2014.
13. Capitalism: a love story:

http://en.wikipedia.org/wiki/Capitalism:_A_Love_Story#mediaviewer/File:Capitalism_a_lov
e_story_poster.jpg, , accessed on 7/6/2014.
37
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Download Delhi University Political Science Notes from TutorialsDuniya.

Paper: Introduction to Comparative Government and

Lesson Name: Capitalism- Meaning and Development;

Lesson Developer: Dr. Pranav Kumar

College/Department: Motilal Nehru College, University of

3. Capitalism and Modernity

5. The Industrial Revolution

6. Growth and expansion of Capitalism

7. Types of Capitalist systems in contemporary world

8. i)Capitalism and Globalisation

ii) Defining Globalization

9. Globalization and modern nation- states:

9.1 The three views

II. Different types of states and globalization

I. Essay type questions

II. Objective type question

III. True/False questions

An understanding of capitalism is essential to make a sense of contemporary world. If

Value addition—Important to know

Philosophy of Adam Smith

Adam Smith was an 18th century Scottish philosopher. He

Value addition—Important to know

Basic theme of End of History –Francis Fukuyama

American political Scientist Francis Fukuyama wrote a book “The End of

Value Addition: Surf and know

Defining the Concept

Capitalism is variously described as an economic system, a social system, an ideology, or

i) Investment of money to make profit.

iii) Wage labour is central to the functioning of capitalism.

vi) Economic freedom translating in freedom of contract, freedom of choice, freedom of

viii) Limited role of government in economic sphere. Absence of economic planning or

Value-Addition:Surf and know

To know more about Capitalism, you may go to: -

ORIGIN AND DEVELOPMENT OF CAPITALISM

3. Capitalism and Modernity

Since capitalism is a phenomenon of modern society, we need to understand the emergence

Value addition---Did you know:

Basic understanding of Rennaissance

Renaissance (rebirth) spanned from 14th

Value addition—Did you know:

According to the Stanford Encyclopaedia of Philosophy, the Enlightenment is the

Value addition—Additional information

 General Electives  AECC

Please Share these Question Papers with your Friends

Value Addition: Additional Information

Weber's model of capitalist development

i) Prior growth of merchant capitalism: Merchant capitalism grew significantly by 16 th

Value Addition: Illustration

(Illustration of the Black Death from the Toggenburg Bible (1411))

Value Addition: Additional Information

Defining Putting –out System

Putting-out System, production system widespread in 17th-century western Europe in

5. The Industrial Revolution:

Value Addition—Interesting to know

Exposure to spinning wheel

(http://en.wikipedia.org/wiki/File:Spinning_jenny.jpg , Model of the spinning jenny in a museum

Value Addition: Additional Information

Industrial revolution and related changes

6. Growth and expansion of Capitalism

Value Addition: Did you know

7. Types of Capitalist systems in contemporary world:

Value Addition: Additional Information

Various types of capitalist systems