page_title: History of capitalism
section_title: Industrial capitalism
hierarchical_section_title: History of capitalism / Industrial capitalism
caption_attribution_description: Over London–by Rail from London: A Pilgrimage (1872)
context_page_description: The history of capitalism is diverse and has many debated roots, but fully fledged capitalism is generally thought by scholars to have emerged in Northwestern Europe, especially in Great Britain and the Netherlands, in the 16th to 17th centuries. Over the following centuries, capital accumulated by a variety of methods, in a variety of scales, and associated with much variation in the concentration of wealth and economic power. Capitalism gradually became the dominant economic system throughout the world. Much of the history of the past 500 years is concerned with the development of capitalism in its various forms.
context_section_description: Mercantilism declined in Great Britain in the mid-18th century, when a new group of economic theorists, led by Adam Smith, challenged fundamental mercantilist doctrines, such as that the world's wealth remained constant and that a state could only increase its wealth at the expense of another state. However, mercantilism continued in less developed economies, such as Prussia and Russia, with their much younger manufacturing bases.
  The mid-18th century gave rise to industrial capitalism, made possible by (1) the accumulation of vast amounts of capital under the merchant phase of capitalism and its investment in machinery, and (2) the fact that the enclosures meant that Britain had a large population of people with no access to subsistence agriculture, who needed to buy basic commodities via the market, ensuring a mass consumer market. Industrial capitalism, which Marx dated from the last third of the 18th century, marked the development of the factory system of manufacturing, characterized by a complex division of labor between and within work processes and the routinization of work tasks. Industrial capitalism finally established the global domination of the capitalist mode of production.
  During the resulting Industrial Revolution, the industrialist replaced the merchant as a dominant actor in the capitalist system, which led to the decline of the traditional handicraft skills of artisans, guilds, and journeymen. Also during this period, capitalism transformed relations between the British landowning gentry and peasants, giving rise to the production of cash crops for the market rather than for subsistence on a feudal manor. The surplus generated by the rise of commercial agriculture encouraged increased mechanization of agriculture.
caption: Gustave Doré's 19th-century engraving depicted the dirty, overcrowded slums where the industrial workers of London lived.
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