Since capitalism began, worldwide incomes have risen to levels higher than they ever have in history.
It surprises me that people still believe capitalism has caused people to become poorer than ever in history. Pre-capitalism we had a system of feudal lords and serfs. Capitalism began in the 1300s between the monarchs and the serfs.
Everybody was poor and the further you go back, the poorer people were. We live in the wealthiest period in history, by far.
Do people who are anti-capitalism want to return to that pre-capitalist society? Certainly serfs were poorer than our poorest of today.
The highest GDP per capita was in Italy in 1 A.D. $800. That’s right, $800 per person for a whole year. That’s in 1990 dollars. Not 1 A.D. dollars.
Japan had the lowest GDP per capita of $400 per year. $400. The U.S. was also $400 annually but this was before Europeans came over and screwed up the place for everyone.
Now, the highest GDP per capita in 2003, was the U.S. with $29,037. Keep in mind this is 1990 dollars AND in 2003. It’s much higher now. As of 2016, it has almost doubled, and is at $55,805.
The lowest GDP per capita in 2003 was in Africa, $1,549 annually. That is appalling and we should do everything in our power to raise the standard of living in Africa, but also, in comparison to 1 A.D. number, Africa is still twice as better off than the wealthiest country, Italy, in 1 A.D.
So enough about how great the world could be without capitalism. We know what the world was like without capitalism. Would you want to live in it again?
Serfs performed self-sustenance labor, which would look like farming to provide just enough food for themselves. There was little technological innovation because there was no competition to incentivize it. (Source) Serfs were paid by getting to live on their land and having a house. They still had to pay rent and when they did get money from their lords, it was salt or small pieces of gold OR none at all.
“Because serfs had obligations to produce for lords, they had no interest in technological innovation; because serfs produced to sustain their own families, they had no interest in co-operating with one another.” (Source)
That is why technological innovation was stagnant.
Then agricultural productivity reached it’s technological limitations and stopped growing, they had a famine, and the black death led to a population decline, and as a result, a decline in labor. (Source)
The feudal lords decided to spend all their money on war, which is expensive, so they taxed the serfs.
In a panic, Nobles competed to find enough serfs so their estates could be kept up. The nobles began trading human beings for wages, which encouraged people to move to towns that were offering to pay wages, rather than just earn their keep.
As a result, the population grew.
In England, the serfs rebelled and started buying out their landlords’ land, which they accepted because they were desperate for cash.
Serfs began a more capitalist system in the form of landlord-tenant relationships over land. If they made enough money, then they could actually buy the land.
I think the serfs rising up after the famine TOTALLY proves my point that people only overthrow their government if they are hungry.
Anyway, so that’s what led to the collapse of the manorial system and ushered in mercantilism. That’s what led to the beginning of investment in new technologies and a burst of discoveries, especially in the field of agriculture. This led to the marketplace, where the serfs could sell their shit.
Towns began to trade, and when towns had similar goods, they would compete for money, lowering their prices as a result, and more people could afford what they were selling.
What’s the best way to acquire wealth? To steal it, right? Get it for free.
But actually, this doesn’t lead to the greatest wealth creation. Under colonization, countries would go to war with other regions, and strip them of their resources.
One of the problems, besides the destruction of human beings lives, as well as their cultures and civilizations, in the worst, most inhumane ways; is it actually wasn’t that profitable. Machines became more profitable than free human labor.
So for a while at least, slavery was profitable, just not as profitable as industrialism.
Adam Smith was the one who initially noted that mercantilism was not the development creator that the world thought it was. He believed it was a continuation of the feudal system and keeping the world from advancement. His influential book An Inquiry into the Nature and Causes of the Wealth of Nations wrote on paper what we now read in our economics textbooks in school on what is now capitalism.
With capitalism and industrialization, technological discoveries were developed rapidly. For the first time in history, the poorest people could become wealthier without being born into it. It was the first time poor people COULD become wealthy, and wealthier than their feudal lords, nobles, and banking families. It was the first time in history that could benefit levels of society besides the noble class. It reduced the class system that was stringently in place previously.