Consequences of Capitalism: Economic and Social Changes

Consequences of Capitalism: Economic Changes

Capitalism is an economic system based on liberalism in which most means of production (machinery, factories, etc.) are privately owned. Its main theory is that of a free market and is based on competition law (supply and demand and reduce costs).

• Capitalism led to an inequality society (class society): high difference by wealth.
• Sometimes led to overproduction and economic crisis. It grows very fast but can decrease also very fast.
• Banks are joint-stock companies.
• Could finish in monopolies or oligopolies.

Consequences of Capitalism: Social Changes

There are high, middle, or petty bourgeoisie. Factors of class society: Capitalism organized society into the bourgeoisie, the rich people who carried out business and owned factories, and the proletariat, the working class that provided the labor force and represented the most disadvantaged social group. They had bad working conditions of wages and no protection (accident or illness). Working days were very long (14-16 hours) and the working environment was very noisy.

Conclusion: was class society based on wealth differences, there were bad conditions of the working class, and there was a growth of cities, urbanization, and rural exodus.

New Social Movements

The difficult working conditions and the poverty the workers lived led to workers' associations:

• Luddites: consisted in the violent destruction of machinery in the belief that it was responsible for low wages and unemployment.
• The first organizations were relief societies and trade unions, groups that helped workers in the event of illness or unemployment and organized the first strikes in the beginning of the 19th century.
• National Trades Union defend the right of association, reduce the working day, improve wages, and regulate child labor.
• International Workingmen's Association (First International): was created in 1864. Marxists, anarchists, and trade unions joined, but the ideological differences made it split. The Marxists founded the Second International and established symbols such as the 1 May holiday.

New Ideologies

The utopian socialists were the first to propose forms of collective ownership. The Catholic Church proposed the need to improve the living conditions of workers (Rerum Novarum). Anarchism is a collection of the ideas of thinkers such as Bakunin. It is based on individual freedom, social solidarity, rejection of all authority, and create an egalitarian society. It opposes participation in politics against capitalism and create revolutionary unions. Marxism is an ideology defended by, for example, Karl Marx. It advocated revolution to destroy capitalism, create a workers' state (the dictatorship of the proletariat), destroy private property, put it in the hands of the state, and a communist society without social parties. It created socialist workers' parties; they both fight against capitalism and also against private property, social differences, and inequality. They wanted a proletariat revolution.