Capitalism: Capitalism and East India Company Essay

Submitted By gerluisan
Words: 869
Pages: 4
Open Document
Gerardo Sanchez
Intro to Global Studies
Prof. Peter Bell
Capitalism
What is Capitalism?

In his book “Capitalism: A Very Short Introduction” its author James Fulcher defines capitalism as the investment of money in the expectation of making a profit. He also argues that this profit is made from the difference between the prices paid for the products and the prices at which they are sold. This gap is made really significant by factors like scarcity and distance. Scarcity is essential in making a good profit. Fulcher refers to scarcity as “Market Conditions”. The market conditions have to be good in order to make a large profit. If there is no scarcity the price of the product decreases significantly. This is how the market functions. An example given by Fulcher backs to the 17th century, when the East India Company started sending ships to buy spices like pepper for very cheap in the East Indies and sell it back in England for a reasonably higher price. The investors would be able to almost double their money by not doing anything, but this was a risky business. Sometimes the ships would get lost at sea and never return and the capital would be lost. What made this so risky was the fact the investments would go to one specific ship, so all the eggs were just in one basket rather that in several, this increased risk, so if that ship did not return all the capital would be lost. Therefore logically to reduce risk to investor’s capital they started spreading this capital on various voyages rather than just one. After some time the company became public and started being exchanged in the London Stock Exchange. Another factor that reduced the risk for the East India Company was monopoly; they were able to achieve this by close connections to the state that granted this company exclusive right to import oriental goods. The state itself gained from tariffs. The East India Company although a monopoly in England had international competitors such as the Dutch. The Dutch merchants created a monopoly in their own country bigger than the one the East India Company created. They were really able to dominate prices by withholding the product in order to create scarcity or to flood the market in order take out competition. Another Example Fulcher uses takes place in the last decade of the 18th century and the beginning of the 19th century. He explains how two men worked in a cotton mill and during the time they worked there they gained money and experience to establish their own mill. They did so in Manchester in 1795 and by 1820 they had 3 mills and were the leading spinner in Manchester which Fulcher says was the global spinning metropolis. But this lead became harder to keep with time, which brought competition to the table. Mills were now bigger and more technological, requiring more capital in order to buy machinery. All this new capital investment, decreased yard price due to high production and competition tied together brought profitability to the floor by the 1830’s. Profitability now depended on the workers who spun the cotton. So they started hiring cheap labor, kids under the age of 16 made up a significant part of the work force in the 1830’s. Kids under the age of 10 worked from 6 am to 7:30 pm. Wages were the main cost of
Show More

Related Documents: Capitalism: Capitalism and East India Company Essay

Age Of Exploration

The initial purpose of what is now known as the Age of Exploration was to have European ships travel the world in search of new trading routes and partners to help with the increasing capitalism in Europe. As it turns out, this need to explore caused many great discoveries of land previously unknown to them. This time of constant findings lasted from the early 15th century and continued into the early 17th century. Just a few of the most famous explorers that contributed to this were Christopher…

Words 829 - Pages 4

How Did Elizabeth Build The Economy In 1570 To 1571

country was quite poor. After the war with Spain, England suffered tremendous debt. The obstruction in the economy over the period of her reign caused prices to increase ultimately leading the country into a severe depression. And although the term capitalism had not yet existed, the idea of free enterprise and private markets did. She believed in encouraging expeditions because of her own personal interests in seafaring. England had become a superior force to be reckoned with, through her enterprises…

Words 624 - Pages 3

Marxist Theory Research Essay

Since the spring of 1916 when Lenin wrote his pamphlet Imperialism, that work has been a focal point of discussion by both Marxists and non-Marxist political economists. Many critics have attempted to prove that Lenin’s analysis of contemporary capitalism is essentially incorrect; others that it is partially incorrect, but not outdated. Lenin’s “official” defenders in Moscow have tried to prove that every word written in 1916 is still totally valid today, while…

Words 7485 - Pages 30

Nike vs. Adidas Essay

-began with philosophes -some Enlightenment thinkers followed Deism, and then left it to operate by natural law -Philosophers: John Locke, Jean Jacques Rousseau, Adam Smith -Adam Smith set forth the principles of laissez-faire economies, capitalism(more supply and demand) -Rousseau wrote the social contract -John Locke: natural rights and popular sovereignty (influenced A LOT) -Voltaire: individual freedom -Influenced revolutions, organization of states and societies, Declaration…

Words 729 - Pages 3

Difference Between Individual And Collective Identity

Concentration and Convergence. * Media Convergence is the different types of ways to distribute the media information. Ex. Newspaper, Cell Phone, Internet, etc.. * Media Concentration is the way TNC control the media now. Only one company owns a bunch of media station for the media becomes BIAS. Related Issue #2 * Silk Road * It’s the trade route throughout Asia. The first spread of globalization Arabic Number System, clothing, silk, spices. * Industrial Revolution…

Words 2501 - Pages 11

Business Environment Essay

Business is ever-changing and always growing. From the multinational corporations and other publicly traded companies that fuel the global stock markets, to the small business enterprises that are the staples of our communities. Business is moving at breakneck speed fueling the world economies, and shaping our societies. A business is any activity that provides goods and services in an effort to earn a profit, (McGowan 2012). It is the backbone of the economy providing the products, and services…

Words 1676 - Pages 7

Not Mine Essay

Saving Capitalism from the Capitalists © Rajan and Zingales, 2003 Raghuram R. Rajan and Luigi Zingales Saving Capitalism from the Capitalists: Unleashing the power of financial markets to create wealth and spread opportunity Introduction Capitalism, or more precisely, the free market system, is the most effective way to organize production and distribution that human beings have found. While free markets, particularly free financial markets, fatten peoples’ wallets, they have made surprisingly…

Words 8731 - Pages 35

Law And White Collar Crime

shameless, direct, brutal exploitation. Within the context of rapidly changing social, political, religious, and economic relations develops the possibility of white-collar crime. Clearly distinct class relations did exist prior to the growth of capitalism, but the essence of the relations did not allow for such unadulterated and unmasked exploitation of all contending classes. It did allow for exploitation of some but then it has been argued that even slaves and bonded serfs in some since faired…

Words 1848 - Pages 8

Every Woman's Heritage

2015 Beauty is Every Woman’s Heritage: Advertising, Whiteness, and Indian Womanhood in Femina Magazine “Beauty is Every Woman’s Heritage,” reads an ad for “style classes” in a 1970 issue of Femina magazine, one of the leading women’s magazines in India both then and today. But what is “beauty” in the context of Indian advertising and how did it contribute towards a sense of heritage, tradition, and history? By looking at advertisements in Femina magazine in the early 1970s, a distinct sense of the…

Words 3289 - Pages 14

Essay on ch 25 QCRs

f land, gross wealth, and industry just like they have been for a majority of their history 2. What are the legacies of the 20th century imperialism? Independent states in Africa and Asia, the Vietnam War, Communist China, apartheid, Middle East turbulence, present­day economic structure and agricultural production, Christian church tension, existence of self­ruling Canada, Australia, and New Zealand, WWI 3. Let’s review: Which countries were most dominant during the age of discovery and exploration…

Words 3735 - Pages 15