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Originsof Capitalism

Asnations slowly recover from the shocks caused by the financial crisisthat recently hit the world, it is gradually being realized thatcapitalism is one of the factors that perpetuate financial hardshipsamong a significant number of people in any country. In a book titled‘The Origin of Capitalism: A Longer View’, Ellen Wood definescapitalism as a problem that is bound to slow down national progress,especially considering that it manifests through a vicious cycle(Wood 1). As the author observes, capitalism widens the gap betweenpoor people and the rich, besides resulting in massive ecologicaldestruction. Contrary to the widespread notion that capitalismoriginated from the city, Wood categorically states that capitalismwas born within the countryside. In as much as this argument soundsincredible, it is important to consider the definition of the termcapitalism in order to arrive at an informed conclusion. According toWood (2), capitalism refers to a system whereby goods together withservices are produced to be exchanged at a profit. This definitionimplies that in a capitalist structure, workers willingly exchangetheir labor for wages. Going by this definition, it appears true thatcapitalism began in the rural areas, where locals had to exchangethings like their farm produce for money. To substantiate Wood’sclaim that capitalism began in the villages, this essay explores thesocial property relations that were deemed essential for capitalistpractices to develop, as well the significance of market forces toproducers together with appropriators. The essay also explores theconcept of agrarian capitalism in order to illustrate further theidea that capitalism did not begin in urban areas, but in the ruralareas.

Manypeople associate capitalism with trade together with commerce, whichtends to be more common in urban areas. In addition to this, thethinking that capitalism began in cities appears correct when viewedfrom the understanding that it is in cities where commercialactivities flourish more conspicuously and easily as compared tovillages. It is, perhaps, due to this thinking that capitalism isthought to have originated within cities. Moreover, cities are theplaces where the distinction between the very wealthy and lessprivileged is profound. As Wood (13) notes, most cities, especiallyin Western countries are uniquely defined by the existence of abourgeois class. That notwithstanding, the definition of the termcapitalism suggests that the practice is not necessarily limited tourban areas.

Supportingthe assertion that capitalism began in rural areas, Wood introducesthe concept of agrarian capitalism, which essentially revolves aroundthe exchange of ownership of ‘means of production` and other basicneeds. Wood notes that in the agrarian era, farming was the mainactivity through which human beings were able to fulfill their needs.The author further observes that during that time, people weredivided into socio-economic classes. One class comprises people thattilled the land, and the other class was made up of appropriators-those who bought the results/fruits of other people’s work (Wood95).

Acrucial point about the agrarian era is that land and other importantfactor inputs like labor were owned by peasants (Wood 95). By virtueof them being peasants, these producers had no alternative but todepend on upon appropriators –wealthy entities- in order to obtainmoney so that they could purchase other necessities to which they didnot have access. In other words, the agrarian period was marked byvital social property relations, which gave rise to capitalism. Inthe words of Wood (96), the only valuable property possessed bypeasants was the means of production. On the other hand, the wealthy,who are viewed as the appropriators or capitalists, possessed money.Owing to these differences, it became necessary for these two groupsto trade their property such that peasants could obtain wages byworking for the rich, while the rich used their money to obtainlabor. In short, it is correct to say that capitalism emerged fromthe countryside since people in rural areas tend to, in most cases,depend on urban economies for their survival (Holton 50). Elaboratingon this point, it is a matter of common sense that rural-urbanmigration is more common that urban-rural migration, which can betaken to insinuate that rural populations require amenities foundwithin urban centers in order to survive.

Thereare specific reasons why the concept of social property relationsbecame very common and important during the agrarian period.According to Wood (106), a key feature of English agriculture in thesixteenth century is that there was a preoccupation with profits,both among tenants and landlords. Accordingly, tenants agreed withlandlords that it was imperative to embrace all possible mechanismsthat would help to ensure that land and other resources generated asmuch profits as possible.

Acrucial observation made by Wood is that even though capitalismoriginated in rural areas, where the idea of markets was not asreadily embraced as it is in urban areas, the social propertyrelations that existed between appropriators and producers quicklybecame highly dependent upon the market. Providing further evidenceto the idea that capitalism began in countrysides, Wood (100) reportsthat even during the agrarian era, trade was more inclined towardsluxury goods. What this means is that even though peasants had theland and other factor inputs that they needed for their survival,they still found it necessary to produce more in order to sell thesurplus in exchange for items like clothes. It is interestinglearning that in pre-capitalist times, peasant producers used to selltheir surpluses on the local market, and in some instances, surplusfarm produce was also sold in markets far from the sellers` home area(Wood 100). The implication of this is that even before the emergenceof capitalism, producers and appropriators alike relied heavily onthe market to facilitate the exchange of social property among oneanother.

Referringto the argument that people in rural areas are more dependent onurban areas for survival and development, it is worth noting that inthe pre-capitalist society, producers could access key factor inputswithout having to depend on the market. Similarly, appropriators werecapable of using taxes or rent to extract labor from the peasants(Wood 100). However, a unique feature about England during that timeis that it had an unmatched network of infrastructure thatfacilitated trade. Precisely, England is said to have had anextraordinary network of water together with road transport, whichmade it a favorable market center.

Apartfrom the above, Wood (100) discloses that in England, a significantportion of land was held by big landlords. This created the impetusfor producers to depend on appropriators in that many people had tolive and make a living on rented property. Because of this, the biglandlords were capable of exercising extra-economic powers to exploittheir tenants, which again illustrates capitalist practices. Still,on the issue of market dependence on the part of producers andappropriators, Wood (100) argues that tenants were regularly exposedto market imperatives that forced them to increase theirproductivity. According to the author, the definition of tenancy inEngland took a variety of forms, meaning that in certain instances,rent rates were determined by legal standards as well as customarystandards. Even though, the author reports that there were instanceswhere conditions prevailing in the market determined the amount ofrent that tenants had to pay. Viewed from this perspective, itappears that market forces determined the relationship betweenappropriators and producers.

Theimpact of market forces on the relation between appropriators andproducers in the pre-capitalist society is also reflected in the factthat many of the agricultural products that were produced by peasantfarmers were influenced by market forces of supply and demand. Inaddition to this, Wood (100) reports that right to land usage wasacquired largely through the leasing arrangement, meaning that anylandowner who did not meet a specified production target faced therisk of losing rights to owning the land. In other words, there wasstiff competition for land, and this imposed an obligation onlandowners to produce at the highest level of productivity possible.Wood (100) refers to these requirements as a ploy used by capitaliststo exploit farmers and other producers to their own (thecapitalists’) benefit.

Stillon the question of how appropriators and producers within acapitalist system have become heavily dependent upon the market, Wood(38) argues that despite being the owners of factor inputs, producershave been forced to rely on the market in order to sell their factorinputs. Using the example of labor, the author states that the onlymeans through which a worker can exercise his power (his labor) is toseek employment in a highly competitive job market. This indicatesthat producers have lost ownership or access to the production meansthat they own, and can only do so through mechanisms dictated by themarket.

Onthe same note, Wood (39) argues that capitalist appropriators becamedependent on market forces in order to actualize their expansion andsurvival ambitions. What this means is that appropriators could onlyutilize labor and other inputs when it was clear that such inputswere affordable and profitable. To be more precise, appropriatorscould only source labor from workers who offered the cheapestbargain.

Inconclusion, it might be hard to discredit the perception thatcapitalism has its roots in cities, especially given that commercialactivities tend to be more concentrated in urban areas that ruralareas. Nevertheless, when the definition of capitalism is taken intoaccount, one begins to see that the practice started in rural areas.To begin with, people living in rural areas usually lack the money topurchase other necessities besides food. Consequently, they have nooption but to trade their surplus produce in exchange for money.Secondly, when approached from the dimension of employment and labor,the idea of capitalism seems to have originated from the countryside,where opportunities for employment are less as compared to towns.


Holton,R. J. Cities,capitalism and civilization.Routledge, 2013. Print.

Wood,Ellen M. Theorigin of capitalism: a longer view.London: Verso, 2002. Print.