INDUSTRIAL CAPITALISM

At the end of this topic student should be able to:

1.     Explain the meaning of industrial capitalism

2.     Explain the demands of industrial capitalism

3.     Explain the roles of the agents of industrial capitalism in preparing Africa for colonisation

Demands of Industrial Capitalism

The Meaning of Industrial Capitalism

Explain the meaning of industrial capitalism

Capitalism is the social, political and economic system based on private ownership of the major means of production. It first developed in Europe during the fifteenth century when feudalism collapsed.

Under the capitalism system companies and individuals own and direct most of the resources used in production of goods and services. Capitalism underwent different stages before reaching its maturity. These stages included:

·         Commercial or mercantile capitalism

·         Industrial capitalism

·         Monopoly capitalism

The commercial or mercantile capitalism took place between the year 1500 and 1750 this was capitalism based on trade. The merchants obtained wealth through trade activities. A lot of wealth was accumulated during this period and therefore increased new demands that resulted into development of another stage of capitalism known as industrial capitalism.

The next stage was industrial capitalism; this was the period when machines begun to be used for production in industries. The transition to industrial capitalism was the period when mercantile capitalism was giving way to industrial capitalism.

The transition was manifested by five major events namely:

·         Political revolution

·         Agrarian revolution

·         Demographic revolution

·         Commercial revolution

·         Transport revolution

Therefore, the above mentioned revolution created a conducive condition for capitalism to enter in the second stag; industrial capitalism. This new stage was characterised by intensive competition among the industrial capitalists. They were competing in terms of production of goods and profit maximisation. This stage of industrial capitalism took place between the 1750s and 1870s.

The Demands of Industrial Capitalism

Explain the demands of industrial capitalism

There were several demands of industrial capitalism, but most of them were mainly economic. These included:

·         The need for raw materials

·         Markets

·         Areas for investment

·         Cheap labour

At the period of industrial capitalism there were also changes in the methods of production of commodities that the world was demanding in increasing quantities.

The new methods of production involved the invention of machinery and the investment of huge capital. Industrial capitalism began in England by the end of eighteenth century; other countries such as French, Italy, German and Belgium were growing into industrial nations.

This necessitated the high demand of industrial capitalism to advance several demands as explained below:

The need for raw materials

This was caused by increasing production due to expansion of industries which needed large quantities of raw materials supply. These materials included cotton, coffee, tea, iron ore, palm oil, sisal, sugar cane, tobacco and rubber.

The available raw materials could not meet the demand. At the same time they could not be produced in Europe at large quantities. This resulted into the search and control of the sources of raw materials.

The need for markets

Due to the investment of capital in production, industrial goods flooded the European markets. Overproduction and under consumption became a critical problem among the industrial capitalists hence they were forced to look for markets outside Europe

Areas for investment

Due to unreliable markets and high concentration of capital in Europe, profit marginalization occurred. As a solution new areas for investment were needed among other areas, Africa provided the best areas for investment of such capital

In Africa the tropical crops could do better compared to other countries it was also a good source for non agricultural raw materials such as minerals and forest products.

Need for cheap labour

Due to labour consciousness caused by working class in Europe and Britain in particular, the need to search for cheap labour become important. This was a measure taken to compete in production for profit maximisation.

Reasons for the increasing demand of industrial development in 19th century

Competition in industrial production:European capitalist nations increased the demand for industrial development as a result of competition in industrial production.

During the period before the nineteenth century Britain dominated the industrial production and was the leading major industrial nation in the world.

However, in the nineteenth century other European nations such as German, France, Italy and Belgium became industrial nations. The emergence of other nations in industrial development brought about competition for markets of industrial goods, raw materials and areas for investment. Therefore, the industrial nations were compelled to look for an alternative for that competition outside Europe, where they could sell their goods and collect raw materials.

Demands for raw materials: The highly demanded raw materials were cotton, oil, sugar cane, ivory, rubber and iron ore. Most of these raw materials could not be found in Europe in large quantities. In fact, those tropical crops could not grow in Europe. Following this Europe decided to produce such raw materials in Africa, India, New Zealand, Australia and China. In those areas raw materials were produced in large quantity than in Britain and other nations in Europe.

In Africa sugar cane plantation were established by the French in the Reunion and Mauritius Islands. The French depended on slave labour in those plantation the main sources of slaves was east Africa and some parts of southern Africa such as Mozambique.

The rise of other industrial nations: In the 1870s other European countries were industrialised this resulted in increased demand of raw materials. Therefore, it was difficult for one European country to obtain raw materials from other European countries.

It was also more difficult for one European country to export her manufactured goods to another European country. Each country was struggling to protect its domestic market industries and controlling its sources of raw materials.

American independence: Resulted in the development of the industrial sector. By the beginning of the 1870s, Europe could not easily enter U.S.A since it had introduced protective tariffs to keep out foreign manufactured goods and protect its industries. By the 1860s, markets for manufactured goods and sources of raw materials in Europe had greatly declined.

Accumulation of wealth: In order to ensure this they decided to invest the wealth that was being obtained in industries into other areas outside Europe.

Overpopulation and unemployment:The problem of overpopulation and unemploymentwas also rising in European countries. Therefore, the solution to those problems was sought outside Europe

The need for assurance of genuine and reliable markets and control of sources of raw materials: Europeemployed and sent agents to various important regions of Africa. These industrial capitalism agents prepared Africans for colonisation in future years. Therefore, in the early nineteenth century European activities in Africa were led by agents of industrial capitalism known as agents of colonisation.

The transition to industrial capitalism began during the period of mercantile Capitalism when the European nations such as Spain, Holland, Portugal and Britain sold goods from local small industries to Africa and Asia. European merchants got enough capital for discovery of industries during the mid – 18th century.

Industrial capitalism firstly started in Britain in 1750.

 NB.
There was different demands that made occurance of industrial capitalism, these were;

1. Areas to invest capital.  Due to unreliable markets and high concentration of capital in Europe, profit marginalization occurred. As a solution new areas for investment were needed among other areas, Africa provided the best areas for investment of such capital. In Africa the tropical crops could do better compared to other countries it was also a good source for non agricultural raw materials such as minerals and forest products.

2. Need areas of  Market. Due to the investment of capital in production, industrial goods flooded the European markets. Overproduction and under consumption became a critical problem among the industrial capitalists hence they were forced to look for markets outside Europe

3. Needs for raw materials. The increasing production due to expansion of industries needed large quantities of raw materials supply. These materials included cotton, coffee, tea, iron ore, palm oil, sisal, sugar cane, tobacco and rubber. The available raw materials could not meet the demand needed by industries.This resulted into the search and control of the sources of raw materials. 

4. Demand of Cheap labours. Due to labour consciousness caused by working class in Europe and Britain in particular, the need to search for cheap labour become important. This was a measure taken to compete in production for profit maximisation. 

5. Area to settlement surplus labours. Also they demanded the area for surplus unemployed personal population in their countries.