Capitalism Vs Industrialization

Industrialization is the process when a society transforms itself from a primarily agricultural society into one that is based on the manufacturing of goods and services (Investopia.com). In industrialization, individual manual labor is often replaced by mechanical machines and craftsmen are replaced by assembly lines. Industrialization is most commonly associated with the Industrial Revolution of the early nineteenth century. The outbreak of the second World War also led to a period of industrialization which resulted in the growth and development of urban centers and the suburbs (Investopia.com). Capitalism on the other hand is an economic system in which trade, the means of production, and industry are entirely privately owned and operated

for profit (World Socialism Movement). Capitalism started to emerge during the seventeenth century (The Origins of Capitalism). At first the merchants or sometimes called the “buyer uppers” were a link between the consumer and producer. However, they gradually started placing orders and paying in advance, then supplying the raw materials, and paying a wage for the work in producing finished goods (The Origins of Capitalism). The concept of waged workers was a huge development for capitalism. Capitalism is the social system which now exists in all countries of the world.

Especially the developed countries. Under this system, the means for producing and distributing goods are owned by a small minority of people. These people are often referred to as the capitalist class. The majority of the people must sell their ability to work in return for a wage or salary, who are referred to as the working class. The working class are paid to produce goods and services which are then sold for profit. The profit is gained by the capitalist class because they can make more money by selling what the working class has produced, then they cost to buy on the labor market. In a sense the working class is exploited by the capitalist class because the capitalists live off the profits they obtain from exploiting the working class while reinvesting some of their profits for the further accumulation of wealth. Capitalism results in class division. This is very evident in the United States of America. In the USA there is a very clear line between wealthy and poor. The richest one percent of the population in America holds over seventy percent of all financial assets in the country (Alternet- Economy). Leaving ninety-nine percent to share the remainder thirty

percent. This is what is meant when it is said that there are two classes in society. It is a claim based upon simple facts about the societies around us. This class division is the essential feature of capitalism. There are other ‘classes’ existing such as the ‘middle class’, but it is the two classes defined here that are the key to understanding capitalism. Industrialization and Capitalism are completely related to each other. The idea of capitalism existed way before the idea of industrialization. However, capitalism was the foundation for the Industrial Revolution. As industrialization occurred, companies got bigger, the want for money got stronger. The Industrial Revolution worsened the divide between the rich and poor, by creating the dependency on employers to give wages so they were able to have a living. Capitalism was thus firmly established as the dominant economic system that is still here today.