American Capitalism

“America has thrived on capitalism and America will thrive again on capitalism” Kenneth

Longone. Capitalism can be defined as an economic system in which private firms have control

of the factors of production (land, labor, capital and entrepreneurship). Capitalism was birthed in

Western Europe around the 16th century, most notably in Britain. The rise of capitalism came

about because of new technologies being invented and the decline of feudalism which ultimately

led to the rise of the merchant class. The feudal way of life began to deteriorate at the start of the

16th century due to the emergence of foreign trade which then led to the rise of the merchant

capitalist. This new class earned fortunes by buying foreign products at a very low price and then

selling it over to European aristocracy making a huge profit. This generating of wealth led to

many European countries becoming wealthy from taxes and increasing their share of trade by

creating colonial empires. Capitalism made its way into America in the 19th century. This was so

because the American colonist who were British citizens and after the American revolution they

were fully able to industrialize which then led to America becoming a capitalist state. This essay

will discuss the four stages of development which led to America becoming a capitalist nation

with the use of relevant examples and quotes.

The first main period of development of American capitalism was the connection between

slavery and capitalism. The migration and horrible treatment of the slaves in the cotton fields

played a very important role in the United States being a world economic super power.

According to Edward Baptist the economic growth depends to a large extent on slavery. In the

19th century, cotton was seen as the cash crop that determined the wealth of America. Cotton

contributed to 50% of US exports and this fueled the economic boom that America experienced

because without slavery, America would’ve never been considered a first world country. The
south remained in agriculture because cotton provided them with an economic system which was

beneficial for the whole country. An example of this can be seen when a white Alabaman said

that once they have rice, sugar,tobacco and cotton they control the wealth to purchase whatever

they want. The main reason why planters planted cotton was because the price of cotton

increased from 14cents to 29.5cents and so therefore 80% of the cotton was exported. Major

banks in JP Morgan made millions from slavery and took slaves as collateral, merchants such as

james brown made a vast amount of riches from slave grown cotton. Since he made a lot of

money from the cotton, he went into banking and his organization is still alive up to this day

(Brown Brothers, Harriman &Co). Also fathers who made millions from sending their ships out

to voyage for slaves, passed down their wealth to their sons who either built factories , made

investments or even built railroads. These examples all show how slavery played an important

role in facilitating capitalism in America and how it made entrepreneurs out of people who

accumulated fortunes.