Origin of Capitalism

Origin of Capitalism

The concept of capitalism has for a long time raised controversy with regard to its evolution from the actual origin. While some quarters argue that capitalism evolved from the cities with the influence of merchants, others are of the view that it emanated from the countryside. It is difficult to choose one over the other as any of these concepts could rightly be true. However, the case of Europe presents a specific case of a form of capitalism evolving from the countryside. In the past couple of decades, Wood has produced exciting publications on the concept of capitalism and its origin. In these books, the argument raised is that capitalism emanated from the countryside as small-scale farmers evolved their means of production through the use of wage labor. In her book, The Origin of Capitalism: A Longer View, Wood (2002) argues that the long held belief of capitalism developing from the city is wrong. Arguments from the text provide enough empirical evidence in support of this assertion. Ultimately, it is evidently true that capitalism, at least in Europe, emerged from the countryside and not from the city.

According to Wood (2002), the origin of capitalism cannot be traced to a specific time in history as it has existed ever since time immemorial. The concept was indeed present in the commercial dealings of the earliest records of trade. Indeed, the definition of capitalism is such that it has existed for a long time and only required activation through the eradication of traditional obstacles. The emergence of technological improvements over time cannot therefore be deemed as the introduction of capitalism but rather an attempt to reach capitalism’s full potential. In essence, the introduction of division of labor during the industrialization of European countries only served to increases the quantity of capitalism and not the quality of the concept. Although capitalism is associated with the growth of cities and urban areas, the reverse is not necessarily true. In fact the relationship between cities and capitalism is such that the former results from the latter and not the vice versa. This relationship thus begs the question on the origin of capitalism as it cannot certainly be the cities.

The origin of capitalism is best explained as emanating from the countryside through the drive for accumulation, productivity, profit and competition. One of the most interesting concepts of the arguments in the book stem from the unorthodox interpretations of capitalism and its origins (Dimmock, 2014). In this undertaking, Wood relies on the tradition of classical Marxism by supporting the criticism of classical political economy because of its tendency to globalize capitalist relations through history. According to the arguments raised, the universality attached to the concept of capitalism is erroneous. Indeed, citing capitalism as having emanated from the city is quite false since it is considered as having transitioned from feudalism. The obsession that capitalism is a product of urbanization and that it results from cities is quashed by the question of the place of feudalism in the entire process. Accordingly, assertions to this effect can only be substantiated through a dissection of feudalism. The notion of capitalism as a product of the cities assumes that the same process is incompatible with feudalism which was largely practiced in the countryside (Wood, 2002). That notwithstanding, capitalism is a transition of feudalism which was largely manifested in the countryside. Consequently, therefore, capitalism originated from the capitalism under the name of feudalism.

The consideration of different patterns of growth and development are best explored through a dissection of the assumption that cities, commerce and trade in different locations characterize early capitalism. Indeed, there are several cities in the world that have witnessed continued development and urbanization without the need for capitalism. Everywhere, both in European and non-European countries, cities have continued to proliferate in the absence of capitalism (Dimmock, 2014). Certain countries such as China and Russia have continued to urbanize and develop under different economic models other than capitalism.  Even in capitalist countries that witnessed urbanization, the processes of growth cannot necessarily be attributed to the evidence of capitalism. In fact, it is capitalism, just like other economic models, that contribute to the development of cities and not the other way round. The example of the Italian city of Florence is cited as an example of cities that did not develop under the auspices of capitalism. In fact, the growth experienced was attributed to cheap purchases and the resell within fragmented markets occasioned by regional specialization. Although there was some of rivalry in the form of trade, it was not based on capitalist competition.

The origin of capitalism is clearly painted in Wood’s arguments as having emerged from the rural southeast of England during the sixteenth century. Indeed, the unified state of Britain was an important condition in the development of capitalism as it was different from the nature of continental Europe (Dimmock, 2014). Although the local landowners did not possess the level of economic power evident in other European locations, they took advantage of their increased landholding rights. Consequently, the rural people had the opportunity of increasing production through wage labor and mechanization resulting in the development of capitalism. The strength of the agrarian society in Britain is attributed with the emergence of the concept of capitalism. By taking this approach, Wood (2002) criticizes the traditional view that agrarian societies are buried in traditional customs and practices. In essence, therefore, the notion that agrarian societies contributed to the birth of capitalism is manifested in these arguments. In the end, Britain witnessed the early growth and development of farming by tenants instead of the normal peasantry farming. Also, the norm was that rent was paid to the landowners depending on the productivity of a certain period rather than direct coercion as was practiced elsewhere.

Evidence of capitalism emerging from the countryside is further enhanced through the observations that rural Britain had a distinct way of doing trade. During the development of Britain, agrarian traditions contributed to the market influencing both the price of land and the produce. In extension, therefore, the most productive stakeholders determined the market price of all the goods that were up for sale. For instance, the price of land within England was solely dependent on its productivity as well as the prevailing market prices (Wood, 2002). In the same period, the countryside farmers appreciated the concept of improvement and integrated the same in determining the value of services and goods. As such, attempts were made to improve the productivity of land as well as profit thus improving the value gained by the users. These attempts are the very basis under which the concept of capitalism emerged and developed resulting in the improvement of the people’s wellbeing in the process. The aspect of improvement was used in overrunning customary practices ad replacing the same with the enclosure of common lands thus signaling the birth of capitalism.

The earliest emergence of capitalism does not reside in the confines of cities but the very countryside of England. In fact, there were no cities by the time capitalism emerged and the emergence of the concept is what resulted into the urbanization of cities. In its earliest forms, agrarian capitalism is quite interesting due to the unique set of social property relations. Indeed, it is these forms of relations that resulted into the maturation of the ideals of capitalism through trade, mass proletariat and industry. Wood (2002) alludes to the importance of the country’s internal domestic commercial system rather than the external factors characterized by foreign trade. The emphasis on internal commercial systems of trade is maintained due to its attribution with the unified national market of Britain. The value of having an internal model of trading was that it created a ready market that necessitated the acquisition of goods and services for the daily consumption by the residents. It is not surprising therefore that capitalism in England resulted from improved production in the countryside and not from the cities as has been argued in some texts. The rationale for improved internal commercial systems warranted pressures to increase competition, productivity as well as cost effectiveness. Consequently, the combinative strength of England’s agrarian and industrial sectors resulted in a replication of capitalism elsewhere due to competition.

The assertions from Wood’s observation have faced criticism from scholars regarding their Eurocentric nature. It is argued that the depiction of capitalism as emanating from a single country is not only erroneous but dangerous to racial harmonization. The criticism has been based on attempts to give a wider explanation to the emergence of the concept of capitalism (Dimmock, 2014). Despite the criticism, the assertions made in the book are factual as they explain the role of agrarian societies in the development of capitalist ideologies. Essentially, therefore, Wood does not allude to the monopoly of England as a source of capitalism. Rather, it is only a reference point and the process could have easily been happening in other countries. Her assertions are more of a case for use in understanding the basis of the emergence of capitalist ideologies in the world. In fact, the contribution of non-European societies in the development of capitalism is appreciated in the book. For instance, there is a level of contribution attributed to other societies including the development of urban cultures and trading networks. Nonetheless, these forms of development do not necessarily point to the proliferation or emergence of capitalistic ideals.

The emergence of capitalism from the countryside is well represented in other European societies including Spain and Portugal (Wood, 2002). While capitalism has been associated with imperialism, England benefited from the former as it concentrated on internal development. There are suggestions that Britain was a late comer to the table of colonizers as it concentrated its efforts more on internal commercialization. While other countries were toying with the idea of foreign trade, England was concerned with internal development through commercialization of its economic systems. It is not surprising therefore that the country is touted as the origin of capitalism in its current form. For instance, countries such as Spain were more concerned with imperialism and had their concerns not on replacement but the accumulation of wealth from colonized countries.

Even when Britain was involved in imperialism, it was not at the expense of capitalism as had been advanced from the countryside. Wood is further concerned about raiding confusion in the understanding of relations between the old and new. In this process, the writer connects the emergence of the modern state with the pre-capitalist world with its fragmented political conditions. In fact, Wood (2002) asserts that power of the state was only accumulated from the countryside through capitalist tendencies. The evolution of capitalism from feudalism contributed a significant amount of power as the country became more mechanized increasing productivity in the long run. In essence, therefore, capitalism could only have emerged from the country side and not the cities as prior scholars had argued.

Despite reports to the contrary, capitalism emerged from the countryside through the mechanization of agrarian farming. The use of land for tenure and in the processes of production increased the chances of national development in a nationally unified England. Further improvements on land productivity and profit resulted in the evolution of capitalist tendencies (Wood, 2002). Evidence from Wood’s book assert to the very fact that capitalism originated from the countryside and not from the cities. Although this notion has faced criticism for its Eurocentric tendencies, it is largely factual and testable. The relationship between cities and capitalism is only advanced through the formation of cities from the effects of capitalism. In the end, the case of Europe presents strong evidence in support of the notion of capitalism emerging from the countryside.



Wood, E. M. (2002). The origin of capitalism: A longer view. London: Verso.

Dimmock, S. (2014). The origin of capitalism in England, 1400–1600. Brill.



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