The Rise of Capitalism in Europe

Thus far, we've been looking at the emergence of a global economy which began (in many ways, at least) around 1500. European voyages of exploration and conquest opened new markets for both exports and imports, to be sure, but perhaps even more importantly, these voyages fundamentally altered the relationships between Europeans and the rest of the world. There had already been trade between Europe, Asia, and the Middle East, for example, but the scale, scope, and tone of that trade changed after 1500. Europeans became conquerors and colonizers; as Stearns points out, many Asian markets were "opened" to European trade only by violence.

This willingness to employ force signaled that new attitudes towards commercial activities had emerged in Europe. Put simply: why did access to these foreign markets become so important that Europeans would literally kill for it? Sure, the goods (exotic silks, porcelains, luxury goods, and-especially-spices) were important, but it's clear we are also seeing the construction of a new mindset--an economic ideology--that is guiding the behavior of European elites.

The most visible examples of these shifting attitudes are the enormous trading companies (the Dutch East India Company, the British East India Company) that were created in the 1600s. Stearns points out that the scale and scope of their activities, the size of these enterprises and their large bureaucratic structures, were significant departures from earlier patterns of commerce. The size of these companies is a result of the stakes involved: there was enormous wealth to be had from colonial empires, and these companies were aimed at extracting as much of it as they could. Gigantic amounts of capital thus accrued to these companies, as well as other European merchants and investors, and it was this capital that would fuel the profound economic and cultural changes that occurred later (such as the Industrial Revolution).

But, again, there remains the question: was all this capitalism? After all, as both Stearns and Appleby have shown us, trade and commerce don't by themselves guarantee a capitalist transformation. Other things have to occur to create this change in ideology that we know occurred with Europeans. Hunt and Lautzenheiser argue that it was this new, emergent merchant class which helped accelerate the trend towards capitalism, as they were the ones on the rise, yet found existing methods and commercial policies restricted, rather than enabled, the types of exchange and profit-making they were after.

So what do you think? How did this "proto-globalization" which occurred after 1500 pave the way for the emergence of capitalism as the dominant ideology in Europe?